m :!J 'I jlll I Hi"! illiiiiiiiliiiiiiliijj iii| ill dip i lii :i m llill mmu iiliiiii^ ::i a liiiliiliS liliiii ii;i;iliii CORNELL LAW UBRARY I i'iitiifijM-' Mlili' '<)e6«.— The administrator of one Corey, having been sued on a note of |3,000, purporting to have been made by C.,but believed by the administrator to be a forged note sub- stituted for the genuine one, after it had been paid, offered in evidence, from his own custody, a small diary containing daily entries by C, including some showing payment of the note. It was admitted that this was not Corey's account- book, or book of daily charges, and there was no evidence, except from the date of the entries themselves, that they were made at the time they bore date. The entries were excluded, and in the opinion of the Supreme Court, rightly excluded, the court saying — "This was not an account-book, but a mere memorandum-book, and has no weight beyond any memorandum in writing made by C." (Costello v. Crowell, 139 Mass., 588.) Wlien Account Stated Deemed Conclusive. — "A settled account will be deemed conclusive between the parties unless some fraud, mistake, omission, or inaccuracy is shown." (Story on Equity Jurisprudence, sec. 527.) When an Account Rendered Becomes an Account Stated, — "An account rendered shall be deemed an account stated from the presumed approbation or acquiescence of the par- ties, unless an objection is made thereto within a reasonable time." (Story on Equity Jurisprudence, sec. 526.) Opening of Account Stated and Settled.—^, and J. had a running mutual account, which was adjusted and settled on the basis of a balance of |54 found due to J. It was after- wards found that in consequence of error apparent on the face of the books, a balance was really due from J. to H., and the latter sued for and recovered the amount. The Court of Appeals, in giving its decision, announced the following prin- ciples: "In every such case there is an implied obligation upon both parties, ex s3quo et bono, to rectify any mistakes ACCOUNTS. 13 which may be discovered in stating the account, and an action at law will lie to recover the balance by reason of such a mistake, or to recover whatever appears to be due to the plaintiff upon a correction of the mistake. (Hanson v. Jones, 2 West. Rep., 611.) Account Stated, when Binding on Debtor. S. & Co., mer- chants in England, sold goods to F., of New York, and received sundry payments. On July 27th, 1880, they shipped him nine cases of goods, and subsequently rendered him an account made up to December 31st of that year, showing a balance due them of £1,160.08, and asking him to acknowl- edge receipt of statement, and transfer balance to the new account. F. did not comply with this request, but later told an agent of S. & Co. that he had remitted all but £40 of the account, and asked for a statement. After receiving it, Janu- ary 15th, he remitted £500, and on February 21st another £500, writing at the same time as follows : " There are still a few pounds due you, providing the goods still on hand " (part of the nine cases shipped in July, 1880, not yet with- drawn from the Custom House) " are up to the contract. I shall withdraw them shortly, and determine all about it." On March 23d he notified S. & Co. that the whole lot was inferior to sample, and held subject to their order, on the payment of £847. 14s. Id. as damages. F. had never raised any objection to the account rendered. The court said — "The sole question for our determination is whether there was an account stated. We think the court at general term did not err in holding there was. The goods had been subject to the control and inspection of the defendant for five months before he received the account. He had had four cases of of them in his actual possession for three months. The account was a short one, composed of few items. Immedi- ately after its receipt he paid £500 thereon, a portion of which was necessarily applicable to the goods last shipped. More than a month later he sent another payment on the account, in which he acknowledged that there was a balance still due, provided the goods still on hand were 'up to the contract.' There was no express agreement upon the account by a mutual looking over of the same. But the law raises from 2 14 LEGAL AND COMMERCIAL PRECEDENTS. such facts an implied agreement to the correctness of the account." (Samson et al. v. Freeman, 7 N. E. Reporter, 419.) Admission of Books as Evidence.— Entries When not Made Contemporaneously with Sale.— W., the assignee of Can- field & Sherwood, sued Michener, on a promissory note given in settlement of an account with C. &W. M. denied the debt, and the books of C. & W. were offered in evidence to prove the items. Sherwood testified that the entries were in the hand- writing of himself and partner, principally in his own ; that to the best of his knowledge and belief the charges were just and correct, and that they were made in connection with sales in the usual course of their business. Sales were made by each partner, and were usually entered temporarily upon slips of paper, and from them, soon after and ordinarily at the close of each day, at least, transferred to the day-book. He was generally present when business was transacted, but sometimes absent, and when absent, the books were posted by Canfield, apparently in the usual way. The sales made byCanfield, Sherwood used to enter each day from his memo- randa. The Supreme Court held that as to his own entries certainly, and as to Canfield's presumptively, they were sea- sonably made, and the books were admissible as prima facie evidence of the debt. (Webb. v. Michner, 32 Minn., 48.) Running Account. — Bar by Limitations Begins to Bun from Last Item.— In an open account between S. & K., and J., the last charge made against J. was on August 30th, 1873, and the last payment, as claimed by S. & K., was made on June 21st, 1876. Suit was begun May 4th, 1881. After the last item was charged, K. took the account by assignment, the firm dissolving. All but one of the payments were made afterwards, and over ayear and nine months elapsed between two of them. J. claimed that the debt was barred by the statute of limitations, but the Supreme Court held otherwise, and said that — "Takingthose before and after and the whole together, and considering that all of the items have relation to the same open and continuous transaction between the parties, we are inclined to think there was no such break in ACCOUNTS. 15 the account, or cessation of dealing as to cause the statute of limitations to commence to run before the date of the last item. We have held that the statute of hmitations com- mences running from the last item in the account, whether it be on the debit or credit side thereof." (Keller v. Jackson, 58 Iowa, 629.) Check in Payment of Balance Stated. — Conclusive Admission. — Pynchon had dealings with Day and another as stock- brokers, who rendered him statements of the purchase and sale of stocks as they were made, and monthly statements of account each month. When the accountwas finally closed there was a balance shown to be due Pynchon by Day &Co.'8 books, amounting to $2,511.01, for which they gave him two checks in settlement. At the time of passing the checks the accounts were not before Pynchon. The adjustment having been afterwards disputed and litigated, the court said — "Surely, under such circumstances the acceptance of the check as the payment of the balance most due upon the account must be taken as an adjustment of it." (Pynchon V. Day, 111. Sup. Ct., 5 Western Reporter, 698.) Copies of Account-Books not Receivable in Evidence.— Ill a disputed account between partners, one of the parties attempted to prove his claim by offering in evidence copies taken from the books of the firm. They were excluded by the lower court, and on appeal to the Supreme Court it was said — "We think the ruling is correct. The evidence was offered for the purpose of estabhshingthe claim. The account consisted of a great number of items, and the transactions extended through a number of years. The books in which the accounts were kept could probably have been introduced ; but copies of the entries were not competent." (Creswell v. Slack, 68 Iowa, 110.) Presumption after Settlement as to Omdtted JReiw.— Mason built and repaired certain salt-well machinery and fixtures for Peter, resulting in a series of charges and payments amounting to |8,800 on each side. There was a dispute in settlement, regarding defective work, charges for repairs, the supply of better material than the contract called for, etc., 16 LEGAL AND COMMERCIAL PRECEDENTS. and claims of damage and extra work were set up on either side. Finally, a certain sum beyond the contract price was agreed on, and a balance was struck. Afterwards there was another adjustment, and still later Mason made a claim of f 260 for repairing the first well constructed. On a reference the referee disallowed the charge, reporting that it was for repairs rendered necessary by defective work. On appeal to the Supreme Court the same conclusion was reached, the court saying— "We can see no reason for excepting this item of $260 from the balances struck in the case, or for supposing it was not regarded as settled by the omission to name it in the compromise." (Mason v. Peter, 58 Mich., 554.) Accounts Between Partners. — Interest not Allowed. — In a partnership accounting between S. and N., the former claimed interest on certain sums, which the Supreme Court disallowed, saying — "Interest can never be allowed on an unsettled or an unliquidated account without an agreement, express or clearly impUed, and the case must be a very strong one when it is between partners to warrant its allowance without express agreement to that effect. We have been unable to find any understanding or agreement, either express or implied, by which either party was to be allowed interest for moneys owing to the firm from either, or from the firm to either, or from the one to the other, in the conduct and man- agement of the copartnership business, before dissolution and final settlement; and in that case, until that time, neither is chargeable with interest on money he owes to the other or to the firm, arising out of the business transactions of the company. (Sweeney v. Neeley, 53 Mich., 421.) Under Nebraska statutes interest on account does not begin to run until six months from date of last item. Lepin v. Paine, 15 Neb., 326, Account Stated and Accepted, may be Disputed when.— '2. Goodman sued Kennedy on promissory notes given to cover balance found due on open account between the parties. Goodman kept the account, made monthly statements, and at times, it seems, the partners looked over them together. After giving the notes Kennedy claimed errors and over- ACCOUNTS. 17 charges. The Sup. Court said — "Merely giving the note therefor will not stop Kennedy from showing errors or over- charges, or a want of consideration. If we consider the account as having been stated by the parties there is a, prima facie presumption in its favor, and it will not be disturbed except there was fraud or mistake in the settlement. But where fraud or mistake is shown the account will be opened and the errors corrected." (Kennedy v. Goodman, 14 Neb., 585,) Bow Error in Account Stated may be Corrected.— Not Neces- sary to Re-open Whole Account.— Kent &Co. were commission merchants in New York, and sold grain for Carpenter & Co., of Chicago. They rendered an account, showing a balance due them of $1,986.82. An item of this amount was a draft of $1,550 charged as having been paid by Kent & Co. It was conceded on both sides that this charge was erroneous, though that fact was unknown to both parties at the time of settlement. C. & Co. disputed the account in other particu- lars, but finally offered to pay one-half of the balance stated. K. & Co. accepted, and gave a receipt in full of all demands to date. Thereafter C. & Co. discovered the erroneous charge. K. & Co. admitted the mistake, and offered to pay back with interest the difference between the |1,550 and the amount they had received in settlement, going over the items of the account and making a new statement. C. & Co. objected to re-opening the statement and compromise, and demanded that the whole |1,550 should be paid back. In this demand they were sustained by the judgment of the court, which said — "Where an account has been adjusted by the parties, if any mistake is subsequently discovered, the whole account need not be opened and re-adjusted, but the mistake can be corrected, and the rights of the parties re-adjusted to such mistake. Here, leaving everything to stand just as the par- ties actually adjusted and settled the items of the account, there still remains due to the plaintiffs (C. & Co.) the sum which they claim in this action, and that sum they were enti- tled to recover, without opening the account." (Carpenter V. Kent, 5 North-Eastern Eeporter, 787.) 18 LEGAL AND COMMERCIAL PRECEDENTS. Fromise to Pay Account Stated Bars Corrections,-!), intrusted G. with property to be sold, proceeds to be invested for his benefit. On settlement D. claimed that G. owed him $9,000, and though the latter disputed the amount an adjustment I was made on that basis, G. making a written acknowledg- ment that such sum was due, and giving a written promise to pay it. He afterwards re-opened the dispute, denied his liability, and attempted to bring the items of the account again in question. The Court of Appeals, however, decided against him, saying — " It was no defense to this action for the defehdant to prove that hedid notowethe plaintiff anything. The plaintiff having made a claim against him, and behaving disputed it, and the parties having settled the dispute by agreeing upon the amount due in an account stated, which the defendant promised to pay, that promise is founded upon a sufficient consideration, and can be enforced against him, though he might be able to prove that nothing was, in fact, due from him." (Dunham v. Griswold, 100 N. Y., 224.) Books of Account in Evidence,— Sow Accounts of Other Far- «iesJPro«ec release or compromise his demand; or if it provide for the payment of any 54 LEGAL AND COMMERCIAL PRECEDENTS. known false or fraudulent claim, or for the payment of more upon any claim that is known to be justly due. Property exempt from execution and insurances upon the life of the assignor do not pass to the assignee, unless expressly declared to pass in the assignment. The assignee must account within six months from date of assignment. The dividends are made in proportion to and applied upon respective demands. The assignment does not discharge the assignor with- out the consent of all the creditors. The assignor, like a trustee, must sub- mit to examination. The assignee acts under the direction of the assign- ment and the court. (C. C, §§ 2027-2046.) The assignment does not affect a levy made under attachment. Assignments (Delaware). — Deeds of voluntary assignment for the benefit of creditors should be acknowledged before a notary public and filed in the office of the register of the court of chancery. The assignee must then file in said office, within thirty days after the execution of the deed of assignment, a schedule of the property assigned, with an affidavit that such Bohedule is correct. The chancellor appoints two disinterested persons as appraisers of the estate, who shall be duly sworn or affirmed, and shall also file in said office their inventory and appraisement with affidavit, whereupon the assignee shall give bond with warrant of attorney in the name of the State of Delaware, with sureties to be approved by the chancellor in double the amount of the appraised value of the estate so assigned. The bond is for the faithful discharge of the trust, and shall inure to the use of persons interested in the property assigned. The assignee shall render an account of his trusteeship every year from the date of the bond, before the register in chancery, until the estate is closed and final account I'endered and approved, and may for cause shown be removed by the chancellor and another appointed in his stead. Any person interested may file exceptions to the accounts within one year from the date ot the same. These exceptions will be heard by thechancellor, either in term time or at his chambers. Any order by the chancellor in the premises may be enforced by attachment or imprisonment. There is no provision for giving notice, proving claims, discharging debtor, or subject- ing him to a personal examination. Preferential assignments are not allowed. Proving claim in assignment proceedings or accepting a dividend will not operate as a discharge of the debtor, except a release to that effect is especially executed. Assignments (District op Columbia).— As at common law; no statu- tory provisions ; there may be preferred creditors. There are practically no insolvent statutory provisions in force. A levy made under an attachment prior to an assignment for benefit of creditors will not be affected by such assignment. The old Act of Maryland, 1774, on the subject providing for arrest and imprisonment is practically inoperative since the abolishment of imprisonment for debt by Act of Congress. Assignm,ents (Florida)— Insolvent Law.— There is no provision made by law for insolvent debtors. A debtor may assign his property with or ASSIGNMENTS. 55 "without preference. Proving claim and accepting dividend will not operate as a discharge, the amount so received being applied on account. Assignments (Georgia). — Every assignment or transfer by a debtor insolvent at the time, of real or personal property, or choses in action of any description, either in trust or in behalf of creditors, where any tru.st or 1 benefit is reserved to the assignor or any person for him, is fraudulent in law against creditors, and as to them null and void. Likewise every conveyance of real or ])ersonal estate by writing or otherwise, and every bond, suit, judgment, and execution, or contract of any description, had or made with intention to delay or defraud creditors, and such intention known to the party taking, is void as to creditors. So also every voluntary deed or con- veyance, not for a valuable consideration, made by debtor insolvent at the time of such conveyance. A debtor may prefer one creditor to another, and to that end may bona fide give a lien by mortgage or other legal means, or he may sell in payment of the debt, or he may transfer negotiable papers as collateral security, the surplus in such cases not being reserved for his own benefit or that of any other favored creditor to the exclusion of other creditors. But in ease of limited partnerships, partners, whether general or special, insolvent or in contemplation of insolvency, cannot make assignment in preference of creditors. A general assignment for the benefit of creditors will not affect a levy made under an attachment prior to such assignment. (53 Ga., H4.) Insolvent Laws. — In voluntary assignments by insolvent debtors for the benefit of creditors, there must be afuU and complete inventory and schedule of all the assets of every kind held, claimed, or owned by the debtor at the time of the execution of the deed of assignment, which must be sworn to by the debtor. One of a firm or chief officer of a corporation may make the oath required. Without such sworn schedule the assignment is invalid. Upon indictment and conviction for filing a false, deceptive, or incomplete schedule, the party is liable as persons convicted of perjury. In case any corporation not municipal, or any trader or firm of traders, shall fail to pay at maturity any debt, payment of which has been properly demanded, and is insolvent, a court of equity, under a creditor's bill by one or more creditors holding such debts, may proceed to collect up all the prop- erty and assets of such debtor and appropriate the same to the creditors, for which purpose the chancellor may appoint a receiver. Upon such appointment no creditor shall acquire any preference by any judgment or lien, or any suit or attachment under proceedings commenced after filing the bill, nor by assignments or mortgages made thereafter ; but the assets shall be divided pro rata among the creditors, preserving existing liens. During the pendency of the proceedings the court may make a suitable allowance for the defendant's support, having regard to his condition and the circum- stances of his failure. Any person or firm shall be considered a trader who is engaged as a busi- ness in buying and selling real or personal estate of any kind, or who is a 56 LEGAL AND COMMERCIAL PRECEDENTS. banker or broker or commission merchant or manufacturer manufacturing articles to the extent of five thousand dollars per annum. In the final decree the court may recommend to the creditors the debtor's discharge from further liability, if there has been an honest and fair surren- der of his assets for distribution under the law. (Acts, 1881.) Assignments (Idaho). — An assignment of property is not valid unless it be of all the insolvent's property and for the benefit of all his creditors. Insolvent must petition the judge of the district court of the district in which he resides, which petition must briefly state the circumstances which compel him to surrender his property to his creditors, and conclude with a prayer to make cession of his estate and be discharged. He must annex to such petition a schedule of all his property, both real and personal, and also a list of all his creditors, with the amount due each, to the best of his knowl- edge; also a statement of his indebtedness and nature thereof; and he must also make a perfect inventory of his property, and, as near as possible, esti- mate the value thereof. Such schedule shall be signed by the debtor and sworn to before the judge having jurisdiction. The oath is prescribed by statute. The inventory is not conclusive. The judge shall make an order, and the clerk shall give notice thereof, requiring all the creditors of such insolvent (except mortgagees and attach- ing creditors) to appear upon a specified day (not less than thirty nor more than forty days from the first publication of said notice) before said judge, either at chambers or in open court, and show cause why the prayer of the alleged insolvent should not be granted. When issuing the order for the meeting the judge shall direct that all proceedings against the debtor be stayed, except for foreclosure of mortgages or other liens, or of attachment creditor. The judge may appoint a receiver if necessary. At the meeting of the creditors (if no sufficient cause be shown why debtor should not have the benefit of the insolvent act, and he shall produce satisfactory proof of the facts on which his affidavit is founded) they must prove claims and proceed to appoint one or more assignees, not exceeding three. The assignee must give a bond, the amount of which shall be fixed by a majority of the credit- ors; and if the creditors should not fix the amount, it shall then be fixed by the judge. The assignee shall forthwith file with the clerk of the court a copy of the assignment. The property of the debtor vests in the assignee after he is duly qualified, and the insolvent must deliver to the clerk of the court all books, notes, accounts, etc., and the clerk must deliver the same to the assignee. The assignee shall apply to the court for an order to sell at public auction the assets of the insolvent, which sale may be had after three weeks public notice thereof has been given in a newspaper. The assignee i& always subject to the order of the court. If the insolvent makes any transfer or sale of property after assignment or filing his petition, he will be considered a fraudulent bankrupt, and all such sales or transfers will be void ; any creditor, upon accusation of fraud made in writing, may oppose any further proceedings, which accusation must be tried in the district court before a jury. If the jury find the accusa- tion true the debtor shall be deprived forever of benefit of the insolvent law. ASSIGNMENTS. 57 If the appointment of any assignee be not legally made, objection thereto must be taken within ten days, other than for fraud of the insolvent, wliieh may be taken at any time. Personal property exempt from execution ia to be first set apart for the insolvent by the judge. Preferential assignments are not allowed. The proving of a claim in insol- vency or in general assignment proceedings and accepting dividend will operate as a discharge of the debtor. All mortgages and liens and attachments prior to assignment may be enforced after surrender of property. The judge shall appoint an attorney to represent non-resident creditors. If no fraud is found, insolvent may be discharged without consent of cred- itors. If after an insolvent has had the benefit of the insolvent act it is made to appear that he has concealed any part of his property, oi- given a false schedule, or committed any fraud, he will be declared to have forfeited all the benefits of this act, and he cannot avail himself of any of its provi- sions in bar to any claim. (Rev. Laws, Idaho, 8th Sess., pp. 767, 777.) Assignments (Illinois)— Insolvent Laws.— Assignments forthe benefit of creditors are administered under the supervision of the county court. The debtor is required to annex to his assignment an inventory of his estate under oath, and a list of his creditors, their residence, place of business, and amount of respective demands. Such inventory is not conclusive as to amount of debtor's estate, and the assignment vests in the assignee all property of the debtor comprehended within its general terms and not exempt. The assignee has such power to dispose of, and act generally in regard to, the property assigned, as the debtor had at the time of the assign- ment. The assignment must be acknowledged and recorded in the county where the maker resides, or where the business, in respect of wh ich it is made, is carried on. If it embraces lands, it must be recorded also in the counties where the land is situated. The assignee must forthwith give notice thereof by publication in some newspaper in the county for six weeks, and must mail to creditors notice to present their claims under oath within three months. The assignee must forthwith file in the county court his sworn inventory and valuation of the estate and give bonds in double the valuation. He then enters upon his duties. At the expiration of three months from the time of first publishing notice of the assignment, the assignee presents to the court proof of the publication and of the notices mailed to creditors, and a list of all claims presented. "Within thirty days thereafter exceptions may be filed to the claim of any creditor, of which the latter receives notice, and a hear- ing is had thereon at the next term of court. At the first term after the three months allowed for presenting claims, sh<3uld there be no exceptions, or if such are made and disposed of, the assignee is ordered to make equal dividends among creditors, except as to laborers and servants, whose claims are preferred in payment, and within one year thereafter is required to render a final account. Provision is made for the appointment by the court of another assignee in case of death, neglect of duty, or failure to qualiiy, on 58 LEGAL AND COMMERCIAL PRECEDENTS. the application of any creditor, and also for additional security in certain emergencies. Any provision in the assignment for preferences is void; and all debts are required to be paid pro i-ata. Debts to become due, as well as debts already due, may be proved, a reasonable abatement being made on the former when not drawing interest. Commissions and allowances to the assignee are at the discretion of the court. The debtor maybe compelled to submit to examination touching his estate. There are no provisions forthe debtor's discharge. No assignment shall be declared fraudulent or void for the want of any list or inventory as provided by the act. Claims not pre- sented by creditors within three months from the publication of notice, as aforesaid, cannot participate in the dividends until after the payment in full of all claims presented within that time and allowed. All proceedings may be discontinued upon the assent, in writing, of the debtor and a majority of his creditors, in number and amounts; in such case all parties are remitted to the same rights and duties existing at the date of the assignment, except so far as such estate shall have already been administered and disposed of. The court has power to make all needful orders to carry this provision into effect. (Kurd, 147, 631.) Assignments (Indiana).— Our assignment law does not change the rule allowing a debtor in failing circumstances to make an actual bona Me sale of his property, and apply the proceeds in payment Of his debts, or any por- tion of them. (23 Ind., 290.) The act "providing for voluntary assign- ments for the benefit of creditors," etc., in force in Indiana, took effect August 6th, 1859. Its provisions as modified to date are, briefly, asfollows : Any failing debtor may make a general assignment of all his property, in trust, for the benefit of all his bona 6de creditors. Such assignments must be by indenture, duly signed and acknowledged, and recorded, within ten days, in the recorder's oflBce of the county where assignor lives. The indenture must describe all real estate and be accompanied with a schedule enumerating all personalty assigned, verified by oath, with the statement that nothing has been withheld or transferred except by said assignment, and no judgment been confessed to defraud or delay creditors. Within fifteen days a copy of the indenture and schedule must be filed in the clerk's office by the trustee, who, before acting, must qualify by oath, show the probable value of the property delivered to him, and file a bond in double the value thereof, and if he fails therein the court may remove him and appoint another. After qualifying he must give proper public notice of his appointment. Within thirty days he must file a complete inventory of all property that has come to his hands or of which he has knowledge, and from time to time additional inventories, if need be. In twenty days after filing inventory he must file appraisement made by two reputable householders. If the assignor be a resident householder of this State the appraisers set off to him six hundred dollars worth of real or personal property, as he may elect. The trustee must proceed atonceto collect the credits of the assignor, and, after thirty days notice, to sell his personalty, for cash, or on credit of not ASSIGX.VEXTS. 59 exceeding twelve months, at auction. But tho court may order private sale,, if deemed best, and fix the terms thereof, or may extend the time for selling. The court has supervisory power over the entire estate, and may, at any time, make all necessary orders for the interest of the creditors, before sale. (See acts February 1st, 1875, and February 26th, 1875 ; B. S. 1881, § 2G71.) Report, under oath, is required of the trustee, within six months, showing caeh on hand, claims presented, those allowed and disallowed. The latter are docketed and set down for trial as other causes. Where there are liens on assigned property it may be sold subject thereto, or the court may order them paid, if for the benefit of creditors, from the general fund. Holders of liens must first exhaust them, and may only claim dividend pro rata, on the- residue. After the first report, if thei'fe be no contested claims, the court may order the trustee to pay to the clerk the money in his hands for pro rata distribu- tion, deducting fees and allowances to trustee. The court may, at any time, by warrant, arrest the assignor or other per- son, if satisfied that any fraud is being perpetrated on the estate, subject them to examination, and enjoin any transfer, etc. Claimants must make oath that their claims are just and no part thereof for usury, or if so, state what part.- The trustee may compromise debts due the assignor, if for the general interest. After one year, or at the next succeeding term thereafter, the trustee must file his final report, unless for cause the court shall grant further time. The court may, for cause, remove a trustee at any time, and in such case, or on death or resignation, appoint a successor. An appeal to the supreme court, in favor of any party, lies as in other civil causes. Clerk's fees are the same as in other actions ; appraiser's fees, one dollar per diem ; trustee's compensation is fixed by the court— all payable out of the general fund. Surviving partners may make assignment. (R. S. 1881, §§ 2662- 2683.) The statute makes no provision for the release of the assignor. An assignment does not aifect any levy or lien under execution, mortgage, jiidgment, or attachment previous to the assignment. Assignments (Iowa)— Insolvent Laws.— A general assignment of prop- erty by an insolvent is not valid unless it be made for the benefit of all his creditors. No preference allowed, except that in the absence of actual fraud an insolvent may sell or mortgage to one creditor and afterwards make a valid general assignment. Assent of creditors is presumed. The debtor shall annex to such assignment an inventory, under oath, of his estate, real and personal, according to the best of his knowledge, and also a list of his creditors, with the amount of their respective demands ; such inventory is not conclusive; such assignment vests in the assignee the title to any other property belonging to the debtor at the time of making the assignment. Every assignment must be acknowledged the same as conveyances of real estate, and recorded in the county where the assignor resides, or where his business has been carried on. The assignee shall also forthwith file with the clerk of the district or circuitcourtof the county where assignment is recorded afull inventory and valuation of said estate, under oath, aad shall enter into 60 LEGAL AND COMMERCIAL PRECEDENTS. bonds to said clerk, for the use of the creditors, in double the amount of the inventory and appraisement, with one or more sureties to be approved by the clerk, for the faithful performance of his trust. The assignee shall forth- with give notice of such assignment bypublication in some newspaper in the - county, which jjublication shall be continued at least six weeks; and shall also forthwith send a notice by mail to each creditor of whom he shall be informed, notifying the creditors to present their claims, under oath, to him within three months thereafter. At the expiration of three months from the time of first publishingnotice,the assignee shall file with the clerk a true list, under oath, of the creditors who have filed their claims, together with a statement of their claims. Any person may appear within three months after filing such report and file with the clerk any exceptions to the claim of any creditor; notice thereof shall be served upon the creditor, as in case of an original notice, returnable at the next term ; and at such term the court shall hear the proofs and allegations of the parties, and shall render judg- ment thereon, and may allow a trial by jury thereon. If no exception is made to the claim of any creditor, or if the same has been adjudicated, the court shall order the assignee to make dividends among the creditors pro rata,, and as soon as may be to render a final account. Such commission shall be allowed the assignee as is just and right. The assignee is always subject to order of court. No assignment is void for want of any list or inventory. Citation may issue upon application of the assignee, compelling the debtor to appear before the court to answer such questions as may be proposed to him. The assignee shall file with the clerk an additional inventory of all property that comes into his hands after the filing of the first inventory. A valid attachment levied before assign- ment will not be affected thereby. Any creditor may claim debts not due as well as, debts due, but on the former a reasonable abatement shall be made when same are not drawing interest, and all creditors who shall not file their claim within three months from the first publication of notice of assignment shall not participate in the dividends until after the payment in full of aU claims jjresented within said term. An assignment does not discharge the debtor frcim all his debts and liabili- ties, but only entitles all his creditors to share equally in his estate. The assignee has full power to sell real and personal property and to bring suits, but no sales of real estate shall be made without notice as in sales under execution. If assignee dies before closing his trust, or fails for twenty days after assign- ment to file inventory and valuation, and to give proper bonds, the court, on application of any person interested, shall appoint some person to exe- cute said trust, with the same powers as were given to the original assignee named in the assignment. In case of wasting or misapplying the estate, the court may require additional security or remove such assignee and appoint another. The debtor appoints his assignee. Assessments or taxes levied under the laws of Iowa, including municipal corporations, are preferred, and must be first paid in full. ASSIGNMENTS. Ql No assignment shall be declared fraudulent or void for want of any list or inventory. Foreign creditors are not compelled to accept dividend or composition, and a refusal to accept does not prejudice their right of action. Assignments (Kansas).— Every voluntary assignment of lands, tene- ments, goods, chattels, effects, and credits, made by a debtor to any person, in trust for his creditors, shaJl be for the benefit of all the creditors of the assignor, in proportion to their respective claims ; and every such assign- ment shall be proved or acknowledged, and certified and recorded in same manner as prescribed bylawin caseswherein real estate isconveyed. (§370.) The deed of assignment is required to be recorded in the office of the regis- ter of deeds of the county where the assignor resides, but does not necessa- rily remain on file any where. "Within thirty days after the execution of the deed of assignment, an inventory of the property, effects, and things assigned must be filed in the office of the clerk of the district court of the county in which the assignor resides, and must be sworn to. (§§ 371, 372.) A schedule of the liabilities of the assignor or assignors, with the name of the creditors, the amount and character of their debts, and post-office address, so far as the same shall be known to such assignor or assignors, verified by his or her affidavit, etc., shall be filed on the day of executing such assignment, in the clerk's office of the district court of the county in which such assignment is recorded. The clerk of the district court, within two days after the schedule is filed, shall mail to the post-office address, as given, of each such creditor whose demand exceeds ten dollars, a notice of such assignment, name of assignor or assignors, date of assignment, name of assignee, and names of all credit- ors and amounts as stated in such schedule; and shall name a day, not less than twenty nor more than thirty days from the day of such assignment, on which creditors shall convene at said clerk's office and choose an assignee; and until such assignee is chosen the assignee named in such assignment shall exercise no other powers thereunder than the safe keeping and control of the property assigned. (§ 412.) If a majority of the creditors whose debts exceed ten dollars are present, either in person or by attorney, an assignee may be chosen — said choice to be made by the greater part in value and number of said creditors then attending; and to determine who are creditors and the amount of their claims, the clerk of said district court may administer oaths, etc. (§ 413.) The clerk shall immediately file in his office a report of the particulars of said meeting of creditors, setting forth the names of the creditors who were present and the amounts due them respectively, and the action of the cred- itors in choosing an assignee, etc. Assignee thus chosen must signify his acceptance in five days after being notified of his election, and must file a bond. If the creditors fail to elect an assignee, then the judge of the district court appoints, and in his absence the probate judge appoints. All elections or appointments of assignee shall be subject to be set aside by the judge of the district court, upon exceptions properly filed. (§ 414.) 5 62 LEGAL AND COMMERCIAL PRECEDENTS. The assignee, after being elected or appointed and approved by the judge, must give bond in double the amount of the appraised value of the estate and effects assigned. (§ 378.) The assignee shall appoint a day, within six months after the date of the assignment, and a place, which shall be the county seat of the county where the inventory is filed, when and where he will proceed, publicly, to adjust and allow demands against the estate and effects of the assignor. (§ 389.) The assignee shall give notice of the time and place of adjusting and allowing demands against the estate of his assignor, by advertisement, pub- lished in some newspaper printed in the county, or, if there be none, in the one nearest the place where the inventory is filed, for three months, the last insertion to be at least four weeks before the appointed day ; and also, when- ever the residence of any of the creditors is known (and they should be all known) to him, by letter addressed to such creditors at their known or usual places of residence at least three months before the appointed day. (§ 390.) The assignee shall require such evidence, and no other, of the justice of such demands, as is required to establish demands of a similar character in the district court in suits between the original parties to the contract. (§ 392.) The practice is, if the assignor has set forth in his schedule that he owes the creditor all he claims, for the creditor merely to append his own affidavit that all just credits and offsets have been allowed, and that the amount claimed is justly due, and still remains unpaid. But if from any cause regu- lar proof is required, the claim would have to be proven by witnesses upon the stand, or by deposition, as in any litigated case. The decision of the assignee in relation to all claims presented to him for allowance shall be final, unless a creditor or some other person interested shall, after a decision is made on any such claim, ask an appeal therefrom ; ' and all appeals bo asked shall be allowed by such assignee to the district court of the county having jurisdiction thereof. (§ 393.) No preferences are allowed (see § 370, ante,) and no provision is made by law for any exemption to the family of the debtor. The assignment is merely a conveyance, and transfers what is stated in the deed of assignment, no more, no less. The court or judge in vacation shall order sale of assigned property in such manner and at such time as shall appear most advantageous to all parties in interest. As soon as practicable, and not exceeding one month after the time for an allowance of demands had under this chapter (assignments), the assignee or assignees shall pay upon the demands allowed, according to their right, as much as the means on hand will permit, after reserving enough for proper fees, costs, expenses, and demands whose trial is legally continued or removed, and as often thereafter as a dividend of five per centum can be paid upon the demands allowed as aforesaid. (§ 404.) This assignment only has the effect of distributing a person's property ratably among all his creditors, but does not discharge him from all his debts; nothing in this State can do that but an agreement to that effect ASSIGNMENTS. (53 with each creditor personally. The amount received is credited upon the claim, leaving the remainder of the claim still due and unpaid, and to be collected in any legal way thereafter, if practicable. Foreign creditors are not compelled to accept any dividend declared, but as such acceptance does not alTect in any way their right to collect the balance of their claim, they are always quite willing to accept it. The assignment law of Kansas is in no respect an insolvent law ; it does not discharge the debtor from his debts ; it does not require him to submit to an examination, nor is there any punishment attached if he does not assign all his property, or if he fraudulently conceals any portion of it. It merely provides for the ratable distribution among all his creditors who prove their claims before the assignee at the proper time and in the proper manner, of all the property assigned by the debtor. Jissignments (Kentucky) — Insolvent Laws and Assignments. — Deeds, of as.signment are acknowledged, filed, and recorded as other deeds are. Assignee is named by debtor, and is removable as other trustees for cause. He must execute sufficient bond with surety approved by the county court, and take oath faithfully to perform his duties, before executing the trust. He must return inventory under oath to the county court within sixty days, and render a report of sales within two years from the time of qualification. The administration of the assigned estate is under the control of the courts of equity, and settlements may be made or compelled in said courts. Notice to prove claims is given by publication in a newspaper, time being fixed by court. Claims may be proved at any time until final distribution. Rejection of claim by court is a judgment against creditor. Creditors may sue assignee upon claims rejected by him. Preferences are not allowed. Property exempt from execution is also exempt from assignment. Dividends should be made as the estate is converted into money. When fraudulent preference is attempted and suit is brought to set it aside for benefit of cred- itors generally in the distribution of such estate, debts due as guardian, or administrator, or executor, or trustee under deed or will, duly recorded, have preference. If preference be given by deed, transfer, or mortgage to a creditor, or judgment be suffered, or any act or device be done, or resorted to, with the design to prefer, in contemplation of insolvency, a court of equity will set the same aside if suit be brought by another creditor within six months, and same will operate as a general assignment for benefit of creditors. (Gen. Stat., art. II., ch. 44; Act of March 8th, 1876.) Attachments levied prior to voluntary assignment give priority, if sus- tained by judgment of court. Assignments (Louisiana). — The debtor cannot assign his property to his creditors by private act and obtain a discharge of his debts without their unanimous consent. As a matter of contract they may accept the assignment, and discharge their debtor from all of his debts, but such assignment has no effect except against the parties thereto. Insolvent Laws. — Under the insolvent law of this State a debtor can sur- render his property and obtain a discharge from all of his debts, provided a 64 LEGAL AND COMMERCIAL PRECEDENTS. majority of his creditors in number and amount agree thereto. A surrender of property made by a debtor, together with an order of court staying all proceedings against him, suspends all actions — whether by attachment or otherwise — then pending ; and all claims in suit must be transferred to the court where the surrender was made, and cumulated with the insolvent pro- ceedings. A creditor may pursue his remedy until a stay of proceedings arrests him. A final judgment which was legally obtained before a cession of property will not be affected by the surrender. YoluDtary Surrender.— A.ny person may mal;e a surrender, if bona fide, without fraud. It must be by petition to the judge having jurisdiction of the debtor's domicile, stating circumstances obliging surrender, asking, for meeting of creditors, as the judge may direct, to present statement of affairs to them. A schedule must be annexed to the petition, signed and sworn to by the debtor, containing summary of affairs, losses sustained, names of creditors, residences, amounts, and property of every kind, and approximate value. Property exempted need not be mentioned. If judge be satisfied that all formalities have been complied with, he accepts surrender for benefit of creditors, and orders a meeting of them — if resident, within ten days, non- resident, thirty days — and appoints an attorney to represent non-resident creditors. After surrender and acceptance, property is fully vested in credit- ors. A provisional syndic may be appointed, if creditors ask it, until syndic be elected. He must give bond with security. His duties are merely con- servatory, and he accounts to syndic when elected. If debtor fails or refuses to surrender property, he may be imprisoned until he does surrender. At meeting of creditors before notary or other officer, debtor must present copy of petition, decree thereon, schedule, and books and papers explaining his affairs. Creditors must swear to the justice of their claims. The notary or other officer issues certificate of election of syndic, requiring syndic to give bond with surety. Two-thirds of creditors may dispense with surety, except for mortgage and privilege claims. Creditors may vote by proxy. Any person may be elected syndic. If creditors fail to elect, judge may appoint one. In electing a syndic, or sale of property, a majority of credit- ors in number and amount shall prevail. The wife in partnership with her husband or his heirs cannot vote except their rights are settled by partition or judgment of separation. Mortgage and privilege creditors are not bound by decision of the other creditors, but may require the property on which their lien exists to be sold for cash. Oppositions to appointment of syndic or charges of fraud must be made within ten days after creditors' meeting, and the matter shall be tried by jury. Fraud may consist in concealment of body or property ; of commercial books or papers; debtor's absconding; passing simulated deeds of property; omitting to disclose all of it; purloining books or any of them; altering, changing, or making them anew. Presumptive fraud may consist in giving within a year, prior to surrender or being proceeded against, any unjust advantage or preference; anticipating any payment, or purchasing property for cash and selling or disposing of it, so that vendor cannot seize it; or failing to pay over money collected for another, or deposited with debtor ; ASSIGNMENTS. 65 making conveyance, transfer, mortgage, or pledge to the prejudice of his creditors. A debtor charg-ed with fraud may be arrested. He may be inter- rogated in writing, and he must answer categorically. Every insufficient answer shall be construed against hiin. If the debtor be convicted, he shall be forever deprived of the benefit of the insolvent law, and shall be impris- oned notexceedingthree years. The creditor mayproceed in thesameaction against the debtor and the party in whose favor the sale, pledge, or payment has been made. Any debtor selling or mortgaging his goods, or otherwise disposing of them, or confessing judgment, in order to give an unjust pref- erence to any creditor, within theee months prior to his failure, shall be debarred the benefit of the insolvent laws, and such deeds or acts shall be declared null and void. Defaulting receivers of public funds, and all unfaith- ful depositaries, shall be deprived of the benefit of the act; also where losses occurred from gambling, dissipation, or debauch. The syndic may sue aud be sued, sell at public auction debtor's real estate, upon terms fixed by creditors, also all personal estate; he must deposit funds in chartered bank, and cannot withdraw them except by order of court; he must file table of distribution of funds in his hands, and all creditors must be notified thereof by the clerk of the court, by publication in the newspapers. Syndics may be dismissed from office for failure to comply with these require- ments, and condemned to pay twenty per cent interest per annum on money not deposited, or withdrawn without order of court, besides all special dam- ages. Any creditor can, by motion, compel the syndic to file his bank book in court in ten days, and a true statement of his accounts, or, in default thereof, be dismissed from office, and pay ten per cent per annum interest on all sums for which he may be responsible. Forced Surrenders. — Any judgment creditor, after execution returned " no property found," may compel debtor to surrender. The creditor must pre- sent a petition to the court or judge at chambers having jurisdiction of debtor's domicile, showing he is a judgment creditor, for what amount, that execution has been returned no property found after due demand, and that he believes the debtor has property available to his creditors, and praying that the debtor be ordered to make a surrender. Petition must be signed and sworn to by the creditor or his attorney. The judge will order debtor to file schedule, as in voluntary surrender, by a day fixed. Upon filing this schedule the court will order a meeting of the creditors before a notary, at which meeting a majority in number and amount shall determine whether the surrender shall be made. If recommended, thecourtwill order the debtor to make a suiTcnder by a time fixed. If debtor fails or refuses to obey he may be imprisoned until he complies. The surrender shall be made and axjcepted, syndics elected, aud all proceedings conducted as in voluntary sur- renders. Unless a non-resident creditor participates in the proceedings he is not bound by them, nor is his debt affected, and he may proceed against the debtor, here, in United States court, if his claim exceeds five hundred dollars. Respite. — A respite is voluntary where all the creditors consent to the time debtor asks in which to- pay his debts. It is forced where a part of the cred- itors refuse to accept the debtor's proposal, and he comrielsthem by judicial 66 LEGAL AND COMMERCIAL PRECEDENTS. authoi'ity to consent, then the opinion of the majority in number and in amount prevails. To obtain a respite debtor must present petition to court of his domicile, praying a meeting of his creditors, and annex thereto a true and exact schedule of liis property as well as his debts, which must be sworn to. The meeting shall be ordered by the judge, on a certain day, before a notary public, and all creditors summoned, if wdthin the court's jurisdiction ; otherwise they are notified by letter by the notary. If all creditors reside in the parish, meeting may be held within ten days ; if otherwise, in thirty days. The meeting, as well as the object of it, must be advertised at least three times. The creditors make oath to their claims; no creditor can vote with- out. Creditors residing but of the State are represented by an attorney appointed for that purpose. His duties are to see that the proceedings are regular, but he cannot grant any thing in the name of the person he repre- sents. Notary may adjourn meeting from day to day, not to exceed ten days. The respite, to be binding, must be approved by the judge. All oppositions thereto must be filed within ten days after the proces-verbal has been filed in the clerk's office. The property of the debtor is not hypothecated by reason of the respite, unless expressly granted on thatground; butcreditors obliged to abide by the will of the majority may require that the debtor shall furnish security for the property left in his possession, or its proceeds if sold. Cred- itors with special mortgage or privilege are not bound by the respite. Res- pite cannot be for a longer time than three years. If a debtor has claimed the benefit of a surrender, he cannot afterwards pray for a mere respite. When the creditors refuse a respite a surrender must be made under the insolvent law. A^ssignments (Maine) — Insolvent Laws. — (General insolvent law, eh. 70.) Thepourts of probate in the several counties are made courts of insol- vency. Proceedings in insolvency are had only when debts are not less than three hundred dollars ; are both voluntary and involuntary, and are carried on in the county where debtor resides, or from which he has absconded within six months, leaving property therein. In voluntary proceedings the debtor applies- by petition, setting forth his inability to pay his debts and his willingness to assign his property for his creditors. A warrant then issues on which the sheriff takes possession of the estate and papers, and notice is given. (§§ 15, 16.) Involuntary proceedings are commenced by one or more creditors alleging that they believe their debts to be more than one-fourth of the whole, that debtor is insolvent, and it is for the best interests of his creditors that hia assets be divided under the act. A warrant issues for attaching all his prop- ertyin the State and forbidding any disposition of it. Notice is given to the debtor, and the warrant may be revoked on hearing. If not, a like warrant issues asin voluntary proceedings. (§ 17.) The messenger takes possession of the estate and notifies the first meeting of creditors, who then choose an assignee by majority in number and value, subject to the approval of the judge, who may set aside, order a new election, appoint others, or remove for cause. Assignees are required to give bond. (§§ 18, 31, 32.) ASSIGNMENTS. Q7 Claims may be proved at any time before final dividend, as follows : All debts, with rebate of interest on those not yet payable, unless interest is provided. Demands for conversion of personal property. Contingent liabilities share, if they become fixed before final dividend, or present value may be determined. Any person liable as surety, etc., may have benefit of dividend, whether the creditor proves or not, by proving in his name or otherwise. Debts like rents falling due at stated periods may be apportioned. Proof is made before the register of the insolvent court without expense, or before any justice of the peace or notary public at the creditor's expense, by the creditor or his authorized attorney, in the following form: State of Maine,|^^ ^ourt of Insolvency. COUXTY OF / •' In the case of insolvent debtor. I, of in the county of do swear that the said by or against whom proceedings in insolvency have been instituted in said court for said county of at and before the commencement of such proceedings still justly and truly indebted tome in the sum of dollars and cents; that the evidence of said debt is hereto annexed and marked "Exhibit A;" that the consideration for said indebtedness was and is that the credit to be given upon said claim is that I hold as security upon said claim a copy of which is hereto annexed and is marked " Exhibit B ;" that this is the only security I hold upon said claim, and I have not nor has any other person for me to my knowledge and belief received any other security or satisfaction whatever in the premises. And I do further swear that said claim was not procured by me for the purpose of influencing the proceedings in this case. And I do further swear that I have not, nor has any other person to my knowledge or belief, directly or indirectly, enti'ied into any bargain or agreement, expressed or implied, whereby 1 am to receive any exclusive benefit hereafter, or whereby my vote for assignee, or my assent to the said debtor's discharge, or any action on my part in such proceedings, has been, is, or shall be in any way affected, influenced, or controlled. (Deposing creditor.) State of Maine,\ ^ j, ^8 County of / -^° • The foregoing proof was made and subscribed and sworn to this day by the said Before me. Register for said court for said county of (or notary public or justice of the peace). No debts but those provided for can be proved. Unliquidated damages on contracts or for torts are assessed. Any person accepting illegal prefer- •ence cannot prove without surrendering same. (§§ 25-29.) Attachments made within four months are dissolved, unless prosecuted by assignee at his election for benefit of the estate. Mortgages not recorded within three months are avoided. Money paid on writ, judgment, or execution within two months, as a preference, may be recovered by the assignee if creditor knew of insolvency. Transfer of any kind as a preference, by debtor, within four months, if insolvent or in contemplation of insolvency, are void, if known to creditor to be such, and the property orits value maybe recovered by assignee. If not in usual course of business it is prima facie evidence of illegal preference. Loans on security taken at the time in good faith are upheld. (§§33,52.) G8 LEGAL AND COMMERCIAL PRECEDENTS. Estate is applied : 1. To costs of proceedings ; 2. To taxes and debts due town, county, State, or United States; 3. To wages of operative earned within six montlis, not over fifty dollars ; 4. As often as enough is received, twenty-five per cent is paid on other claims, and final dividend when ordered by the court. (§§ 39, 40.) The debtor and any other person may be examined. (§ 42.) Discharge is granted from all debts provable except those created by fraud or embezzlement, defalcation as a public officer, or in any fiduciary capacity ; does not release any person jointly liable with debtor; is not granted a sec- ond time unless a majority, nor a third time without three-fourths of hi& creditors in number and value assent. (§§ 44-49.) Discharge is denied if debtor has: 1. Sworn falsely; 2. Concealed property, books, or papers; 3. Paid or secured any debt or liability of or for him within the prohibited four months; 4. Caused his effects to be attached; 5. Destroyed, altered, mutilated or falsified books or papers ; 6. Been privy to any false or fraudulent entry ; 7. Removed or allowed removal of his property — either of the foregoing being with intent to defraud his creditors or to give an illegal preference; 8. Made any fraudulent transfer of property ; 9. Known of any fictitious debt proved against estate and has not disclosed the same; 10. Failed to keep proper books of account since the passage of the act, if a merchant or trader. Discharge is void if assent of creditor is procured by pecuniary consideration or promise for the future, and may be annulled within two years after it ia granted if causes were not known at time of discharge. (§ 49.) Suits and arrest are suspended pending insolvency proceedings. (§ 51.) Compositioa may be affected by an affidavit of the debtor negativing fraud, preference, or promise of same and an agi'eement signed by majority in number of the creditors whose debts exceed fifty dollars each, and by creditors holding three-fourths of all his indebtedness, and a discharge is granted, which is void if any signature is obtained by fraud, or any material statement in affidavit, or schedule of debtor is false to his knowledge. (§ 62.) If dis- charge is not valid debt may be collected, less dividends. Penalties are provided against debtor for concealing property and papers; against others for aiding the same or making fraudulent purchase or agree- ment to purchase ; against messenger and assignee for fraudulently dispos- ing of estate. In each case the penalty is imprisonment not more than one year or fine of not over five hundred dollars. (§§ 53-56.) Partnerships may be declared insolvent; either partner may file petition. Estates of each member are kept separate and applied to the claims against the estates respectively ; assignee is chosen by partnership creditors. Dis- charge is granted or refused to each partner separately. (§§ 57-60.) Corporations are subject to these provisions if carrying on any private business; not to include corporations engaged in a business involving public duties and obligations, among which are railroads, banks, gas and water companies. Corporation is not discharged nor liability of stockholders affected. (§ 61.) Allowance may be made to the debtor for support out of estate pending proceeding. The judge in any county may examine witnesses and compel attendance. * ASSIGNMKXTS. 69 Appeals lie to the supreme judicial court from decisions upon granting and annulling discharge, and allowing claims, which may be tried by jurj-, and exceptions taken and determined by law court. (§§ 12, 25, 44, 49.) The same court has full equity jurisdiction in all matters arising under the act. Assignments may be made to the register of the court by persons owing less than three hundred dollars. The assignor submits to an examination by creditors which is limited to the time since debts accrued . If the examina- tion is not found to be untrue or inconsistent with the oath, which is in sub- stance that he has not made over or concealed property to defraud, the oath is administered and the debtor is discharged from arrest on any debts then existing, but not from debts. (§ 64.) Assignments for benefit of creditors are held void in cases within scope of insolvent law. (Smith v. Sullivan, 71 Me., 150.) There is no statute pro- viding for such assignments. Assignments (Maryland)— Insolvent Law. — The insolvent law of the State is contauied in the Revised Code of 1878, art. 67, as amended by the act of 1880, ch. 172, and of 1884, ch. 295. Any person, being insohent, may apply for the benefit of the insolvent law by petition to the circuit court for the county where he resides or to the court of common pleas of Baltimore city, if he resides in the city of Baltimore, stating that he is insolvent, and offering to deliver up for the benefit of his creditors all his iiroperty,real and persona], and exhibiting therewith a schedule of his property and a list of the debts due from and owing to him, with the naines of his debtors and creditors and their respective places of business or residence so far as known to him, all verified by afiidavit; but no person can so apply if he has at any time within two years previously been discharged under any insolvent law of the State. Any person who shall depart from or remain absent from the State with intent to defraud his creditors, or conceal himself to avoid service of process upon him in any action for the recovery of a debt, and any person who con- ceals or removes any of his property to prevent the same fi-om being taken under legal process, or makes any assignment, gift, sale, conveyance, or transfer of all or part of his estate or property with intent to delay, hinder, . or defraud his creditors, or, being a banker, broker, merchant, manufacturer, or trader, when insolvent or in contemplation of insolvency, executes a deed or conveyance giving preference, creates a lien making any unlawful prefer- ence, or otherwise gives such preferences, or, belonging to said last mentioned classes, when insolvent or in contemplation of insolvency, confesses any judgment or allows any judgment to be entered against him by any conniv- ance or, belonging to any of said classes, when insolvent or in contemplation of insolvency, fraudulently stops payment or suspends payment of his nego- tiable paper and fails to resume the payment thereof within twenty days, or, being a banker or broker, shall fail, for twenty days, to pay any depositor on demand lawfully made, is deemed to have committed an act of insolvency, and may be declared insolvent upon the petition of one or more creditoi-sthe aggregate of whose debts against the insolvent amount to at least the sum 70 LEGAL AND COMMERCIAL PRECEDENTS. of two hundred and fifty dollars, at any time within sixty days after the recording of any of the conveyances, creation of liens, or committing of any of the acts of insolvency above specified. The petition must allege the facts upon which the application is grounded, and pray for process against the debtor and an adjudication of insolvency, and must be verified by the affida/- vitof the petitioner. A summons is thereupon issued forthedebtor requiring him to show cause, within not less than five nor more than ten days, why such adjudication shall not be made. The act of 1884, ch. 295, Baves such preferences in deeds, etc., as result from operation of law, and for wages or salai'ies to clerks or employees contracted not more than three months before the execution thereof. After an adjudication of insolvency in either a voluntary or involuntary H. Kearney, 200 each, the lat- ter 600 shares being given or sold at a nominal price by the Wrights to the holders, for the purpose of interesting them in the corporation, and making the requisite number of stock- ' holders under the statute. It was stated in the articles of association that the amount of cash actually paid in was f 3,000, and that the cash value of property conveyed to the company contemporaneously with its organization was $422,000. In fact, the only property thus conveyed was the lease of the mine, and the $3,000 cash consisted of the expenditure already made in exploration, etc. E. H. Wright was made the holder of 3,000 shares as a trustee for the cor- poration, these shares to be sold for working capital. Only 17,000 shares were issued, stated on the face of the certifi- cates to be fully paid up and non-assessable. In September, 1883, the lease was forfeited for non-payment of royalty, and the company suspended business, owing besides the royalty debt some $70,000, including a large amount to the Wrights themselves. One of the creditors got a judgment against the company, and execution having been returned nulla Z>oi2a,he then filed a bill against the stockholders resident in Michigan, to make them personally liable for the debt, on the ground that the stock had not in fact been fully paid up. The bill charged that the lease transferred by the Wrights to the cor- poration at the sum of $422,000, and counted as so much capital paid in, was worthless, and that this enormous valua- tion was placed upon it with the fraudulent intent to secure the stockholders from assessments to pay the just debts of the corporation, and so to cheat and defraud its creditors. It was also alleged that the stock, the par value of which was $25, was placed on the market and sold at from $5 to $8 per share — ^none higher than $8. It also alleged the insolvency of the Wrights. The Marquette Circuit Court decreed that the defendant share-holders, Martin Butzel, Magnus Butzel, Emil S. Heineman, Emil Heyn and Henry Heyn, being the only responsible ones within the jurisdiction of the court, CORPORATIONS. 267 were each " chargeable with knowledge or notice of the facts by reason of which the stock in his hands remained unpaid and assessable for the payment of the just debts of the said corporation." It was referred to a commissioner to find whether or no there were other stockholders pecuniarily responsible within the jurisdiction of the court; if not, it was ordered that those named " must share pro rata according to the number of shares held by each, in the payment of the said debts." On appeal totheMichigan Supreme Court thedecree was reversed. In delivering the opinion of the Court, Mr. Justice Morse said : "I find no warrant in the testimony for the claim that the "Wrights intended any fraud in the organization of this com- pany. They honestly supposed that they had found value in this mine, and seemed to believe that it might become nearly, if not equally, as valuable as the Republic mine, then worth from $1,000,000 to 12,000,000. * * * * It is true they gave away some of their stock, and sold more or less at |5, $8, and |12.50 per share, in order, as thej claim, to get people interested in the company, and to procure funds to work the mine, but this action grew out of the necessity of the corporation. The circuit judge does not find any fraud in fact as charged in the bill of complaint, but he finds that the mine was not as valuable as the Wrights supposed, and that the lease held by them was not worth the $422,000 but much less — not over $80,000 — and that therefore the state- ment in the articles of association was a fraud in law upon the creditors of the corporation. '•It must be considered as well settled that corporators cannot agree among themselves that property worth only $80,000 shall be treated as worth $422,000 and count at that sum as so much capital stock paid in, and then proceed to mark their shares as fully paid up and non-assessable upon such false basis — as such action would be clearly a fraud upon the creditors. But it is equally well settled that such corpo- rators are not responsible for an honest error of judgment, or a mistake in placing a valuation upon property appropri- ated or used as capital by a manufacturing or mining com- pany. * * * There was no deception practiced any 268 LEGAL AND COMMERCIAL PRECEDENTS. where, and any one dealing with the corporation had ample means of notice as to the character and value of its capital stock and property." As to the defendant stockholders, Heineman, Butzel & Co., the court said they bought their shares in good faith, and "if there was no fraud upon the part of the Wrights, but simply a mistake or error of judgment in the overvaluation of the lease, the authorities are nearly unanimous that the holder of the shares, purporting upon their face to be fully paid up and non-assessable, cannot be called upon to pay the debts of the corporation." Young v. Erie Iron Company, <1887,) 8 Western Reporter, 153.) Concealed Ownership of Bank Shares. — Individual Liability ■of the Meal though not the Registered Owner.— Calvin Stevens, the owner of shares in a national bank, transferred them to one Elston, an irresponsible person, porter in the oflBce of his New York broker. The bank was then, and for a year after- wards remained, in good credit. Stevens made other pur- chases of the stock, directing the transfers to Elston, and also sold stock, acting as Elston's agent under power of attorney to make the necessary transfers from Elston's to the purchaser's account. On the 22d of November, 1871, there stood to the credit of Elston on the books 161 shares, for which a formal certificate was issued in his name, a,nd delivered to Stevens as his agent. On the 12th of December the bank failed, and the receiver undertook to hold Stevens liable as a share-holder under Section 5151 of the Revised Statutes. The United States District Court, southern district of New York, directed a verdict for the defendant, and the receiver appealed. The Circuit Court, in reversing the judg- ment and ordering a new trial, said: "The point to be decided now is, whether in an action at law by a receiver of the bank, the real owner of stock in a national bank standing by his procurement in the name of another, and never having been in his name on the books, can be charged as a share- holder with the statutory liabihty for debts. The Supreme Court at its last term held, in Germania Bank v. Case, 99 U. S., that if the registered owner transferred his stock in a CORPORATIONS. 269 failing corporation to an irresponsible person for the mere purpose of escaping liability, or if his transfer was colorable only, the transaction was void as against creditors. At the same term in Casev. Marchand, an effort was made to charge Marchand with liability as the real owner of stock standing in the name of oneLubie, the allegation being that Marchand, having bought the stock from one Keenan, caused it to be transferred to Lubie for the purpose of concealing his owner- ship and escaping liability imder the act of Congress. The Court decided the case on the ground that the evidence was not sufficient to show the actual ownership of Marchand ; but there is nowhere an intimation that if the facts had been as alleged the action might not be sustained. The present case shows that Stevens bought the stock from registered owners and took assignments of their certificates with authority to complete the transfers on the books. As between Stevens and the vendors, this made Stevens the owner. At that time the vendors could have registered their transfers, and thus, while relieving themselves from liability, charged Stevens. (Web- ster v. Upton, 91 U. S., 71.) * * * As between Stevens and Elston, however, Stevens was the real owner, and Elston his authorized representative in the bank. So far as Elston was concerned the transfer to him was colorable only, and it is apparent that the only object Stevens had in caus- ing it to be made was to conceal his ownership, and thus, if possible, escape all statutory liability. Such being the case, I am unable to see how he can occupy any different position from what he would if the stock had been taken directly from his own name on the books and put in that of Elston. He is still the real owner, with Elston as his agent, specially authorized to hold for him the legal title." (Davis, Receiver, V. Stevens, Ex'r, 28 Reporter, 710.) Place of Meeting.— Validity of Acts Done Outside the Corpo- ration's Domicile.— In the suit of a foreign bond-holder to set aside as invalid the Berdell mortgage on the Boston, Hart- ford & Erie Railroad Company, dated March 19, 1866, to secure the payment of $20,000,000 in bonds issued by that company, it was alleged on behalf of the complainants that 18 270 LEGAL AND COMMERCIAL PRECEDENTS. the mortgage was based on authority given at a meeting of the share-holders held in the city of New York, when, as- alleged, it was not a New York corporation, but a corporation of Connecticut, Massachusetts and Rhode Island, and that therefore the meeting was illegal and the mortgage void. The United States Circuit Court held that by virtue of the act of the New York Legislature, Chapter 385, Laws of 1864, to consolidate the road in question with certain other roads, the company became a New York corporation, and that accordingly the meeting was lawfully held, and its proceed- ings were binding on the company. The United States Supreme Court affirmed the decree, and said — "That a meet- ing in one of several states of the stockholders of a corpora- tion chartered by all those states is valid in respect to th& property of the corporation in all of them, without the neces- sity of a repetition of the meeting in any other of those states, is, we think, a sound proposition. Whether it be or be not true that proceedings of persons professing to act as corpo- rators, when assembled without the bounds of the sovereignty granting the charter, are void. (Millerv. Ewer, 27 Me., 509.) There is no principle which requires that the corporators of this consolidated corporation should meet in more than one of the states in which it has a domicile, in order to the valid- ity of a corporate act." (Graham et al. v. Boston, Hartford & Erie Railroad Company et ah, 118 U. S.) In the Maine case cited it was held that a corporation cre- ated by the State could " hold no meeting for the election of its officers or the regulation of its affairs, without the limits of the State." A distinction was drawn between such acts as may be performed by a board of directors, the court saying that "the directors of a corporation are not a corporate body, are, when acting as a board, but a board of officers or agents, and they may exercise their powers as agents beyond the bounds where the corporation exists." Coatrdt't by Offical without Xamlng Corporation. — JtnpUca- tlonfrom Contracting Party's Knowledge.— "1 promise to pay to the order of T. S. Lowe, Pres't, * * * value received. I. C. Thompson." This note was indorsed "T. S. Lowe, Pres't," and transferred in payment of a debt owed by the CORPORATIONS. 271 gas company of which Lowe was president. The note being unpaid, Lowe was sued individually on his indorsement. The defense was that the note was given to the company, was indorsed by him as its representa,tive, and that the contract , of indorsement was therefore the company's and not his own individually. The Pennsylvania Supreme Court took this A'iew, but were led to do so by the special feature of the case referred to in the following sentence of its opinion: "The plaintiffs were dealing with the gas company when they took the note from T. S. Lowe. They received it ia payment of a debt due from the gas company, and therefore must have known that the indorsement of the note by its president was the indorsement by the company." (Seyfert v. Lowe, 1879.) Stock and Stockholders.— Title to Dividends.— Between Buyer and Seller.— Transaction Incomplete.— l-t is sometimes the case that an incomplete sale of stock is made, without actual transfer of the scrip, or payment, and before its completion by these acts, a dividend is declared. Is the buyer or seller, in such a case, entitled to the dividend ? The courts have not had an opportunity to answer this question exhaiistively, but it appears that where the sale itself is not subject to a con- tingency, or dependent upon a future state of mind on the part of seller or buyer, the dividend belongs to the latter. Example : Homersham sold to Black, early in August, his shares in a gas company, with payment of twentj'^ per cent down, and remainder on August 29th. On August 28th a dividend was declared, and Black having completed his pay- ment according to contract, was adjudged to be entitled to the dividend. (L. E. 4 Exch. Div., 24.) (1878.) On Shares Sold, Seller's OpUon.—ThQ question whether buyer or seller was entitled to dividends declared subsequently to the date of the following contract, was decided by the New York Court of Appeals in the case of Currie v. White, 45 N. Y., 822: 1,000 Shares. New York, Feb. 18, 1867. I have sold to Currie, Martin & Co. one thousand shares of the capital stock of the Hudson River Railroad Company, at 128 per cent, payable and deliverable, seller's option, in this year, with interest at therate of six pei- cent per annuin ; either party having the right to call, from time to time, for deposits to meet the fluctuations of the market. (10-cent stamp.) C. G. WniTE. 272 LEGAL AND COMMERCIAL PRECEDENTS. A corresponding bought note was signed by Currie, Martin & Co. On April ISth and October 15tli, of the same year, dividends were declared, payable to holders of stock on Feb- ruary 18th and October 15th. "White did not exercise his option to deliver the stock until December 18th. Currie, Martin & Co. accepted the tender, at the same time demand- ingthe dividends. "White refused to comply with this demand, but the Court of Appeals said he must. "By a contract such as this," said the Court, "the seller of shares deliverable at a future time assumes to have them, and to make a present sale of them, and to hold them for the benefit of the purchaser until delivery. The language of the contract imports a sale in prsesenti, and charges the purchaser with interest on the purchase money, from the time of the sale to the time of delivery. * * * On this theory the purchaser pays interest on the purchase money. He is, therefore, entitled to dividends accruing between the sale and the delivery." The Supreme Court came to a different conclusion, on a contract by which John M., John and Charles Lord "agreed to sell" to one Bright 520 shares of the Indianapolis Rolhng Mill Company, at his option, to be taken at any time previous to June 18th, 1883, afterwards extended to July 18th. A dividend was declared July 3d, payable August 1st. On the 16th of July Bright exercised his option and took and paid for the stock, claiming also the dividend. It was decided that he was not entitled to it, because, the Court said, " Bright did not become the owner of the stock until the 16th day of July, 1873. Up to that time it was optional with him to purchase it or refuse it. The Lords would have had no remedy if Bright had refused the stock, and Bright would have suffered no loss, except the consideration he had paid for the option, and incurred no liability whatever." The language of the Court is also expressive as to the right of dividends declared before but payable afterachange of ownership. "Thedividend had been declared on the 3d day of July, 1873, and the amount fixed, by which it became the property of the Lords at that time, although not payable until the 1st day of August ensuing." (Bright v. Lord, 51 Indiana, 272.) ^CORPORATIONS. 273 These cases are not in real though apparent conflict. The first was an absolute sale with an option merely as to the time of delivery and payment ; the second appears to have been merely an option to buy, where there was no sale until the option was exercised. Proceedings of Corporate Directors and Managers.— Have Stockholders or Members a Might to Enow what is Done?— The Right to Inspect Books and Minutes.— In an English case the right of stockholders in a joint stock company to inform themselves with regard to the proceedings of the directors was passed upon by the Court of Queen's Bench. (Queen v. Mariquita Mining Company, 1 Ell. and Ell., 289.) The deed of settlement required the secretary to make the proper entry in a book of minutes of the proceedings of general meetings, and keep a book of minutes of the proceedings of the direct- ors, and provided that the by-laws, the register of share- holders, and the books of balance and account should be open to the inspection of share-holders. Richardson, a share- holder, asked a mandamus to compel the secretary to grant him an inspection of the " book of minutes of the proceedings of the said company." The Court, in giving judgment against the demand, said: "The question is, whether Mr. Richardson, as a share-holder of the company, is entitled, any day, on requiring it at the office of the company, to an inspection of the book containingthe minutes of the proceed- ings of the directors. He is clearly entitled to, and has been offered, such inspection of the book containing the minutes of the proceedings of the company, i. e., of the meetings of the share-holders; and to this we think his right is restricted. * * * * The proposed daily and hourly inspection and publication of all their proceedings would be tantamount to admitting the presence of strangers at all their meetings, and would probably ere long be found very prejudicial to the share-holders." The Supreme Court expresses the opinion that "if we are not greatly in error, a private stockholder of an incorporated company has no right to have access to the minutes of the proceedings of directors, unless that right is expressly given 274 LEGAL AND COMMERCLiL PRECEDENTS. I by charter, and consequently and of necessity he must remain ignorant of their action until they choose to makethataction known." Again : " There is a very marked and obvious dif- ference between the action of a general meeting of the stock- holders and that of a board of directors. All the proceedings of the former are presumed to be known to each individual stockholder, it being not only his right but his duty to be present for the purpose of participating in such proceedings. But not so with reference to the proceedings had at a meeting of the board of directors. These proceedings are usually private." (Ala. & Fla. E. R. Co. v. Rowley, 9 Fla., 508.) Statutes do not always cover the whole question at issue. They usually, as in this State, assure share-holders the right to inspect the "stock book" and "transfer-book," and where the information properly to be found in such books cannot be had without the inspection of other books, the latter must be exhibited. In a case of this kind, where a mandamus was sought to compel the Pacific Mail Steamship Company to exhibit their stock ledger to a share-holder, Judge Gilbert, in the Supreme Court, Kings count\'^, basing his opinion on the Revised Statutes, said: "I think it clear that a right of insiiection generally is not given, but that it is restricted to the register of transfers and the list of stockholders; or if such books are not formally kept, to such books as the com- pa,ny do keep, for the purpose of showing the original owner- ship of the stock and the changes which shall have occurred from time to time in such ownership." (People v. Pacific Mail Steamship Company, 50 Barb., 280.) In some of the states, however, as in Ohio, California, etc., the liiiht of inspection extends to all corporate records. In Michigan this right is given to bank share-holders; but the Supreme Court denied a plank road company stockholder's demand for an inspection of all the corporate records, includ- ing the proceedings of the directors. He alleged his reason to be his desire "to ascertain the condition of said company, as well as to ascertain and determine the rights, duties, privi- leges and liabilities, and for the protection of this deponent as such stockholder." In refusing the writ of mandamus asked, the Coui't said: "I have examined all the cases to CORPORATIONS. 275 which we have been referred, and we And none where the writ was granted to enable a corporator to gratify idle curiosity. The principle seems to be, and very properly too, that the party asking the writ must have some interest at stake which renders the inspection necessary." (People v. Walker, 9 Mich., 328.) In the opinion of a, recent text-book writer, "It would take a very strong case to induce a court to issue a mandamus commanding the corporate officers to allow a stockholder to inspect the minutes of the meetings of the directors." (Cook on Stock and Stockholder, Section 517.) Right to Dividends.— Existence of Surplus Earnings not Alone Sufflcient.— Declaration by Directors a Prerequisite.— On the reorganization of the New York, Lake Erie & AVestern Railway in 1878, a plan and agreement of re-adjustment pre- viously adopted, was made one of the articles of association, and stipulated as follows : " (13.) Preferred stock, to an amountequal to the preferred stock of the Erie Railvfaj now outstanding, to wit, eighty- five thousand three hundred and sixty-nine shares of the nominal amount of f 100 each, entitling the holders to non- cumulative dividends, at the rate of .six per cent per annum, in preference to the payment of any dividend on the common stock, but dependent on the profit.s of each particular year, as declared by the board of dii'ectors." By the report of the board of directors for the fiscal year «nded September, 1880, it appeared that after adding together the netearnings of the road, and the " earnings from other sources," and deductingtheopei'atingcxpenses, interest on funded debt, rentals of leased lines,, and other charges, there was, in the language of the report, " a net profit from the operations of theyearof fl, 170,620. 71. This amount," continued the report, "together Avith |737,119.34 received during the year from the assessments paid on the stock of the Erie Railway Company, has been applied to the building of double track, erection of buildings, providing additional equipment, acquiring and constructing docks at Buffalo and Jersey City, and to the addition of other improvements to the road and property." 276 LEGAL AND COMMERCIAL PRECEDENTS. Two of tlie preferred stockholders, believing that they had a right to dividends in preference to these expenditures for betterments, filed a biU asking that the company be required to declare such dividend, and the United States Circuit Court for the southern district of New York, made a clause in accordance with the prayer of the bill. The United States Supreme Court reversed the decree and ordered the bill to be dismissed. The court reviewed the circumstances which seemed to show that "the use of the surplus fund in the way in which it was applied was imperatively demanded by the interests as well of creditors, share-holders and bond-holders as of the public," and cited the testimony of President Jewett — "In my judgment, if these improvements had not been made, and most judiciously made, the company could not not have paid its fixed charges. It Avould have again gon& into bankruptcy, and the entire interest of the stockholders been destroyed." The question under what conditions the right of the preferred stockholders to a dividend, as stipu- lated by the agreement, and articles of association, was discussed in the following terms : "That instrument did, indeed, provide for preferred stock- holders being paid a dividend of six per cent before any divi- dend was paid to common share-holders. But it was not intended to confer upon the former an absolute right to a dividend in any particular year, dependent alone on the fact, or the official ascertainment of the fact, tha.t there were profits in that year, after paying operating expenses and fixed charges. The words of the thirteenth article, 'as declared by the board of directors,' do not qualify the words 'dependent on the profits of each particular year.' They should rather be read in connection with the preceding words, ' non-cumu- lative dividends, at the rate of six per centum per annum, in preference to the payment of any dividend on the common stock.' * * What was stipulated to them as holders of preferred stock in the new company was not a, debt payable in every event out of the general funds of the corporation, but a dividend, 'as declared by the board of directors,' and payable out of such portion of the profits as should be set apart for distribution among share-holders ; non-cumulative. CORPORATIONS. 277 because 'dependent on tlie profits of each particular year/ and not to be fastened on the profits of succeeding years. That the parties contemplated the declaration of a dividend, and not a mere statement of net profits during a designated period, is made evident by the requirement that ' dividends ' to preferred stockholders should be paid ' in preference to the payment of any dividend on the common stock.' This lan- guage is not consistent with the theory that the holders of preferred stock were entitled to six per cent thereon simply because there were profits, and irrespective of any declaration of a dividend. A declaration of profits, as in itself, and with- out further action by the directors, entitling share-holders to dividends, is unknown in the law, or in the practice of corpo- rations. Dividends are ' declared ' by some former act of the corporation; the question whether there are or are not profits being settled entirely by the accounts of the company as kept by subordinate officers, not by the mere statement of directors as to what appears upon its books." (N. X., L. E. & W. R. R. Co. V. Nichols, 7 Sup. Ct. Rep., 209; Revers- ing 15 Fed. Rep., 575.) Payment of Capital in Froperty.— Over-valuation.— If Made in Good Faith, Stockholders not Liable to Creditors.— The case of corporations formed with a certain nominal capital, paid in largely by putting in property at a valuation sometimes extravagant, occurs so often that another section may be not unprofitably given to this subject. In Coit v. North Carolina Gold Amalgamating Company, 7 Sup. Ct. Rep., 231, the United States Supreme Court (1887) again passed on a case of the kind. The company named was formed underthe laws of North Carolina with a minimum capital of $100,000, and power to increase it, by a majority vote of the stock- holders, to two and a half millions. The charter provided that the subscription to the capital stock might be paid "in such installments, in such manner, and in such property, real and personal," as a majority of the corporators might deter- mine, and that the stockholders should not be liable for any loss or damages, or be responsible, beyond the assets of the company. Previously to incorporation the corporators had been engaged in mining operations, and after obtaining a .278 LEGAL AND COMMERCIAL PRECEDENTS. charter the capital stock was paid by the property already in the business, valued at |100,000. The plaintiff was a judgment creditor, and being unable to collect his debt of the company, by reason of its insolvency, he sought to make the stockholders personally liable, as if the whole amount of capital had not been paid in, alleging that the valuation put upon the property, reckoned as payment of the capital, was illegally and fraudulently made at an amount far above its actual value. It was alleged that it consisted only of a machine for crushing ores, the right to use a patent called the Crosby process, and the charter of the proposed organization ; that the articles had no market or actual value; therefore that the capital stock issued thereon was not full}' paid or paid to any substantial extent ; and that the holders thereof were still liable to the corporation and its creditors for the unpaid subscription. In the United States Circuit Court for the eastern district of Pennsylvania, where the bill was filed, it was dismissed, and on appeal the decree was confirmed. A point in the case, involving an increase of the capital stock to f 1,000,000, upon the purchase of certain lands, the subsequent cancellation of the increased stock, and a reduc- tion of the capital to its original amount, is hardly necessary to be noticed here. Upon the main issue the appellate court •expressed its views as follows : " If it were proved that actual fraud was committed in the payment of the stock, and the complainant had given credit to the company from a belief that its stock was fully paid, there would undoubtedly be substantial ground for the relief asked. But where the charter authorizes capital stock to be paid in property, and the share-holders honestly and in good faith put in property instead of money in payment of their subscriptions, third parties have no ground of complaint. The case is very different from that in which subscriptions to stock are payable in cash, and where only a part of the installments has been paid. In that case there is still a debt due to the corporation, which if it becomes insolvent, may be sequestered in equity by the creditors, as a trust fund, liable to the payment of their debts. But where full paid stock is CORPORATIONS. 279 issued for property received, there must be actual fraud in the transaction to enable creditors of the corporation to call the stockholders to account. A gross and obvious overvaluation of property would be strong evidence of fraud. But the alle- gation of intentional and fraudulent under-valuation of the property is not sustained by the evidence. The patent and the machinery had been used by the corporators in their busi- ness, which was continued under the charter. They were immediately serviceable, and therefore had to the company • a present value. The corporators may have placed too high an estimate upon the propert}^, but the court below finds that its valuation was honestly and fairly made; and there is only one item, the value of the chartered privileges, which is at all liable to any legal objection. But if that were deducted, the remaining amount would be so near to the aggregate capital that no implication could be raised against the entire good faith of the parties in the transaction." LiabUitij of Directors.— The well established doctrine of equity that directors of a corporation cannot escape the liabilities and restrictions which the law places upon persons acting in a fiduciary capacity, has been pared down and trimmed away by many of our coui'ts. Soiiietimes on the ground of looking at the relative amount of plaintiff's hold- ing of stock, or the time when he acquired it, or the motives imputed to his suit, or by invoking the doctrine of acquies- cence, or the notion that if a majority of stockholders could consent, a minority cannot object. The most recent re-assertion of the wholesome principles established in the English Chancery, and fully applied by Chancellor Walworth in this State, is in a decision rendered in the Franklin County (Ohio) Common Pleas. Columbus & Hocking Valley Railroad Company v. Stevenson, Burke & Co., (reported in 19 Weekly Law Bulletin, 27.) The familia,r rules as to trusts were there applied to the fund raised by the sale of corporation mortgage bonds. The Court held that such a fund, raised for purposes stated in the mortgage pursuant to statute, is a trust fund, to be 280 LEGAL AND COMMERCIAL PRECEDENTS. used in good faith by the corporation forthe purposes stated in the mortgage. Where such trust fund, amounting to $8,000,000, has been used by the directors of the railroad corporation to purchase from a majority of themselves and from other persons the entire capital stock of a mining corporation, of the value of only $800,000, and such use of the fund was beyond the ' powers of the railroad corporation, andcontrary to theterms of the mortgage: held, that such use of the fund is prima facie a violation of the rights of the owners and holders of the bonds and an injury to them ; which equity, upon their application, could have prevented by injunction. The directors of a corporation are its agents, and their relation to it is generally one of confidence and trust. The law does not permit them to purchase, for it, their own prop- erty, or property in which they are largely interested. There- fore when the directors of a railroad company have purchased, from themselves and others, the entire capital stock of a mining corporation, and paid for the same with the corpora- tion funds, the contract is void, and an action lies against them in favor of the company, to account for the funds so received by them. And the rule is the same, though a minor- ity of the directors had no interest as sellers in the property purchased. The company is not estopped from maintaining the action by the fact that at the time of the piirchase of the stock and use of the funds, the directors owned all its capital stock, and BiS stockholders unanimously ratified what they, as directors, had done. The directors having, from the proceeds of the bonds, dis- charged a private indebtedriess due from them to a third party who held their stock in the plaintiff company as collat- eral thereto, the company may follow the funds so used into the stock and claim an equity in it. Such collateral stock, after redemption, was held by defend- ants as trustees for the plaintiff, and the latter, though not empowered to traffic in its own stock may, as cestui que trusty have an equity therein. CROPS. 281 CROPS. luien on for Services.— 1- A laborer, who has been employed byafarmer to harvest a crop is not entitled to a lien upon it, for the value of his work and services, in the absence of a special contract creating it, to be followed by an actual and physical change of possession in the nature of a pledge. (McDearmid v. Foster, (Oregon,) 12 Pacific Reporter, 813.) 2. An agreement by which plaintiff was to work upon defendant's farm, the latter to furnish the mules and imple- ments necessary therefor, the profits, after paying expenses, to be divided equally, does not create between the parties the relation of debtor and creditor, such that the plaintiff is enti- tled, under Code of North Carolina, §§ 1781, 1782, to alien upon the crops for the work so performed, but abandoned before completion, for the failure of the defendant to perform his part of the agreement. (Grissom v. Pickett, (N. C.,) 3 South-Eastern Reporter, 921.) 3. A provision in a chattel mortgage declared a lien, on certain naval stores not then in existence, which the mort- gagor consented to ship to the mortgagees during the year. The mortgage failing for insufiiciency in the granting clause, held, that such provision could not, under the South Carolina statutes, be considered to create an agricultural lien. Such liens were created by statute to favor and encourage the cultivation of the soil, and the courts cannot extend the statutory provision so as to cover the case stated. (Whil- den V. Pearce, (S. C.,) 2 South-Eastern Reporter, 709.) Advances On.—l. A mortgagee of a cotton crop, who in order to gather and secure the crop makes further advances to the mortgagor, does not thereby obtain a lien on the pro- ceeds of the sale of the crop that takes precedences of a lien created by a second mortgage or deed of trust executed to a trustee to secure an indebtedness due from the mortgagor to his wife for moneys advanced to him. (Weathersbee v. Far- rar, (N, C.,) 1 South-Eastern Reporter, 616.) 2. An agreement that in consideration of advances to make a crop, the cropper sells, transfers, and agrees to deliver 282 LEGAL AND COMMERCIAL PRECEDENTS. enough of said crop to cover the advances, only secures advances made after its execution. (Lowdermill v. Boslick, (N. C.,) 3 South-Eastern Keporter, 844.) Landlord and Tenant.— Under Mansf. Dig. Ark., § 4452, providing that, where land is rented for a share in the crop, no mortgage or conveyance of any part of the crop made by the person cultivating the land shall be valid, unless made with the consent of the employer or owner of the land or crop, which consent must be endorsed on such mortgage or convey- ance, when their respective rights in the crops have been ascertained and adjusted, and the laborer's or tenant's part specifically set aside to him, he may mortgage it or dispose of it as he will, independently of the landlord's consent. And a mortgage made in such case of the laborer's or tenant's share, without the landlord's consent, will prevail as against a subsequent purchaser from the tenant or laborer. (Parkes V. Webb, (Ark.,) 3 South-Western Keporter, 521.) Priority of Liens On.— A tenant agreed with his landlord to pay the taxes due on the leased premises for a given year. The tenant subsequently executed a mortgage on his crop to secure a merchant for supplies to be furnished during the year. The crop proved insufficient to pay both the landlord and merchant, and the tenant delivered three bales of cotton to the former and turned over the balance of the crop to the merchant as mortgagee. Held, that as the agreement of the tenant was to pay the taxes due on the specified tract of land, for a given year, the landlord had a statutory claim to the three bales of cotton which was paramount to the claim of the mortgagee. (Eoberts v. Lewis, (Miss.,) 2 Southern Keporter, 72.) Executors and Administrators.— Undev Code of Alabama, 1876, §2439, which enacts that " The executor or adminis- trator may complete and gather a crop commenced by the decedent," and § 2440, which makes a crop, completed by the executor, assets in his hands, it is optional with the executor to complete and gather a growing crop. (Blair v. Murphree, (Ala.,) 2 Southern Reporter, 18.) CUSTODY OF PROPERTY. 283 Dower.— li the executor does not enter and make the crop, and thereby convert it into assets of the estate, it will belong to the widow, under Code of Alabama, 1876, § 2238, which provides that the widow may retain possession of the dwell- ing-house, and the plantation connected therewith, until her dower is assigned, free from payment of rent. CUSTODY OF PKOPERTY. Gratuitous Care of Valuables,— Loss Without Negligence, — Bailee not Liable S. deposited bonds valued at $4,500 with his brother-in-law, N., for safe keeping, and four of them were afterwards stolen. In an action to recover their value, S. alleged both negligence and conversion, but the Supreme Court failed to sustain either branch of the plaintiff's case. The theft was committed by a woman who entered the house by the street door early in the morning, went up stairs into the room where the bonds were kept, locked in a bureau drawer, broke open the drawer, and then broke the lock of the box containing the bonds, taking also some papers and jewelry belonging to N., and escaping from the house without meeting any one. With respect to the charge of negligence the Court said : " The proofs show that the bonds were left with the defend- ant for safe keeping, without any reward or profit, and that he agreed to take care of them solely for the accommodation of the plaintiff; that he put them in a box in which he kept his own valuable papers, and put the box in the bureau drawer in his bedroom, and that both box and drawer were locked ; that this was done with the knowledge and consent of the plaintiff, and that they remained there with his con- sent. Under these circumstances the plaintiff cannot reason- ably say there was any negligence in regard to the place in which the bonds were kept. If this be so, there is no evidence to show that they were subsequently lost by any wrongful act or fault of the defendant. Hewas notrequired, of course, to keep the doors of the chamber room in the third story locked in the day-time, much less could he be required to keep watch against such a bold and daring theft as this. 284 LEGAL AND COMMERCIAL PRECEDENTS. "There is a well recognized distinction in regard to the case and diligence required of a bailee for hire, and one who under- takes to keep property without reward, and solely for the accommodation of another." A previous decision is cited in which it is said "this court has laid down in explicit terms what seems to us the most satisfactory rule or test, by which the liability of unpaid bailees is to be determined, namely, that he is bound to observe such care in the custody of property committed to his keeping, as persons of ordinary prudence, in his situation and business, usually bestow in the custody and keeping of like property belonging to themselves." (Schermer v. Neu- rath, 54 Maryland Reporter.) Bailment,— Special Bank Deposits, etc. SECTION I. Bailment defined. — "A delivery of goods in trust for some special object or purpose." — Blackstone. SECTION II. Degrees of care required in the custody of property on bailment : 1. Slight care, which is that degree of care which every man of common sense, though very absent and inattentive, appUes to his own affairs. 2. Ordinary care, which is that degree of care which every person of common and ordinary prudence takes of his own concerns. 3. Great care, which is the degree of care that a man remarkably exact and thoughtful gives to the securing of his own property. (1 Parsons on Contracts, 87.) SECTION III. There are accordingly, three degrees of negligence — 1. The absence of slight care constitutes gross negligence; 2. The absence of ordinary care constitutes ordinary negligence ; 3. The absence of great care constitutes slight negligence. (1 Parsons on Contracts, 87.) SECTION IV. Bailees themselves are distributed by Parsons into three general classes corresponding with these degrees of care and negligence : CUSTODY OF PROPERTY. 285 1. Where the bailment is for the benefit of the bailor alone. In this class, but slight care is required of the bailee, and he is responsible only for gross negligence. 2. WTiere the bailment is for the benefit of the bailee alone. In this class, the greatest care is required of the bailee, and he is responsible for slight negligence. 3. Where the bailment is for the benefit both of bailor and bailee. In this class, ordinary care is required of the bailee, and he is responsible for ordinary negligence. Class I. DEPOSIT FOR THE BENEFIT OF DEPOSITOR ALONE. — LIABILITY OF BANK FOR SPECIAL DEPOSIT. — POWER OF NATIONAL BANKS TO RECEIVE SUCH DEPOSITS. — LIABILITY OF BANK FOR SPECIAL DEPOSITS. Illustration. — One A. deposited in the Essex Bank, for safe keeping, a large quantity of gold. The treasure was placed in a cask, and kept within the bank vault in the same manner, and with the same care, as other special deposits, and as the specie of the bank itself. It was, however, stolen by the cashier and chief clerk, who thereupon absconded, having also defrauded the bank of the greater part of its capital. The cashier and clerk supported fair reputations up to the time of the discovery of their crime, and the directors were not chargeable with knowledge of the robbery. Held, by the Supreme Court, that the bank was not liable to A. for the loss. (Foster v. The Essex Bank, 17 Massachu- setts, 479.) SECTION v. The question, whether the ofiicers of a bank can make the bank the gratuitous bailee of a special deposit and render it liable in any event whatever, was presented in the above case, and the point was, as observed by Judge Eappallo of the New York Court of Appeals, "argued by the most eminent counsel of the period, and decided by a court of distinguished reputation," in the afiirmative. The power of the national banks to incurthe liability of gratuitous special depositaries was, however, subsequently called in question, and denied in two Vermont cases, but it was affirmed bvthe Supreme Courts' 19 286 LEGAL AND COMMERCIAL PRECEDENTS. of Massachusetts, Pennsylvania, Iowa, Georgia, the New- York Court of Appeals, (the Supreme Court of the United States,) and is now the settled doctrine. SECTION VI. The question of negligence is one of fact for the jury : Ulustration. — Pattison deposited a package of iDonds with Ballard, teller of the Syracuse National Bank, but who some- times acted as cashier, and the package remained in the bank safe some two years, the owner taking it out occasionally to detach the coupons. The safe was so situated as to be accessible to a person entering the bank from the street, and the employees were so placed that at times the safe was not in their view. The bonds were stolen in the day-time, while the bank was open, and it was in evidence that the safe was sometimes leffc open. The court left it for the jury to say whether there was or was not gross negligence in the care of the bonds, and the jury found that there was. Held, by the Court of Appeals, that the question was prop- erly submitted to the jury, and the court said — "The jury could from the evidence have found that the theft was com- mitted by some person entering from the street and finding the safe open, who abstracted the plaintifi^'s package without being observed by any one in the room, and that leaving the property thus exposed was gross negligence. * * * The fact that property of the bank was stolen at the same timefromthe same place is not conclusive against the allega- tion of gross negligence." (Pattison v. Syracuse National Bank, 22 A. S. J., 506.) (1880.) SECTION VII. For it is not enough that a careless person 'bestows the same degree of care upon the property of another in his custody as he does upon his own : Illustration. — B., a broker, undertook, without reward, to carry a bag of gold belonging to A., from New York to Bos- ton. He went on board the Providence boat, having the gold in two bags in his valise, with other gold of his own, and put it in a berth in the forward cabin. He made inquiries whether the valise would be safe, and was told that if it con- tained valuables it had better be put into the custody of the DEBTOR AND CREDITOR. 287 captain's clerk, under lock and key. He nevertheless left the property where he had first placed it, and the boat lying at New York all night he went to the theatre, and returning slept in the middle cabin. In the morning he discovered that one bag of the gold was gone, and went on deck to send information of the loss leaving his vahse containing the other bag of gold on a table in the cabin. On his return this was also missing. Held, by Story, J. : " The present is a case of a mandatary of money. Such property is by all persons, negligent as well as prudent, guarded with much greater care than common property. The defendant is a broker, accustomed to the use and transportation of money, and it must be presumed that he is a person of ordinary diligence. He kept his own money in the same valise, and took no better care of it than of the plaintiff's. Still, if the jury are of opinion that he omitted to take that reasonable care of the gold which bailees without reward in his situation usually take, or which he himself usu- ally took of such property, under such circumstances, he has been guilty of gross negligence." (Tracy v. Wood, 3 Mason, 132.) DEBTOR AND CREDITOR. Payment by Paper Security.— Substitution of One Acceptance for Another.— The Kiverside Iron Works of Wheeling, W. Va., sold a quantity of iron rails, etc., to the Great Western Iron Company of Crystal Falls, Mich., and received therefor the individual acceptance due in four months of S. C. Hall, presi- dent of the company. The following acknowledgment was made : " We acknowledge receipt of your valued favor of the 26th inst., covering acceptance for $853.87 in settlement of account as stated." The acceptance was not paid at matu- rity, and subsequently an agent of the Eiverside Works went to Crystal Falls commissioned to make settlement of the sus- pended account. He met Hall on the train, and was assured by him that his company only needed a little time, that "in sixty days he thought there wouldn't be any question at all butwhat they would be able to pay all of their indebtedness." 288 LEGAL AND COMMERCIAL PRECEDENTS. Mr. Hall said "he would make settlement with the paper of the Great Western Iron Company on sixty days time, if that would be satisfactory — if the time would be satisfactory — and that there would not be any question in his mind but what it would be paid at maturity." The agent also made some inquiries, the results of which he regarded as confirmatory of Mr. Hall's statements. Thereupon the Great Western Iron Company's paper was given in exchange for Mr. Hall's own dishonored acceptance, and the latter surrendered. On the maturity of the substituted security that too was unpaid, and the creditors sued Hall on the original debt, for so many car-loads of iron. The jury gave them a verdict for the amount of their claim. Hall appealed, and the Michigan Supreme Court reversed the judgment, ordering a new trial. "We think," said the Court, "that all the testimony shows that the first draft accepted by the defendant (Hall) was received by the plaintiff in payment for the property." In support of this view the following summary of evidence was given: "It is quite clear that when the iron was purchased it was for the use of the Great Western Iron Company ; also that the defendant gave his own individual acceptance therefor, due in four months, and received credit for the same on the books of the Great Western Company. When the draft became due the defendant gave the acceptance of the com- pany, for what was before his individual paper, due in sixty days, and was then charged with the amount of the compa- ny's acceptance upon the company's books. When the defendant gave the plaintiff's agent the Great Western Com- pany's acceptance for his own liability, it does not appear that he was asked to accompany the same with his individual liability in any way, or that he promised it to the plaintiff in any form. If the plaintiff expected that liability to continue for sixty days longer, the ordinary way of securing it would clearly have required the draft to have been drawn in such a manner that he would have indorsed it. This was not done, nnd it has a bearing upon the question in what manner and for what purpose the acceptance of the company was received, whether as payment or as security. This circumstance, taken DEBTOR AND CREDITOR. 289 in connection with the fact that the defendant's individual acceptance was regarded by the plaintiff as a settlement of the account for the iron purchased, and which was delivered up unconditionally to the defendant, is, I think, clearly suffi- cient, prima facie, to show that the acceptance of the com- pany was received by the plaintiff as payment. * The surrender of the evidence of the debt or liability strongly ■ indicates payment, as whatever is received therefor is to be regarded as payment. I have been unable to find any evi- dence in the case tending to contradict the prima facie case that the company's acceptance was received in payment of the first draft and defendant's acceptance thereon." (River- side Iron Works v. Hall, 7 "Western Reporter, 350.) Whether Note is Fayment.— Different Law in Different States. —When One or the Other Controls Stevens, a merchant in New Hampshire, was indebted to Gilman, of Massachusetts, on account of goods sold to him in Boston by the latter. Gilman's traveler called on Stevens for payment, and was offered notes, which he forwarded to his principle, who retained them and had them discounted. Before their matu- rity, however, he began suit on the account, and a few days afterwards paid the bank the amount of the notes and took them up. The question was, whether Gilman could then sue on the account, without reference to the time when the notes became due. In New Hampshire, where the debtor resided and the notes were executed and payable, the acceptance of a note does not operate as a payment of the indebtedness for which it is given, unless there is a special agreement to that effect. In Massachusetts the reverse is the case, and in the absence of any agreement on the subject, the note constituted payment. Under the Masssachusetts rule Gilman could not have sued on the account, but must have waited and brought his action on the notes. But the New Hampshire Supreme Court held that the transaction was governed by New Hampshire law, that Stevens continued to be indebted on the account, and conse- quently that Gilman could then sue and recover. (Gilman v. Stevens, July 31, 1885.) 290 LEGAL AND C0MMEBCL4.L PRECEDENTS. Debtor's Conveyance to Wife and Children,— When Less than Statutory Exemption, Cannot be Attached by Creditors.— ^i^- iam M. Carr, while indebted to Letitia Faurote, bought a piece of land, pa.ying for it with his own money, and had it deeded to his wife and minor children. At the time of the conveyance and thenceforward, Carr was the owner of a less amount of property' than would have been allowed him by the exemption laws of the state. Letitia brought suit to have the conveyance set aside, in order to subject the prop- erty to the payment of her debt, but the decree was denied in the lower court, and judgment affirmed by the Indiana Supreme Court. "We are unable to see," it was observed, "how the rights of a creditor are in anyway impaired in case his debtor in good faith either sells or gives away property which is exempt, and beyond the reach of any process which might be invoked for its subjection, even in the hands of the debtor. It is only where the debtor voluntarily disposes of property which the creditors might have subjected to the payment of this debt that the law raises an inference of fraud." (Faurote v. Carr, 6 West. Rep., 281.) (1886.) Sureties of a Failing Debtor may Protect themselves by Buy- ing his Stock of Goods, though Creditors may be Hindered and Delayed.— O^ae Besel, on the 22d of March, 1883, made a mortgage to Meyer on his stock of goods, to secure a debt of f450. One Schivelbline, about the same time, sued Besel for a debt of fiOO. Regenhardt, Kempe and Popp, being sureties for Besel, became alarmed, and on the 26th of April following purchased Besel 's entire stock of goods, agreeing to pay him therefor |2,100. They received a bill of sale, and at once took possession of the property. In payment therefor they gave their notes to Meyer and Schivelbline, and thus satisfied the mortgage and pending suit. They also gave their notes to other persons in payment of debts of Besel, upon which they or one or more of them were sureties. The debts thus assumed, including a rent account, amounted to about $2,000. Other creditors brought suits and attached the property. Regenhardt, Kempe and Popp interpleaded, setting up their purchase. An attaching creditor took issue, DEBTOR AND CREDITOR. 291 alleging tliat the sale was fraudulent. The Missouri Supreme Court reversed a judgment of the Cape Gii^ardeau Court of Common Pleas against the interpleader, saying— "The evi- dence in general tends to show that the interpleaders paid for the goods the fair value, and that they purchased the same for the sole purpose of protecting themselves, because of their suretyship for Besel on the debts assumed. They had a per- fect right to buy the goods for that purpose, though the pur- chase might operate to hinder and delay the other creditors in the collection of their demands, and though to their knowl- edge Besel intended the sale should have that effect, provided they did not participate in the fraudulent purpose of Besel." (Albert v. Besel et ah, 8 Western Reporter, 305.) After Admitted Insolvency, and Offer of Settlement by Com- position, Persistence in Carrying On the Business,— Creditor's Might to Injunction and Receivership.— ^. firm of grocers doing business in Petersburgh, Va., sent the following circular to their creditors : Petersburgh, 18th June, 1884. To . Dear Sir: We owe by bills payable and open accounts 126,552.19 Our assets are stock in hand, bills receivable and open accounts that we consider good 14,156.81 We offer to our creditors fifty cents on the dollar, to be paid as follows: Twenty cents on the dollar, first November, 1884; twenty cents on the dol- lar, on the first March, 1885 ; and ten cents on the dollar in cash as soon as our banks begin to discount paper, which we believe will be in a very few days. The deferred payments to carry interest at the rate of six per cent per annum. We make no preferences, but make the same proposition to all. Please let us hear from you at as early a date as practicable. Yours truly, Patterson, Madison & Co. The facts are further recited, as follows, in the opinion of Judge Hughes, of the United States Circuit Court, Virginia, E. D., before whom the case came on a bill asking for the appointment of a receiver : "Meanwhile, and until the 8th of July, their business went on as before, except that they discharged two clerks, and made purchases of only such goods as were necessary to fill orders, buying both for cash and on credit. They continued to collect and sell, and they paid some of their debts in full. More than a majority of their non-resident creditors answered 292 LEGAL AND COMMERCIAL PRECEDENTS. accepting their propoeition of compromise; a few of them' accepting absolutely, but most of them in a form more or less qualified and conditional. The complainants and one or two other creditors refused to accept. In the course of a short time their proposition for compromise, after its acceptance as aforesaid, assumed features not contained and expressed in the circular of June the 18th, among them, the avowal that some of their creditors had been and others would be, paid in full. The claims of these creditors, it was pretended, were ' confidential debts which stood upon the highest ground of personal honor and obligation.' One of the creditors, in a conversation with the debtors, on the first of July, pressed them to make an assignment, but they refused, and gave him- the impression that if any creditor should annoy them by suit they would leave him out, or postpone him to the other cred- itors. The business went on until the 8th of July, when the marshal of the court took possession, under an order, returnable on the 10th, to show cause why a receiver should not be appointed, and why a preliminary injunction against interference with the effects of the firm should not be granted." In rendering judgment, the Court said — "The case is in its facts a novel and peculiar one. I do not know any case like it in the reports. * * * Tjjg i^in complains that the defendants refuse to make assignment of their effects for the payment of their creditors ; that the firm have no credit, and are still going on with a feeble and crippled business, consum- ing by expenses the fund out of which creditors must be paid ; that defendants announce tlleir purpose thus to continue their business until October if necessary. * * * * "From and after the acceptance by any creditors of the proposition for compromise made by the defendants on the 18th of June, 1884, all the assets of the firm, including prop- erty and choses in action, became a trust fund expressly dedicated to the payment, without preferences, of the fifty per cent of debts promised by the circular letter. Ofifering no indorsements, tendering no security, insolvent themselves, their proposition could be nothing else than a dedication of their assets to the fulfillment of the terms of the composition. * * * * There was the case of a firm, which after DEEDS. 293 dedicating and being presumed by law to have dedicated all their effects as a trust fund to the payment of all their debts pro rata, yet going on with the business as if the property was still their own, paying off debts in full, and subjecting an exceedingly perishable trust fund to the hazards and losses of a business which had brought them while in good credit to hopeless bankruptcy. « * * Tj^e crucial question is whether equity has any remedy for such a state of things. ***** There is but one mode in which com- plainants can insure the application of these assets to the purposes of the trust imposed upon them, and that is by the intervention of the court through the instrumentality of a receiver and an injunction." Decree was made accordingly. (Fink V. Patterson, 21 Federal Keporter, 602.) DEEDS. Absolute Deed Intended as a Mortgage.— Parol Evidence of Intent must he Convincing.— G. conveyed to P., by an absolute deed, a tract of land for a consideration of $20,000, taking back a mortgage for the amount in four equal promissory notes. Afterwards C. claimed that the deed was intended as a mortgage, P. to hold the land until he could sell it to advantage, and dividethe profits with C. The latter brought a bill in equity to have it so declared. There was no written evidence to contradict the tenor of the instrument. In the lower court it was held that the agreement set forth, if valid, would make C. a beneficiary under the deed, would create a trust in P. concerning or relating to land, and not being in writing and properly signed, was void under the statute of frauds. In the United States Supreme Court, the judgment in favor of P. was affirmed, but on a different ground, as follows : " If the conveyance is in fee, with a covenant of Avarranty, and there is no defeasance, either in the conveyance or a col- lateral paper, parol evidence to show that it was intended to secure a debt, and to operate only as a mortgage, must be clear, unequivocal and convincing, or the presumption that the instrument is what it purports to be must prevail." (Cadman v. Peter, 118 United States, 73.) 294 LEGAL AND COMMERCIAL PRECEDENTS. Agreement to Exchange Warranty Deeds. — Acceptance of One without Warranty .—No Relief in Equity cCgainst Incum- brance.— When Written Instrument Cannot be Reformed.— In delivering the opinion of the New York Court of Appeals (Whittemore v. Farrington, 1879, 8 ,Eep., 506,) Judge Eapallo stated the following facts and principles : "A party who under a verbal agreement for the conveyance to him of lands is entitled to insist on a good title and a deed with covenants, pays the consideration and is then tendered a deed without covenants. He demands a deed with cove- nants, and this is refused ; he then accepts a deed without covenants, and believing the title to be clear, records it, and continues to keep and improve the property. An incum- brance at the time unknown to both parties is afterwards discovered. It is conceded that no liability rests upon the grantor in such case. In the absence of fraud or covenants a purchaser takes the title at his own risk. Then do these facts thus stated entitle the plaintiff to any equitable relief? We think not. It is beyond the power, even of a court of equity, to make contracts for parties. The jurisdiction to reform written instruments in cases free from fraud is exercised only where the instrument actually executed differs from what both parties intended to execute and supposed they were executing. And a mistake will be corrected in equity only on the clearest proof, and then only by making the instrument conform to what both parties intended. But an instrument or covenant, the nature and contents of which are fully com- prehended by both parties at the time of its execution, cannot be altered in its terms by the court." Conveyance not Delivered Gives no Title.— An agreement for an exchange of homesteads was made between Piatt Smith and Mrs. Waite. An agent of W., in order to clear her title from a tax lien, redeemed and had the tax deed made to S. W. subsequently executed her own deed to S. and wife, and the two were filed by Herod, her agent, at the same time, for record. The heir-at-la,w of S. claimed that as the tax deed to him was prior in date it gave him alone the title, andW. had nothing afterwards to convey to him and wife. But the DEEDS. 295 •Supreme Court said in reply, that "no title thereunder had vested in Smith, because the deed had never been delivered to him ; which deed, in fact, as we have said, was never delivered to Smith, but was filed for record by Herod under the belief . that such was the best way to perfect the title. Before it was filed the deed from Mrs. Waite was executed. Smith had knowledge of this deed, dictated it, and under it the title vested in Piatt Smith and wife as joint tenants or tenants in common, and the former could not procure a tax deed to the prejudice of his co-tenant." (Smith v. Smith, 68 Iowa, 608.) Conveyance of Dower Right,— Description of Interest Con- veyed. — Fee-Simple Interest, Derived by Ascent, leftin Chrantor, — On the 29th of January, 1869, Mary E. Holman, widow of Soloman Holman, made a deed to Aaron N. Dukes, of her dower right in a certain piece of land, conveying "all her right, title and interest, the same being a life estate in the undivided one-third part" of the property; "the said grantor, her heirs and assigns, hereby covenanting with the grantee, his heirs and assigns, that the title and interest in and to said premises hereby conveyed is clear, free, and unin- -cumbered; and that she is lawfully seized of the premises aforesaid as of a sure, perfect life estate of inheritance, and that she will warrant and defend the same against all claims whatever." At the time these covenants were made Mary E. Holman was not only the owner of a life estate in the premi- ses, but entitled to a fourteenth interest in fee-simple, derived by inheritance from one of her children, who died after her husband, but several years before her conveyance to Dukes. She brought a partition suit to recover this interest. It was urged in defense that Dukes purchased without any knowl- edge that there had ever been such a child ; that he platted the property into lots and made permanent improvements thereon ; that he bought and paid for the interest of all the other children, paying full value for the land ; that with full knowledge of the death of the child in question, Mrs. Hol- man falsely represented that she held only a dower interest in the land, and that she was thus estopped from claiming any other interest. The Miami County (Ind.) Circuit Court 296 LWAL AND COMMERCIAL PRECEDENTS. decided the case on demurrer in favor of Dukes, but the judg- ment was reversed by the Supreme Court of Indiana. Said the Court— " All the interest that Mrs. Holman assumed to convey, and all that she did convey, was her interest in dower as widow of Soloman Holman. * * « If the appellee contracted Avith her for a life interest, and got what he con- tracted for, he has no cause for complaint against her. * * ' As he received the interest he bargained for, he cannot insist that, as she did not convey all her interest she is estopped." (Holman v. Dukes, 8 Western Reporter, 386.) An Unrecorded Deed, Accompanied by Possession and Acts of Ownership, is Good against Subsequent tTudgment Creditors, — Stephen White, in 1865, made a deed of land to his son JohnC, who gave in return an agreement to provide a home and support for his father during life. Stephen White was at this tim6 free of debt, and had considerable other property. The deed was delivered but not recorded. The son entered into possession, claimed ownership, and exercised all the rights of an owner. In 1879 Stephen executed another deed to his son John C. and wife, for the same consideration, and the latter deed was recorded. Meanwhile, in 1877, Stephen became surety on a bond, and in 1880 judgment against him as such surety was entered, execution levied on the land in question, and a bill filed to set aside the deed of 1879, as an obstruction to the levy. In defense John C. and wife set up thedeedof 1865, and the Illinois Supreme Court holding that it was valid, and passed the title, said that the validity or invalidity of the deed of 1879 was a matter ot no moment. Relative to the want of record, it was said — "Tlie object of recording a deed is to aiford subsequent purchasers or incum- brancers notice ; but the recording of a deed is not the only method under which such persons may receive notice of a conveyance. Where a person purchases a tract of land, and obtains a deed, and enters into the possession of the land, and continues in the possession as owner, such possession is notice to all the world of the grantee's rights in the premises under his unrecorded deed. As held in Coan v. Olsen, 91 111., 273, actual occupancy is equal to the record of a deed under which the occupant claims, and the purchaser is bound to DEEDS. 297 inquire by what right or title he holds." (Higgius v. White, 6 Western Reporter, 3-t5.) (1886.) With regard to the consideration for the deed, it was said — "In 1865, when Stephen White executed the deed conveying the land to his son, he was free from debt ; he retained on his premises after this conveyance |10,000 worth of property, under which circumstances, if he saw proper to make a settle- ment on his son, who was an only child, he had a right to do so. * * * Higgins cannot complain unless he was a creditor at the time, which he was not, or unless the convey- ance was made by White with a view of contracting future fraudulent indebtedness, which does not appear." Boundaries. — Conveyances. — JRiver Bank as Boundary Line. — A deed contained the following description : ' ' Beginning at a stake and stones on the west bank of the Unadilla river," thence going by courses and distances around the tract "to the Unadilla river ; * * * thence down the west bank of the Unadilla river as it winds and turns to the place of beginning." The New York Court of Appeals, in fixingthe boundary line in this case, held that if the expression had been "to the Unadilla river" theline would have been carried to its centre, but here the starting point was unequivocally from the bank and not the centre, and Judge Selden said — "From the terms of the deed I think it must be held to convey the farm to the west bank of the river only, leaving the title to the river and the land covered by it in the grantor." (Babcock v. Utter, 1 Abb. Ct. App., 27.) "Is there enough in the language used here," asks the Court, "to exclude the street from the conveyance? The mere mention in the description of a fixed point on the side of the road as the place of beginning or end of one or more of the lot lines, does not seem to be of itself sufficient ; nor will similar language, with reference to monuments standing on or near the bank of a stream, in lines beginning or ending a,t such stream, prevent the grantee from holding to the mid- dle of the water. * * Had the plaintiff run his first line 'by the north-easterly side line of said road,' instead of 'by said road,' and conveyed the land 'lying between the south-westerly side line of said road and Mousam river,' 298 LEGAL AND COMMERCIAL PRECEDENTS. instead of that 'lying between said road and Mousam river/ a different question would have been presented." The Court accordingly held that the grantee under the deed owned to the middle of the road. Another deed described the property conveyed as " Begin- ning on the east side of the Bloomingdale road, at the south- erly corner of lot No. 2 * * * and running thence along the southern boundary of the same south, thence to the north-east corner of lot No. 4^ * * * thence along the same north to the Bloomingdale road aforesaid, thence along the said road, five chains to the place of begin- ning." In construing this description the Court said — "The point of beginning is given as ' the east side of the Blooming- dale road.' The effect is to make the east side of that road a fixed monument to mark the starting point of survey, and it is impossible, without doing violence to the language used, to transfer that monument to the centre of the Bloomingdale road." (Lee v. Lee, 27 Hun, 1.) In another conveyance the description ran as follows: "Beginning at a point on the southerly side of the Wallabout bridge road ; * * * . thence running other courses, thence along the land of Jacobus Lott north 48 deg. and 9 min., west 594 feet to the Wallabout bridge road, and thence along said road to the place of beginning." Here the New York Court of Appeals held that the road-bed was excluded by the terms of the description. (Kings County Fire Insur- ance Company v. Stevens, 1882.) Per contra, the Wisconsin Supreme Court has held that a deed bounding by the south side of a street conveyed title to the centre; (Kneelandv. Van Valkenburg, 46 Wis., 434; and the Supreme Court of Pennsylvania holds that "nothing short of an intention expressed in ipsis verbis to exclude the soil of the highway, can exclude it." (Paul v. Carver, 26 Penn. St., 223.) Deed of Land Bounded by Highway.— Title Extends to Cen- tre when.— When Stops at the Side.— "The well settled doctrine in this State," said the Supreme Court, in Lowy. Tibbetts, (72 Maine, 92,) "is, that a grant of land bounded on a highway DEEDS. 29& carries the fee in the highway to the centre of it, if the grantor owns to the centre, unless the terms of the conveyance clearly and distinctly exclude it, so as to control the ordinary pre- sumption." The description in the deed was as follows: " Situate in the village of S. * * * beginning on the north-east side of the new road, » * * g^j^^ g^^ the southerly corner of the lot as now fenced, * * * and running (course given) by said road * * * to a stake, and thence around the rear of the lot to the place begun at ; also the land now owned by said Low and Mousam river." Contradictory Grants.— After a Fee-Simple is Given, a Sub- sequent Repugnant Disposition of the Estate is Void, — In a deed executed by H. Newman, in consideration of $5 and natural love and affection for his daughter, A. R. Winter, he granted and assigned " unto the said A. R. Winter, her per- sonal representatives and assigns, separate and apart from her said or any future husband," certain leasehold property, "the said A. R. Winter to have and to hold the hereinbefore described property for and during her natural life, and at her death the said property to go and descend to her children by her present or any future husband, and their descendants, in equal shares, per stirpes; but in case there should be no chil- dren, child or descendants of the said A. R. Winter that shall survive her, then the said property to revert to and become vested in the other child or children or their descendants of the said H. Newman, that may be alive at the death of the said A. R. Winter, in equal proportions as the heirs of the said H. Newman, per stirpes, and not per capita." "By the premises of this deed," said the Maryland Court of Appeals, "an absolute and unqualified interest is given to the daughter, and by the habendum that interest is cut down to a life estate, with contingent limitations to her children and the heirs of the grantor. The repugnancy between the two is apparent and irreconcilable." The Court applied the rule as stated in Bla«kstone (2 Com., 98) — "if a grant be to one or his heirs in the premises, habendum to him for life, the habendum will be utterly void," and the estate was held to 300 LEGAL AND COMMERCIAL PRECEDENTS. pass absolutely to A. E. Winter and her heirs. (Winter v. Oorsuch, 8 North-East Reporter, 307.) Delivery of Deedto Effect Transfer of Property. -Peckoam, J., delivered the opinion of the Court. This action was brought by the plaintiff to set aside and have declared void a deed said to have been executed by one Emma D. Owen to Isaac Nelson and Mary Ann Nelson, her father and mother. The deed conveyed certain premises in the county of West Chester belonging to Mrs. Owen, and it was recorded in the clerk's office of that county within a few days after it was executed, which was on the 20th of Decem- ber, 1862. In 1867 the grantor in the deed, who with her husband continued to occupy the premises, executed a mortgage thereon to one Todd for the purpose of securing the payment of |4,000. Subsequently another mortgage was executed by her to the same mortgagee for the purpose of securing the sum of |2,000 additional, made up in part of the interest due on the |4,000 mortgage and the balance in cash advanced. Subsequently an action was commenced to foreclose both mortgages which proceeded to judgment; and a decree of foreclosure was rendered and the premises were sold under that decree and bid in by the mortgagee. No judgment for deficiency was ever entered up against the mortgagor. The mortgagee having received the referee's deed, upon seekingto obtain possession was confronted with the deed of the prem- ises executed in 1862 to said Nelson and his wife; and he found defendant, Isaac Nelson, (his wife having died,) in pos- session, claiming to own the premises by virtue of said deed. This action was tried before a judge without a jury and resulted in a judgment for the plaintiff setting aside the deed from Mrs. Owen to her father and mother, and adjudging the title to have been in her at the time of the execution by her of the mortgages above mentioned, and adjudging that the plaintiff was entitled to the immediate possession of the said premises. An appeal from that judgment was taken to the General Term, where it was reversed and a new trial granted ; but the order granting such new trial did not state that the judgment was reversed on questions of fact. DEEDS. 301 The first question which arises here is upon the finding of fact made by the trial judge that the deed from Mrs. Owen to her father and mother was never dehvered by Mrs. Owen to them or either of them, nor did she ever authorize any person to deliver such deed to such grantees or either of them. As the judgment of the Special Term was not reversed on any question of fact, if there were any evidence to support the findings above stated, it is conclusive upon us upon this appeal. But if there were none, and an exception was duly taken to the finding, a question of law is raised which is receivable here. At the outset the plaintiff claims that no proper exception has been taken to the finding referred to, because the judgment includes in that finding the facts that the deed was voluntary and without consideration, and that the same was never delivered by the grantor or by any one authorized by her ; and he says that there is but one exception to a finding which thus includes three different facts, and that under the ruling in Ward v. Craig, 87 New York, 550, 557, the exception is unavailing. The exception in that case was " to the twenty-fifth finding of fact by such referee, and to each and every part thereof," and there were in that finding separate and distinct findings of fact upon separate, distinct and independent subjects. The exception was treated as a general exception to the whole finding, and as one of the findings upon a separate and distinct subject was clearly sufficiently authorized by the evidence, the exception was held to be unavailing. But the language used in this case, we think, can fairly be regarded as a separate exception to each separate fact contained in the finding. The counsel for defendant stated in his exceptions as filed, that "he excepts to all that part of finding number 11, which finds that the deed therein mentioned given by Emma D. Vernol, was without any real consideration, and that the same was never delivered by the said Emma D. Vernol to the said Isaac Nelson, and Mary Ann, his wife, and that the said Emma D. Vernol never delivered the said deed to any person or persons for said grantees therein named." 20 302 LEGAL AND COMMERCIAL PRECEDENTS. We think this is substantially to be regarded as an excep- tion to each of those findings, within any fair definition of the rule requiring exceptions to be filed to the decision of a court or to the report of a referee. Too minute a subdivision of exceptions is not to be required in such a case. It is suflicient if the attention of the opposite counsel and of the trial court or referee shall be called to the particular point upon which the exception rests. Having done that the exception has filled its purpose, and nothing^ more should be required. Upon a careful review of the evidence and of the pleadings and the course of the trial as manifested in the record, we are of opinion that there was no delivery of this deed is not sup- ported by any evidence in the case, and is against the exist- ence of a fact which was assumed upon the trial and charged in the complaint. By the complaint itself, taking it alto- gether, it is perfectly apparent that it proceeded upon the ground of the execution and delivery of this deed. It assumes that such an instrument has been executed and delivered ^ and upon such assumption it bases the allegations contained therein that the grantor was a woman of weak mind, and did not know or have any idea of the nature of the instrument she was executing, and that she executed it solely upon the representations of the grantees that it was a paper of no importance, and which in nowise affected her rights or interests. The complaint also contained the allegation that the grantees in the deed obtained said conveyance in the manner above stated, and with the view and intent of defrauding the creditors of the said Emma D. Owen, and for the purpose of delaying and defrauding this plaintiff in the collection and obtaining payment and satisfaction of the moneys loaned as aforesaid. This examination of the complaint furnishes conclusive proof that it proceeds upon the assumption that a deed such as is described therein was given by Mrs. Owen and was received by the grantees, but that the whole thing was done for a fraudulent and illegal purpose. No one would ever suspect on looking over the complaint that any issue could be made in regard to the delivery of the DEEDS. 303' deed in question. The answer admits by not denying the execution of the deed, and then denies that the grantor did not know the character of the instrument she was executing, or that she supposed it was a paper of no importance which in no way affected her rights or interests; and it denies that any such representations as alleged in the cotoplaint were made at the time of the execution of the said deed, by the grantees or by any other person. It then set up reasons which existed in the minds of the grantees at the time of the execution of the deed, calling for its execution, and set up the fact that it was duly executed and delivered by the grantor to the grantees, at the time it bore date. A careful perusal of the evidence on the trial conclusively shows that a delivery as following the execution of the deed was assumed. A fact assumed is to be regarded as proved or admitted. {Paige v. Fazackerly, 36 Bart, 592; Cooper v. Bean, 5 Laws, 318.) It is perfectly apparent that the word execution when spoken of in the record, in reference to the execution of the deed, was used bybothsides as tantamount to execution and delivery, as embracing all that was necessary to make a formally valid conveyance by deed. Both sides, in the exam- ination of Mrs. Owen and her brother, used language which assumed that the formal things necessary to be done in the way of executing and delivering this instrument had been done; and the plaintiff's counsel in the examinations of Mrs. Owen and her brother spent considerable time in endeavoring to find out what the motive or intent of Mrs. Owen was in the making of this deed. From the context it appears clearly that the word execution was, as I have said, meant to include the whole formal part necessary for the operation of the deed as a complete instrument. The learned counsel for the plaintiffs, before this Court, in endeavoring to meet the claim that there was no allegation in the complaint of a non-delivery of the deed, stated that there was no objection interposed on the trial to any of the proof on that ground. There was no proof in the case offered by either party, and no point raised, so far as this record 304 LEGAL AND COMMERCIAL PRECEDENTS. shows, upon the question of delivery ; and so there was no opportunity to object to any thing of that kind. The evi- dence as to the execution of the deed was admitted on the question at issue under the pleadings, which was that of fraud ; it was not directed to the specific fact of a delivery separated from and independent of the general fact of the execution of the deed. The plaintiffs should not now be permitted to claim that there was no proof of this independent fact of delivery, when, as has been said, the existence thereof was not only assumed on the trial, but in addition it was substantially charged in this complaint. The finding of the trial court, therefore, (that there was no delivery of this deed,) being at war with the pleadings and in opposition to the fact assumed through- out the trial, and having been properly excepted to, was an error of law receivable in this Court. The finding of non-delivery being thus an error of law the General Term was right in granting a new trial ; and we must afiirm the order, unless it shall appear that upon the other findings in the case, assuming that there was a delivery of the deed, the judgment of the trial court was necessarily correct. This makes it necessary to look still further into the record; and the first question that meets us is as to theflndingof the trial court upon the question of fraud. If there were a delivery of the deed, and no fraud in its purpose, of course that is an end of the case; and it is not necessary to inquire further as to whether the action could be maintained if there were a delivery of the deed and a fraudulent purpose accom- panying it on the part of the grantors. The Court found that prior to September, 1862, it was known to her parents that their daughter, Mrs. Owen, then Mrs. Vernol, was about to marry, and that in such event she intended to occupy and carry onthefarm she owned through the agency of her intended husband, John Owen. It was fur- ther found that the parents and daughter, believing that the marriage was hazardous, and that indebtedness would arise and losses be sustained, with a view to entering into the DEEDS. 305 marriage and engaging in the farming business, and to leave the farm to Mrs. Owen and protect the same from her future creditors, agreed that the daughter should convey the farm to her parents ; and they promised to hold the title to the same in trust for her, and she should continue in possession of the premises and enjoy the proceeds and income thereof; . and in pursuance of such agreement the deed was executed, '■■ and soon thereafter she went into the occupation of the farm with her husband, engaged in the business of farming and sustained heavy losses therein, and became totally insolvent. The Court further found that the deed was colorable only, and made with intent to defraud the creditors of the grantor, and with intent to defraud the subsequent mortgagee, the plaintiffs' intestate. These findings were duly excepted to by defendant's counsel. Of course the same rule holds in this instance as was stated in regard to the findings madebythetrial court thattherewas no delivery of the deed, and if there be any evidence to sustain these findings of fraud we are concluded by them. A careful examination of the whole evidence in the case satisfies us that there is none upon which the finding of the learned trial judge can be based. The Court found (and the evidence upon that point fully sustains the finding,) that at the time when this deed was delivered the grantor owed no debts whatever, and she had in addition to the farm in question some personal property and money, which together amounted in value to $19,000, and the deed was placed on record within four days of its execution. The theory upon which deeds, conveying the property of an individual to some third party, have been set aside as fraudu- lent (in regard to subsequent creditors of the grantor) has been that he had made a secret conveyance of his property. While remaining in the possession and seeming ownership thereof, and has added credit thereby, while embarking in some hazardous business requiring such credit, or the debts which he has incurred were incurred soon after the convey- ance, thus makingthe fraudulent intent a natural and almost a necessary inference; and in this way he has been enabled to 306 LEGAL AND COMMERCLiL PRECEDENTS. obtain the property of others who were relying upon an appearance which was wholly delusive. Such are the cases cited by the learned counsel for the appellants. But here the grantor was not about to engage in business within the meaning of that term as used in the cases ; she was simply going to live on the farm with her husband, and presumably off the products thereof. She had |19,000 in personal property, and the farm was then worth about f6,000. She was wholly free from debt. The deed was placed on record at once. It was four years and four months there- after before the first of the mortgages was executed to plain- tiffs' intestate, and eight years and four months before the second was executed. Under such circumstances we think it is too much to say that there was any evidence at the time she executed the deed that the grantor meant to defraud creditors. On the con- trary, no such inference can be drawn. The parties evidently (or at the least the mother,) were fearful in regard to the marriage, and decided that at least some part of the property which she possessed should be saved to the grantor from the husband's possible future misfortunes. That years after the execution of the deed, which was on record, the grantor at the request of her husband should mortgage the farm, and should make an affidavit that she was the owner thereof, however it may show an intent to defraud the mortgagee at that time, does not, we think, show that the purpose of the deed executed more than four years prior thereto, at a time when she was largely solvent, was to defraud this mortgagee or any subsequent creditors, not one of whom was shown to exist earlier than the above stated time of more than four years from the execution of the deed. She swears distinctly that her purpose was to give the farm freely and wholly to her parents and the survivor, and she may have felt full con- fidence in their intention to treat her with kindness. We have not gone at length into the evidence. On the con- trary we have given only a partial review of it ; and we feel convinced that it cannot be regarded as furnishing any sup- port for the finding of fraud, as made by the trial court. DEFINITONS OR TERMS. 307 This conclusion renders it unnecessary to enter upon the examination of any further question in the case. The deed being delivered and there being no fraudulent purpose which caused its delivery, the title was in the grantees at the time Mrs. Owen assumed to mortgage the farm; and the plaintiffs cannot maintain this action. The equities in favor of the plaintiffs are very strong indeed. Their intestate advanced his money, believing that has mortgage was a lien on the farm. But he had the opportunity at all times before loaning any money to resort to the record in the clerk's ofBce ; and the least attention given thereto would have led to the dis- covery of this deed. He saw fit to trust to the declarations of Mrs. Owen, and these plaintiffs must sustain a heavy loss in consequence thereof. The order of the General Term granting a new trial must be affirmed, and judgment absolute rendered against the plaintiffs, in accordance with their stipulation, with costs. All concur, except Earl and Gray, J. J., dissenting. DEFINITIONS OR TERMS. (see also glossary, pace 50.'!,) What Constitutes "One Calendar Month."— The governor of Coldbath Fields Prison, England, was sued for illegal •detention of a person who had been sentenced for an assault to imprisonment for "one calendar month;" and for a second assault, for the further term of fourteen days, beginning at the expiration of the first term. He was taken to the prison on the afternoon of October 31st, and demanded his release on the 13th of December, but was held until 9 A. m. of the 14th. The British Court of Appeal admitted the plausibility of the prisoner's argument that "he had been imprisoned during the whole of November and one day of October as constituting a calendar month," but Justice Bramwell laid down the following rules for reckoning the period : "The difiiculty really arises because the term 'calendar month' is not applicable except as applied to particular months, and that it is inapplicable where the month begins in the middle of a particular calendar month. Then the month is made up of a portion of two calendar months, which 308 LEGAL AND COMMERCIAL PRECEDENTS. may be of unequal leng-ths, and various consequences seem to= follow. It is clear that the only sensible rule which can be laid down is this, that where the imprisonment begins on a day in one month, so many days of the next month must be taken, if there are enough days to do it, as will come up to the date of the day before that on which the imprisonment commenced. That is to say, that if the day of imprisonment commenced on the 5th of the month, it must go on until the 4th of the next month ; if on the 29th, until the 28th. * * As the plaintiff was sent to prison on October Slst there were thirty days wanting from the next month, and as a conse- quence the month did not expire imtil the 30th. Then the fourteen days did not begin until the 1st, and the plaintiff was therefore diily kept in prison until the Idth." (Migotti V. Colville, 40 L. T. R., N. S., 746.) Fellow-Servants,— IjOGOvaotvfe engineer and conductor ar& not. (Chicago, Milwaukee and St. Paul Railway Company v. Ross, United States Supreme Court, 1884.) There have been decisions in New York, Indiana, Michigan, and other states^ to the contrary. Landing Goods.— "Putting them on land, or upon that which by the custom of the port is its equivalent." (Houl- der V. Merchant Marine Insurance Company, Law Rep., 17 Q. B. D., 355.) The goods in question were insured "until safely landed," and were discharged in lighters, for tranship- ment. The transfer to lighters was held to be equivalent to landing. Mercantile Partnership.— A. coal and oil mining association is not. A mercantile partnership is one which habitually buys and sells, which buys for the purpose of afterwards sell- ing. (Com. Nat. Gas Co., Pennsylvania Common Pleas, 31 A. L. J., 425.) Shop.— The office of a loan company, where it keeps its collaterals and sells them when not redeemed, is a "shop." (Boston Loan Company v. City of Boston, 137 Mass., 332.) DRAFTS. 309 DRAFTS. Payment of Drafts.— A Question of their Acceptance.— Wiil- iam Stallcup et ah, assignees, etc., appellants, against the National Bank of the Republic, respondent. Appeal from judgment entered upon the dismissal of the complaint at Circuit at close of plaintiffs case. The action is brought upon an alleged agreement of the National Bank of the Republic to pay certain drafts in favor of the firm of Lamborn & Gray, drawn upon and accepted by the Cleveland, Youngstown & Pittsburg Railway Company. The plaintiffs sue as the assignees of Lamborn & Gray. Held, that there was no contract or promise on the part of the authorized officers of the bank to pa,y the drafts, and Mr. Lamborn sent them at his risk, and his firm could not recover thereon without proving an authorization in fact. The complaint was dismissed and the judgment affirmed with costs. Bartlett, J. — This action is brought upon an alleged agreement by the National Bank of the Republic to pay cer- tain drafts in favor of the firm of Lamborn & Gray drawn upon and accepted bytheCleveland, Youngstown & Pittsburg Railway Company. The plaintiffs sue as the assignees of Lamborn & Gray. The interview upon which they rely as constituting the contract took place on November 8th, 1883, between Mr. Lamborn and Mr. Ford, the president of the bank, who was at the same time also president of the railroad company. Similar drafts had previously been paid at the bank, but just prior to this date there had been " some little hitch " in the matter, accordingto Mr. Lamborn, and he came from Ohio to New York, by way of precaution, and went to see Mr. Ford at the bank. He asked Mr. Ford what the trouble was, and why the drafts could not be taken care of at sight. Mr. Ford responded that there was trouble in the bank, among the bank people and himself and Mr. Buckley, who was the vice-president of the bank. He said the bank directors, or some of the directors, were dissatisfied with the advances to the railroad, and he asked Mr. Lamborn as a favor to him SIO LEGAL AND COMMERCIAL PRECEDENTS. and Mr. Buckley, who were "in some trouble with the bank people," to draw as lightly or sell exchange as lightly as possible against the credit of his firm in the bank. Mr. Ford then went on to say that the bank held a large quantity of the bonds of the Cleveland, Youngstown & Pitts- burg Kailway Company, the value of which depended upon the line being completed and ironed to a certain point, and that it was within a few weeks of completion ; that a man was in Europe attempting to negotiate the bonds, and that he desired Lamborn & Gray to make further advances to the railroad company, as they had previously, " drawing drafts, and accompanying these drafts with vouchers approved by the ofiicers of the railway company and sending them to the Bank of the Republic for collection, and they would take care -of them to the last dollar." He used the words " to the last dollar." Mr. Lamborn further testifies that Mr. Ford said he might possibly lose his place in this trouble with the bank people. It may be of some importance to note that Mr. Bergholz, the vice-president of the railroad company, was present during part of the conversation. If an agreement to pay the drafts which were dishonored is to be found anywhere in the case it must be in this interview. In the first place, it may be well doubted whether Mr. Ford in giving Mr. Lamborn the positive assurance that if he sent on his drafts to the bank for collection, "they would take care of them to the last dollar," was not speaking of himself as president of the railroad company, and of Mr. Bergholz as vice-president, rather than in his character as president of the bank. But assuming that he professed to represent the bank, there is not ovXy an entire lack of evidence of his authority to make the contract in question in its behalf, but there is proof of a state of facts disclosed to the plaintiff's assignors which preclude them from relying upon any implied authority on bis part. That the directors had already made trouble for Mr. Ford by reason of the advances to the Cleveland, Youngs- town & Pittsburg Railway Company was a fact distinctly communicated to Mr. Lamborn, and was notice to him that DRUMMERS. 311 further transactions of the same nature would not be sanc- tioned. Having this information, if he chose to rely upon the promise of Mr. Ford, he took the risk of the existence of actual authority to make such promise in behalf of the bank, and his firm could not recover thereon without proving an authorization in fact. The complaint was properly dismissed, and the judgment should be affirmed with costs. I concur. Francis A. Macomb er. DRUMMEES. Right to Sell Without License.— One Robbins, a traveler for a Cincinnati stationery firm, in the discharge of his duties, visited Memphis, technically called "The Taxing District of Shelby County, Tennessee," and began soliciting orders. A state law of Tennessee subjected all drummers offering or selling goods by sample to a tax of |10 a week, or f 25 a month. Robbins refused to pay a penny. He was arrested and fined by the Tennessee courts. He carried the case to the Supreme Court of the United States which reversed the decision. Justice Bradley took the ground that the state law, for breaking which Robbins was fined, was clearly uncon- stitutional. The power to regulate commerce between the states is vested by the constitution exclusively in Congress. The failure of Congress to act in the matter of taxing drum- mers, indicates its will that they should be left free from any imposition or restriction of that kind. If the presence and activity of drummers in any community constitutes a menace or injury to local trade, the remedy of the local tradesmen (and the only remedy) lies in an appeal to Congress for regu- lating legislation in the premises. Congress, and Congress alone, can afford relief. To allow the several states, each on its own hook, to regulate and tax the drummers at their dis- cretion would be, to throw the commerce of the country into confusion; to turn back the hands on the clock a hundred years, and to find ourselves in the disorders that prevailed under the Articles of Confederation. A state cannot impose taxes upon persons passing through or coming in merely for 312 LEGAL AND COMMERCIAL PRECEDENTS. a temporary purpose, nor upon property imported and not yet become part of the common mass, and no discrimination can be made by any such regulations adversely to the per- sons or property of other states, and no regulation can be made directly affecting interstate commerce. In the matter of interstate commerce the United States are, in the opinion of this Court, but one country, and are and must be subject to one system of regulations, and not to a multitude of systems. It seems to be forgotten that the people of this country are citizens of the United States as well as of the individual state, and that they have some rights under the constitution and laws of the former, independent of the latter, and free from any interference or restraint from them. (Sabine v. The Taxing District of Shelby County, Tenn., U. S. Sup. Ct. Rep., 1886, vol. 120, p. 489; also a more important case, George W. Corson v. The State of Maryland, U. S. Sup. Ct. Rep., 1886, vol. 120, p. 502 ; also Asher v. State of Texas, U. S. Sup, Ct., Oct. 29, 1888, reported in "Railway and Corporation Law Journal," Jan. 5, 1889, vol. 5, No. 1.) EMPLOYER AND EMPLOYEE. Liability of Employer for Injuries to Employee,— Fellow- Employee's Negligence.— Railway Conductor and Engineer.— It is a case of frequent occurrence that persons in a common employment are injured in consequence of each other's negli- gence, and the general rule is that persons thus employed take upon themselves this risk, provided that the employer is not negligent intakingtheminto or retaining them in his service,^ or in furnishing suitable materials and machinery for the work to be done. But unless the persons concerned are engaged ina "common employment" the rule does not apply, and the employer becomes liable. The question what consti- tutes such "common employment" becomes therefore one of leading importance in all such cases. As often occurs in mat- ters of this kind, the courts are much a,t variance in their conclusions. There are in this country, as remarked by the United States Supreme Court in Chicago, Milwaukee & St. Paul Railway Co. v. Ross, (1884,) "many adjudications of great learning, restricting the exemption to cases where the fellow-servants are engaged in the same department, and act EMPLOYER AND EMPLOYEE. 313 under the same general direction;" or as held in England, where they are "men iu the same common employment, and engaged in the same common work under that common employment." In Massachusetts a railroad engineer and a switch-tender were held to occupy that relation. (Farwell v. Boston & Worcester Railroad Co., 4 Met., 49.) In the United States Supreme Court case cited, the engineer of a freight train was injured by a collision with a gravel train, resulting from the negligence of the conductors on both trains. There was a verdict against the railroad company for damages, and the Court said : "There is, in our judgment, a clever distinction to be made in their relation to their common principal, between servants of a corporation, exercising no supervision over others engaged in the same employment, and agents of the corpora- tion, clothed with the control and management of a distinct department, in which their duty is entirely that of direction and superintendence. A conductor, having the entire control and management of a railway train, occupies a very different position from the brakeman, the porters and other subordi- nates employed. He is in fact and should be treated as the personal representative of the corporation, for whose negli- gence it is responsible to subordinate servants. This view of his relation to the corporation seems to us a reasonable and just one. * * * * Subject to the general rules and orders of the directors of the companies, the conductor has entire control and management of the train to which he is assigned. * * * In no proper sense of the term is he a fellow-servant with the fireman, the brakeman, the porters and the engineer." The Court accordingly affirmed the judgment against the company. There are decisions to the contrary of this in several of the states. Injuries Occasioned by Negligence of Fellow-Employee.— Employer not Liable.— ^ass, a seaman employed on a vessel of the Philadelphia Southern Mail Steamship Company was acting as night watchman of the vessel while in port at New Orleans. A stevedore had charge of loading and unloading, 314 LEGAL AND COMMERCIAL PRECEDENTS. and had absolute control of the gangway planks and blocks. A^rrangements had to be made by the use ol blocks to keep the planks on a level with the levee, as the tide rose and sank. During the night this was not attended to, and Hass in con- sequence stumbled over the planks into the water, breaking his leg. There was some evidence that he knew the condition of the planks, and should have blocked them himself, or reported their condition to the oflScer of the deck, who was in charge of the cargo planks at night. Was the steamship company responsible for the seaman's injuries? On all the facts as found by a jury, the Pennsylvania Supreme Court held the company free from liability, approv- ing the judge's charge in the court below, to the effect that if Hass were guilty of contributory negligence he could not recover; that a man entering upon any employment assumed all the risks ordinarily and naturally belonging to that employment ; that at the time of the accident the plaintiff was acting in his ordinary employment as sailor ; that while a man did not assume risks not voluntarily belonging to his employment, and which are occasioned by the negligence of his employer, yet he did assume all risks arising from the negligence of those in the same common employment with himself. That where a man employed another who is engaged in a separate or independent employment he was not responsible for the negligence of that person, and that if the stevedore were in an independent employment, and the acci- dent arose from his negligent placing of the planks, the plaintiff could not recover. ' ' (Hass v. Philadelphia Southern Mail Steamship Company, 1879.) EXECUTION. Husband and Wife.— Wife's Dower Preserved in Premises Mortgaged by Husband when Judgment is Pending.— S. exe- cuted a mortgage upon his property in which his wife joined about four years subsequent to the filing of a judgment against him. Two years after the making of the mortigage the sheriff conveyed the property under an execution issued upon the old EXECUTION.-EXECUTORS AND ADMINISTRATORS. 315 judgment. The question arose as to the dower interest of the wife being subject to the mortgage. The Court of Appeals in the very recent case (decided in October, 1886,) of Hinchliffe v. Shea, 103 New York, 153, held, that the wife, in joining with her husband in conveying or mortgaging his property, merely releases her future con- tingent right of dower in the premises, as a means or in aid of the deed or mortgage. She forfeits thereby all claim. But it is well settled, that in the event of the death of the husband where the property has been sold on a process under a judg- ment earlier than the mortgage, the wife regains her original right, and may recover dower as if she had not joined with her husband in the mortgage in the first instance. (Robinson V. Bates, 3 Mete, 40; Malloney v. Horan, 49 New York, 111; Kitzmillerv. Van Rensselaer, 10 Ohio St., 63; Littlefield v. Crocker, 30 Maine, 192.) The joining of the wife became a useless matter as her release of future interest inasmuch as the title itself becaJne defeated. (Scribner on Dower, Chapter 12, § 49.) The reason for this is that the judgment creditor had aprior or earlier right or lien to that of the owner of the mortgage, and the same was perfected by the sale under the execution issued upon the judgment. If the owner of the judgment realized on the sale a greater sum than would have reimbursed him the balance would go to satisfy the owner of the mortgage. (Elmendorf v. Lock- wood, 57 New York, 322.) EXECUTORS AND ADMINISTRATORS. W*/e.— An interesting and important case was decided upon the question whether a divorced wife, if the husband die intes- tate, is entitled to the administration of his estate or to a distributive share of his personal estate. Mrs. M. obtained a decree of divorce and married before the death of her first husband. Upon his death she claimed an interest in his personal estate, which was very large, and a necessary party to the proceedings granting letters or authority to administer the estate. 316 LEGAL AND COMMERCIAL PRECEDENTS. It was declared that the decree in divorce destroyed all rela- tions between her and her husband, and all future rights or interests are forfeited as to her. Provision having been made for her in the decree she can never, at law, be entitled to prop- erty or money of which he afterwards may become possessed. (See 103 New York, 284, citing cases of courts of the different states.) Effect of Judgment Against them in their Representative Capacity.— \^. obtained judgment against the executors of H. for a sum of money on a deficiency upon a foreclosure sale of real estate. H. had, after the making of a mortgage to L., transferred certain other real estate to K. and another. The Court of Appeals held that the judgment obtained against the executors in their representative capacity did not act as a lien upon real estate of H., and therefore that no execution could issue on the judgment so as to affect his real estate. That executions are issued against the personal estate of a deceased person upon a judgment entered against his executors or administrators . It is well settled that no creditor, by any proceeding or by his diligence, can obtain any priority or preference over the other creditors of a deceased person, in the estate or assets of the same. It is the bounden duty of executors or administrators to use diligence and care to recover or reclaim real estate that had been conveyed by the deceased for the purpose of hinder- ing, delaying, and defrauding his creditors. (103 N. Y., 302.) When not Excused for Keglect.—l. An executor cannot be excused from neglect of duty for the reason that his co-execu- tor had taken the burden of the trust upon himself. It is the duty of an executor to protect the funds of the estate. Should he not interfere with the collection of assets by his associate he does not become liable by the waste and negligence of the latter; but where he has knowledge of the doings and short- comings of his associate, his liability for the loss is fixed. The measure of his liability is established by the degree of carelessness or omission of duty. The intent of the executor is as a guide in arriving at his liability for loss that occurs to the estate. (103 New York, 329.) FARM LAW. 317 2. Executors are obliged to perform the unfinished con- tracts of the deceased, whether it be the purchase of real estate or the completion of the sale of personalty. And if any loss is sustained thereby, the executors acting in good faith and as prudent men, they are exempt and free from liability therefor or even blame. It is not a safe or a wise course for executors to invest «state funds in mortgages upon real estate situated in a differ- ent state from that in which they received their letters of authority. In the event of a loss occurring they would be liable for the same unless there was a cogent reason or urgency why the investment should have been made in such other or foreign state. (103 New York, 607.) 3. Executors, who, by the will, are authorized to carry on the business from the time of the death of the testator until, in in their judgment, the business is no longer a paying one, and who are also authorized to pay for repairs to the property of the business, are entitled to deduct these expenses from the income or net profits of the business so carried on by them as the trustees of the deceased. Under a will the executors were to pay the "residue and net proceeds" to certain persons named therein, during their lives. The executors in settling their accounts charged for purchases made, bad book accounts, repairs, etc., and deducted them from the shares of these certain persons enti- tled thereto. The language of the will was general in turning the business over to the executors, vesting them with discre- tionary power. (103 New York, 626.) FARM LAW. Away-Going Crops.— Things Partaking of the Nature of :Bealty.— Requisites of Sale.— Sale of growing grass and stand- ing timber is a sale of an interest in land, and a contract of that character, to be binding, must be witnessed by a memo- randum in writing. It is a question, however, whether clover belongs in the same category with other grasses in this respect, not being of a perennial growth. One A., in 1830, was the holder of a lease measured by three 21 318 LEGAL AND COMMERCIAL PRECEDENTS. Ijves in being. The last of the three lives came to an end iu July, terminating the lease. In May previous A. had sowed a field with barley, seeding at the same time with clover. In the autumn he reaped the barley, taking off at the same time- some of the elover-tops. The clover was not fit for hay until the following year. In January the property was surrendered to B., who was next entitled, after the expiration of A's lease. ■ B. cut the clover about the end of May, and a second crop in the fall. A. contended that he was entitled to the spring crop, because it was growing when his lease expired. The Court, however, held substantially that he was limited to the year in which the seed was sown. (Graves v. Weld, 5 B. & Ad., 105.) Sale.— Reaping Machine.— Delivery in Parts.— Ko Complete Delivery imtil Set up.— The Wood Mowing Machine Company made a contract with G., about the 10th of July, to sell him a reaping machine, which the agent promised should be deliv- ered ready for use on or before the 15th of that month. On the 14th the boxes containing the parts arrived at the sta- tion, and G. drew them home on the forenoon of that day. The agent told G. that he expected an expert to set it up, and the next day, which was Saturday, G. went to the station for him. He did not arrive, and again on Monday, the 16th, G. went for him, with the same result. He then told the agent that he did not want the machine, because his wheat was dead ripe, and he must hire men and cut it right away. This h& proceeded to do. On the 18th the expert went to G.'s to set up the machine, but G., having already cut most of his wheat, refused to _take it. The trial judge charged the jury as fol- lows : " I say to the jury, if you find the machine was deliv- ered there on or before the 15th, then the company were tO' have a reasonable length of time after Mr. Gaertner had drawn the machine home in which to set it up, and give him an opportunity to test it, and that by Wednesday was a rea- sonable time, within the law ; and that if you find from the- evidence that Mr. Gaertner said, ' I will not take it,' as early as Monday, which was the next day after the time fixed for its delivery, and repeated it on Tuesday, and then on Wednes- day, ' I will not hitch on to it, and 1 am not going to taifee jt,' FARM LAWS. 819 then tile company need not set it up, nor test it, nor give him any opportunity to examine it at all, and he became liable for the machine at the contract price." On appeal the Supreme Court said — " This was practically directing a verdict for plaintiff, and was an error. The machine could not be considered as delivered until it was set upas a machine. The different parts, which none but an expert could put together and form into a machine, could not be called a machine, as required by the contract, until attached together, and forming a complete harvester. Under all the circumstances, it would seem that both parties contemplated that the machine should be delivered in a condition fit for use on or before July 15th. Certain it is, that the whole tenor of defendant's testimony was to that effect, and he had a right to go to the jury upon that theory. If the jury so found the question of reasonable time would be out of the case entirely." The judgment below in favor of the Wood Company was accordingly reversed, and a new trial granted. (Wood Mow- ing Machine Co. v. Gaertner, 30 North- Western Reporter, 106; Michigan Sup. Ct., Nov. 4, 1886.) Laborer Quitting Employment.— Damaffes.—R. hired by the month to B., and in defending a suit for wages, B. claimed that R. left during the haying season, before the end of the period for which he was hired. He also offered to prove that when R. left his service he had a large quantity of hay in the shock, and a quantity uncut in the field, that he was notable to get other help, and that it was lost in consequence. He also offered to prove the value of the hay. The district court excluded this evidence on the ground that it did not afford the measure of damages for the breach of contract. The Supreme Court took the same view, and said — " The damages sustained by defendant in the loss of the hay are too remote to be recovered in an action for a violation of the contract. It can not be said that the injury complained of is the natural and proximate consequence of plaintiffs breach of contract." (Riech V. Bolch, 68 lowsi, 526.) 320 LEGAL AND COMMERCIAL PRECEDENTS. Ownership of Ice on Navigable Streams.— Riparian Owners no Title.— W. and others were the lessees of premises on the banks of the Kansas river, and made a business of gathering ice, claiming to the centre of the river. F. and others under- took to gather ice off the shore in question, and the Kansas Supreme Court was asked to issue an injunction restraining them. The Court, saying that the Kansas was a navigable river, held that owners of the land along its banks had no title to the soil underneath the water, and therefore none to the ice, which was held to belong to the general public, or the State. (Wood V. Fowler, 1882.) Ice.— Ownership On Non-Tidal Streams.— Shortall owned land on both banks of the Calumet river, and the Washington Ice Compa,ny, owning land adjoining, cut and gathered the ice in front of their own land, and then proceeded to cut and gather opposite Shortall's. The latter sued them for tres- pass. The Supreme Court, conceding that the Calumet was navigable in fact, said that by the common law only arms of the sea, and streams where the tide ebbs and flows, are regarded as such, and with regard to all others the law of that State, following the common law, extended the title of the riparian owner to the middle of the stream. Where the same owner held both banks he owns the whole river to the extent of the length of his lands upon it, and the Court accordingly adjudged that Shortall was the owner of the ice. The Court said— "The exclusive right in the owner to take the ice formed over his land is an analogous right to those other ones which are acknowledged to exist in the subjects which have been mentioned, and may with like propriety be recog- nized. It is connected with and in the nature of an accession to the land, being an increment arising from formation over it, and belonging to the land properly, as being included in it, in its indefinite extent upward." (Washington Ice Com- pany V. Shortall, 101 Illinois.) Public Ownership of Ice on Great Ponds.— R., a milk dealer, had an ice-house on the bank of a large pond, of about 180 acres in extent, and had cleared away the snow on a large area of it, preparatory to cutting and harvestingthe ice. D., FARM LAWS. 321 for the purpose of fisWng through the ice, cut several holes about a foot in diameter in the cleared area, and was sued by R. for trespass. In the Supreme Court the rights of the parties were thus defined by Chief Justice Gray : " The right of fishing, as well 8/8 the right of taking ice, in a great pond, is a public right, ■ which every inhabitant who can obtain access to the pond = without trespass may exercise, so long as he does not inter- fere with the reasonable exercise by others of these and like rights in the pond, and complies with any rules established by the legislature, or under its authority. * * * * The plaintiffs had no peculiar title or right in the pond by virtue of being lessees of an ice-house and land upon the shore." (Rowell v. Doyle, Mass. Sup. Ct., October, 1881.) Running Waters, Ponds, etc.— Use of Mill Streams.— Injury by Backwater or Pollution,— Loss of Profits Recoverable.—^ . G. & K. were owners of a mill-dam and mill on S. river, and F. & O. were owners of a similar dam and mill on the same stream about six miles below. The former brought an action to recover damages produced by backwater from F. & O.'s dam, and also for an abatement of the dam. A judgment for damages and the removal of a portion of the dam was given inthelower court. Evidence was introduced, under objection, tending to show the profits, or how much G. & K.'s mill would have earned if the dam had not caused the water to flow back on the water-wheel and impede the operation of the machinery. On appeal to the Supreme Court the opinion was expressed that however inadmissible such evidence might be in an action on contract, it was competent evidence in the case of a tort or wrong, for the purpose of enabling the court to determine the amount of the damages. The judgment was accordingly affirmed. (Gibson & Kloppenstein v. Fischer &Orton, 68 Iowa, 29.) 2. A. was the owner of a lumber and clothes-pin mill situated on a small stream, and below them C. owned and operated another mill. C. complained that sawdust from A.'s mill floated down and filled up his pond ; that some of it also was deposited on C.'s meadow land. C. also complained that A. 322 LEGAL AND COMMERCIAL PRECEDENTS. had diverted the water of one of the branches composing the mill stream, kept it ponded or stored up, and discharged it in an unreasonable manner, depriving C. of its beneficial use. The diversion and storing up of the water was admitted, and claimed asA.'sright; but it is shown that the diverted water is returned to its natural channel before entering G.'s land, and is not materially diminished in quantity. It was also proved that the sawdust deposited on C.'s meadows was in part from A.'s and in part from C.'s own mill, and the Supreme Court held the damage from this latter cause to be so inconsiderable that they would not undertake to separate and estimate its amount. They also held that A. had the right to the use of the water, and to detain it as long as might be necessary to the proper enjoyment of the right. But the discharge of A.'s sawdust into the stream, or its deposit on the banks in such a way that it found its way into the stream in quantities injurious to C, the Court declared to be illegal, and ordered its further deposit in that manner to be restrained by a perpetual injunction. (Canfield v. Arthur, 54 Vermont.) Wood and Timber Cut and Removed from Mortgaged Land. —Mortgagee's Right to Follow and Recover it or its Value. — One Warner, the owner of a mortgaged wood-lot, after a breach of the conditions of the mortgage, but before the mortgagee had taken possession, cut and sold a quantity of wood and timber therefrom. The mortgagee brought suit against the purchaser, for a wrongful conversion, and gained a verdict. It was set aside, and a new trial ordered by the Massachusetts Supreme Court, because the jury did not pass upon the question whether the mortgagee's consent might not have been presumed from the circumstances. As to the mortgagee's rights generally, in such a case, however, the Court said : " Upon the question whether if a mortgagor commits waste by removing buildings, wood, timber, fixtures or other parts of the realty, the mortgagee out of possession can follow the property after it has been severed and recover it or its value, there have been conflicting decisions in different jurisdictions. FRAUD AND FALSE REPRESENTATIONS. 323 In New York and Connecticut it has been held that a mort- gagee out of possession cannot maintain an action at law for waste committed by the mortgagor, and that he has no property in wood or timber cut and removed, so as to enable him to maintain trover for its possession. On the other hand, it has been held in Maine, New Hampshire, Vermont and Rhode Island, that timber, if wrongfully cut and removed by the mortgagor, remains the property of the mortgagee out of possession, and he may recover its value of the mort- gagor or a purchaser from him. * * * Under our law a mortgagee is so far the owner in fee of the mortgaged estate, that if any part of it is wrongfully severed and con- verted into personalty by the mortgagor, his interest is not divested, but he remains the owner of the personalty and may follow and recover it or its value of any one who has converted it to his own use." (Searle v. Sawyer, (1879,) 8 North-East Reporter, 820.) FRAUD AND FALSE REPRESENTATIONS. One Crowley was a depositor in the Mechanics and Laborers Savings Bank of Jersey City. He heard rumors affecting the condition of the ban)?, and went to Smyth, one of the direct- ors, and a member of the finance committee, mentioned the rumor, and saying that ho was a depositor and did not want to lose his money, suggested that he should draw his money out. Smyth replied, " It can't be so, unknown to me and Mr. Monks. We are on the finance committee. There can be nothing wrong with that bank unknown to me and Mr. Monks". Don't believe any of these false reports ; believe me, take my word for it. The bank is good, paying six per cent — the best in the state. If all that is in Jersey tells you the bank is bad, don't believe it till I tell you." He also said, ^' there was a surplus of over $6,000 after the dividends were paid." This was about the first of August, and the bank was actually insolvent at that time, but it continued payment until the first of November following, when it went into the hands of a receiver. There was no evidence that Smyth knew the condition of the bank, but it appeared on the other hand 324 LEGAL AND COMMERCIAL PRECEDENTS. that he was present at a meeting of directors when the presi- dent read his statement, showing a surplus of $6,000, and a dividend of six per cent was declared, and at several subse- quent meetings when semi-annual dividends were voted upon the statements submitted. It was contended that even if Smyth did not know his statements to be false, and did not really know the condition of the bank, yet his assertions having been made with the pretension to knowledge, and Crowley having suffered injury thereby, he was liable in damages for the false representation. The Supreme Court would not go to this length, and said that "it should have been left to the jury to say whether, upon the evidence, Smyth made the representations with a fraudulent purpose to deceive, or whether he made them in good faith and in the honest belief that they were true," the implication being that in the latter case he would not be liable in damages. (Crowley v. Smyth, N. J. Sup.Ct., 1884.) Evidence of Fraudulent Misrepresentation.— Clear Prepon- derance Necessary to Rescind Contract.— J . M. K. sold to D. twenty-five shares of stock in the Hawkeye Seed Company, the consideration being the conveyance of certain real estate to H. M. K. Misrepresentation of the business of the com- pany was alleged as a ground for setting aside the deed and rescinding the sale. D. claimed that J. M. K. represented to him that the company was on a secure footing, and that there were no debts but what the outstanding accounts would bal- ance. J. M. K. testified — " I did not say that the credits due the corporation would about liquidate the outstanding indebtedness. I said they might come in the neighborhood of balancing; I could not say. I said this was simply a guess. He said 'guess at it,' and insisted upon a guess ; and that was my guess. That was my impression at the time I made the statement." With respect to the facts thus alleged, the Court said— " Neither the plaintiff nor Knox are materi- ally corroborated, and so far as we can see they are equally entitled to credit. There is nothing in the story told by either which will warrant us in disbelieving either of them. All that can be said is, that they have understood the trans- FEAUD AND FALSE REPRESENTATION. 825 action differently. But," the Court said, "it must be true, we think, that before a contract can be rescinded the evidence •must be clear, satisfactory and preponderate in favor of the party asking the rescission. Possibly the rule is that a mere preponderance is not sufBcient, but the preponderance must be made to clearly appear. It is also true that if no artifice be used to prevent the party asserting the fraud from making the requisite examination to ascertain the truth, and he has the opportunity to do so, and there was no special confidence between the parties reposed by the one in the other, the con- tract will not be rescinded. (Dirkson v. Knox, 30 North- Western Reporter, 49; Iowa Sup. Ct., Oct. 23, 1886.) Selease Obtained by Misapprehension of Object.— When Con- sideration Need not be Returned in Order to Avoid the Contract.. — One Mullen was injured by a collision on the Old Colony Railroad, and having sued them for damages, was met with the defense that he had released them from their hability, in consideration of a payment of $450. A paper to that effect, attested by his mark, was offered in evidence. Mullen testified that he received the money as a gratuity, or provision for hi& support during the pendency of the trial, and, not being able to read, did not know that he was signing a release of his cause of action. In the trial court a verdict was ordered against him, because he had not first returned the money ; the principle being, as stated by the appellate court, that "if a party enters into a contract and in consideration of so doing receives money or merchandise, and afterwards seek& to avoid the effect of such contract, as having been fraudu- lently obtained, he must first give back to the other party the consideration received." A new trial was however ordered, because, said the Massachusetts Supreme Judicial Court, "the principle applies to those cases only where that which was received, and which must be returned, was the considera- tion of the contract or settlement which the receiver intended to make, and understood that he was making. It does not apply to cases where a party holds out that he gives the con- sideration for one thing, and by fraud obtains an agreement that it was given for another thing. In the case at bar, if the 326 LEGAL AND COMMERCIAL PRECEDENTS. evidence for the plaintiff was true, he signed the paper which, purports to show a settlement of his claim, believing it to be a totally different paper from what it in fact was. Signing in^ that belief, in consequence of the fraudulent representations of the defendant, he is not bound by it, because he never made the agreement which the paper indicates. If this fact is established, it establishes the further fact, that he did not receive the money which was paid him when the paper was signed, in consideration of the settlement of his claim. The answer of the defendant, which sets up a release and discharge of the plaintiff's claim, in consideration of $450, is fully met by the plaintiff's evidence, if true. If it was paid for the sup- port of the plaintiff till his case should be tried, or for a year •as a gratuity, it is clear that the defendant cannot insist on repayment. If it was paid with a representation that it was a gratuity, though with an intention on the part of the defendant's agents, to get the plaintiff's signature to the paper relied on in defense, in consequence of such payment, the payment was a part of the fraudulent scheme, and the defendant cannot obtain any advantage from its own fraud." (Mullen V. Old Colony Kailroad Company, 8 New England Reporter, 363.) GIFTS. Gift Made in Expectation of Death.— Bonds and Mortgages Pass by Delivery Without Assignment.— But Such a Gift May be Set Aside for the Benefit of Creditors.— A. man in his last illness, while despairing of all hope of recovery, and on the third day previous to his death, handed several notes, bonds and mortgagestoW.,inthe presence of several witnesses, and said that he gave them to him to take and collect them, and that he might have the money in case he died. After the donor's death, his administrator sued W. to recover the securities, contending that thetitleto bonds, bills of exchange and promissory notes, could only be passed by indorsement or assignment, and could not be transferred by mere delivery as a gift causa mortis. On this point the Supreme Court did not sustain the administrator's claim, but after citing the GIFTS. 327 English, case of Baily v. Snellgrove, 3 Atk . , 214, went on to say: "This is undoubtedly an authority for the doctrine, that a bond without indorsement is the subject of a donatio causa mortis in equity. And the principle is fully sustained by the authorities. When this principle was first apphed to the transfer of personal property, it was limited to chattels which might be delivered by the hand. But as trade and commerce advanced, it was gradually relaxed, and was extended, first to embrace bank notes, then lottery tickets and securities indorsed in blank, and finally to bonds. Snellgrove v. Baily ■was the first case, we believe, in which the doctrine was extended to bonds. There the donor had delivered a bond to the donee, saying, 'In case I die it is yours, and then you have something.' " It was also contended that the gift must be established by -clear and unmistakable proof, but the Court replied, "The law raised the presumption from the fact of possession, and the onus was upon the plaintiff to rebut it." But the Court also said that " upon a deficiency of assets to pay the lawful claims of creditors, any gift causa mortis must give way, so far as may be necessary to discharge lawful demands." It appearing that the estate was insolvent, judgment was given that the administrator had the right to recover the securities, and to apply them as far as might be necessary to the dece- dent's det)ts, any remainder being repaid to the donee, W. (Kiff V. Weaver, 94 North Carolina, 274.) "Donatio Causa Mortis," (Gift in Anticipation of Immediate Death.)— i- A gift causa mortis is one made by the delivery of personal property by the donor in his last sickness, and in expectation of death, then imminent, and upon condition that it shall belongto donee, if the donor dies, as anticipated, ■without revoking the gift, leaving the donee surviving him, and not otherwise. (Henschel v. Warner, (Wis.,) North- western Reporter, 926.) 2. To constitute a valid gift causa mortis actual delivery by the donor in his life-time is necessary, or if the nature of the property is such that it is not susceptible of corporeal delivery, the means of obtaining possession of it must be 328 LEGAL AND COMMERCIAL PEECEDENTS. delivered. (Emery v. Clough, (N. H.,) 4 Atl. Eep., 796 ; Gano V. Fisk, (Ohio,) 3 N. E. Rep., 532; Vandor v. Roach, (Cal.,) 15 Pac. Rep., 354; Parcher v. Savings Bank, (Maine,) 7 Atl. Rep., 266.) 3. Testator gave to the draughtsman of his will, afterwards his executor, a note made by his son, to be given to the latter if he did not contest the will; if he contested the will the note wastobegiven to the widow. Testator never again resumed possession of the note, though his wife put the note in his pocket-book. Held, that this was a complete and valid gift causa mortis to the son. (Woodburn v. Woodburn, (111.,) 14 North-East Reporter, 58.) 4. A deposited money in a savings bank in his own name,, "payable also to B. in case of death of A." Held, that this did not constitute a valid donatio causa mortis, it not appearing that the alleged gift was made during the illness- or peril of the donor, and in contemplation and expectation of death which resulted therefrom. (Parcher v. Savings Banks, (Maine,) 7 Atl. Rep., 266.) 5. Where one a few days before his death delivered to another big bank-book, requesting him to keep it for his daughter, and on his death deliver it to her, but does not part with the present dominion or control of the book, or the money represented thereby, there is no donatio causa mortis. (Daniel v. Smith, (Cal.,) 17 Pacific Reporter, 683.) 6. The instrument or document must be delivered to the donee, so as to vest him with an equitable title to the fund it represents, and to divest the donor of all present control and dominion over it ; and a delivery which does not confer upon the donee the present right to reduce the fund into possession by enforcing the obligation according to its tones will not suffice. (Opinion of Court per Mathews, J., in Basket v. Has- sell, 107, United States, 602.) 7. A certificate of deposit may be the subject of gift causa mortis, and if delivered bj- the donor during her last illness, in anticipation of death, to a third person, for the use of the donee, the title passes upon her death, though the certificate is payable to the donor's order, and has not been indorsed by her. (Connor v. Root, (Colo.,) 17 Pacific Reporter, 773.) GIFTS. 329 8. A memorandum disposed of certain personal property to different individuals, made by atestatrix after making her will, was called for by her on her death-bed, and delivered to her sister, with the request that it be carried out as her will. Most of the donees, as well as of the articles mentioned, were not present at the time. Held, not to be gifts causa mortis. (Trenholm v. Morgan, (S. C.,) 5 South-Eastern Eeporter, 721; see also Manikee v. Beard, (Ky.,) 2 S. W. Rep., 545.) "Inter Vivos,'' {Between the Living.)— 1- To establish a parol gift or sale of land between parent and child, the evi- dence must be direct, positive, express and unambiguous; the terms of the sale or gift must be clearly defined, and all the acts necessary to its validity must have special reference to it, and to nothing else. (Erie & Wyoming Valley Railroad Company v. Knowles, (Pa.,) 11 Atl. Reporter, 250.) 2. A gift of personal property from father to son, to be valid, must be accompanied by delivery, and the delivery must be actual, so far as the subject of the gift in its nature is capable of delivery. (Medlock v. Powell, (N. C.,) 2 South- Eastern Reporter, 149.) 3. Where a father gave his daughter, residing with him, and who continued to reside with him as long as he hved, a colt, of which she had possession only at their residence, which she eight or nine years afterwards exchanged for a mare, which she kept on her father's farm as long as he lived, such mare is the property of the daughter. (Lowther v. Lowther, (W.Va.,) 3 S. E. Rep., 42; Snowden v. Reid, (Md.,) 10 Atl. Rep., 175; Space's Exrs. v. Guest, (N. J.,) 10 Atl. Rep., 152; Smith V. Ossippee Valley and C. Bank, (N. H.,) 9 Atl. Rep., 792; Marston V. Marston, (N. H.,) 5 Atl. Rep., 713; Flan- ders v. Blandy, (Ohio,) 12 N. E. Rep., 321; Scott v. Ford, (Mass.,) 2 N. E. Rep., 925; Love v. Francis, (Mich.,) 29 N. W. Rep., 844.) Delivery.— 1. Any act which indicates a renunciation of dominion by the donor, and transfer of dominion to the donee, is sufficient delivery under Code of Georgia, § 2660, relating to gifts, and at common law. (Poullain v. PouUain, (Ga.,) 4 South-Eastern Reporter, 81.) 330 LEGAL AND COMMERCIAL PRECEDENTS. 2. In an action by an administrator for the possession of property claimed by defendant under a parol gift from dece- dent, where the gift is fully proved, subsequent declarations of the donor tending to controvert the gift will be excluded. (Bennett v. Cook, (S. C.,) 6 South-Eastern Reporter, 28.) It appeared that the intestate some time before his death said, "All I've got I have carried to Joe Cook's, and there is- where I expect to stay until I die. And this horse I have given to Joe Cook, on condition that when I want to ride he is my horse, and, when I have no use for the horse, it's Joe Cook's and all that I have." Held, that the reservation of the right to use was a condition subsequent, and did not invalidate the gift, though made by parol. (PouUain v. PouUain, (Ga.,) 4 South-Eastern Reporter, 81.) Property not in Existence.—^ husband agreed to give the crop to be planted and grown on land that was the statutory separate estate of his wife, to his wife and minor son in con- sideration of their working and raising such crop, he agreeing to furnish a horse to make ^t with. Subsequently he executed a mortgage on the property to secure advances, and still later the wife and son executed another mortgage. Hdd, that the gift to the wife and son did not effect, as there was no crop in existence at the time capable of delivery to the donees ; that the contract was merely executory, and liable to be revoked ; that the execution of the mortgage by the hus- band was a revocation ; and that the mortgage by the wife and son was void. (Bayett v. Potter, (Ala.,) 2 S. Rep., 534.) GUAKANTY AND SUKETYSHIP. Written Guaranty on Oral Condition Precedent.—Signer not BoiMid Unless Condition is Fulfilled.— The question of liability on an unconditional written contract of guaranty, accom- panied by an oral condition precedent, arose on the following instrument : $10,000. OrFiCE OF Belleville Nail Mill Co.,\ Belleville, III., July 17, 1874. / Four months after date pay to the order of Belleville Savings Bank teft thousand dollars, value received, and charge same to account of Belleville Nail Mill Co. Conrad Bornman, Pres't. To F. H. Piepek, Treas. Belleville, EI. •^^®- ^- Waugk, Secy. GUARANTY AND SURETYSHIP. 331 Written across the face of the instrument were the words "Accepted, F. H. Pieper, Treas." On the back were the sig- natures of Conrad Bornman and James Waugh. On the trial of a suit against the estate of Bornman as guarantor of this obligation it was proven that after it was executed by the Belleville Nail Mill Company, Bornman wrote his name on the back of it and gave it to F. H. Pieper, directing him to tell the cashier of the bank that the draft was not to be taken unless Mr. Abend placed his name on the back of it. The cashier was so notified. Abend never indorsed the draft, but he executed a separate paper guarantying its payment if it was not paid by the Belleville Nail Mill Company or Conrad Bornman. The Illinois Supreme Court said : "This contract was a conditional one; he (Bornman) guaranteed the draft on the condition that Abend should also become a guarantor like himself by writing his name on the back of the draft, and the bank before accepting the draft had notice of that fact. As the condition on which Bornman agreed to become bound as a guarantor of the paper was never performed, of which the bank had notice before accept- ing the draft, he incurred no obligation. The bank had no right to take the draft until Abend had written his name on the back of it. It was, as between the bank and Bornman, an incomplete instrument until that condition was complied with, and, so far as the conditional contract of Bornman is concerned, no recovery can be had upon it." (Belleville Sav- ings Bank v. Bornman, 8 Western Reporter, 366.) Caneellation of Guaranty on Execution of Renewal. — The Renewal Being Void the Old Contract Remains in Force.— ^T^ the previous case the draft there reproduced was given in renewal of one similar in all respects except date and indorsement. On the back were the signatures of Conrad Bornman, James Waugh, and Edward Abend, as co-guarant- ors. The first draft, when the other was taken to the bank, was marked paid and surrendered. It was, however, con- tended by the bank that if Bornman was not liable as guar- antor on the second draft, by reason of the lack of Abend's signature, then his liability on the first draft remained undis- 332 LEGAL AND COMMERCIAL PRECEDENTS. charged, aud might be enforced against his estate. The Illi- nois Supreme Court adopted this view, and said : "That draft has never been paid, and Bornman's liability to pay it has not been discharged. As respects Bornman, all that he has done in the way of discharging this undoubted liability of his, is, that he has made an abortive attempt toward the continuation and extension of his liability for four months. In place of his guaranty of the draft of March 4, he was willing to become a guarantor with Abend on a draft in renewal, payable at the end of four months, upon the condition that before it was delivered Abend should likewise place his name on the draft as co-guarantor. This Abend did not do; consequently Bornman's placing his name on the renewal draft went for nought, and it was as if he had never done so. So Bornman's liability on the draft of March 4, 1878, remains with nothing whatever done on his part in discharge of it." Delay in Realizing Money on ChecTco— Discharge of Surety on Debt Thereby Left Unpaid.— It is not safe to hold a check as if it were a promissory note. Among the other consequences which may happen from such a course, is the loss of the debt for which the check was given, by the discharge of a surety. This occurred under the following circumstances: Rose, treas- urer of the Girard Lodge, by direction, sent on May 27th to the Grand Lodge his personal check for $920, due by the sub- ordinate to the superior body, and payment was receipted for. On the 28th there was money to meet the check, but it was presented until the 4th of June, and on the morning of that day a note of Rose's came due at the bank, and the funds to his credit were appropriated to its payment, leaving the bank without the means to honor the check. Under compulsion of the Grand Lodge, the Girard Lodge took up the check, and sued McDonald, surety on Rose's official bond to enforce reimbursement. The Supreme Court held the bank to be right in appropriating the funds at Rose's credit to the note due there, and also held that McDonald was released from liability on Rose's bond, by the delay in collecting the check. The Court said : GUARANTY AND SURETYSHIP. 333 " A cheek is generally designed for immediate payment, and not for circulation. It is the duty of the holder to present it for payment as soon us he reasonably may, and if he doe? not he keeps it at his own risk. The Girai'd Lodge accepted it as a payment from Rose. In like manner the Grand Lodge accepted it from the subordinate lodge. In order to charge the surety by reason of the non-payment, it should have been presented for payment within a reasonable time. Had it been so presented it would have been paid. A delay of seven days was an unreasonable time." (Fegley v. McDonald, Pennsyl- vania Sup. Ct., May 5, 1879.) Joint Maker in Form Showtito be Only Surety.— Discharge of Surety by Extension to Principal Debtor,— G. S. and John H. Oaks made a joint and several note to William H. Stevens, for money lent to the former. Stevens understood that John H. was to be held as surety only, though he signed as one of the principals. For a consideration from C. S. Oaks he extended the time of payment, and the Supreme Court held that this extension discharged John H. Oaks from liability to pay, saying — "The form of the obligation does not prevent a showing that one of the parties was a surety. He was bound by the obligation in the form which he adopted. But it is elementary law that a creditor who knows of the fact of sure- tyship must not violate the rights of the surety." (Stevens V. Oaks, 58 Mich., 343.) Guarantor's Right to Notice that His Offer of Guaranty is A^ccepted.— Formal Notice not Always Necessary.— ^hs follow- ing agreement was made and delivered to Lewis & Brother, of Louisville, agents of S. E. Thompson, of New York, in order to enable the shipper to draw on him for the full value of the tobacco : Louisville, Ky., May 26, 1876. Mr. S. E. Thompson, New York. Dear Sir— My brother, T. B. Glover, having this day shipped to you for his account, 23 hhds. of tobacco marked (giving numbers), and in view of his drawing for full cost of same, I hereby agree to secure you against any loss that this shipment may make, and in the event of any loss bind myself to pay it. Signed. Tho. H. Glover. The agreement was forwarded to Thompson, and the ship- per at the same time drew on him for $1,943.22, the draft 22 334 LEGAL AND COMMERCIAL PRECEDENTS. being to the order of Tho. H. Glover, indorsed by him, and paid by Thompson at maturity. The tobacco did not realize the amount of the draft by f 854.39, and Thompson sued T. H. Glover on his guaranty, in order to recover the defi- ciency. The question was whether the guarantor was bound without formal notice that his guaranty was accepted. In • the lower court it was held that he was not, but the Kentucky ■ Court of Appeals thought otherwise ; "It is well established," remarked Justice Hines, "that there must be an acceptance of the offer of guaranty, and a notice, express or implied, to the guarantor, of such accept- ance. The reason of this rule is, that the guarantor may have an opportunity of arranging his relations with the party for whose benefit or in whose favor the guaranty isi given. The rule should not be pressed beyond this reason. When the whole of the transaction is connected, and of such a nature as to give the guarantor this information, no specific or formal notice is necessary. In the case under consideration the agreement to accept made with Lewis & Brother for appellant (Thompson) was contemporaneous with the guar- anty, and was the consideration therefor, and all the parties being privy to the whole transaction, no specific notice was necessary. The minds of all the parties met, and the contract was completed at the time of the execution and delivering to Lewis & Brother of the writing by appellee (Glover), and of the drawing of the draft. The only notice that could have been of any benefit to appellee, and to which he was entitled, was a notice of the amount that the tobacco fell short, and the failure of T. B. Glover to pay the same. This notice appellee received within a reasonable time." (Thompson v. Glover, 8 New England Reporter, 589.) Effect of Oral Promise to Become Surety.— Conflict of Author- ities.— A. asked B. to become surety for his (A.'s) son, on a note to W., promising orally to see the note paid. Default having been made, A. refused to fulfill his promise, standing upon the provision of the statute of frauds, that no action shall be brought to charge any person upon a special promise to answer for the debt, default or miscarriage of another HIGH WAYS AND STREETS. 335 unless the same is in writing. The Supreme Court, while admitting that the American and English decisions are hope- lessly in conflict on the question, held that the promise was binding though not in writing. (Demilt v. Bickford, 58 New Hampshire.) The decision agrees with cases in New York, Wisconsin, Connecticut, Massachusetts, and other states, but is opposed by Ohio authority. (Easter v. White, 12 Ohio State, 219.) HIGHWAYS AND STREETS. Time Necessary to Complete Dedication of Land as Highway, — J. M. Proctor, the owner of land along a highway in Mis- souri, left a strip of his land, which was used ten years, with his acquiescence, as a part of the road. He then attempted to enclose it and secure his right of ownership, but was indicted and fined $20 for obstructing the highway. On appeal to the Supreme Court, the judgment was afHrmed, and it was said in the opinion : "The Court, by its instructions given on behalf of the State, tried the case on the theory that if the owner of a tract of laud, in fencing it up leave a strip of land for the purpose of a public road, and that said strip so left had for more than ten years been continuously claimed, used, traveled, worked, and repaired as a public road, with the knowledge and acqui- escence of the owner and occupant of said land, then such road was a public road, for the willful obstruction of which the obstructor could be proceeded against by indictment. The Court was fully warranted in giving instructions embrac- ing this theory of the case." (State of Missouri v. Proctor, 7 Western Reporter, 135.) Unusual Objects on the Mighway. —Liability of Municipali- ties from Resulting Injuries.— Mary Adams sued the town of Rushville, Ind., from injuries caused by her horse running away, in consequence of fright in seeing a vessel suspended on a tripod over a fire, a candy manufacturer thus being engaged in proscuting his business on the public street. The Indiana Supreme Court affirmed a judgment against the town for damages, saying that it is the duty of " such corporations 336 LEGAL AND COMMERCLiL PRECEDENTS. to keep their streets in a safe condition, and free from all obstructions that may seriously interfere with travel, and thus result in injury to travelers. This duty relates not only to defects in the roadway, and objects thereon, against which vehicles may be wrecked, but also extends the liability to injuries from falling awnings, ice and snow, and to injuries resulting from the fright of horses of ordinary gentleness at objects upon the streets naturally calculated, and which may be reasonably be expected, to produce such fright. It cannot be said, with reason, that streets in which such obstructions are suffered to be placed and remain, which by their appear- ance are calculated to frighten such horses, are in a reasona- bly safe condition." (Town of Rushville, appellant, v. Mary Adams, 5 Western Reporter, 682.) The Might of Way.— When a Mailroad Coinpany May Take Possession of a Public JSoad.— When a body corporate com- mands or directs an act to be done, and it is done to the nuisance of the community at large, there is no principle which places it beyond the reach of the criminal law. An indictment will lie, at the common law, against a corporation for not repairing a road, a bridge, or a wharf, when by statute or prescription it is bound to do so. (Whar. Crim. Law, (7th ed.,) 86.) If it were notso, there would be no effectual means for deterring railway and other corporations from an oppressive exercise of power in this respect. A railway cor- poration may take possession of such portion of any public road as may be within the limits of the right of way ; it is not liable to indictment for nuisance for the mere taking and occupancy of the road. (Danville, etc., Railroad Company v. Commonwealth, 73 Pa., 29.) In Northern Central Railway Company v. Commonwealth, 90 Pa., 300, it was held, how- ever, that, although the company may construct its railway across any established road, whenever it is necessary to cross or intersect it, the railway must be so constructed that it will not impede the passage or transportation of persons or property along the road ; if it is not, but, on the contrary, is so constructed as to be a dangerous obstruction to travel along the road, the company may be indicted therefor. HIGHWAYS AND STREETS. 337 The Act of 8d of April, 1837, which constituted the charter of the Sunbury & Erie Railroad Company, (now the Philadel- phia&Erie Railroad,) in the 14th section, expressly provides that the said railroad shall be so constructed as not to impede or obstruct the free use and passage of any public road or roads which may cross or enter the same, etc. By a supple- - ment passed in the year 1852, it was provided, "That, if said '■■ railroad company shall find it necessary to change the site of any turnpike or public road, they shall cause the same to be reconstructed forthwith, at their own proper expense, on the most favorable location, and in as perfect a manner as the original road." The provision last quoted is similar in all respects to the 13th section of the Act of 14th of Febru- ary, 1849, and it has been held that an indictment will lie against a railroad company for failure to reconstruct the road within a reasonable time, in accordance with the require- ments of this section of the Act of 1849. (Pittsburg, etc., Railroad Company v. Commonwealth, 101 Pa., 192.) "The injury," says the Court in the case cited, "is not to an indi- vidual only, but to the public ; it is the denial to every citizen of the commonwealth of aright to the use of a public highway in place of the one taken by the corporation. * * * The Act provides no specific remedy for the enforcement of this duty. All common law remedies are therefore open against the violators of this law. The failure to reconstruct concerns the public; it is, therefore, an injury to the common- wealth, to which belongs the franchise of every highway as trustee forthe public. (O'Connor v. Pittsburg, 6 Harris, 187.) In the case we are now considering the road was situated between the railroad and the river. It is admitted that the company appropriated a considerable portion of the road, not by crossing it or by passing along it at grade, but by constructing upon it a retaining wall of stone and a high embankment, upon which the railroad bed is built. It was such an appropriation as was wholly inconsistent with the use of the same ground for a public road. It was the duty of the company, therefore, at their own proper expense, forth- with to change the site, and to reconstruct the road on the 338 LEGAL AND COMMERCIAL PRECEDENTS. most favorable location, in as perfect a manner as the original road for the public. No new road has ever been constructed, and it is alleged that the public has ever since been obliged to pass, at great inconvenience and with much danger, upon a narrow shelf between the wall and the river. Now, the Philadelphia & Erie Railroad Company, if they were operating their road, would without doubt be responsi- ble criminally for the failure to comply with the requirements of its charter. This is settled by the case we have referred to, Pittsburg, etc.. Railroad v. Commonwealth, supra. "In accepting the charter," as Mr. Justice Mercur says in the case justcited, "the corporation acquires all the rights and privi- leges thereby given, but it assumes all the duties and obliga- tions thereby imposed. Having taken the benefits, it cannot repudiate the burdens; it cannot be tolerated that the corpo- ration may claim to enjoy everything beneficial to itself, and wholly omit to perform an act in which the public is so largely interested. The rights granted are in consideration of duties assumed, among which is the duty of reconstructing the public highway, from which it has excluded the public. Having accepted all the provisions of the Act, this duty arises not onlyfrom the imperative command thereof, but also from all implied agreement and by tenure." But. the contention is, that the defendants are mere lessees of the railroad ; that this public duty did not legally devolve upon them as lessees, and that the criminal law will not charge them with the perform- ance of duties which the Philadelphia & Erie Company alone had assumed. The Pennsylvania Railroad Company became the lessees of this road in the year 1862, before its completion. The lease was of a road "located, in part constructed, and now being constructed, and to be constructed and completed, from its terminus at Sunburj'-, etc., to its terminus at the harbor of Erie," etc., with all the lands, bridges, depots, station-houses, machine-shops, etc., embracing the entire property and estate of the company, for a period of 999 years, etc., with the right to use, exercise, and enjoy all the rights, powers and authority, etc., and all the corporate powers and privileges, etc., of the Philadelphia & Erie Railroad Company, as fully and amply HIGHWAYS AND STSEETS. 339 as the same might be used, exercised and enjoyed by the lessors had the lease not been made. These rights and fran- chises in the hands of the lessees were of the same public character as if they had remained in the hands of the lessors ; they were public rights to be exercised by the Philadelphia & Erie Railroad Company in conjunction with the performance of certain public duties, which, by the acceptance of the char- ter and the construction of the road under it, were assumed. It is from the exercise of these public privileges and franchises, granted by the charter, that the public duty arises. More- over, the commonwealth not only granted the charter to the Philadelphia & Erie Company, it also authorized the transfer by the lease of the powers and privileges it secured to the Pennsylvania Railroad Company, and the latter company, in accepting the same and in the exercise thereof under the char- ter of the Philadelphia & Erie Company, must be taken to have assumed all the correspondent duties and obligations resting upon the lessors. Where a corporation leases the road of another corporation, it becomes subject to all the statutory duties, obligations and restrictions imposed upon the leasing company : (1 Wood on Railroads, 578.) The lessee of a railroad is subject to all the provisions of the lessor's charter, and during the existence of the lease is subject to all the duties and liabilities of the lessor under the charter, except such as may be said to be personal: (Chicagov.Evans, 24 Ill.,52.) The Pennsylvania Railroad Company could not exercise these extraordinary powers under their lessor's charter, to the exclusion of all others, even of the Philadelphia & Erie Company, itself, with- out assuming all the correspondent duties imposed by the charter upon the latter company. The State confers upon railway companies some of its most essential powers of sov- ereignty, and in return stipulates for the faithful performance of such duties by the corporation as are deemed an equivalent or consideration, and neither the terms of their contract, as contained in the charter, nor any sound principle of public policy, will permit another railroad corporation, by a lease or transfer, to enjoy these high privileges and immunities except on the terms imposed. 340 LEGAL AND COMMERCIAL PRECEDENTS. The Pennsylvania Eailroad Company, as the lessee, must accept the subject-matter of the lease cum oaere. As the duty to reconstruct this public road was a public duty, the disregard and violation of it is a public wrong, and, as w& said in Pittsburg, etc.. Railroad Company v. Commonwealth, supra, this is a proper subject for indictment. The judgment was therefore reversed, and a venire facias de novo awarded by the following opinion of Judge Clark: ' 'A railway corporation may take possession of such portion of any public road as may be within the limits of the right of way, and may construct its railway across any established road whenever it is necessary to do so ; but the railway must be so constructed that it will not impede the passage or transportation of persons or property along the road. It is not, but, on the contrary, is so constructed as to be a dan- gerous obstruction to travel along the road, the company may be indicted therefor. "If the corporation finds it necessary to appropriate a public road or any portion of it in such a manner or to such an extent that it is no longer fully available for its original use, a duty arises for the corporation forthwith, at its own expense, to change its site and to reconstruct the road on the most favorable location in as perfect a manner as the original road for the public. "When a corporation leases the road of another corporation, the lessee company becomes subject to all the statutory duties, obligations and restrictions imposed upon the lessor." (Commonwealth of Pennsylvania v. Pennsylvania Railroad Company, Court of Quarter Sessions of Warren County, Janu- ary 3, 1888.) HUSBAND AND WIFE. Meal Estate Meld in Name of Musband and Wife. — Survivor Takes Title to the Whole.— Axaong the points of property law, in connection with the relation of husband and wife, is one familiar to lawyers, but strange to others, known under the legal description of tenancy by the entirety. At common law, when land was conveyed to husband and wife they became each entitled to an indivisible part of the whole, and when. HUSBAND AND WIFE. 341 one died the survivor took the whole. It was supposed that the married women's acts in Now \'ork had abolished this form of estate, but in Bertter v. Nunan, 92 New York, 152, the Court of Appeals affirmed its continued existence as a rule of law in that state. In that case N. K. H., in 1868, executed a deed of premises in Buffalo to ''C. D. and H. D., his wife, * * * their heirs and assigns." He died leaving her surviving, and on her death the property was sold by her administratrix, who was also her sole heir at law. The pur- chaser, however, refused to complete the sale, alleging that H. D. had never been seized of more than an undivided half interest, and her administratrix therefore could not convey a clear title. The Court of Appeals decided that she could. Relative to the peculiar nature of the estate by the entirety, the Court said "the survivor took the estate, not by right of survivorship simply, but by virtue of the grant which vested the entire estate in er.cJi i^rantee. During the joint lives the husband could, for hia own benefit, use, possess and control the land, and take all the profits thereof," (this wasat common law,) "and he could mortgage and convey an estate to continue during the joint lives, but he could not make any disposition of the land that would prejudice the right of his wife in case she survived him. This rule is based upon the unity of husband and wife and is very ancient." Referring to the Married Women's Property Acts the Court said — " The claim is made that the legislation referred to has destroyed the common law unity of husband wife, and made them sub- stantially separate persons for all purposes. We are of the opinion that the statutes have not gone so far. * * * * Legislation similar to that which exists in this state, as to the rights and property of married women, exists in many of the states of the Union, and the decisions are neai'ly uniform in all the other states where the question has arisen, that a conveyance to husband and wife has the common law effect,, notwithstanding such legislation." It appears by the citations in the opinion that this conclu- sion had then (in 1883) been announced by the courts ol Pennsylvania, Michigan, Mississippi, New Jersey, Indiana, Wisconsin, Maryland, and Arkansas. S42 LEGAL AND COMMERCIAL PRECEDENTS. In Iowa the Supreme Court early adopted an opposite rule, and in a case where husband took an estate jointly by a decree in partition, the tenancy was one in common, with no right of survivorship, and that an estate by the entirety could only be created by words specially adapted to the purpose. (Hoffman v. Stigers, 28 Iowa, 305.) INSURANCE. Temporary Breach of Condition Merely Suspends Insurance. —Revival on Cessation of the Breach.— Ti- was the keeper of a bowling-alley which was insured in the Germania Fire Insurance Company, and was destroyed by fire in August. Between May 1st and the last of June H. had no license, and was then carrying on an illegal business. This illegal occu- pation ceased in June, over a month before the fire occurred. The Massachusetts Supreme Court under these circumstances reversed a judgment which was directed for the insurance company by the court below, and ordered a new trial. The Court said — "It does not appear that the defendants were or would be in anyway injuriously affected after such illegal use had ceased. They have the benefit of the temporary suspen- sion of the risk without any rebate of the premium. There is no hardship to the defendants in requiring them to show an actual injury, or else to avail themselves of the clause of the policy giving them a right to cancel it upon notice and a return of a ratable proportion of the premium. There is no rule of law preventing the revival of a policy of insurance after temporary suspension." (Hinckley v. Germania Insur- - ance Compa,ny, 1 Eastern Reporter, 73 ; 32 A. L. J., 110.) In several other states the same conclusion was reached in analogous cases cited in the above. In Maine the property was alienated, but was reconveyed to the insured, and it was teld that the policy was merelj^ suspended during the aliena- tion. (Lane v. Lane, 12 Maine, 44.) A similar case was decided in the same way by the Louisiana Supreme Court. (Power V. Ocean Insurance Company, 19 Lousiana, 28.) Violation of the condition against other insurance has been lield to have only the like temporary effect in Missouri, Penn- sylvania and Illinois, and in the latter state an increase of INSURANCE. 34-3 the risk, which ceased before the loss occurred, was held to involve no graver consequence. (Insurance Company of North America v. McDonald, 50 Ilhnois, 120.) Several New York cases on insurance were approved by Knapp, J., in Nelson v. Bound Brook Mutual Fire Insurance Company, (N. Y., June, 1887, 10 Central Reporter, 220.) He quotes Sheldon on Subrogation, Section235, where it is said : "If the mortgagee has procured the insurance, though in his own name, at the request and expense and for the benefit of the mortgagor, as well as for his own protection, though this is by a parol agreement unknown to the insurers, the mort- gagor will have the right, in case of loss, to have the avails of the policy applied for his relief towards the discharge of his indebtedness," and Judge Knapp adds: "This statement of the rule is well supported by numerous <;ases cited by the author. (Kernochan v. N. Y. Bowery Fire Ins. Co., (17 N. Y., 428,) Hay v. Star Fire Ins. Co., (77 N. Y., 236,) and Clinton v. Hope Ins. Co., (45 N. Y., 455,) fully supported the rule as stated in the text." Life. — Sale of Folicy by Husband with Wife's Consent, —An. interesting and important branch of the law is that relating to life insurance where the wife and her children are the beneficiaries. An endowment policy was issued to Mrs. A. upon the hfe of her husband, payable in case of her death before her husband to her children; she joined with her husband in an assignment of the policy. In an action brought by the assignee or owner of the policy upon the policy wherein ]\Irs. A. was made the defendant, being substituted as such in place of the insurance company, it was decided by the Court of Appeals the assign- ment or sale was valid. The fact that Mrs. A. had children at the time of the assignment or sale does not affect its validity, that the children had only a contingent interest, which contingency did not arise, as the policy had matured in the life-time of the mother, (Mrs. A.,) and by the assignment the purchaser (who was the plaintiff in the action,) became vested with the entire interest in the policy. That Chapter 248, Laws of 1879, of New York, makes poli- cies of insurance issued upon the lives of husbands for the 344 LEGAL AND COMMERCIAL PRECEDENTS. benefit of their wives "assignable by said wife, with th& written consent of her husband." (103 New York, 617.) Life.— Effect of Warranty .—A. celebrated life insurance case came up on appeal, or an important branch of it, and was decided in October, 1886, by the Court of Appeals. The facts of this case are, that one Walton Dwiglit made and signed an application for insurance in the Germania Life Insurance Company, August 28, 1878, in which he answered certain questions. The policy was delivered to him, contain- ing among others these provisions: "This policy is issued, and the same is accepted by the said assured upon the follow- ing express conditions and agreements : That the same shall cease and be null and void and of no effect * « * «- if the representations made in the application for this policy, upon the faith of which this contract is made, shall be found in any respect untrue." The company asked Dwight : A. " For the party whose life is proposed to be assured, state the business carefully speci- fied." Ans. "Real estate and grain dealer." B. "Is this- business his own, or does he work for other persons, and in what capacity?" Ans. "His own." C. "In what occupa- tion has he been engaged during the last ten years?" Ans. "Real estate and grain dealer." D. "Is he now, or has he been engaged in or connected with the manufacture or sale of any beer, wine, or other intoxicating liquors ?" Ans. "No." Dwight died November 15, 1878, immediately before the payment of a second quarterly premium became due. Upon the trial it appeared that Dwight was engaged in the business of keeping hotel from May, 1874, until March, 1877, and that during those years he regularly sold wines and liquors in bottles to such of his guests as desired them . He also kept a wine room in which he kept the liquors stored, and had a regular license and permit to sell beer, wine and liquors at retail to be drank upon his premises. It was proven that Dwight liad made answer to other insur- ance companies that he kept a hotel during three years, and that he sold liquor in packages, so that there was no room for doubt of Dwight having understood the questions of this com- pany answered by him, and that his answers were incorrect. INSURANCE. 345 The motive as well as the propriety of the questions put by this compauy were clear aud understood, to and by Dwight. The language used was free from all and any ambiguity. Dwight's answers at best were evasive. That he was in any other business was not proven by his legal representatives, as the plaintiffs in this action. Upon many facts contradictory to the statements made by Dwight to this company, the defendant herein, a new trial was ordered, which reversed the judgments of the inferior courts. Hence, from the opmion of the court, it was held that where, by the terms of a policy of life insurance, the assured warrants the truth of his answers to questions in his application, com- pliance with the warrants is a condition of the validity of the contract, and any substantial deviation from the truth in an answer, it is to be assumed, is material to the risk and forfeits the policy. Where, by plain and unambiguous language in such a policy, the observance of an apparently immaterial require- ment is made the condition of a valid contract, neither courts nor juries have the right to disregard it. The construction of a contract depends upon the language of the instrument itself, and it therefore becomes a question of law only, and is for the court to pass upon. In considering the language of an insurance contract, the words of a promise are to be regarded as those of the promisor, (the company,) while those of a representation, upon which the promise is founded, are the words of the promisee, (the assured,) and, in either case, are to be taken most strongly against the party using them. It was held, that the statement of Dwight, that he was not engaged in any other business than real estate and grain dealer was false, and so was a breach of warranty and for- feited the policy; also, that it conclusively appeared the insured did not misconceive the meaning and intent of the question. (103 New York, 341.) Ziife.-Ejfect of New Policy Issued on Conditions of Old Policy, — An insurance company issued a policy to the wife of the insured upon his life, containing a clause which provided for 346 LEGAL AND COMMERCIAL PRECEDENTS. its surrender and the issuing of a new policy therefor. The suit was brought because of this clause upon which a new policy was given. The original policy contained the following provision: "That if after the receipt by the company of two or more annual premiums, the policy should cease in consequence of the non-payment of premiums, the company, oh the surrender of the same, will issue a new policy for the full value acquired under the old one, subject to any notes that may have been received on account of premiums; that istosay, if payments for two years have been made, it will issue a policy for two- tenths of the sum originally insured; if for three years, three- tenths ; and in the same proportion for any number of payments, without subjecting the assured to any subsequent charge, except the interest annually on all premium notes remaining unpaid on this policy." The policy was allowed to lapse after payment of six annual premiums. She surrendered the policy, therefore, to the com- pany, and received a new one for six-tenths of the original amount of insurance; this new policy gave, as the considera- tion therefor, the surrender of the old one, the representations for the same and the payment of annual interest on the notes which were given for premiums. There was this clause in the second or new policy : " If the interest upon said notes or credits shall not be paid on or before the day or days above mentioned for the payment thereof, * * * then and in every such case the company shall not be liable to pay the sum assured, or aj\.j part thereof, and said policy shall cease and be null and void without notice to any party or parties interested therein." Three annual payments of interest on notes only were made after this new policy was issued. In 1882 the company passed into the hands of a receiver, five years after the last payment of interest. The wife claims that she was ignorant of this forfeiture clause and that it was fraudulently inserted. It was decided that the assured was bound to pay the pre- mium annually, and if not paid on the day fixed the policy lapsed. The original policy was non-forfeitable only in so far as the company was obliged to issue a new policy for as many tenths as there had been two or more premiums paid up to INSURANCE. 347 time of the omission, uponthe surrender of the original policy. If the assured had violated auy other condition she would not have been protected against its forfeiture. The new policy provided that it was subject to any notes given on account of premiums. The assured upon receiving the new policy obligated herself to pay the interest on all unpaid . premium notes and to bear no other charge. It was not necessary that the first or original policy' should provide a forfeiture clause for non-payment of interest, in the new policy, for the successful carrying of the insurance business requires prompt payment upon the part of the policy-holders, and the new policy required the payment of interest on out- standing premium notes; the law implies the right of the company to insert a forfeiture clause for enforcing payment of interest, and thus avoid accumulation of unpaid interest. (New York Life Insurance Company v. Statham, 93 U. S.,24, 30.) The cases holding otherwise are those where the clauses in the original policy are entirely different from those above quoted, as shown in Cowles v. Continental Life Insurance Co., in the Supreme Court of New Hampshire, (2 New England Eeporter, 247), and in Bruce v. Continental Life Insurance Company, in the Supreme Court of Vermont, (2 New England Eeporter, 635.) These cases were decided upon clauses Which did not provide that the new policy should be subject to the payment of interest on outstanding premium notes. (The People v. Knickerbocker Life Insurance Company, 103 New York Court of Appeals, 480.) Assignment of Policy by Husband.— ^ince about 1880 many states passed laws requiring the wife to join in the assignment of a policy of life insurance by the husband wherein she was the assured or beneficiary. An endowment policy upon the life of G. was issued to his wife in 1870, payable in fifteen years. The policy provided the usual clause, that "in case of the death of Mrs. G. before the death of G. (the insured, her husband,) the amount of said insurance shall be payable after her death to her children, for their use, or to their guardian, if under age ; or, if she shall have no children, to her executors, administrators or assigns." 348 LEGAL AND COMMERCIAL PRECEDENTS. About 1881 Mr. and Mrs. G. united, in a written assign- ment, signed by them, of all their right, title and interest, in and to said policy, to one A. A. died before the policy matured, hence his executor brought suit against the insur- ance company to recover the amount of the policy. Mrs. G. was substituted as defendant, and the company deposited the money in court. Mrs. G. set up in her defense that the assignment made by her and G. to A. was void, because she was a married woman having children who had an interest in the policy, and also that the assignment was not made in conformity with the statute. The Supreme Court and the Court of Appeals decided against her on both points, and held that the assign- ment was valid, because — 1. The fact of signing the assign- ment by both Mr. and Mrs. G. was a written consent to sell by both, and — 2. That, although there were children, husband and wife, joining, may assign or surrender a policy. Had the wife been dead the husband could not have sold the policy, as then the interest of the children in the same would have been that of their mother, and the consent of her legal representa- tives was necessary. Their interest then was vested and not contingent, as in the case presented. The statute referred to (as provided in Chapter 248, Laws of 1879,) states "All policies of insurance heretofore or here- after issued within the State of New York, upon the lives of husbands, for the benefit and use of their wives, in pursuance of the laws of the state, shall be, from and after the passage of this act, assignable by said wife with the written consent , of her husband ; or in case of her death, by her legal repre- sentatives, with the written consent of her husband, to any person whomsoever, or be surrendered to the company issuing such policy, with the written consent of the husband." This provision is the same or similar in other states. (See Anderson v. Goldsmidt, 103 N. Y. Court of Appeals, 617.) Mecent CUses on Benefit Insurance.— In Taylor v. National Temperance Relief Union (Missouri, November 28, 1887, 17 Ins. L. J., 109), the following points were ruled : In the certificate of a benevolent association it agreed to INSURANCE. 349 make an assessment upon all the members subject to assess- ment, and pay the amount collected, not exceeding one thousand dollars, less the cost. Held, that in an action against the association to recover damages of .|1,000 and for proper relief, a petition which averred a refusal to pay the sum, but which failed to aver that it had made and collected an assessment, was fatally defective on demurrer. Held, that the action should properly be brought at law if solvent, or if insolvent, perhaps equity might be sought. Where the assessment need not be made until sixty days after proofs, the petition should aver the making of proofs. When there is no power to change the beneficiary it cannot be claimed that the latter, in case of death prior to the insured, has a mere expectancy. In Mendt v. Iowa Legion of Honor (October 19, 1887, 17 Ins. L. J., 133), the following points were ruled : An instrument purporting to be a will, but which could not be admitted to probate because not witnessed in the manner prescribed by statute, was not effectual to change the beneficiary of a life policy. The constitution of a benevolent society provided that a member might change the beneficiary by authorizing such ■change in a prescribed form, in writing, on the back of the certificate, attested by the secretary, and by him reported. Held — 1. That an oral agreement by the secretary, that the instrument purporting to be the will should be regarded as changing the beneficiary, was not a compliance with the con- stitution, and was ineffectual to work such change. 2. That though the original beneficiaries had only an expectancy during the life of the insured, their rights attached upon his death, and they were entitled to object to an illegal change of the beneficiary. Benevolent Society.— Who are the Legal Beneficiaries.— Effect of Marriage by a Member.— Bill of interpleader to determine to whom the plaintiff should pay a certain death benefit pay- able upon the death of one John J. Callahan. Hearing in the Supreme Judicial Court before Devens, J., who reported the 23 350 LEGAL AND COMMERCIAL PRECEDENTS. case to the full Court. The facts appear in the opinion, (Supreme Court of Massachusetts, March, 1888.) Devens, J. — The Massachusetts Catholic Order of Foresters is a beneficiary association, originally formed on July 30th, 1879, under the statute of 1874, Chapter 375, as amended by the statute of 1877, Chapter 204, (Pub. Stat., Chapter 115.") . The directing and governing body of the organization, or ■ order, consisted of what was termed a high court, which wa» composed of representatives from the subordinate courts, to which the members of the order individually belonged. It i& through the high court, acting by means of requisitions on the subordinate courts, that the sums payable on the decease of the members, respectively known as death benefits, or endowments, are collected and paid. The association which brings this bill of interpleader concedes its liability and avers its readiness to pay the sum of f 1,000, which became due on the decease of John J. Callahan, to the person legally entitled thereto. John J. Callahan became a member of the order on the 10th day of June, A. D. 1883, and remained in good standing until the day of his death, on the 24th day of Feb- ruary, A. D. 1886, having paid all the assessments made upon him. In his application for membership, which was according to the form prepared by the association, he desig- nated his mother, Mrs. Catherine Callahan, as the person to whom the sum due as endowment should be paid in the event of his decease. John J. Callahan was not then married ; he did not then, or afterward, live with his mother, nor was she then, or afterward, dependent upon or supported by him. He subsequently married Mrs.Mary J. Callahan, who survived him, but who is now deceased. An administratrix has been appointed on her estate, Mrs. Hannah Keefe, who was the mother of Mrs. Mary J. Callahan. Mrs. Keefe is also the next of kin and sole heir of her daughter. The sum due from the association is claimed by Mrs. Catherine Callahan, under the designation made to her in the application for membership which was never changed. It is also claimed by Mrs. Keefe, either as administratrix, or next of kin, (as the Court shall deem most correct), upon the ground that the designation INSUMANCE. 351 of his mother, as the beneficiary of the fund due on his decease, could not legally have been made by John J., and that under Section 5, Article 16, of the constitution of the subordinate courts, by which it is provided that "in case no direction has been made by a brother, either by will or entry in his application for membership as to the disposal of his endowment, the trustees of the court of which he was a mem- ber may cause the same to be paid to the person, or persons, whom they may find entitled thereto," it should be held that Mrs. Mary J. Callahan was the person entitled thereto. Under the Statutes of Massachusetts, as they existed in 1879, when the corporation was originally formed, the only right which the association had to provide for or to accumu- late afund for the purpose of paying a sum upon the decease of its members was "for the purpose of assisting the widows, orphans, or other persons dependent upon deceased mem- bers." (Pub. Stat., Chapter 11.5, Section 8.) This section was amended by the statute of 1882, Chapter 195, Section 2, providing that the fund thus authorized should be "for the purpose of assisting the widows, orphans, or other relatives of the deceased, or any persons dependent on deceased mem- bers." The association republished its constitution and by-laws in 1882, subsequent to the passage of the actof 1882, with certain alterations made subsequent thereto, although the existence of that act is not alluded to or noted. These changes had no reference to nor were they occasioned by reason of the large powers with which the corporation was invested. They related to matters of detail only. It was under this constitution of 1882 that the association was conducting its business when John J. Callahan became a member in 1883. It is the contention of Mrs. Keefe that, although Mrs. Catherine Callahan, as the relative of her son, might have been designated under the statute of 1882 as a beneficiary, yet this statute had never been adopted by the association. The statute required no formal adoption. It enlarged the powers of this and other similar beneficiary associations. When, after the passage of the Act of 1882, the association accepted the application of John J. Callahan, 352 LEGAL AND COMMERCIAL PRECEDENTS. and the designation which he might then lawfully make, it could not be said by it, or by any claimant, that it was exer- cising, and was only authorized to exercise, the more limited powers which it had under the earlier statute. It is also con- tended, that by its constitution the association had so limited itself, that it could not accept a designation of the mother. We have no occasion to consider whether a beneficiary asso- ciation might not, by its constitution, so limit itself in its operations, that its endowments should be only for the benefit of one or more classes of those whom it might lawfully entitle thereto, as for the widows only, or as orphans only of deceased members. "VVe find no such intention manifested by this association. The argument on behalf of Mrs. Keefe is that the constitution of 1882, under the title, " Object," has the effect to limit the benefits of the association to two classes of persons, only widows and orphans. The "name and object" of the association are stated in a preamble to the constitution. It is declared that the object of the organiza- tion is to promote friendship, unity and true Christian charity. It defines these respectively, unity as "unity in uniting together for mutual support and in making suitable provision for the widow and orphan." It would be a very forced construction to infer from this generality that the association had thus excluded itself from making provision for those who were dependent on the deceased which it legally might make when the constitution was originally framed, or for his relatives which it might lawfully make when Callahan became a member. The constitution of 1879, which was the one originally made, and that of 1884, which was in force when Callahan died, are each prefaced by the same recital of "name and object," yet each constitution declares, in defining the duties and powers of the subordinate court, that the principal object of the association is to secure " to the depend- ents of its members" the sum of f 1,000, payable on the death of such member. It is thus manifest, that under these two constitutions it could not have been intended to limit the benefits of this association to the widows aud orphans, merely because they alone are mentioned in the declaration of its INSURANCE. 353 "name and object." In the constitution of 1888, in defining tlie powers of the subordinate courts, the phrase above quoted as to securing "to the dependents of its members," $1,000 is not used. Under the constitution, to hold that because it had adopted as its preface a statement that among its purposes ^Yas a suitable provision for the widow and , orphan, it could not provide for others as "relatives" or '■■ "dependents" for whom the statute permits such association, would not be a reasonable construction. The deceased mem- ber had a right to designate as the beneficiary of the fund any person coming within the statutory provisions which enumer- ate those who may be thus designated. The law which per- mitted a relation merely, not being necessarily a dependent, to be designated, was in force when he made his designation, The designation of his mother by the deceased Was, therefore, one to which the association had a right to assent, as it did assent, by accepting the order of the deceased. (American Legion of Honor v. Perry, 140 Massachusetts, 580; Elsey v. Odd Fellows Mutual Eelief Association, 142 Massachusetts, 226 ; Briggs v. Earl, 139 Massachusetts, 393.) This was not revoked by the subsequent marriage of John J., and his mother, Mrs. Catherine Callahan, is now entitled to receive the fund of $1,000. Decree accordingly. Change of Beneficiary.— A.ction of contract upon a certifi- cate of insurance issued by the defendant society upou the life of Thomas G. Rice. At the trial in the Superior Court, without a jury, before Thompson, J., it appeared that on the seventh day of July, 1888, Thomas G. Rice was indebted to Frederick H. Rindge, Clarissa H. Rindge and Francis J. Par- ker, administrators of the estate of Samuel B. Rindge, in the sum of $6,368, and on said date the defendant, a corporation duly established under Chapter 3175 of the Acts of 1874, as amended by Chapter 204 of the Acts of 1877, issued the cer- tificate of policy (said administrators being beneficiaries thereunder,) as collateral security for the payment of said indebtedness. The word "re-issue" was on the face of the certificate, and referred to the fact that on November 7, 1879, on the application of Thomas G. Rice, a certificate was issued 354 LEGAL AND COMMERCIAL PRECEDENTS. to him, in which his wife, Ellen C. Rice, was named as benefi- ciary, and on the 7th day of July, 1883, this certificate was substituted therefor. In the certificate of organization made by the officers, and the certificate of incorporation issued by the secretary of the commonwealth, under the provisions of Section 4 of Chapter 375 of the Acts of 1874, the purpose of which said corporation was constituted was stated to be to render assistance to the widows, orphans, or other dependents of deceased members, and also to promote the cause of tem- perance. The other evidence in this case was the same as in the case of Rice v. New England Mutual Aid Society, reported ante; and the Court ruled that the certificate was forfeited by reason of non-payment of the assessment called for, found for the defendant, and reported the case to the Supreme Judicial Court. Other facts appear in the opinion. Hutchins and Wheeler, for the plaintiff. Ely, Gates and Keyes, for the defendant. C. Allen, J. — The designation of beneficiaries in the policy or certificate of membership is invalid, as the statutes under which the defendant corporation was organized did not authorize it to grant insurance for the benefit of friends. (Daniels v. Pratt, 143 Mass., 221.) But an invalid designa- tion of beneficiaries does not render the whole contract invalid. The contract in terms recognized that there maybe a change or substitution of beneficiaries, and there is a pro vi- sion that if the member shall survive all original or substituted beneficiaries, then his membership shall be for the benefit of his legal heirs. This provision is within the authority of Statutes of 1882, Chapter 195, Section 1, heirs being included under the head of relatives, and if there is no other legal designation this may take effect. (Daniels v. Pratt, ubi supra.) By an amendment the action is now prosecuted in the name of the administrator of the estate of the assured, and he is the proper party to maintain the action. (Bailey v. New England Insurance Company, 114 Mass., 177, and cases cited ; Flynn v. North American Insurance Company, 115 Mass., 449; Unity Association v. Dugan, 118 Mass., 219.) This is not controverted, but the defendant contends that the INSURANCE. 355 declaration avers that the action is brought for the benefit of Rindge, and therefore that the action cannot be main- tained. This objection cannot be supported.. If the plaintiff receives the money, it will be a good discharge to the defend- ant of its liability, and the defendant will not be responsible for the proper application of the money by the plaintiff. It is to be assumed, at this stage of the proceedings, that he will dispose of the funds properly, and he may be compelled to do so, by judicial proceedings to which the defendant would not be a necessary party. (Gould v. Emerson, 99 Mass., 154 ; Bailey V. New England Insurance Company, 114 Mass., 177.) The averment that the action is brought for the benefit of Rindge is unnecessary, and may be disregarded. Since the action is now prosecuted by the proper plaintiff, we need not consider the effect of Statutes of 1885, Chapter 183, which the plaintiff relies on as enlarging the effect of the defendant's contract. The other objections to the plaintiff's recovery depend on the same facts which were considered in the case of Rice against the same defendant, (reported above), where it was held that the defendant must be deemed to have •waived the forfeiture. According to the terms of the report the entry must be judgment for the plaintiff. (Frederick H. Rindge v. New England Mutual Aid Society, Supreme Court of Massachu- setts, March, 1888.) Marine,— Insurance on Cargo " Until Safely Landed."— Dis- charge on Lighters for Transshipment, — Misk Not Covered, — One of the forms of the question, how far goods are covered by a marine insurance policy after being discharged into lighters at the end of the voyage, was decided by the British Court of Appeal in the case of Houlder Brothers & Co. v. The Merchants Marine Insurance Company, limited. (Law Rep., 17 Q. B. D., 354, 1886.) A cargo of rails was shipped on the Steamship Kirkstall, under a policy describing the risK as " at and from Hull to London , including all risk of craft, until the goods are discharged and safely landed." When therails arrived in London they were discharged into lighters, not with the intention of landing them, but of loading them into 356 LEGAL AND COMMERCIAL PRECEDENTS. other ships for exportation to Sydney. Some of the lighters^ with the rails on board, were sunk by a gale, and an action was brought against the insurance company for salvage and average expenses. It was proved at the trial that almost all rails sent coastwise to London are reshipped for export with- out being landed. Consequently the plaintiif claimed that the terminus ad quern which the parties contemplated was. the export ship — that is, that the cargo was not "safely landed " until it was put on board that vessel. On the other side it was contended that the word "landed" must be taken in its ordinary and natural meaning unless there is some custom which controls the interpretation. No such custom was proved. When the goods were put into the lighters to bfr carried to the export ship, instead of being landed, it was. argued there was an abandonment of the voyage and a commencement of the new voyage. In the trial court it was held that " the underwriters were discharged because the accident happened after the expiration of a reasonable and ordinary period from the time at which the goods had been placed on the lighters for transshipment." The Court of Appeal affirmed the judgment, but in doing so took the broader ground that the risk was terminated by discharge upon the lighters. The Court said : "The risk insured against is the risk of the transit upon the- lighters which have in the ordinary course of business to convey the goods to the shore. * * * Cargo discharged upon lighters for transshipment is * * * -exposed to a peril which is not the same as that which it encounters if discharged upon lighters to take it to the shore at once. It is perfectly true that by taking delivery short of the shore the consignee determines the risk insured. But this is not because in such a case the risk is terminated by an actual landing, but because the consignee waives the landing and himself terminates the risk instead by taking delivery short of the land. Nobody in commercial or business language can say that goods are landed which are transshipped without landing, or that goods which are placed in lighters for trans- shipment are placed in lighters to be landed. Itwas no doubt INTEREST. 357 proved conclusively on the trial that steel rails which are consigned by coasting vessels to London are most commonly transshipped into export vessels at London without being landed, and underwriters no doubt must be taken to be familiar with the ordinary incidents of the trade and of the transit of the goods insured. But this falls far short of proving that by any custom transshipment is equivalent to landing. "We are told that it is unusual in such cases to make the policy in anj' other form than that in which it was made. If this be true it only follows that it is usual in these cases not to insure the risk which has really to be run. Policies which provide for transshipment are perfectly familiar to all com- mercial lawyers, and if those who consign steel rails to Lon- don are in the habit of transacting their business by means of policies which do not contain the appropriate and proper clause the shippers, if a loss happens outside of the risk against which they are insured, must take the consequence of not having protected themselves by the proper contract of insurance. The goods here have been lost, but by an accident not covered by the policy." INTEREST. If a Mortgage or Other Contract Stipulates For a Certain^ jRate of Interest, and After Maturity the Statutory Mate is Higher or Lower than the Contract Bate, TFhich Prevails?— Opposite Rule in Different States.— Manj mortgages receiving seven per cent interest were running in New YorJc State when the legal rate was reduced by statute to six per cent. The question at once arose, what rate was now collectible upon these securities? In Vermont the same question in principle, though somewhat different in form, came up in a suit to fore- close a mortgage made to secure certain bonds of the Bur- lington & L. Railroad Company, a Vermont corporation, bearing seven per cent interest. At the date of the foreclosure proceeding the bonds were overdue, and the legal rate in Vermont was six per cent. The United States Circuit Court, district of Vermont, ruled on this point as follows : 358 LEGAL AND COMMERCIAL PRECEDENTS. " Question has been made as to the right to the special rate of seven per cent interest after the faUing due of the bonds. This is a Vermont contract, to be construed by the laws of Vermont. This question arose upon bonds and mortgages of the Rutland & Burlington Railroad, in Cheever v. The Rutland & Burlington Railroad Company, in the Supreme Court of Vermont, the highest court of the State, at the gen- eral term, 1869, not reported in the State reports. In that case it was held that the principal of the bonds bore interest at the special rate after they were due as well as before, and the interest coupons at the usual rate allowed by law from the time when they fell due. Opinion by Steele, J. Pamph., 18, 19. The reckoning stated from the master's report is in accordance with this decision, which is controlling upon this question." (Jackson & Sharp Co. v. Burhngton & L. R. Co., 29 Federal Reporter, 474.) The earlier New York cases, as interpreted by the Massachu- setts Supreme Court, in the case of Brannon \. Hursell, 112 Mass., 63, adopted the same rule, and it was said by the €ourt in that case that it was then the established doctrine in Indiana, California, Texas, New Jersey, Illinois, Wisconsin, Iowa, Nevada, Tennessee, Ohio, Michigan, and Virginia. It has also been adopted in Nebraska. Later New York cases were interpreted by the United States Supreme Court in Brewster v. Wakefield, (22 How., 118,) as holding the con- trary doctrine that the contract rate governed only until the maturity of the contract, and the legal rate only could be thereafter collected. Note. — We have ventured, on this point, to make considerable use of a paper by one of the present writers, Mr. Olmsted, contained in the " Pro- ceedings of the Convention of American Bankers Association," at Saratoga, (1884, p. 31.) This case was carried up from Minnesota, and the rule there established has been adopted in Kansas, South Carolina, Rhode Island, Kentucky, Arkansas, and Maine. It is admitted, however, in some of the decisions upholdingthis principle, "that theintentof the parties, if expressed with sufficient clearness in their contract, will govern the rate of interest to -the time of judgment." What Constitutes Usury,— Money to be Paid on Contingency. — Where the promise to pay a sum above legal interest depends upon a contingency and not upon the happening of & certain event, the loan is not usurious. INTEREST. 359 A borrower secured a loan by pipe line certificates, agreeing to pay seven per cent interest, and was to have the privilege of keeping the money until the certificates were worth |1.15 a barrel in the open marliet. Held not a usurious contract. The facts in this case as found by a special verdict are that D. A. Ealston, who is represented in this case by his assignee, Truby, borrowed in 1880 from James E. Brown, since dead, and represented by Mosgrove et ah, his administrators, vari- ous sums of money, amounting in all to $60,000. He secured this loan by the pledge of United Pipe Line certificates as collateral security, at the rate of 1,000 barrelp of oil for each $1,000 borrowed. The certificates were sold by the defend- ants about the 20th of November, 1882, who realized there- from $870.31 in excess of the said debt and six per cent interest thereon. When the loan was made it was agreed in writing that Ralston should " pay seven per cent as long as he retains the same, not to be less than four months, and Ralston to have the privilege to retain the money until United Pipe Line certifi- cates are worth in the open market $1.15 per barrel." Opinion by Paxson, J. Filed January 3, 1888. On an appeal from decision of Ct. of Common Pleas of Armstrong County. The learned judge of the court below entered judgment in favor of the defendants upon the special verdict. In this there was no error. The contract between Brown and Ral- ston, while resembling somewhat a conti-act for the loan of money, was not so in substance. It was practically a venture or speculationin oil, with a capital to be furnished by Brown. If unsuccessful, that is, if oil never reached $1.15 per barrel, the loss fell on Brown; if successful. Brown was to get his money back with seven per cent interest. In other words he risked the capital with the chance of getting one per cent above legal interest as profit. We do not see any taint of usury in this. It is settled law that when the promise to pay a sum above legal interest depends upon a contingency and ilot upon the happening of a certain event, the loan is not usurious. This was decided in Philadelphia & Reading Rail- road Company v. Stichter, 11 W. N. C, 325. And see, also, 360 LEGAL AND COMMERCLiL PRECEDENTS. Spain V. Hamilton's Administrator, IWall., 604'; Corcoran's Case, Id. In Ptiilip v. Kirkpatrick, Addison, 124, the princi- ple is thus stated : "If money be lent, payable on a contin- gency, which may never happen, as the arrival of a ship,, more than legal interest may be reserved on the payment and it is not usury, for the lender risks the loss of the whole." Judgment aflBrmed. (Supreme Court of Pennsylvania, Truby, assignee, etc., v. Mosgrove et al.) JUDGMENT. for All Purposes is Like a Contract.— The Court of Appeals (New York) held in a case to appear in 20 Abb. New Cases, reversing the Supreme Court, that a judgment is a contract for the purposes of the remedies incidental to actions on con- tract. This is a sensible rule. The remedies peculiar to actions on contract all rest on the fact that if defendant has contracted, it is reasonable to allow simpler and directer methods of procedure than if he were merely contending" against a liability for unliquidated damages for a tort, or against a penal liability. If his liability has been established by judgment, it is just as good for the purpose of suing as if he had stipulated. The decision is put on the ground that the judgment merges- not only the cause of action, but also the right to provisional remedies peculiar to the original cause of action. There is,, however, an exception to this rule in the case of a foreign judgment and the provisional remedy of arrest. The result is that after recovering a money judgment, whether domestic or foreign, and whether on contract or in tort, (unless it was confessed merely as security, or unless the judgment has been opened and allowed to stand as security pending further litigation), plaintiff suing again must sue on the judgment. If the judgment is a c^oznestic judgment plaintiff may have attachment, if defendant is a non-resident or foreign corpora- tion, or a resident guilty of fraudulent disposal, etc., of prop- erty, or concealment to avoid summons, etc. Plaintiff may have arrest, if defendant is guilty of fraudulent disposal, etc., of property. JUDGMENT. -LEASE. 361 If the judgment is a foreign judgment, plaintiff may have attachment in the same cases only as in an action in a domestic judgment, and may have arrest in the same case as in an action on a domestic judgment, and also in any case where defendant might have been arrested in an action on the original demand. LEASE. Ziien Oiven to Landlord on Goods, Effect of.—^. took a lease of B. for five years of a store at the rent of $2,000 for the first year, and a greater sum thereafter, payable monthly in advance, and in case of a default in payment, or seizure of the goods and merchandise, or other personal property in or upon the premises, by virtue of any suit, judgment, execution, assignment or otherwise, the whole amount of such rent agreed to be paid should immediately become due and payable. There appeared this clause in the lease : "And it is further agreed, that the lessor shall have a lien as security for all the rent, water rates, for damage to building, upon all the mer- chandise, chattels, fixtures and other personal property, which are, or may be in or put on the demised premises, belonging to the lessee, (A.,) or claiming under him as assignee, under-tenant or otherwise, and such lien may be enforced on the non-payment of any of said rent or water rent, by the taking of such property and the sale thereof in the same manner as in case of a chattel mortgage on default thereof," etc. It was agreed that the lessee (A.) "should remain in pos- session of said mortgaged goods in said store, and that he might sell the goods covered by said mortgage, in said store, and use the proceeds in his business, buying other goods with the money as opportunity ofiered, and using the proceeds of the sales to meet his liabilities, and in the prosecution of his business, etc. That at the time said chattel mortgage lease was executed, the lessee (A.) was in possession of store and mortgaged goods, and continued therein as he did before the chattel mortgage lease, in carrying on his retail business, in all respects as if no mortgage were in existence, all of which 362 LEGAL AND COMMERCIAL PRECEDENTS. was done with the knowledge and approval of the lessor (B.) That B. never had possession of the goods covered by the chattel mortgage lease." About two years after the lease was executed A., the lessee, made a general assignment to C. of all his property, including that upon the leased premises, for the benefit of his creditors. C. took possession of the goods and sold them without notice to B., the lessor. B. then demanded of C. the rent or the goods and fixtures in the store. By statute law the landlord (B.) could not obtain prierity over other creditors for the collection of rent, as was intended by the contract of lease, and his debt for rent must be enforced like other obligations. (In New York it wa& abolished by Laws of 1846, Chapter 274.) The contract was a valid one between the landlord (B.) and his tenant (A.) as to the merchandise then in the premises, as well as to other goods acquired later on. In similar cases the same was held. (See 65 N. Y., 459, and 71 N. Y., 113.) But here in this case the landlord raises the question of his prior right to the goods as against the tenant's assignee for the benefit of his creditors. The landlord makes his stand that the assignee is in no better position than his assignor, (A.), the tenant, and that he, the landlord, is entitled to the proceeds of the sale. The Court held that that was not so, because the assignee represents creditors, and may treat all agreements made in fraud of their rights as void. There was no change of possession of the things covered by the agreement between A. and B., nor a delivery of them, and it was so agreed that there should be neither. This was a void agreement even at common law. (Twyne's Case, 3 Coke, 80.) This agreement was in the nature of a mortgage. Its object was to prefer B., and it formed a cover for a secret trust in favor of A., which is in the nature of a fraud upon the other creditors of A. The statute makes a mortgage of goods and chattels upon any condition whatever, without a delivery and without a change of possession, fraudulent as against the creditors. The question of date or time of the creation of the LEASE. 363 debt as before or after the lease was executed was immaterial. It is against all principles of equity that B. should maintain his lien to the exclusion of all other bona, fide creditors. A. was allowed by B.to sell the goods as though no lien existed, nor was any restraint put upon him as to the money obtained from the sales. (Reynolds v. EUis et ah, 103 N. Y., 115.) Waiver of Notice to Continue Lease.— ^. executed lease of a store to S. containing this clause : "And it is further agreed that the party of the second part (S.) shall have the privilege of continuing this lease for two years at the annual rental of $600, to be made in monthly payments in advance on the first day of each and every month during said lease, by first giving written notice to the party of the first part (L.) on the first or during the month of February (before the renewal) of such intention." The store was vacated by S. four months after the new term expressed above commenced. He paid no rent after vacating. The parties to the lease waived the written notice as pro- vided therein by their acts in continuing in the premises after the first term expired, and paying the increased rent up to the time S. vacated them. This waiver was implied from their conduct irrespective of the question of benefit to be derived from the written notice to L., or to S. as the tenant. L. refused to terminate the lease until the expiration of the two years, and refused to accept the pay. S. was liable for the rent of the balance of the term of lease, for twenty months. S. attempted to show the action was barred by the statute of limitations, but this is met by the fact that the lease was executed under seal. (Long v. Stafford, 103 N. Y., 274.) Landlord and Tenant.— In Cowen v. Sunderland, Massachu- setts Supreme Judicial Court, which was a suit by a tenant against her landlord for damages resulting from falling into a cess-pool in the yard, covered by rotten planks, which were concealed by earth on which grass and weeds were growing, there was evidence that the same had never been pointed out to her by the defendant, and that she was ignorant of its position and dangerous character, and that defendant had 364 LEGAL AND COMMERCIAL PRECEDENTS. •directed the cover to be repaired with old boards some time previous, and was present when such repairs were made. The €ourt held that it should have been left to the jury to say whether defendant knew of the defective covering and the danger therefrom, and had neglected to inform plaintiff of it ; and also whether plaintiff had been injured in consequence of her failure to make a proper examination of the premises. It is a general rule, well established by the decisions of this Court, that the lessee takes an estate in the premises hired, and takes the risk of the quality of the premises, in the absence of an express or implied warranty by the lessor or of deceit. If, therefore, he is injured by reason of the unsafe condition of the premises hired, he cannot ordinarily main- tain an action in the absence of such warranty or of misrep- resentation. The rule of caveat emptor applies, and it is for the lessee to make the examination necessary to determine ■whether the premises he leases are safe, and adapted to the purposes for which they are hired. There is an exception to this general rule, arising from the duty which the lessor owes the lessee. This duty does not originate directly from the contract, but from the relation of the parties, and is imposed by law. While there are concealed defects attended with dan- ger to an occupant, and which a careful examination would notdiscover, known to the lessor, the latter is bound to reveal them in order that the lessee may guard against them. While the failure to reveal such facts may not be actual fraud or misrepresentation, it is such negligence as may lay the foun- dation of an action against the lessor if injury occurs. The , principle that one who delivers an article which he knows to be dangerous to another, ignorant of its qualities, without notice of its nature or qualities, is liable for an injury reasona- bly likely to result, and which does result, has been applied to the letting of tenements. It has thus been held that where one lets premises infected with the small-pox, and injury occurred thereby, he was liable, if knowing this danger he omitted to inform the lessee; this upon the ground of his negligent failure to perform a duty which he owed the lessee. It was not deemed important whether the omission to give the information was intentional or otherwise. LICENSE AND TAXATION. 365 Obviously, there may be many concealed defects and dan- gers about a house which careful examination will not dis- cover. If these are known to the lessor, it is for him to reveal them. Traps or contrivances may exist by means of which the most careful occupant might be injured. " Such traps or contrivances," says Mr. Justice Field, "are notmerely a want of repair ; they are in a sense active agencies of mischief, which no tenant would expect to find, even in a decayed and ruinous tenement." (Bowev.Hunking, 135 Mass., 380.) luReichen- bacher v. Pahmeyer, 8 Bradw., 217, the defect alleged was in the manner of hanging a chandelier. The chandelier was hung unsafely, and the lessor knew it, and did not disclose this fact to the lessee. It was not apparent to an observer. Itwas held that the lessor was liableto a servant of the lessee who was injured by its fall. In Bowe v. Hunking, ubi supra, it was held that the case then at bar was not within the exception of the general rule by which a lessor is rendered liable for negligence of this character. There was no evidence that the defective step by which the injury in that case occurred was known to the lessor or her agent to be unsafe; and further, this defect itself was obvious, and whatever •danger existed was readily seen by examination. LICENSE AND TAXATION. Taxation not License, — The Ohio .(Dow) Liquor Tax Law. — Certain liquor dealers of Cuyahoga county, Ohio, brought an action to restrain the county treasurer from collectiLg the assessments made uponthem as sellers of intoxicating liquors under the Act of the General Assembly passed May 14, 1886, entitled "An Act providing against the evils resulting from the traffic in intoxicating liquors." (33 Ohio Laws, 157.) Atemporary injunction having been allowed, on a motion to dissolve the injunction, the Court granted the motion and dismissed the petition of the liquor dealers. The Supreme Court pointed out the fact that if the law was valid relief could be had only in separate actions, and then addressed itself to the broader questions involved. "The general grounds upon which the invalidity of this law is asserted," said the Court, " are (1) that it grants a license 24 366 LEGAL AND COMMERCIAL PRECEDENTS. to traffic ID intoxicating liquors; (2) that it is in substance a tax on property, not levied by uniform rule according to its true value in money; (3) that the summary method which it prescribes for the collection of the tax is not due process of law; and (4) that it is a law of a general nature, not uniform in its operations throughout the State." On the first point the Court said — " The competence of the General Assembly to provide against the evils resulting from the traffic in intoxicating liquors by tax levied upon the business, without infringing the provision of the (Ohio) Con- stitution that no license to traffic therein shall be granted was recognized in Statev.Hipp, 380hioSt., 199, was directly affirmed in State v. Frame, 39 Ohio St., 399, and was not denied in the subsequent cases. (Several cited.) * * * Unless it can be shown that a simple tax on the traffic enlarges the privileges of those engaged in it, or confers a right that did not previously exist, thei'e is no ground for saying that the tax is a license for the business. * * * The distinction between the tax upon a business, and what might be termed a license is, that the former is enacted by reason of the fact that the business is carried on, and the latter is exacted as a condition precedent to the right to carry it on. In the one case the iudividual may rightfully engage in and carry on the business without paying the tax ; in the other he cannot." On the second point the Court said — "This is an assessment of the form and nature of a tax upon the business of traffick- ing in intoxicating liquors carried on by any person in this State, and — Is there power in the General Assembly to levy a tax upon this business? — is the question. We think without doubt there is. As observed, it is not material as to what the power should be called. But as we think it may properly be termed a police power recognized by the Constitution as within the legislati ve authority conferred by that instrument upon the General Assembly over the business of trafficking in intoxicating liquors." * * ****** On the third point— "The next objection to the validity of this statute is that the summary methods by which the tax MISCELLANEOUS. 367 and penalties imposed by it are assessed and collected deprive the individual of the guarantee contained in the 16tb section of the Bill of Eights, that ' every person for an injury done him in his lands, goods, etc., shall have remedy by due course of law ;' and for a like reason violates the clause in the 14th amendment to the federal Constitution, ' nor shall any state deprive any person of life, hberty or property without due process of law.' * * * * -Quq course and due process of law are one and the same thing. We do not feel required to enter upon any extended discussion of this impor- tant constitutional guaranty. For whatever doubt there may be in its application to a variety of cases, it is well set- tled that it does not affect the usual modes that have been long adopted for the assessment and collection of taxes. In other words these modes are recognized as due process of law." On the fourth point — "The objection to the statute, that it is not uniform and general in its operation, is baised upon the fact that it does not include the manufacture of intoxicating liquors from the raw material, and the sale thereof by the manufacturer of the same in quantities of one gallon or more at any onetime." The Court likened this provision to one drawing the line between a felony and a misdemeanor at a point just above and below the larceny of $35, or to a statute (in Ohio) fixing the legal age of majority in males at twenty- one, and females at eighteen, and said — "The generality and uniformity of these laws has never been questioned." (Adler V. Whiubeck, 7 Western Keporter, 201.) MISCELLANEOUS. Damages Arising from Injury.— h. case of some interest on statutory actions, and the abatement of an action by death is that of Burns v. Grand Rapids, etc.. Railroad Company, (Ind., January 24, 1888,) 15 North-Eastern Reporter, 230. Although, at common law, actions ex delicto for injury to the person abate upon the death of the person injured, yet where the statute in the state in which the injury is inflicted gives a right of action to the personal representative in such case, it 368 LEGAL AND COMMERCIAL PRECEDENTS. is here held, in approval of New York cases, that that right may be enforced in another state having a similar statute, in a court having jurisdiction of the defendant. Judge Mitchell says: "It is not perceived why a right of action transitory in its nature, arising ex delicto, under a statute of a foreign state, should not be as readily enforced by the courts of this State as are those which arise ex-con- tracted, but which depend for their validity upon the statute of a foreign state. Rights of the latter class are enforced without hesitation. Some of the decisions seem to rest upon the principle that rights acquired or liability incurred under a statute in one state, will not be enforced in a foreign state, unless the law of the former and that of the place where the right of action accrued are of similar import and character, or unless both concur in giving a right of action for the injury complained of. (Leonard v. Steam, etc.. Company, 84 New York, 48, and cases cited; Boyce v. Eailroad Co., supra.) Other well-considered cases proceed upon the theory that, in order to justify a court in one state in refusing to enforce a right of action which all need under the law of another state, it must appear that the liability sought to be enforced is against good morals or natural justice, or that the enforce- ment of the law would be prejudicial to the general interests of the citizens of the state whose courts are asked to give it affect. (Herrick v. Eailway Company, 31 Minnesota, 11; 16 North-Western Reporter, 413, and cases cited.) "The statutes of the states of Indiana and Michigan areso nearly identical in import and character as to manifest the close coincidence in the policy of the two states in respect to the statutes applicable to cases like the present. Under such circumstances there is, as is said in the case of Railway Com- pany v. Richards, (4 South-Western Reporter, 627,) a general concurrence of authority' to the effect that the courts in either state, which can by their process obtain rightful jurisdiction over the person of the defendant, will enforce liabilities arising in the other. We need, therefore, give the question above suggested no further consideration, except to say that the better view, as applied to actions for death caused by negli- MISCELLANEOUS. 369 gence, seems to be that taken by the Court of Appeals of the State of New York, which is, that while the statutes of the different states involved need not be alike in detail, they should be of the same import and character. (Story Confl. Law, 845, note.) Indeed this seems to be the better view in any case where the statute of a foreign state has made that actionable for which an action was expressly forbidden by the common law, since by the adoption of the common law it may plausi- bly be urged that prohibition was also adopted in the absence of an express statute making that actionable for which an action was previously forbidden. All the cases agree, that, whatever the law of the forum may be, the plaintiff's case must stand, if at all, so far as his right of action is concerned, upon the law of the place where the injury occurred . (Hyde v. Eailroad Co., 61 Iowa, 441; 16 North-Western Eeporter, 351; Allen v. Eailroad Company, 45 Md., 40.) "In order to obtain an action of tort founded upon an injury to the person or for wrongfully causing the death of the person injured, the wrong which caused the injury and death must at least be actionable by the law of the place where it was committed, if not also by the law of the place where redress is sought. Unless the alleged wrong was actionable in the jurisdiction in which it was committed, there is the cause of action which can be carried to and asserted in any other jurisdiction. (Leforest v. Tolman, 117 Massachu- setts, 109 ; Davis v. Eailway Company, 143 Massachusetts, 301; 28 Amer. and Eng. Ey. Cas., 223; 9 North-Eastern Eeporter, 815 ; Deevoise v. Eailroad Company, 98 New York, 377 ; Whitford v. Eailroad Company, 23 New York, 465 ; McDonald v. Mallory, 77 New York, 546.) " The principle last above stated ruled the decision in the case of Buckels v. EUers, (72 Indiana, 220.) That was an action by an unmarried woman to recover damages for her own seduction. The injury complained of was committed in the State of Illinois. Notwithstanding the statute in this State which confers upon every unmarried woman a right to prosecute an action for her own seduction in the absence of any thing to the contrary being made to appear, it was -370 LEGAL AND COMMERCIAL PRECEDENTS. correctly assumed that the common law under which no such action would be maintaiued was in force in the State of Illi- nois. It followed, necessarily, that the Court held the action not maintainable. On the authority of a text writer of high repute, it was stated in an incidental way, in the case referred to, that even if it had been shown that there was a statute in Illinois which conferred upon the plaintiff in that case the right to sue for her own seduction, that would not have authorized her. to maintain an action in the courts of this State upon principles of comity, as it was only common law rights or such rights as are recognized as existing by the general usage of civilized nations, which can be enforced by comity in a foreign forum. This statement in no way impairs the correctness of the conclusion reached in the case, but in the light of the more recent decisions and authorities, it may be doubted whether the test relied on can be regarded as expressing the law upon the subject with entire accuracy." Statute of Limitations.— "^^Q remedy to enforce a promise to waive the Statute of Limitations was before the Supreme Court of Vermont in Green v. Seymour, (5 New England Keporter, 367.) The Court, without deciding whether a con- sideration other than the original indebtedness is necessary, held that in respect to the question of pleading under the statute requiring a new promise to be in writing, the same rule applies as under the Statute of Frauds ; and that the party pleading an agreement which he relies on to satisfy the statute need not allege that it was a written agreement. In the appeal of Kauffman, (Pennsylvania, 1887, 9 Central Keporter, 737,) an attempt was made to extend the doctrine that a beneficiary can require a trustee to plead a statutory bar to the case of creditors attaching a claim of their debtor against which a statute barred offset existed. In this case a son was indebted to his father's estate on notes more than six years due, and refused to plead the Statute of Limita- tions ; and the Court held that an attaching creditor of the son will not be permitted to plead the statute for him. In Kitterar's Estate, (17 Pa., 472,) Ritter's Appeal, (25 Pa., 96,) and in kindred cases, the claimants were themselves MISCELLANEOUS. 371 creditors of the estate being distributed, direct, and as to their right to interpose the statute, there could scarcely be a question. In Milne's Appeal (99 Pa., 483,) the share of A. J.Buckner, Jr., in the estate of A. J. Buckner, Sr., deceased, was attached by a creditor of A. J. Buckner, Jr. A. J. Buckner, Jr., was dead, and could not, as Dr. A. J. Rockerfield in the case before us does, acknowledge his indebtedness, and refuse to plead the statute as to the claim of the estate against him ; and in that case his creditor was permitted to plead the statute. When a debtor is alive and acknowledges his indebtedness, and refuses to plead the statute, he cannot be compelled to plead the Statute of Limitations against one of his creditors for the benefit or advantage of another creditor. Nor can one of his creditors interpose the Statute of Limitations against another, where the debtor acknowledges his indebt- edness and refuses so to do. Testimony of Witness on Transaction with a Decedent.— ^TX interesting question in the law of evidence as to the examina- tion of a party against an executor or administrator was before the New Jersey Chancery in McCartin v. Traphagen's Administrator, (10 Central Reporter, 193.) The Court held that the question of the competency of a witness or a party to testify to a transaction with the decedent could not be affected by making one whose interest was that of a plaintiff, a defendant instead of a plaintiff. The action was by one of the heirs and next of kin of a decedent; and others, although the suit was in part for their benefit, were made defendants. The Court said: "This suit was brought as much for their benefit as it was for the benefit of the complainant. The bill so declares. It first alleges that the executors have wasted the estate of their testator, and that the complainant and the other beneficiaries under the will are, therefore, entitled to indemnity from the executors therefor, and then prays that such indemnity may be decreed to them. ' ' There can be no d oubt that if the three Misses McCartin had taken their true position in the litigation, if they had placed 372 LEGAL AND COMMERCIAL PRECEDENTS. themselves where their interests and their feelings place them, where they are in every thing except the basest form, thej would have been incompetent to give the evidence objected to. Although they are defendants in form they are complainants, in fact. "If a decree goes in favor of the complainant, it must, ex necessitate, give the same measure of relief to each of these defendants that it does to the complainant, unless some spe- cial defense, peculiar to the defendants, and which exista against them alone, and not against the complainant, has been shown. The position of parties having the same rights, in a suit of this kind, is a pure matter of arrangement, over which they have supreme control. The three Misses McCartin were necessary parties to this suit, but they were at liberty to choose their position ; they could be either complainants or defendants, just as they saw fit. 1 have no doubt that they were made defendants, not because they did not want the suit brought, nor because they were unwilling to appear as. complainants, nor because it was supposed that there was- any conflict between their intei-ests and those of the complain- ant, nor because it was suspected that they might desire to make defense against the complainant's action, but because it was thought possible that by makingthem defendants they might be rendered competent to testify to declarations made by Mr. Traphagen, and thus increase their chances and those of their brothers of being able to fasten a liability on Mr. Traphagen's estate. " The decision of the question under consideration must, of course, be controlled by the statute of 1880. The main design of that statute is, so far as it prescribes a rule of exclusion, to prevent a person who seeks, by judicial action, to fasten a claim on the estate of a decedent from putting in proof, by his own mouth, in support of his claim, any thing- the decedent may have said or done tending toshowthat the claim is valid. The purposes which the legislature had in view in enacting the statute are, I think, quite apparent. They were first to guard against the injustice which might arise from a want of mutuality in the exercise of the right to testify ; and second, to prevent the danger which would also MISCELLANEOUS. 37^ unavoidably arise from perjury, on the suppression of mate- rial facts, if the living person to a transaction, where one was dead, was allowed to testify as to what the deceased party had said or done respecting the transaction, in a suit by or against his legal representative. " The nominal position of the person whose competency is challenged as a party on the record in suit is, in my judg- ment, of no importance ; but the test, in such cases, is, does he stand in a position of antagonism to the estate of the intestate or testator represented in the suit or proceeding in in which he is called as a witness, so that if he should testify upon the prohibited subjects, he would give his testimony under a temptation to forget what he should remember, or to commit perjury ? If he does, he is incompetent. This I understand to be the test which the Court of Errors and Appeals adopted in Smith v. Burnet, 18 Sterv. Eq., 314." Money Wrongfully Paid.—k right of action exists in thfr following cases to recover money back that has been wrong- fully paid : 1. Where money has been wrongfully extorted under the statement of an illegal assessment on real estate. (Jex v. New York, 103 New York, 536 ; 9 North-Eastern Reporter, 39 ; 4 Central Reporter, 781 ; 8 Eastern Reporter, 552.) 2. Where one partner falsely represents to the other that he has paid a'partnership debt, and that upon a settlement made between them this pa3'ment was taken into account. (Libby v. Robinson, 79 Maine, 168; 10 Eastern Rep., 838.) 3. Where the owner of a patent makes a statement to a licensee of the same which he believes at the time to be true, and subsequently the patent is declared to be worthless, no recovery could be had ; otherwise if falsely made. (Schwarz- enbach v. Odorless Excavating Apparatus Company, 65 Maryland, 34; 2 Central Reporter, 859.) Money Faid Voluntarily .—1 . One who voluntarily makes a paymenton what he has reason to believe is unsafe asto title or ownership, cannot recover the money so paid thereon. (Baldwin v. Foss, 71 Iowa, 389; 32 North-West. Rep., 389.) 2. Payment not made under protest in case of an alleged 374: LEGAL AND COMMERCIAL PRECEDENTS. violation of an ordinance and upon an arrest therefor, but no force or duress exercised in obtaining tlie money, is construed to be a voluntary payment. (Bailey v. Paulina, 69 Iowa, 463; 29 North- Western Reporter, 418.) Money Paid by Mistake.— 1. Payment of money under : circumstances of clear mistake is recoverable yet where the negligence of the party is so gross and the status of the receiving cannot be restored it is otherwise and the negligent party must suffer. (Walker v. Conant, 31 North- Western Eeporter, 786; 8 Western Reporter, 181.) 2. Interest paid on a note can be recovered back where on the face of it no interest was to be charged. (Hathway v. Hagan, 59 Vermont, 75.) ^Misance.— Injunction is the proper form to seek an abate- ment of a nuisance. In many states a nuisance can be abated in and by a criminal proceeding. 1. It has been declared to be a nuisance that a mill causing smoke and cinders, which with the noise and vibration of the machinery, rendered the occupancy of a residence near by -almost impossible, and impaired the value of the property. (Hurlburt V. McKone, 55 Connecticut, 31; 36 Alb., L. J., 168.) 2. It has been held that a shooting gallery decently con- ducted is not a nuisance. (Hubbell v. Viroqua, 67 Wisconsin, -343; 30 North-Western Reporter, 847.) 3. A railroad company cannot carry on its business in the use of its round and engine-houses, etc., to the loss of health of the neighbors and the practical loss in the enjoyment of their property unless the authority vested in the company contemplated such extreme uses by the company which so affected the surrounding neighborhood. (Cogswell v. New York, etc.. Railroad Company, 103 New York, 10; 8 North- Eastern Reporter, 537.) Perjury.— In an indictment for perjury the facts must be clearly and unequivocally set forth creating the falsity of the eworn statement, and so known to the person making the MISCELLANEOUS. 375 same to be untrue in fact. That the statement was willfully, corruptly and falsely sworn to. Physicians.— The degree of skill and care to be exercised in a case is a question to be determined by a jury, and much will depend upon the attending circumstances in each and every case. The liability of a physician or surgeon ; the degree of care, diligence and skill required in their professional capacity ; the engagement of the physician or surgeon, etc., is treated at length in 24 Central Keporfcer, L. J., 515. Revenue.— {I.) CUSTOMS. — " Under the provisions of the Act of March 3, 1865, that duties based upon the value of any speciiied quantity of merchandise shall not be assessed upon an amount less than the invoice or entered value (13 Stat., 493, Chapter 80, § 7,) the computation of the value of foreign coin stated in an invoice as the value of such goods should be at the rate fixed under the statute in force at the time of the «ntry, although it did not take effect until after the exporta- tion." (Heineman v. Arthur, 120 United States, 82.) "Under the Act of Congress of 1883 (22 Stat., 488), enact- ing a tariff of duties to take effect on and after the Ist day of July, 1883, and providing that goods in the public stores or bonded warehouses on the day when the Act should take effect should be subject to no other duty than if the same were imported after that day, and that the repeal of existing laws or modifications thereof by that Act should not affect any Act done or right accruing or accrued, goods arriving in port by vessel on June 30, 1883, too late to go into stores or bonded warehouses on that day, and, July 1st being Sunday, not entered till July 2d, are liable to the duty imposed by the Acts previously in force." (McAndrew v. Eobertson, 29 Federal Eeporter, 246.) " The provision of the Kevised Statutesthat imported mer- chandise shall be deemed to be the property of the consignee, amended, by enacting that the holder of any bill of lading consigned to order and properly indorsed, or the underwriters to whom merchandise has been abandoned, shall be deemed «uch consignee respectively ; and merchandise ' saved from a 376 LEGAL AND COMMERCIAL PRECEDENTS. vessel wrecked or abandoned at sea, or on or along the coasts,' and promptly brought into port in good faith by the salvors, shall be deemed the property of the salvors." (Act of February 23, 1887, 24 Stat., Chapter 221, p. 415.) " Importers have a right to be present upon a re-appraise- ment ; but it is an appraisal on view, and the re-appraisers have power to ascertain the value of the goods by examina- tion of witnesses and all reasonable means." (Auffueordt v. Hedden, 30 Federal Reporter, 360.) (II.) Internal. — "Although authority to take a bond to protect the United States against loss in the printing of stamps from private dies, as required by the commissioner of internal revenue, (by circular No. 136, of September 30, 1875,) is not given in direct terms by any statute; it is inci- dent to the exercise of the duties of his office. ' ' (United States V. Diamond Match Company, 30 Federal Reporter, 108.) Retail liquor dealers cannot escape paying a penalty by forming an association for the purchase of liquor, when they in fact become wholesale dealers without a license as such required by statute. (United States Revised Statutes, § 3242 ;. United States v. Kallstrom, 30 Federal Reporter, 184.) Sunday.— The states vary in their laws as to what consti- tutes a violation of Sabbath, and what is work of necessity or charity. 1. In Maine it was held by the Supreme Court that a con- tract made on Sunday that " no one shall defend any action upon a contract upon the ground that it was so made, until he restores such consideration received," on the contract. An action is maintainable by one who parted with money or property. (Wentworth v. Woodside, 79 ]\Ie., 156.) i 2. In Rhode Island an action was brought upon a note given in Connecticut where the transaction occurred on a Sunday between the parties. It was held that as the transac- tion occurred after sunset on Sunday, and this was not pro- hibited in Connecticut, although different in Rhode Island, the action could be maintaineil in Rhode Island. (Brown v. Browning, 15 Rhode Island, 422.) 3. In an action for injuries sustained on a Sunday through the neo-lisrence of acityin not keeping the street in a safe con- MORTGAGE. 377 dition, it was held unnecessary for the plaintiff to prove that he was engaged at the time of his injury in a work of necessity to him. (Black v. Lewiston, 13 Pac, 80.) 4. It was held in Montana that in so far as the statutes permit in certain specified cases a summons to be served on Sunday that precluded the idea of allowing service on that day in any other case. (Hauswirth v. Sullivan, 6 Montana, 203.) Warehousemen.— The law authorizing the carrying on of public warehousing varies with the statute of the respective states. 1. Owners of grain are estopped from asserting their title as against innocent third persons where they knew that their grain was commingled with the grain of other people in a common elevator, and from there sold from the common mass by the elevator company to any purchaser. (Preston V. Witherspoon, 109 Indiana, 457.) 2. An excellent illustration of the law of negligence applica- ble to warehousemen is that of a trunk having been returned with the contents to its owner in such a condition as to sug- gest that water was allowed to have caused the condition of things. The court decided that in the absence of all explana^ tion on the part of the warehouseman as to how the trunk and contents were in such condition it was clear that ordinary care had not been exercised, and that the owner could recover for the injury or loss he had sustained. (Reed v. Crowe, 13 Daly, 164.) MORTGAGE. General Bemarks.—ln Illinois a mortgage need not be acknowledged to be valid as between the mortgagor and the mortgagee. It is better to have it acknowledged before delivery. (Roane v. Baker, 120 Illinois, 308.) A note, or in some states a bond, is given to represent the debt, while the mortgage constitutes the security. It is quite common for the inexperienced to consider the mortgage only and as constituting the instrument to be both the debt and the security. In some of the large cities in the United States the business of loaning money on real estate secured by a 378 LEGAL AND CfOMMEEClAL PRECEDENTS. mortgage is of great magnitude. The same attention and care should be bestowed in searching the title to the security (the land) as one does on a purchase of real estate. Any deceit or wrongful inducement exercised in procuring a mortgage or the execution of a party in the making of a mortgage, is enough to have it declared no mortgage. i Mortgages made contrary to the statutes of any state are void. Mortgages expressing on the face or in terms a rate of interest higher than the legal rate, are voidable. Deeds if they contain a clause or clauses which indicate that they were executed in the nature of security for debt, are treated in equity as mortgages, although in form they may appear absolute. A mortgagee cannot enter upon possession of the land mortgaged until such time as the conditions therein contained have been violated, and the instrument or the law of the statute then granted such right of entry. A mortgagee in possession must account for the rents, issues, profits, crops, etc., received or realized, or apply the same to the payment of interest and principal. Mortgages are assignable and negotiable instruments. An assignment of a mortgage should be recorded as promptly as the mortgage itself. The question of priority of mortgages is often an important one upon a foreclosure of a mortgage. The difference in assuming the payment of a mortgage existing at the time of purchasing the real estate and taking the real estate subject to the existing mortgage is often disregarded by the purchaser. The payment or release of a mortgage should be attended to with the same care and accuracy as in the drawings executing and recording of the original mortgage itself. Effect of Recording Assignment of.—B., the plaintiff, became the owner of a mortgage three years after C, the defendant, purchased the property subject to the same mortgage now owned by B. C. not knowing that B. owned the mortgage, paid interest toT., aformer owner of the same. B., however. MORTQAQE. ST^ had authorized T. to collect the interest due thereon but not the principal. B. brought an action against C. to recover amount due on said mortgage. C. set up for his defense that he had paid T. not knowing of B.'s owning the mortgage. C. was not protected in paying T. by statute as to recording of an assignment of a mortgage, who was not authorized to- receive payments upon the principal. G. quoted Jones on Mortgages, § 791, that the recording of the assignment was not sufficient notice to him, C, to relieve B., the owner, from responsibility if C. made payments to a former owner of the mortgage. This is in direct conflict ■with the established principle of lawthat the' assignment of a mortgage is aconveyance within the meaning of the recording act. (See 66 New York, 77; 79 New York, 23, 25; 87 New York, 446.) C. purchases the property after T. sold the mortgage which was recorded. C. was therefore chargeable with notice of the sale of the mortgage. Such a record is constructive notice to all persons of the rights of the purchaser of the mortgage. (82 New York, 32.) By the record B. was protected as to his claim, and C. received notice of the assignment of the mortgage. (Brew- ster V. Carnes, 103 New York, 556.) CHATTEL. A Minor's Chattel Mortgage Foi RIPARIAN RIGHTS. Ownership.— 1. The riparian proprietors of lands bounded on the Ohio river in West Virginia, own the fee in the lands to the low water-mark, subject to the easement of the public in that portion lying between high and low water-mark with the right of the State to control the same, for the purposes of navigation and commerce, without compensation to the owner. (Barre v. Flemings, (West Virginia) 1 South-East- ern Reporter, 731.) 2. When land lying on the Ohio river is conveyed by deed with general warranty, and calling for low water-mark on said river as one of its boundaries, the warranty is not broken by the fact that the public owns- an easement therein, and the State, or one of its municipal corporations, has perpetually enjoined the purchaser from buildinga wharf or private land- ing on the land below high water-mark, without obtaining a license to do so. (Barre v. Flemings, (West Virginia) 1 South-Eastern Reporter, 731.) 460 LEGAL AND COMMERCIAL PRECEDENTS. 3. Where, by the terms of a patent, land is bounded by a navigable river, the title extends no further than the edge of the stream, (Serrin v. Grefe, (Iowa) 25 North-Western Reporter, 227; Wood v. Chicago, etc., 15 North-Western Reporter, 284; Packer v. Bird, (California) 11 Pacific Reporter, 873) and does not include an island, though the channel between that and the main land may not be naviga- ble. (Packer V. Bird, supra.) 4. The rights of riparian owners are left to be settled by the principles of state law. (City of St. Louis v. Meyers, 5 Sup. €ourt Reports, 640; Webber v. Pere Marquette Boom Company, (Michigan) 30 North-Western Reporter, 469.) 5. The title to the soil under freshwater rivers, in a propri- etary sense, is ordinarily in private parties, and the state, except under the exercise of the right of eminent domain, can interfere with such streams only for the purpose of regulating, preserving, and protecting the public easement. (Woodruff V. N. B. Gravel Mine Company, 18 Federal Reporter, 753, 785.) 6. In Kentucky a grant of land upon navigable waters vests the title to the soil ad Slum aquae in the grantee. ( Williamsburgh Boom Company v. Smith, 1 South- Western Reporter, 765.) 7. Ohio. (Day v. Pittsburgh, Y. & C. Railroad Company, 7 North-Eastern Reporter, 528.) 8. Michigan. (Webber v. Pere Marquette Boom Company, 30 North-Western Reporter, 469 ; Fletcher v. Thunder Bay River Boom Company, 16 North-Western Reporter, 647; Cole V. Wells, 13 North-Western Reporter, 813 ; Richardson V.Prentiss, 11 North-Western Reporter, 819 ; Pere Marquette Boom Company v. Adams, 6 North-Western Reporter, 857; Toogood V. Hoyt, 4 North-Western Reporter, 445.) 9. Wisconsin. (Norcross v. GriflBths, 27 North-Western Reporter, 609.) 10. The soil underthe water of the inland lakes in Michigan does not belong to the general government or to the State, but to the riparian owners. (Clute v. Fisher, (Michigan) 31 North-Western Reporter, 614.) RIPARIAN RIGHTS. 461 11. The owner of the adjacent land has a qualified proprie- tary interest in the soil under the edge of the shore of a lake, so as to give him the right to construct and maintain a dock along the shore, and extending the necessary distance under the water; and when thus erected thedock is an appurtenance to the real estate. (Tuck v. Olds, 29 Federal Keporter, 738.) 12. The owners of land bounded by a river declared by Act of Congress to be a navigable stream, do not, upon a repeal of that Act, acquire title to the bed of the river. (Chicago, B. & Q. Railroad Company v. Porter, (Iowa) 34 North- West- ern Reporter, 286.) 18. A railroad company, lawfully constructing its road upon the bed of a navigable stream, thereby precludes ripa- rian owners from acquiring title by accretion to land so formed, and lying between land appropriated by the railroad, and the new high water-mark of the river. (Chicago, B. & Q. Railroad Company v. Porter, (Iowa) 34 North-Western Reporter, 286; see also, for cases on general subject of ownership. Trustees of Schools v. Schroll, (Illinois) 12 N. E. Reporter, 243 ; Steele v. Sanchez, (Iowa) 33 North-Western Reporter, 366; Turner v. Holland, (Michigan) 33 North-Western Reporter, 283 ; Babson v. Taintor, (Maine) 1(» Atlantic Reporter, 63 ; Sewall etc. Company v. Boston Water Power Company, (Massachusetts) 16 N. E. Reporter, 782 ; State of Illinois V. Illinois Central Railroad Company, 33 Federal Eeporter, 730.) 14. The division of a strip of sea-shore between adjoining proprietors of land projecting into the sea, whose title papers 4x definitely the division line of the upland, but not of the shore, should be made by a line running from the point of intersection between the division line of the upland and the high water-line perpendicularly to the low water-line. (Morris T. Beardsley, (Connecticut) 8 Atlantic Reporter, 139.) 15. The rule that accretions are to be divided by extending -the lines of riparian owners at right angles with the middle thread of so much of the river as lies opposite the shore line is subject to modifications by special circumstances, and an instruction which fails to adapt the rule to the conditions of 30 462 LEGAL AND COMMERCIAL PRECEDENTS. the: case at bar, is erroneous. (City of Elgin v. Beckwifeh, (IHinois) 10 N. E. Reporter, 558.) 16. Plaintifiand defendant were originally adjoiningupiand owners, but, by a^ change in the bed of a river, the adjoining- portions of their land became submerged, after' which the- river gradually receded from plaintiff's land, and encroached, on the land of defendant until it passed the original boundary. Held, that, by the submersion, the original lines ceased to exist, and plaintiff became a riparian owner, with all the' accompanying rights of accretion and reliction. (Wells v. Bailey, (Connecticut) 10 Atlantic Reporter, 565.) 17. Whether the river was navigable or non-navigable, the plaintiff was entitled to all accretion to his land, thoug'h it extended iu the first case beyond the original high water-line,. or, in the second case, beyond the original center of th& streami. (Wells v. Bailey, (Conn.) 10 Atlantic Reporter^, 565. > Alluvion is an addition to riparian land, gradually and imperceptibly made by the water to which the land is contigu- ous. (St. Clair Co. v. Lovingston, 23 Wall., 46.) 1. The test as to what is gradual and imperceptible is that although the witnesses may see from time to time that pro- gress has been made, they could not perceive it while the progress was going on. (St. Clair Co. v. Lovingston, 23 Wall., 46.) 2. The ripa,T'ian right to future alluvion is a vested one. It is an inherent and essential attribute of the" original prop- erty. The principle applies alike to streams that do, and ta those that do not, overflow their banks, and where dikes and other defenses are, and where they are not necessary to keep the water within its proper limits. (St. Clair Co. v. Loving- ston, 23 Wall., 46.) 3. Land gained by alluvioh or dereliction belongs to the adjoining owner. (Jones v. Johnston, 18 How., 150 ; Banks V. Ogden, 2 Wall., 57; St. Louis Public Schools v. Risley, 10 Wall., 91.) 4. Where a city has erected a wharf and landing on accre- tion, and leased them to private individuals, and the original proprietors are barred to recover the land by lapse of time, and presumption of dedication, they cannot recover the reve- RIPARIAN RIGHTS. 4G3 Hues paid by such parties for the privileges, because such revenues result from the exercise of the public easement itself, and not from use independent thereof. (Heirs of Leonard v. City of Baton Rouge, (La.) 4 South- Western Reporter, 241.) 5. A city may construct permanent ediflces of public advan- tage on accretion, and if a landing and wharf be erected by the city, the public use thereof is not destroyed because the premises are leased to private individuals. (Heirs of Leonard V. City of Baton Rouge, (La. ) 4 South- Western Reporter, 241. ) ItigM to r««.— The ice in a mill-pond is the property of the riparian owner, and he has the sole right to take it, subject only to the qualification that it is not to be taken in such quantities as to appreciably diminish the head of the water at- the dam below. (Searle v. Gardner, (Pennsylvania) 13 Atlantic Reporter, 835.) Accretions:—!. All grants of land bounded by fresh water rivers, where the expressions designating the T(irater-line are general, confer the proprietorship and entitle the owner to accretion. The size of the river does notaltfefthe rule, and it applies to so great and public a water-course as the Missis- sippi is at the city of St. Louis. The doctrine that on rivers where thei tide ebbs and flows, grants of land are bounded by ordinary high water-mark, has no application in sneh case. (Jones v. Soulafd, 24 How., 41.) 2. Where an island is surveyed by the Uflitfed States, and sold to a party who receives a patent therefor, such party is the owner of land formed by avulsion ft^om the washing away of the upper part of the island, and the sudden formation of new land on the lower end thereof; and one cutting trees gpowing on the land so formed will be liable to the owner in trespass. (Wiggenhoili v. Kbuntiz, (Nebraska) 37 Noathi Western Reporter, 603;) Use of Water.— A. riparian proprietor is allowed to make a reasonable use and detfention of the waters of a stream for d'omefstie and other purposes'; and whether such use attd detention are' reasonable or not, is a question of fact for the court. (Stanford v. Felt, (Gal.) 16 Pacific Reporter; 900.) 464 LEGAL AND COMMERCIAL PRECEDENTS. ROADS AND WAYS. Highway,— Prescription.— 1. Before a highway can be estab- lished by prescription, the general public under a claim of right, and not by mere permission of the owner, must have used some defined way, without interruption or substantial change, for twenty years or more, and a gate erected across the way, and maintained for and kept closed at certain stated times during a period of four years, by the owner evincing an intention to exclude the public from the uninterrupted use thereof, destroys any prescriptive right not already fully accrued. (Shellhouse v. State, (Indiana) 11 N. E. Eeporter, 484; Irving V.Ford, (Michigan) 32 North-Western Reporter, 601 ; Rube v. Sullivan, (Nebraska) North-Western Reporter, 666,.note; Union Company v. Peckham, (Rhode Island) 12 Atlantic Reporter, 130 ; City v. Williams, (Texas) 6 South- western Reporter, 860 ; Price v. Town, (Missouri) 5 South- western Reporter, 20 ; Pavonia Land Association v. Temfer, (New Jersey) 7 Atlantic Reporter, 423.) 2. What constitutes or evidences acceptance by the public. (Morse v.Zeize, (Minnesota) 24 North- Western Reporter, 27; Laughlin v. City Wash., (Iowa) 19 North- Western Reporter, 819; Kennedy v. Mayor, (Maryland) 9 Atlantic Reporter, 234; Hoadley v. City etc. San Francisco, (California) 13 Pacific Reporter, 405; People v. Lohfilema, (New York) 5 N. E. Reporter, 784.) 3. By the common law the fee in the soil remains in the original owner where a public road is made upon it, but the use of the road is in the public. (Barclay v. Howell, 6 Pet., 498.) 4. While it is used as a highway the owner is entitled to the timber and grass which may grow upon the surface, and to all minerals which may be found below ; and he may bring an action of trespass against any one who obstructs the road. (Barclay v. Howell, 6 Pet., 498.) Obstructions.— For an obstruction to a public highway an injunction is not a favored remedy, whether sought by the public or an individual. To justify its issue at the suit of an individual the injury must be special, pressing, and otherwise ROADS AND WAYS. 465 irremediable; and, as a condition to the issue of a permanent injunction, the right must either not be in controversy, or have been settled at law. (Irwin v. Dixion, 9 How., 10.) Liability for Injuries.— 1.. A municipal corporation having the care and control of the streets is obliged to see that they are kept safe for persons and property, and to abate all nuisances; and if this duty is neglected, and any one is injured, it is liable for damages. (Chicago v. Robbins, 2 Black., 418; Weightman v. Washington, 1 Black., 39; Nebraska City v. Campbell, 2 Black., 590.) 2. The party in fault is concluded, as to the amount of damages, by a judgment against the corporation if he knew that the suit was pending. Express notice to him to defend thesuit is not necessary. (Chicago v. Robbins, 2 Black., 418.) 3. The existence of obstructions in a street is such evidence of negligence as requires of the authorities explanation in order to escape liability. (New York City v. Sheffield, 4 Wall., 189.) 4. If a city or town has located a place as a public street, taking charge of it and regulating it, and an individual is injured in consequence of the negligent manner in which this is done, the corporation cannot, when it is sued for such injury, throw upon the party the proof of the regularity of the proceedings by which the land became a street, or of the authority bj' which the street was established. (New York City V. Sheffield, 4 Wall., 189.) 5. In an action against a city for an injury to plaintiff occurring by reason of an approach to a bridge being out of repair, the question whether the city has assumed such con- trol of the approach as to make it responsible is an inference of fact to be drawn from all the testimony, by the jury, and not a question of law for the court. (Manchester v. Ericsson, 105 United States, 347.) 6. Where by the continued use of a street after dedication, the public has established a right thereto, the mere fact that an obstruction, not inconsistent with the use of the street as the wants of the public demanded, has been allowed to remain therein for more than ten years, will not, in the absence of any fraud, operate as the estoppel on the city in an action for 466 LEGAL AND COMMERCIAL FRECEDENTS. an abatement of the nuisance, even thdugh the obstruction may have originally been built under a claim of right. (City of Waterioo v. Union Mill Company, (Iowa) 34 North-West- ern Reporter, 197.) 7. As to the duty of municipal corporations to keep their streets and sidewalks in good repair and safe condition, and their liability in damages for failure to perform such duties, see Pomfrey v. Village of Saratoga Springs, (New York) 11 N. E. Reporter, 43 ; Hubbell v. City of Yonkers, (New York) 10 N. E. Reporter, 858 ; Bishop v. Township of Schuylkill, (Pennsylvania) 8 Atlantic Reporter, 449; Davis v. City of Jackson, (Michigan) 28 North-Western Reporter, 526; McGinty v. (^ty of Keokuk, (Iowa) 24 North-Western Reporter, 506, (note) ; Hanscom v. City of Boston, (Massa- chusetts) 5 North-Eastern Reporter, 251 ; Grogon v. City of Worcester, (Massachusetts) 4 North-Eastern Reporter, 230 ; Veederv. Village of Little FaUs (New York) 3 N. E. Reporter, 306, (note). SALES. What Evidence Required to Prove Fraud.^-A.n action was brought to vacate and annul a sale of land made by A. to B., on the ground that it was executed and delivered for the pur- pose of hindering, delaying and defrauding creditors, and particularly C. in the collection of a debt owing to him by A. C. brought the action. It was proven that B. paid A. the full value of the land upon the transfer, but that it was made with the intent to hinder, delay and defraud C. The payment by the purchaser of a fair consideration upon a sale of property affords strong evidence of the good faith of the transaction, and while not conclusive upon that ques- tion requires clear evidence of the existence of a fraudulent intent to overcome the presumption of honest motives arising from that fact. (Billings v. Russell, 101 New York, 226.) One of the most prominent circumstances from which a fraudulent intent could be attempted to be deduced was the execution by A. on the same day, but after the delivery of the deed in question, of a chattel mortgage to his wife, con- SALES. 467 veying such property as he had remaining after the transfer of his land. The fact that the mortgage was for a valuable considera- tion therefor, and that it was promptly recorded, are of suffi- cient materiality to contest the theory of fraud. To ascertain with some accuracy as to the question of intent of fraud, all the circumstances attending the giving, receiving and keeping of the mortgage should be fully stated. (Nugent v. Jacobs, 103 New York, 125.) Conditional or Installment Sales,— Vendor Reserving Title. —Sale Under Form of Zease.—R. bought an organ of H., giv- ing in exchange a melodeon, and his note for the rest of the purchase ^oney, in installments designated as "rent," paya- ble " withjthe pnderstanding that if I shall have punctually paid all said rent, I shall be entitled to a bill of sa,le of the organ, and if I fail to pay any of said rent when due, all my rights herein shall terminate, and said H. may take possession of said organ." The organ was returned, and H. sued to enforce payment of the note. This form of contract having been somewhat extensively adopted, for the purpose of secur- ing the purchase money of sewing-machines, pianos and other personal property, the language of the Supreme Court and of other State Courts on the subject, will be of general interest. The Court said—" The real purpose was to sell the organ, with an agreement that the seller should not part with the title until the purchase money was paid. Acareful inspec- tion of the instrument shows that this must be so. It is not in the form and does not contain the usual stipulations of a lease. It is not signed by the lessor, and expresses but one agreement to be performed by him, and that is, to give a bill of sale if the note is paid at maturity. * * * We read the transaction therefore as a conditional sale. * * The plaintiff seems to treat it as a conditional sale by him but as an abso- lute purchase by the defendant ; and the Court seems to have sanctioned that view. We think that view does not give «ffect to the real intention of the parties. * * * « We think that the defendant understood that it was at his option to pay or not to pay the note." (Hine v. Roberts, 48 Connecticut, 267.) 468 LEGAL AND COMMERCIAL PRECEDENTS. lu Singer Sewing-Machine Company v. Cole, 4 Lea, the Ten- nessee Supreme Court made a like interpretation of a similar contract. The Supreme Court came to an opposite conclusion in Domestic Sewing-Machine Company v. Anderson, 23 Minne- sota, 57. Sales of " Futures."— Advances to Protect Purchases of Cot- ton "Futures" on New Orleans Exchange.— Transactions Tield to be Wagers.— B., W. & Co., cotton factors and commission merchants in New Orleans, members of the Cotton Exchange, bought various lots of cotton for J. W. 0., and advanced several sums of money to him to protect such purchases. Th& staple declining, and J. W. 0. refusing to put up additional margins, the contracts were declared forfeited and closed out before maturity, and B., W. & Co. sued to recover their advances. J. W. 0. asserted that there was a distinct under- standing that no cotton was to be delivered, and that the object and intention was, as understood between the parties, to speculate in the rise and fall of the price of cotton. On the- part of B., W. & Co. it was testified that every contract of purchase was made under the rules of the New Orleans Cotton Exchange, and for actual delivery of cotton, and could have been enforced if the cotton had been demanded ; that there never was any understanding, either expressed or implied, that no cotton was to be delivered ; that contracts for future delivery are very often sold many times before maturity, and a great many are forfeited, and many of them are settled upon maturity according to the difference in prices, but in all cases the cotton is actually delivered when demanded or tendered by either party, and which either party has a perfect right to. Among the evidence introduced was a letter from J. W. 0. to B., W. & Co., saying— " If you buy or sell telegraph in some character, as it's against the law to deal in futures here" (Tennessee) B., W. & Co. also wrote to him advising — "when you get twenty-five points profit on any purchase, take in your profit. And when a depression occurs, go in again. " The Tennessee Supreme Court said— "The only ques- SALES. 469 tion necessary to be considered is, were these wagering con- tracts, and was the money advanced in aid of them by the complainants with the knowledge that they were such? If so, they cannot recover, but if not they can. » * » * * I was inclined to the opinion that the complainant's right to recover was sustained by the preponderance of the testimony. But the chancellor and referees both came to a different con- clusion, and the majority of the Court are of the opinion that all the evidence, taken together, establishes the defense set up, that these were wagering contracts in regard to the future price of cotton, and that complainants, knowing them to be such, advanced said sums of money in aid of them, and hence cannot be permitted to recover." (Beadles, Wood & Co. v. Ownby, 16 B. J. Lea, 424.) Dealings in "Futures." — Intention to Deliver or Meceive the Property.— How it must Appear Backhaus gave his note for $1,000 to Bartlett&Mohr, but resisted payment, principally on the ground that it was given in settlement of an alleged balance due Bartlett & Mohr, on speculative sales of grain, made without any intention to deliver or receive the stuff, but solely to wager in the market price at the Milwaukee Chamber of Commerce. Was it necessary, in order to establish this defense, that B. should prove affirmatively, that there was no intention on either part to deliver or receive the grain? A decision of the Supreme Court is cited as saying that B. must have made this proof. (Barnard v. Backhaus, 52 Wis- consin, 593.) And the Court indeed does say that "it does not matter what form the parties give their contracts, unless it appears affirmatively and satisfactorily that they were made with an actual view of the delivery and receipt of the grain, and not as an evasion of the statute of gaming or as a cover for a gambling transaction, they cannot be upheld." The county court was of opinion that Bartlett & Mohrinthi& case intended to sell actual wheat but the Supreme Court judges were not unanimous on the point. They finally agreed that at least some of the transactions were mere wagers, and therefore decided that Bartlett & Mohr could not recover on the note. 470 LEGAL AND COMMERCIAL PRECEDENTS. Might of Assignee to Sue in his Own Name.— Language Con- stituting a Promise to Fay.-S>. & 0., partners, had an account against P. S. bought out O.'s interest in the business, including the accounts, and telling P. that he had done this, asked for payment. P. replied that he understood the facts stated, that the account was larger than he supposed, but he would come in and pay S. On being again dunned, he named -a day on which he would call and settle. The question was, whether S. could sueinhis own name on the assigned partnra-- ship account. The Supreme Court answered that he could, by reason of the debtor's promise to pay him. The question then was, whether P.'s language amounted to such a promise, and the Court said — " The language used by the defendant (P.) must be construed with reference to the facts and subject- matter about which he was talking. He then knew that the claim was the property of the plaintiff (S.) and must has^e known that the plaintiff demanded payment as owner. With that knowledge and understanding he made the promise relied on ; and it seems clear that the promises were in fact and in legal effect promises to pay to the plaintiff alone." (Simonds v. Pierce, Vermont Supreme Court, 1879.) Loaning for Special Purpose not Delivery in Sale. — Rose owned a span of horses which he sold to Bruley, payment to be made in work, which was done substantially as agreed. Bruley, however, on a general settlement, was found to owe Rose f 45.60. To secure it Rose claims that Bruley delivered the horses to him as a pledge. Bruley denied this, but it was indisputed that he took the horses from Rose's farm, and as the evidence indicates with Rose's consent to his taking them for the particular purpose of going to Haydens, eight miles westerly. Bruley, however, did not go there but started easterly, in the night, with his family and household goods! The Court held that Rose had not released his lien as pledgee, that he had a special property in the horses, and that in an action for malicious prosecution by Bruley against Rose, on the ground of a false charge of larceny, the Court below erred in instructing the jury that Bruley was not guilty of larceny. (Bruley v. Rose, Iowa Supreme Court.) SALES. 471 Wrongful Sale by Party in Possession.— ^. employed B. to buy a horse for him. B. paid forit with A. 's money, but took the bill of sale in his own name. A., knowing the circum- stances, permitted B. to remain in possession of the horse and bill of sale, which he showed toC, and selling him the animal, took the price and absconded. The question was, whether A. could recover the horse fromC, and the Court answered that having clothed B. with all the indicia of title, he could not. (Nixon V. Brown, 57 New Hampshire, 34.) Seller (Vendor) may Sue Purchaser (Vendee) without Ten- dering Goods if the Latter Notifies the Former not to Ship.— An important case confirming the long contested principle that an anticipatory refusal to perform a contract may amount to an absolute breach before the time of performance is found in Windmuller v. Pope, (New York Court of Appeals, December, 1887, 9 Central Eeporter, 882.) The Court here held that on a contract for a sale of goods, where the vendee notified the vendor that he would not receive the goods nor pay for them, and informed the vendor that if he forwarded the goods he would do so at his own peril, and advised him that he had better stop attempting to carry out the contract, the vendor is justified in treating the contract as broken by the vendee at that time, and may bring his action immediately for the breach of it, without tendering the delivery of the goods or , awaitingthe expiration of the period of performance fixed by the contract; and the vendee cannot retract his renunciation of the contract after the vendor has acted upon it and has sold the goods to other parties. A somewhat similar principle was involved in Eobinson v. Frank (9 Central Reporter, 846) in the same Court, Novem- ber 29, 1887. Here the Court held that where one of the parties to an executory contract, ceases and refuses to manu- facture machines agreed to be manufactured under the con- tract, and so notified the other party or his agent, and such refusal is absolute and total, and is not withdrawn, the other party is justified and excused for his omission to make any further demands, or to serve any other notices, required by the contract. 472 LEGAL AND COMMERCIAL PRECEDENTS. In White v. Barber (United States Supreme Court, Decem- ber, 1887) a principal sued his brother under circumstances the gist of which appears to be that the latter, in fulfilling the former's orders, had put up margins as security, which were thereby subjected to the rules of the Board of Trade ; and th& principal then repudiated his contract as illegal and demanded immediate return of his margins. The broker was threatened with expulsion for non-payment pursuant to his principal's instructions, and having waited till the principal had unsuc- cessfully attempted to enjoin the Board of Trade, the broker yielded to the rules of the Board and paid over the margin in satisfaction of the contracts which his principal had repudi- ated. The Court held that he was protected in so doing. SHIPPING. Variation Between Charter-Party and Bill of liading. — Charter-party Controls,— " On the 11th of January, 1886, at Middlesbro'-on-Lees, England, the steamship Chadwicke was chartered to Bolckow, Vaughan & Co., to take on board 1,300 tons of Spiegel iron, etc.," and " being so loaded there- with to proceed to the Port of New York, Perth Amboy, Jer- sey City, Hoboken or Brooklyn, and there deliver the same as ordered on arrival." The charter, however, provided that the vessel was "to be addressed to the freighter's agent at the port of discharge, the captain to sign bills of lading as presented, without prejudice to this charter." Three days afterward, the cargo having been put on board, a bill of lading in the common printed form was signed by the master, stating'the steamer to be " bound for New York," and that the cargo was to be delivered "at said port of New York * * * unto C. L. Perkins, Esq., 30 Pine street, or his assigns, * » * g^^^j g^U other conditions as per charter-party ;" the port and consignee's name being written in the usual blank spaces. The steamer arrived at the quar- antine station of the port of New York on the 5th of Febru- ary, 1886, where a telegram from Mr. Perkins to the master dated January 30th, was awaiting his arrival, and was received by the master, directing the steamer to Lehigh Valley SHIPPING. 473 Eailroad dock at Perth Amboy. Instead of going thither he «ame up the New York bay, anchored off the Battery, reported to Mr. Perkins, the charterer's agent in New York, demanded to be unloaded there according to the terms of the bill of lading, and refused to go to Perth Amboy. After the charter had been signed, Bolckow, Vaughan & Co. informed Mr. Per- kins by telegram about the option contained in the charter. Thereupon the agent obtained an advance of fifty cents per ton upon a contract then pending, in consideration of the delivery of 1,000 tons of the iron at Perth Amboy instead of " ex ship " at New York. The option was worth to Bolckow, Vaughan & Co. precisely $500. The statement of facts thus far are nearly verbatim, from the opinion of Judge Brown, in the admiralty case of Bolckow, Vaughan & Co., Limited, v. The Chadwicke, (Southern District of New York, 1887, 29 Federal Keporter, 521,) the libel having been filed to recover damages against the vessel, for refusingto go to Perth Amboy to unload, as ordered on arrival at New York. Judge Brown in delivering judgment proceeded to say : "The claimants contend that the bill of lading, in making the port of New York the place of delivery, determined the charterer's option, and that he had no right afterwards to direct the vessel elsewhere. Perth Amboy is a different port, and in a different collection district from New York, although not much further from quarantine, where the master first received his notice, than are the ordinary discharging berths for such cargo in the port of New York. The consular invoices sworn to by the libellants, before the consul at Middlesbro,' declare that the cargo was shipped for New York and designed to be entered there. * * * The master in preparing his manifest stated New York as the only port, and entered his vessel at the New York custom house. "The disposition of the cargo was evidently intended to be left to the charterer's agent in New York. All the other places of alternative delivery named in the charter are in the immediate vicinity' of New York. There is not the slightest reason to suppose that the shipper in making out the consular invoices and the bilk of lading for 'the port of New York' actually intended either to waive his option as to the place 474 LEGAL AND COMMERCIAL PRECEDENTS. of final delivery, or to charge himself with any irregularity ill a delivery at Perth Amboy, should that be directed by his agent, even if he knew that Perth Amboy was in a different collection district from New York, which he probably did not know. * * * Tjig intent of the whole instrument seems clear that the vessel was to be consigned to New York for further orders — a familiar form of charter — except that in ' this case the option was limited to a few places', within the immediate vicinity of the primary port. ' ' The bill of lading must be construed in the same sense, and as designed to indicate the port of New York as the pri- mary port only, where C. L. Perkins would direct the place of final delivery according to the option provided for in the charter. No doubt the bill of lading omits what ought to have been inserted in it in order to nnak« its provisions liter- ally harmonious with the charter, and to make the whole intent clearfrom that paper alone; and some of the ordinary printed language of the bill of lading should also have been stricken out. Such incompatibilities Of expression between* the charter and the bill of lading are not infrequent where the charterer's goods are laden on board. Often the two papers wholly fail to be adjusted nicely to each other. A bill of lading referring to a charter-party is never construed as intending to express the whole intent, or to control the' char- ter-party in consequence of mere inharmonious expressions^ The charter is the deliberate and controlling document; and where the intent of the charter is clear, a bill of lading* under it, and referring to it, as between the ship and the charterer, doesnotsupersedetheexprese provisions of the charter-party that are clearly intended to apply to the situation, however' inartificially the bill of lading may be framed. * * *' To control the charter-party there must be sufficient evidence' of a new contract between the parties pro tanto. In this case there is no evidence" of any further or different conti-act." There was, accordingly, a decree for' the libellants. Demurrage.— Variant Tertns in Charter-Party and Bill of Lading.— Explanation by Parol.— In a charter-party of the bark Wanderer, fifteen days were allowed for loading and SHIPPING. 475 disebarging the cargo. All but two of these days were con- sumed in loading at Stettin. The bills of lading, signed afterwards, contained the words on the margin, "three work- ing days are left for discharging;" and at the bottom of the bills, above the signature of the master, were these words : "The cargo to be discharged for account of the merchant ■within three working days, crew to assist, if more time used, demurrage to be paid as per charter-party." On arrival at Charleston the master of the Wanderer refused to bear the expense of discharging cargo, and the consignee claiming that the master should do so, and waiving none of his rights, had the cargo discharged by a stevedore and paid the bill — $129.25. This amount he claimed to deduct from the freight money, for which the ship-owners filed a bill in the United States District Court, eastern district of South Carolina. The Court pointed out the variant terms of the charter-party and the bill of lading, saying : " The charter-party provided that the cargo should be taken in and discharged in fifteen working days, and also that the expense of discharging should be borne by the ship ; the cargo 'to be taken from along-side at expense and risk of the merchant.' The bill of lading says: 'The cargo to be discharged for account of the merchant within three working days, crew to assist.' Whom? The ship? Is not this within the scope of their employment? Then why insert it ? * * * Thus an ambiguity exists which calls for explanation. Mr. Greenleaf, discussing the rule as to the admissibility of parol evidence upon the subject-matter of written instruments, says: 'Where the agreement in writing is expressed in short and incomplete terras, parol evidence is admissible to explain what is per se UninteUigible, such explanation not being inconsistent with the written terms.' * » * Applying this rule, and admitting this testimony, it appears that while the ship was at Stettin the fifteen days allowed in the charter-party for loading and discharging cargo had almost expired ; that in fact but two days remained. This exposed the charterer to demurrage at the rate of about eight pounds per day. In this condition of things it was proposed that three working days should at all events be allowed for discharging cargo ; that 476 LEGAL AND COMMERCIAL PRECEDENTS in consideration of this indulgence, the ship should be relieved of its obligation to deliver cargo at its own cost, but that the crew should assist in this discharge— the burden, however, being assumed by the merchant. In order to carry out this, these words were added to the bill of lading — words inconsist- ent with the charter-party and calling for explanation. In the light of this testimony the meaning and use of the words are explained." It was accordingly ordered that the ship- owner should recover the full freight money due without ■offset. (The Wanderer, 29 Federal Keporter, 260.) Delivery at Wharf.— Whether Ship is Bound to Deliver at Mer Own DocTe, or may go Elsewhere in for*.— Thirty-six cases of goods shipped by the National Line Steamer Egypt to Arnold, Constable & Co., of New York, were carried by that vessel to the Inman Line Pier, No. 39 North Eiver, instead of the National Line Pier, No. 36, and having been landed on Pier 39, were there destroyed by fire, January 31, 1883. The bill of lading stipulated that the carrier should have the privi- lege of discharging " without notice at the consignee's risk." Notice of the time and place of discharge was in fact given by a bulletin posted at the custom house. Messrs. Arnold, Con- stable & Co. filed a libel in personam against the owners of the National Line to recover the value of the goods, and among other things alleged that it had become an established custom and usage of the port, between the libellants and respondents, that all the libellants' goods should be landed at the dock known as the "National Dock," which at this time was at Pier 39 ; that the change to Pier 36 was made without necessity, in violation of said custom ; and that it was by reason of such violation that the goods were destroyed. The case was tried in the District Court for the Southern District of New York, and Judge BroM'n, in giving judgment, said that the alleged custom, in order to have the legal effect of a stipulation to deliver at Pier 39, "must be so clearly proved, and also so certain in its character, as to have the legal eifect of one of the express terms of the contract. In my judgment, the proof is entirely insufficient in either respect." The opinion proceeds to describe the custom of the line in SHIPPING. 477 ■discharging, which was in a great majority of instances to ■employ their own dock. It was shown that " during the five years preceding the arrival of the Egypt, out of one hundred and ninety -two voyages from Liverpool made by steamers of the defendants' line, in eight instances only had the vessels been sent to docks other than those leased or controlled by the defendants. " Whilethese facts show, undoubtedly," said the Court, "the habit of defendants to discharge at their own dock, this practice was in no way legally incompatible with a, lawful discharge at any other fit and appropriate wharf, whenever there was reasonable occasion for so doing. * * * The question presented is whether the customary discharge of goods by a carrier at its own wharf, so long as no good reason for a discharge elsewhere exists, though not without occasional discharges for cause at a different wharf, imports any strict contract obligation to discharge at its own wharf, and not elsewhere, though good reason for a discharge else- wheredoes arise, forthe reasonable convenience of all parties, so that the contract must be held violated by a discharge made at another place near by equally fit and appropriate,. In my judgment there is no such obligation." In a previous part of the opinion it was said : " The bill of lading in this <;ase stipulated only for a delivery at the port of New York. Under this provision the defendants had a right to deliver the goods in any part of the port in which, by the usage of trade, such goods were accustomed to be delivered." (Arnold v. National Steamship Co., (1886,) 39 Federal Reporter, 184.) Bottomry or Disbursement Drafts.— Nature of the Lien.— Points of Interest to Ship-Agents, Brokers and Bankers.— Instances have occurred which serve to warn ship-brokers and agents, as well as bankers, that the common practice of advancing money to ship-masters upon what are known as bottomry or "disbursement" drafts is sometimes attended with risks, which, whether unsuspected or not, are at least often unprotected. The money is advanced in such cases upon the supposition that the advance by virtue of the lan- guage of the draft or otherwise creates a lien upon the vessel. The following is the form of a draft of this description : 31 478 LEGAL AMD COMMERCIAL PRECEDENTS. £ Btg. IS. Ten days after arrival at port of destination of the called , of which I am the master, now lying at , loaded with and ready to sail for , 1 promise to pay to the order of £ sterling in approved bankers' demand bills on London, value received, for necessary disbursements of my vessel at tliis port, for the payment of which I hereby pledge my vessel and freight; and my consignees at the port of destinationi are hereby directed to pay tlie amount of this obligation, from the first amount of freight received, for account of my said vessel. Any other draft . or obligation by me drawn at this port on said freight to be secondary to this. Master of The question whether an instrument of this character creates a lien on the vessel and freight depends on three con- ditions, which the holder must be able to show by afflrmative proof: First. — The moneys or consideration for the bottomry draft must have been actually and necessarily required for the vessel. Otherwise the draft on the owner of the vessel creates no lien, even if it expresses on its face that it is "recoverable against the vessel, freight and cargo." (The Woodland, 104 United States Supreme Court Report, p. 180, 1881.) Second. — The master must communicate with owner of the vessel where possible, and notify him of the intention to bor- row money on the credit of the ship. If no such communica- tion is had the bottomry draft will be void. (The Giulio, 27 Federal Reporter, p. 318, E. D. N. Y., 1885.) Third. — The moneys must have been advaucea or the sup- plies furnished upon an agreement for a lien or with a reasona- ble expectation that they shall be secured by a bottomry lien onthe vessel. If it is the ordinary case of an agent supplying funds to a vessel, on the credit of the owners, there will be no lien, although afterward a bottomry bond or security is given. (The Steamship Circassian, 3 Ben., 398, E. D. N. T., 1869.) If these conditions are all met, a draft drawn against a vessel and freight creates a valid lien enforceable in admiralty, the same as If the instrument were a bottomry bond under seal. (Force v. The Ship Pride of the Ocean, 3 Federal Reporter, 162, E. D. N. Y., 1880; Bolton v. The Bark James K. Pendergast, S. D. N. Y., decided by JudgeBrown April 1, 1887.) The general maritime law seems to hold that the power of SHIPPING. 479 the master to create a lien on the vessel and freight, either by bond or by draft, is governed by the law of the country to which the ship belongs, and that it is incumbent upon the creditor before making advances, to ascertain whether by that law the master has this power. The maritime laws of nearly all countries, however, confer this right in case of urgent necessity. Some of them are not so strict as the Eng- lish and American decisions in requiring previous communica- tion between the master and the owner. Thus the law of Germany (Article 634 of the Commercial Code) expressly obliges the master in cases of urgent nscessity not only to hypothecate the vessel,, but even the cargo, for the purposes of its preservation, or the prosecution of the voyage. The German law also seems to contemplate a draft being given instead of a bottomry bond, as it permits the instrment to be made payable to order, and to pass by indorsement ; and if no express date of payment is fixed, it becomes payable on the eighth day after the arrival of the vessel in the port of destination. The German code itself speaks of the bottomry security as Bodmereischuld and Bodmereibrief (Article 609) — terms which would apply to a draft quite as well as to any other form of instrument. The point of deepest interest in this summary is that which imposes upon the holders of these drafts the necessity of proving that the money was actually expended for account of the ship, and that the expenditure was such as to carry with it the right of a maritime lien. In the case of the Wood- land, cited above, the expenditure was incurred in part, and nominally in toto, for necessary repairs of a British ship in St. Thomas. There were three drafts, two of which were in the hands of a bona fide holder, who libelled the ship in this district. A third draft was given by the ship-agents to the master, corruptly, and constituted a part of the sum for which the others were drawn against the ship. Chief Justice Waite rendered the opinion, and said: "The drafts them- selves did not create a lien on the vessel. Unless the debt for which they were given bound the vessel, the drafts, notwith- standing what is expressed on their face, did not." 480 LEGAL AND COMMERCIAL PRECEDENTS. TELEGRAPH MESSAGES. Liability for Errors in Transmission.— Bequirement that Messages Shall be Repeated.— The validity of a condition made by telegraph companies that they will not be liable beyond a certain designated amount for errors in transmitting mes- sages, unless they are repeated — that is, sent back from the station at which they are received to the station from which they are originally sent — has been the subject of conflicting decisions in different states. In Ohio it has been settled in the highest court that such a stipulation cannot absolve a telegraph company from the consequences of its own, negli- gence. In the case decided, S. W. C. left a message at Wood- stock, Ont., for transmission to G. & D., Cleveland, Ohio, asking if they would give " one fifty for twenty-five hundred at London" — meaning $150 per bushel for that amount of flaxseed at London, Out. The message was delivered with the words " onefifty " altered to " oneflve." G. &D. accepted in the following terms : "Yes, if the seed is prime, and we can hold at London until spring." Upon the receipt of this reply G. W. C. bought the seed at f 1.45 per bushel, and shipped it in the latter part of January. G. & D. received and paid for the seed, and then brought an action against the telegraph company for damages caused by their erroneous transmission of the message. The company set up in defense the special agreement limiting their liability for messages not repeated, but in the Cuyahoga Common Pleas there was a verdict against them for |1,290.61. The judgment was affirmed in the Supreme Court, which said that in failing to use the care and skill which the law required of those who exercise a public employment, they became "liable for the resulting conse- quences, notwithstanding their stipulation to the contrary. * * * We are also of the opinion that the failure to transmit and deliver the message in the form or language in which it is received is prima facie negligence, for which the company is liable; and that to exonerate itself from the liability thus presumptively arising, it must show that the mistake was not attributable to its fault or negligence." ^Western Union Telegraph Company v. Griswold, 37 Ohio State Reports.) TELEGRAPH MESSAGES. 481 On the last point tlie Court cited concurrent decisions in Maine, New York, Illinois, Michigan, Louisiana, Indiana and Iowa. Telegraph Companies.— Failure to Deliver Message,— Dam- ages.— Cipher Dispatch.— S.. Brothers sued a telegraph com- pany for damages suffered by them by reason of its negligence to deliver a message sent to them. They were merchants and ship-brokers at Pensacola, and they received a cablegram from their correspondent and agent at Barbadoes, giving them the refusal to carry some timber, to which they replied that they could send a vessel to carry the timber at a certain freight, and their correspondent answered accepting the terms; but this message the company failed to deliver. These dispatches were in cipher. As the acceptance was not received, H. Brothers declined the offer of a vessel by M., and on the arrival of their letters they received a copy of the tele- gram, and were forced to recharter the vessel at a loss of $618.90. The company defended on the ground that it was liable for nominal damages, since it had not been informed that the dispatch was an important one, which should be correctly transmitted and promptly delivered ; but a judg- ment for 1618.90 was given against it, and the case (Western Union Telegraph Company) was carried' to the Supreme Court of Florida, where it was affirmed. The Chief Justice, McWhorter, in the opinion, said: "1. The courts of New York, Minnesota, Maryland, Wisconsin, Massachusetts, Nevada and Maine, have decided that in such a case as this nominal damages only can be recovered ; but in Alabama and California it is held that a telegraph company is liable for damages resulting naturally and in the usual course of busi- ness, from its failure to send or deliver a dispatch correctly and promptly, without requiring the sender to disclose its importance to the company. We are of the opinion that full damages should be given. The common carrier charges differ- ent rates of freight for different articles, according to their bulk or value and their respective risks of transportion, and provides different methods for the transportation of each. It is not shown here that the defendant company had any scale of prices which were higher or lower as the importance of the 482 LEGAL AND COMMERCIAL PRECEDENTS. dispatch was great or small ; and it is not shown that had the importance of correct and prompt transmission and deliv- ery been communicated to the operator that the rules of the company required him to send the dispatch out of its order, or with an extra degree of skill or different method or agency. There was then no reason that any such statement should have been made to the operator. It seems to be considered that the relations between telegraph companies and their cus- tomers must be determined by some settled rules of law; but any attempt to apply to so novel a system legal principles adapted to pursuits and occupations which are dissimilar in their nature, and designed for the accomplishment of different purposes, must naturally result in failure and confusion. A recognition of their courts of this truth, and an application, from time to time to its conduct, of such rules and regulations as common sense may suggest as fitted to its peculiar nature and purposes, without reference to systems which are not similar, and principles that are not analogous, is the only method of preserving the law regulating its operation from contradiction and perplexities. Similar difficulties have pre- viously arisen in other branches of the law, when from their novelty and a failure of applicable precedents the courts, probably from the fear of the hazard of framing new rules, or misled by a seeming analogy, have attempted to apply to such legal novelties long-used principles of law, and to analo- gize the new to some old system with which they are familiar. 2. It is of no consequence in determining the question here whether the dispatch was in plain English or in cipher, provided the cipher is written in the letters of the English alphabet." Telegraphic Delay .—Action for Damages.— ^h^s decision ot the Supreme Court of the United States in Western Union Company v. Hall, applies a distinction of much importance, not only in actions against telegraph companies, but in other classes of actions where it is sought to recover for loss of profits. The plaintiff below telegraphed to his agent to buy ten thousand barrels of petroleum, and if the message had been duly delivered and the order executed and the plaintiff TELEGRAPH MESSAGES. 483 had sold the petroleum next day, he would have realized, by the advance which had taken place meantime, eighteen hun- dred dollars. To recover this sum he sued. The company insisted that hisactual loss was only the toll paid. TheCourt below sustained the action for the full amount, and this deci- \sion the Supreme Court reversed. Judge Matthews says, in substance, that the only theory on which the plaintiff could show actual damage or loss is on the supposition that if he had bought on November 9 he might and would have sold on November 10. It is clear that in point of fact he has not suffered any actual loss. It does not appear that it was the purpose or intention of the sender of the message to purchase the oil in the expectation of profits to be derived from an immediate resale. If the order had been promptly delivered on the day it was sent and had been executed on that day, it is not found that he would have sold the next day at an advance, nor that he could have resold at a profit at any subsequent day. The only damage therefore which he is entitled to recover is the cost of transmitting the delayed message. To somewhat similar affect is the recent case of Riley v. Western Union Company, (39 Hun, 158.) This decision is not to be understood, it would seem, as holding that such a loss of opportunity cannot be recovered for, for the Court appear to put their decision on the omission from the plaintiff's case of certain facts which in some instances might be supplied. But it goes at least to the extent of warning the practitioner that to recover for such loss of opportunity there should be evidence that the order would have been executed if received, and that plaintiff would have sold at a profit or that the advance was sustained, or, we may add, that he was obliged to buy the article at an advance for the purpose for which he had sent the order. (Compare Goodsell v. Western Union Company, 53 Superior Court, J. and S.,46; Carrv. Archimedean Company, 12 Daly, 332; Barretts & v. Wharton, 101 New York, 631.) The question whether a party can prove what he would have done in a contingeucy that did not take place is one that is frequently contested, and which would be involved in 484 LEGAL AND COMMERCIAL PRECEDENTS. attempting such proof. The authorities are not quite har- monious, but the better opinion is that when a question of right depends on an act which a party might or might not have performed in such a contingency, his testimony that as to whether he would or would not have performed it is compe- tent. A useful authority on this point is King v. Fitch, where it was held that in seeking to avoid a sale of chattels on account of fraud, the fact that the seller would not have made the sale except for false representations may be shown by the- direct testimony of the seller, if he be a competent witness, because this is not a matter of opinion, but the statement of fact within his personal knowledge. (2 Ab. Ct. App., Dec.,. 508.) To similar effect is Valton v. National Loan Fund Society, 4 id., 437. Contra, Learned v. Ryder, 61 Barb., 552; S. C, 5 Lans., 539. TRADE-MARKS. General Bentarks.— In Pratt's Appeal (Supreme Court of Pennsylvania, 16 Wash. L. Reps., 73), the following points of interest in the law of trade-marks were decided : 1. When a person has acquired the right to use a certain symbol as a trade-mark, an imitator of it will not be pro- tected by the mere act of adding his own name to the label. Such addition is a circumstance and nothing more, to be considered in connection with the whole appearance of the trade-mark, to determine whether it is an imitation. 2. If the children or other descendants of the owner of a trade-mark continue the manufacture of the goods after their ancestor's death, using upon them the same trade-mark, they acquire a right to it independently of any that might accrue to them by descent. In such a case the question as to the descendibility of trade-marks does not necessarily arise. There is, however, ample and recent authority for saying, not only that a business and its accompanying trade-mark may pass from a parent to his children without administration, but that the business may be divided among the children, and each will have a right to the trade-mark to the exclusion of all the world except his co-heirs. TRADE UNIONS AND CONTRACTS. 485 TRADE UNIONS AND CONTRACTS. Trade Combinations and Conspiracies,— A Remedy at Law for Acts in Restraint of Lawful Business.— The branch pilots of New Orleans having formed an organization, agreed that they would not do service as pilots with any persons not members of their union, and a member of pilots, part owners of the pilot-boat Mary E. Lee, having undertaken to act independently, the confederated pilots endeavored by suits, newspaper publications and divers other means, to drive them out of the business. These injurious acts the pilots of the Mary E. Lee sought an injunction to restrain, and obtained one from the United States Circuit Court. The Supreme Court, however, reversed the decision, and in the following language pointed out the remedy : "The whole gist of the complaint is that the defendants do- not treat the plaintiff as having a right to use his vessel as a pilot-boat, and have publicly so stated, and that some of the parties mentioned have been subjected to suits for their acts in piloting. But if this be so, the plaintiff has a full remedy for his alleged wrongs in the courts of law. They furnish no ground for the interposition of a court of equity. If the plaintiif has a right to pilot vessels with his boat through the pass and is wrongfully interfered with by thfr defendants or others, he can prosecute them for the wrong. If his vessel is arrested in its passage, without lawful warrant, he can bring the defenda,nts before the courts to answer for their conduct. If his pilots are duly licensed, and they are hindered or prevented from the exercise of their business, both he and they have the same means of redress which are afforded to every citizen whose rights are invaded or obstructed." (Francis v. Flinn, 118 United States, 385.) Contracts in Restraint of Trade.— Exhaustively Considered by the Court of Appeals, New York, Reviewing the Whole SMftjecf.— Appeal from judgment of the General Term of the Supreme Court in the first judicial department, made March 20, 1885, which modified as to an additional allowance of costs, and affirmed, as modified, a judgment in favor of plaintiff, entered upon a decision of the Court on trial at Special Term. 486 LEGAL ANb COMMERCLiL PRECEDENTS. This action was brought to restrain the defendant from engaging in the manufacture or sale of friction matches in Tiolation of a covenant in a bill of sale executed by defendant, which is set forth in the opinion, wherein also the material facts are stated. Andrews, J. — Two questions are presented. First, whether the covenant of the defendant contained in the bill of sale executed by him to the Swift & Courtney & Beecher Company on the 27th day of August, 1880, "that he shall and will not, at any time or times within ninety-nine years, directly or indirectly engage in the manufacture or sale of friction matches (excepting in the capacity of agent or employe of said The Swift & Courtney & Beecher Company), within any of the several states of the United States of America or in the territories thereof, or within the District of Columbia, except- ing and reserving, however, the right to manufacture and sell friction matches in the state of Nevada and in the territory of Montana,"isvoidasbeingacovenant in restraint of trade; and. Second, as to the right of the plaintiff, under the special circumstances, to the equitable remedy by injunction to enforce the performance of the covenant. There is no real controversy as to the essential facts. The consideration of the covenant was the purchase by the Swift & Courtney & Beecher Company, a Connecticut corporation of the manufac- tory No. 528 West Fiftieth Street, in the city of New York, belonging to the defendant, in which he had, for several years prior to eutering into the covenant, carried on the business of manufacturing friction matches, and of the stock and materials on hand, together with the trade, trade-marks and good will of the business, for the aggregate sum (excluding a mortgage of |5,000 on the property, assumed by the com- pany) of 146,724.05, of which |13,000 was the price of the real estate. By the preliminary agreement of July 27, 1880, f 28,000 of the purchase price was to be paid in the stock of the Swift & Courtney & Beecher Company. This was modified when the property was transferred August 20, 1880, by giving to the defendant the option to receive the $28,000 in the notes of the company or in its stock, the option to be exercised on or before January 1, 1881. The remainder of TRADE UNIONS AND CONTRACTS. 487 the purchase price, |18, 724.05, was paid down in cash, and subsequently, March 1, 1881, the defendant accepted from the plaintiflF, the Diamond Match Company, in full payment of the $28,000, the sum of |8,000 in cash and notes, and f 20,000 in the stock of the plaintiff, the plaintiff company • havinf?, prior to said payment, purchased the property of the Swift & Courtney & Beecher Company and become the assignee of the defendant's covenant. It is admitted by the pleadings that in August, 1880 (when the covenant in ques- tion was made), the Swift & Courtney & Beecher Company carried on the business of manufacturing friction matches in the statesof Connecticut, Delaware and Illinois, and of selling the same " in the several states and territories of the United States and in the District of Columbia;" and the complaint alleges, and the defendant in his answer admits, that he was at the same time also engaged in the manufacture of friction matches in the city of New York, and in selling them in the same territory. The proof tends to support the admission in the pleadings. It was shown that the defendant employed traveling salesmen, and that his matches were found in the hands of dealers in ten states. The Swift &. Courtney & Beecher Company also sent their matches throughout the country wherever they could find a market. When the bar- gain was consummated, on the 27th of August, 1880, the defendant entered into the employment of the Swift & Court- ney & Beecher Company, and remained in its employment until January, 1881, at a salary of f 1,500 a year. He then entered into the employment of the plaintiff, and remained with it during the year 1881, at a salary of $2,500 a year, and from January 1, 1882, at a salary of f 3,600 a year, when a disagreement arising as to the salary he should there- after receive, the plaintiff declining to pay a salary of more than $2,500 a year, the defendant voluntarily left its service. Subsequently he became superintendent of a rival match manufacturing company in New Jersey, at a salary of $5,000, and he also opened astorein New York for the sale of matches other than those manufactured by the plaintiff. The conten- tion by the defendant that the plaintiff has no equitable remedy to enforce the covenant, rests mainly on the fact that 488 ,EGAL AND COMMERCIAL PRECEDENTS. contemporaneously with the execution of the covenant of August 27, 1880, the defendant also executed to the Swift &. Courtney & Beecher Company a bond in the penalty of 115,000, conditioned to pay that sum to the company a» liquidated damages in case of a breach of his covenant. The defendant for his main defense relies upon the ancient doctrine of the common law first definitely declared, so far as I can discover, by Chief Justice Parker (Lord Macclesfield) in the leading case of Mitchell v. Reynolds (1 P. Williams, 181), and which has been repeated many times by judges in Eng- land and America, that a bond in general restraint of trade is void. There are several decisions in the English courts of an earlier date in which the question of the validity of contracts restrainingthe obligor from pursuing his occupation within a particularlocality wereconsidered. The cases are chronolog- ically arranged and stated by Mr. Parsons in his work on Contracts (vol. 2, p. 748, note). The earliest reported case, decided in the time of Henry V., was a suit on a bond given by the defendant, a dyer, not to use his craft within a certain city for the space of half a year. The judge before whom the- case came indignantly denounced the plaintiff for procuring- such a contract, and turned him out of court. This was fol- lowed by cases arising on contracts of a similar character, restraining the obligors from pursuing their trade within a certain place for a certain time, which apparently presented the same question which had been decided in the dyer's case, but thecourts sustained the contracts and gave judgment for the plaintiffs ; and, before the case of Mitchell v. Reynolds it had become settled that an obligation of this character, lim- ited as to time and space, if reasonable under the circum- stances and supported by a good consideration, was valid. The case in the Year Books went against all contracts in restraint of trade, whether limited or general. The other cases, prior to Mitchell v. Reynolds, sustained contracts for a particular restraint, upon special grounds, and by inference decided against the validity of general restraints. The case of Mitchell v. Reynolds was a case of partial restraint and the contract was sustained. It is worthy of notice that most, if not all, the English cases which assert the doctrine that all TRADE UNIONS AND CONTRACTS. 489 contracts in general restraint of trade are void, were ■cases where the contract before the court was limited or partial. The same is generally true of the American cases. The prin- cipal cases in this State are of that character, and in all of them the particular contract before the court was sustained. (Nobles V. Bates, 7 Con., 307; Chappel v. Brockway, 21 Wend., 157; Dunlop v. Gregory, 10 New York, 241.) In Alger V. Thacher (19 Pick., 51), the case was one of general restraint, and the Court, construing the rule as inflexible that all contracts in general restraint of trade are void, gave judgment for the defendant. In Mitchell v. Reynolds the Court, in assigning the reasons for the distinction between a contract in general restraint of trade and one limited to a particular place, saj's, "for the former of these must be void, being of no benefit to either party and only oppressive;" and later on, "because in a great many instances they can be of no use to the obligee, which holds in all cases of general restraint throughout England, for what does it signii;y to a tradesman in London what another does in Newcastle, and surely it would be unreasonable to fix a certain loss on one side without any benefit to the other." He refers to other reasons, viz : The mischief which may arise (1) to the party, by the loss, by the obligor, of his livelihood and the subsist- ence of his family; and (2) to the public, by depriving it of a useful member and by enabling corporations to gain control of the trade of the kingdom. It is quite obvious that some of these reasons are much less forcible now than when Mitch- ell V. Reynolds was decided. Steam and electricity have, for the purposes of trade and commerce, almost annihilated dis- tance, and the whole world is now a mart for the distribution of the products of industry. The great difi"usion of wealth and the restless activity of mankind striving to better their condition, has greatly enlarged the field of human enterprise and created a vast number of new industries, which give scope to ingenuity and employment for capital and labor. The laws no longer favor the granting of exclusive privileges, and, to a great extent, business corporations are practically part- 'nerships, and may be organized by any persons who desire to unite their capital or skill in business, leaving a free field to 490 LEGAL AND COMMERCLiL PRECEDENTS. all others who desire for the same or similar purposes to clothe themselves with a corporate character. The tendency of recent adjudications is marked in the direction of relaxingthe rigor of the doctrine that all contracts in general restraint of trade are void irrespective of special circumstances. Indeed, it has of late been denied that a hard and fast rule of that kind has ever been the law of England. (Rousillonv. Rousillon, 14 L. R., Ch. Div., 351.) The law has, for cen- turies, permitted contracts in partial restraint of trade, when reasonable; and in Homer v. Graves (7 Bing., 735), Chief Justice Tindall considered a true test to be " whether the restraint is such onlv as to afford a fair protection to the interests of the party in favor of whom it is given, and not so large as to interere with the interests of the public." When the restraint is general, but at the same time is co-extensive only with the interest to be protected, and with the benefit meant to be conferred, there seems to be no good reason why, as between the parties, the contract is not as reasonable as when the interest is partial and there is a corresponding par- tial restraint. And is there any real public interest which necessarily condemns the one and not the other? It is an encouragement to industry and to enterprise in building up a trade, that a man shall be allowed to sell the good will of the business and the fruits of his industry upon the best terms he can obtain. If his business extends over a continent, does public policy forbid his accompanying the sale with a stipula- tion for restraint co-extensive with the business which he sells? If such a contract is permitted, is the seller anymore likely to become a burden on the public than a man who having built up a local trade only, sells it, binding himself not to carry it on in the locality? Are the opportunities for employment and for the exercise of useful talents so shut up and hemmed in that the public is likely to lose a useful member of society in the one case and not in the other? Indeed, what public policy requires is often a vague and difficult inquiry. It is clear that public policy and the interests of society favor the utmost freedom of contract, within the law, and require that business transactions should not be trammeled by unneces- sary restrictions. "If," said Sir George Jessell in Printing TRADE UNIONS AND CONTRACTS. 491 Company v. Sampson (19 Eq. Cas. L. R., 462), "there is one thing more than any other which public policy requires, it is that men of full age and competent understanding shall have the utmost liberty of contracting, and that contracts when entered into freely and voluntarily, shall be held good and shall be enforced by courts of justice." It has some times- been suggested that the doctrine that contracts in general restraint of trade are void, is founded in part upon the policy of preventing monopolies, which are opposed to the liberty of the subject, and the granting of which by the king under claim of royal prerogative led to conflicts memorable in Eng- lish history. But covenants of the character of the one now in question operate simply to prevent the covenantor from engaging in the business which he sells, so as to protect the- purchaser in the enjoyment of what he has purchased. To the extent that the contract prevents the vendor from carrying on the particular trade, it deprives the community of any benefit it might derive from his entering into competi- tion. But the business is open to all others, and there is little danger that the public will suffer harm from lack of persons to engage in a profitable industry. Such contracts do not create monopolies. They confer no special or exclusive privilege. If contracts in general restraint of trade, where the trade is general, are void as tending to monopolies, contracts in par- tial restraint, where the trade is local, are subject to the same objection, because they deprive the local community of the services of the covenantor in the particular trade or calling and prevent his becoming a competitor with the covenantee. We are not aware of any rule of law which makes the motive of the covenantee the test of the validity of such a contract. On the contrary we suppose a party may legally purchase the the trade and business of another for the very purpose of preventing competition, and the validity of the contract, if supported by a consideration, will. depend upon its reasona- bleness as between the parties. Combinations between pro- ducers to limit production and to enhance prices, are or may be unlawful, but they stand on a different footing. We cite some of the cases showing the tendency of recent judicial opinion on the general subject. ( Whittaker v. Howe, 3 Beav., 492 LEGAL AND COMMERCIAL PRECEDENTS. 383; Jonesv.Lees, 1 Hurl.&N., 189; Eousillonv.Rousillon, supra; Leather Company v. Lorsout, 9 Eq. Cas., L. R., 345 ; Collins V. Locke, 4 App.Cas., L. R., 674; Oregon Steam Com- pany v. Winsor, 20 Wall., 64; Morse v. Morse, 103 Massachu- setts, 73.) In Whittaker v. Howe a contract made by a solicitor not to practice as a solicitor "in any part of Great Britain," was held valid. In Rousillon v. Rousillon a general contract not to engage in the 'sale of champagne, without limit as to space, was enforced as being under the circum- stances a reasonable contract. In Jones v. Lees, a covenant by the defendant, a license under a patent, that he would not during the license make or sell any slubbing-machines without the invention of the plaintiff applied to them, was held valid. Bramwell, J., said : " It is objected that the restraint extends to all England, but so does the privilege." In Oregon Steam Company v. Winsor the Court enforced a covenant by the defendant, made on the purchase of a steamship, that it should not be run or employed in the freight or passenger business upon any waters in the state of California for the period often years. In the present state of the authorities we think it cannot be said that the early doctrine that contracts in general restraint of trade are void, without regard to circumstances, has been abrogated. But it is manifest thgit it has been much weak- ened, and that the foundation upon which it was originally placed has, to a certain extent at least, by the change of circumstances, been removed. The covenant in the present case is partial and not general. It is practically unlimited as to time, but this, under the authorities, is not an objection, if the contract is otherwise good. (Ward V.Byrne, 5 M.&W., 548; Mumfordv. Gething, 7 C. B. (N. S.,) 305, 317.) It is limited as to space since it excepts Nevada and Montana from its operation, and there- fore is a partial and notageneral restraint, unless, as claimed by the defendant, the fact that the covenant applies to the whole of the State of New York, constitutes ageneral restraint within the authorities. In Chappel v. Brock way, (supra,) Bronson, J., in stating the general doctrine as to contracts in restraint of trade, remarked that "contracts which go to TRADE UNIONS AND CONTRACTS. 493 the total restraint of trade, as that a man will not pursue his occupation any where in the State, are void." The contract under consideration in that case was one by which the defend- ant agreed not to run or be interested in a line of packet- boats on the canal between Eochester and Buffalo. The attention of the Court was not called to the point whether a contract was partial, which related to a business extending over the whole country, and which restrained the carrying on of business in the State of New York, but excepted other states from its operation. The remark relied upon was ■obiter, and in reason cannot be considered a decision upon the point- suggested. We are of the opinion that the conten- tion of the defendant is not sound in principle, and should not be sustained. The boundaries of the states are not those of trade and commerce, and business is restrained within no such limit. The country, as a whole, is that of which we are <;itizeiis, and our duty and our allegiance are due both to the state and nation. Nor is it true, as a general rule, that a business established here cannot extend beyond the s|;ate, or that it may not be successfully established outside of the state. There are trades and employments which, from their nature, are localized ; but this is not true of manufacturing industries in general. We are unwilling to say that the doc- trine as to what is a general restraint of trade depends upon state lines, and we cannot say that the exception of Nevada and Montana was colorable merely. The rule itself is arbi- trary, and we are not disposed to put such a construction upon this contract as will make it a contract in general restraint of trade, when upon its face it is only partial. The case of Oregon Steam Company v. Winsor, (supra,) supports the view that a restraint is not necessarily general which embraces an entire state. The defendant entered into the covenant as a consideration in part of the purchase of his property by the Swift & Courtney & Beecher Company, pre- sumably because he considered it for his advantage to make the sale. He realized a large sum in money, and on the com- pletion of the transaction became interested as a stockholder in the very business which he had sold. We are of opinion that the covenant, being supported by a good consideration, 32 494 LEGAL AND COMMERCIAL PRECEDENTS. and constituting a partial and not a general restraint, and being, in view of the circumstances disclosed, reasonable, is valid and not void. In respect to the second general question raised, we are of opinion that the equitable jurisdiction of the court to enforce the covenant by injunction was not excluded by the fact that the defendant, in connection with the covenant, executed a bond for its performance, with a stipulation for liquidated damages. It is, of course, competent for parties to a cove- nant to agree that a fixed sum shall be paid in case of a breach by a party in default, and that this should be the exclusive remedy. The intention in that case would be manifest that the payment of the penalty should be the price of non-per- formance, and to be accepted by the covenantee in lieu of performance. (Phoenix Insurance Company v. Continental Insurance Company, 87 New York, 400, 405.) But thetaking of a bond in connection with a covenant does not exclude the jurisdiction of equity in a case otherwise cognizable therein, and the fact that the damages in the bond are liquidated does not change the rule. It is a question of intention, to be deduced from the whole instrument and the circumstances ; and if it appear that the performance of the covenant was- intended, and not merely the payment of damages in case of a breach, the covenant will be enforced. It was said in Long V. Bowring (33 Beav., 585), which was an action in equity for the specific performance of a covenant, there being also a clause for liquidated damages, " all that is settled by this clause is that if they bring an action for damages the amount to be recovered is £1,000, neither more nor less." There can be no doubt upon the circumstances in this case that the parties intended that the covenant should be performed, and not that the defendant might at his option repurchase his right to manufacture and sell matches on payment of the liquidated damages. The right to relief by injunction in similar contracts is established by numerous cases. (Phoenix Insurance Company v. Continental Insurance Company, supra; Long v. Bowring, supra; Howard v. Woodward, IQ Jur. N.S., 1123; Coles v. Sims, 5 De G., McN. & G., 1; Avery V. Langford, Kay's Ch., 663; Whittaker v. Howe, supra; Hubbard v. Miller, 27 Mich.) TRADE UNIONS AND CONTRACTS. 495 There are some subordinate questions which will be briefly noticed. First. — The plaintiff, as successor of the Swift & Courtney & Beecher Company, and as assignee of the covenant, can maintain the action. The obligation runs to the Swift & Courtney & Beecher Company, " its successors and assigns." The covenant was in the nature of a property-right and was assignable, at least it was assignable in connection with a sale of the property and business of the assignors. (Hedge v. Lowe, 47 Iowa, 137, and cases cited.) Second. — The defendant is not in a position which entitles him to raise the question that the contract with the Swift & Courtney & Beecher Company was ultra vires the powers of that corporation. Hehas retained the benefit of the contract and must abide by its terms. (Whitney Arms Company v. Barlow, 68 New York, 34.) Third. — The fact that the plaintiff is a foreign corporation is no objection to its maintaining the action. It would be^ repugnant to the policy of our legislation and a violation of the rules of comity to grant or withhold relief in our coiirts- upon such a discrimination. (Merrick v. Van Sautvoord, 84 New York, 208; Hibernia National Bank v. Lacom;be, 84 id.^ 867; Code of Civil Procedure, § 1779.) Fourth. — The consent of the Swift & Courtney & Beecher Company to the purchase by the defendant of the business of Brueggemann, did not relieve the defendant from his cove- nant. That transaction was in no way inconsistent there- with. Brueggemann was selling matches manufactured by the company, under an agreement to deal in them exclu- sively. There are some questions on exceptions to the admission and exclusion of evidence. None of them present any question requiring a reversal of the judgment. There is no error disclosed by the record and the judgment should, therefore, be affirmed. All concur, except Peckham, J., dissenting. Judgment afQrmed. (The Diamond Match Company v. Eoeher, 106 New York Court of Appeals, decided in 1887.) 496 LEGAL AND COMMERCIAL PRECEDENTS. TRUSTS AND TRUSTEES. When Trustee Cannot Purchase.— A. trustee may not, as such, purchase property in which he has an individual interest. The law, in such a case, does not stop to inquire whether the transaction was fair or unfair, but, when the relationship is disclosed, sets aside the transaction, or refuses to enforce it at the instance of the beneficiary under the trust. The law prevents fraud by making them, as far as may be possible, knowing that real motives often elude the most searching inquiry, and it leaves neither to judge nor jury the right to determine upon a consideration of its advantages or disadvantages, whether a contract made under such circum- stances shall stand or fall. The strictness of this rule gives it one of its chief uses as a preventive or discouraging influence, because it weakens the temptation to dishonesty or unfair dealing on the part of trustees, by vitiating, without attempt at discrimination, all transactions in which they assume the dual character of principal and representative. This rule is observed in the House of Lords. (Aberdeen Railway Company v. Baikee and others, 2 Eq., 1281.) This is a general equitable rule. (2 Johns. Chan., 251, 252; 103 New York, 58 et seq.) This ruleis on all fours in the cases of directors and officers «jf corporations. When Trustee Liable for Loss of Funds.— The will of A. imade B. and C. the executors and trustees. A. and B. had fceen partners up to the time of A.'s death. B. continued the business. A. directed a portion of the trust to be invested separately for the use and benefit of his daughter. B. kept the books, papers and accounts of the estate of A. in his pos- session. The money which was realized by the estate was put by B.'s direction into his new firm with the knowledge of C, his co-trustee and executor, and interest was paid therefor. No portion was set apart for the daughter of A. as the 'will directed. The firm of B. failed, and the funds of the estate of A. were swallowed up in the loss. The responsibility for this loss falls on B. and on C. C. waa TRUSTS AND TRUSTEES. 4.QJ equally liable with B. for not attending to the proper invest- ment of the estate's money as directed in the will ; and if C. had not actual knowledge that B. had used the trust money in his business, still he could have inquired, as was his duty, as to what use the funds were put to ; he is liable for his negli- gent conduct in not doing so. He should, at best, have made an attempt to see the funds of the estate properly invested- C, at law, is not the wrong-doer, and therefore not chargeable' for the loss with interest on the losses calculated with annual rests but with simple interest. C.'s failure to make a separa- tion of the trust fund did not induce the conversion or loss* of the fund by B. (Wilmerding v. McKesson, 103 New York^ 329.) Trustee when Liable for Signing Meports.— A.., as trustee of a corporation, joined in making an annual report, whick stated that the capital stock of the corporation had been paid up in full. In an action by a creditor of the corporation, to recover of the trustees signing the report, the amount of his claim, on the ground that such statement was false, to the knowledge of the signers, it appeared that the stock of the corporation was issued to one B. in payment for certain undeveloped mining property. The property had been purchased byB. of another corpora- tion in which A. was a stockholder. A. received from B. $10,000 of the stock of the new company, given to him with- out consideration to enable him to act as trustee. B. surrendered to the new company one thousand shares. of the stock, which was pledged, with $70,000 of the corporate bonds, to secure a loan of $35,000, and gave five hundred shares as a commission to the officer who negotiated the loan. The property was proved to be worth not over |60,000. It was sold to B. for |1,000,000 of stock and $200,000 of bonds of the new company, and in his deed to that company the consideration expressed was $600,000. Of all of which facts it was shown that A. had knowledge. It was decided and held that from these facts that A. signed the report in bad faith, knowing it to be false. (Blake v. Griswold, 103 New York, 429.) 498 LEGAL AND COMMERCIAL PRECEDENTS. JVho Entitled to Benefits of Increase of Securities of Trusts. — The will of A. gave to his executors money in trust, with directions to invest the same in certain specified interest-- bearing obligations, to pay "the annual interest, income and dividends thereof" to his daughter, during her life, and upon iier death, leaving no issue, to divide "the principal or capital sum aforesaid " among his other .children. With the consent of all the parties interested, a portion of the fund was invested in securities other than those named, but all of them, by their terms, drew fixed rates of interest, payable annually. A sale ■of the securities after the death of the daughter (who had an interest for life) resulted in a surplus over the amount of the original investment. Upon a settlement of the accounts of 1;he trustees, it was decided that the surplus was an accretion to the fund, and that the remaining children were entitled to "the same, for there are no other persons lawfully entitled to receive it. This case is not analogous to those where a division is sought to be made on the gain or profit on investments in trade or in corporations. There the will directed a certam and fixed rate of interest. The testator did not want any change in the trust securities. An increase in value of bonds would not go to the legatee of the interest but to the ultimate owner of them. {In re Oerry, 103 New York, 445.) Trustee's Obligations on Testator's Contracts.—^. By the terms of a will certain trusts were created to a certain amount of which the executors of the will were the trustees. The testator held a mortgage upon real estate in another state, which, previous to his death, was foreclosed and at the sale he bought in the property; but before taking the deed therefor he died. The executors were obliged and did take title. They effected a sale of this property at the best terms they could obtain, and took in part payment a mortgage for the purchase money. This mortgage was foreclosed but the full amount was not realized. These trustees were sought to be charged with this deficiency on their individual liability, but it was decided that, in the absence of any evidence TRUSTS AND TRUSTEES. 499 impeaching their good faith, they were not liable; that as executors they were at law obliged to carry out the contract of their testator. As a general rule, trustees residing in, and deriving authority from a will executed in one state may not invest trust funds in mortgages upon real estate out of the state. In this case they were obliged to purchase and had to sell, and did so on the best terms obtainable. The mortgage was held by them as trustees. {In re Denton v. Sanford, 103 New York, 607.) 2. Where a will authorizes the executors to continue the business of their testator for as long a time as they in their best judgment deem advantageous to the estate, and where they had instructions as to the distribution of the profits, and to hold in trust the rents and interest first to deduct the expense and charges, and to pay out to certain beneficiaries the residue and net proceeds, they are entitled to charge or credit themselves for outlays madeorlosses sustained by bad debts, the cost of repairs and replacing old articles necessary to conduct the business. That the same should be deducted from the income of the beneficiaries for life. It was not neces- sary that the will should specifically state what purchases should be made or what expenses were to be incurred, so long as the language of the same gave the executor general authority to conduct the business, including the meeting of losses and expenses, including ordinary expenses for repairs and improvements proper in their nature. (In re Jones, 103 New York, 621.) Fiduciary Accounts. — Payments to Trustee. — A deposit account in the name of A. B., trustee for C. D., or "assignee of E. F.," or "administratorofG.H.,"maybedrawn against by A. B., signing his individual name alone. The New York Court of Appeals has gone to the extent of holding that a bank maypayto H. I., administrator of A. B., a deposit made by A. B. as trustee for C. D. The Court said — " It may not be doubted that if the intestate (A. B.) in her life-time had demanded the money of the bank and had pre- sented her pass-book, no claim by the beneficiary having been interposed, the bank would have been bound to pay; and this 500 LEGAL AND COMMERCIAL PRECEDENTS. for the reason that such was their express contract. What the trust was they neither knew nor were bound to inquire."^ Removal of a Trustee for Cause.— Appeal from judgment of Special Term, dismissing complaint. The complaint in this action was dismissed upon the ground that it did not state facts sufHcient to constitute a cause of action. The plaintiff and the defendant McFaddenwere co-partner» in business when the partnership expired by limitation. The partners agreed to dissolve. The articles of dissolution pro- vided for the sale of the goods excepted and the division of the proceeds. The outstanding accounts were to be collected by one White, and the proceeds deposited in the Pacific Bank, and afterward paid over in equal amounts to McFadden and the plaintiff. White was given a power of attorney to carry out the provisions of the articles of dissolution. It is alleged by the plaintiff that White has not carried out the agreement; and the plaintiff therefore asks that the power of attorney be- cancelled and a receiver appointed. Held, that the plaintiff is entitled to such relief as the facts proved upon the trial entitle him to. The judgment appealed from should be reversed and a new trial ordered with costs of the appellant to abide the event. Van Brunt, P. J. — The complaint in this action was dis- missed on the ground that it did not state facts sufficient to constitute a cause of action. The complaint alleges that the plaintiff and the defendant McFadden, for a long time prior to the 14th of January, were co-partners in business, and the defendant White for about six years previous had been in the employ of said firm as book-keeper and salesman ; that the partnership by its own limitation expired on or about the about the above date, and the parties being unable by reason of past differences and disagreements between themselves to adjust the affairs of the firm, entered into an agreement of dissolution whereby, amongst other things, the defendant agreed to sell, assign, and set over to the plaintiff all his right, title and interest in and to the stock of the firm, except certain stock amounting, according to the inventory, to TRUSTS AND TRUSTEES. 501 about $5,000, and also his right to the lease of the premises where the firm had lately transacted its business for the sum of 113,417.30, and also all McFadden's interest in the Euro- pean accounts for the sum of |1,850.80. The articles of dissolution provided for the sale of the goods excepted and the division of its proceeds. They further provided that the outstanding accounts owing to the firm should be turned over to and collected by the defendant White, and the proceeds thereof deposited in the Pacific Bank in the city of New York, and that the same should be paid over in equal amounts to the said McFadden and the plaintiff after deducting the expenses of collection. The said parties also delivered a power of attorney to said White for the purpose of carrying out the provisions of said articles of dissolution. The complaint then alleges that it was understood that the plaintiff was to continue the business at the firm's place of business, and that White was to continue in his employ, of all of which facts McFadden was well aware. The complaint further alleges that there was a secret under- standing between McFadden and White for the purpose of inducing the plaintiff to enter into the articles of dissolution and to execute said power of attorney, to lead the plaintiff to believe, and they did have him to believe, that White would remain with him, and that the outstanding debts due the firm would be collected from the firm's late place of business; that White remained with the plaintiff for a few days and then removed all the books and memoranda relating to the outstanding accounts from said premises, and went into business with McFadden ; that White, although paid out of the assets of the firm the same salary he received as book- keeper and salesman, devotes by far the larger part of his his time to the business of the defendant McFadden ; that he has exceeded his authority under said power of attorney, and has wholly refused to make weekly returns of money collected, as thereby required to be done, and that he has failed to deposit in said Pacific Bank moneys collected by him belong- ing to said firm to the amount of nearly |2,000, and that he has either misapplied and converted the said moneys to his 502 LEGAL AND COMMERCIAL PRECEDENTS. own use, or in violation of his duty and the plaintiffs right, he has turned them over to said McFadden, instead of depos- iting them in said bank . The plaintiff asks for the appointment of a receiver, that the power of attorney be cancelled and annulled, and that all ; the accounts and property of the firm be delivered to said receiver, who shall collect the same in order that it may be divided according to the terms of the articles of dissolution. The learned counsel for the respondent claims that the allegations of the complaint charging the defendant with misconduct in his office as trustee, with waste and extrava- gance in the management of the estate committed to his hands, are not material and pertinent to the cause of action, which is an action for his removal and the cancellation of the power of attorney, on the ground that his selection and appointment were brought about by a fraudulent conspiracy. An examination of the complaint fails to show that such is necessarily the ground upon which that action is based. Upon the contrary, it would appear rather that the removal of White as trustee was sought because of the violation of his duties as such trustee, and that the allegations in regard to the fraud which was practiced upon the plaintiff inducing him to consent to the appointment of White are rather allegations giving a history of the proceedings to such appointment, and showing the fact that the defendant McFadden and White were linked together, and that, therefore, the plaintiff was excused from making the defendant McFadden a co-plaintiff with him against the defendant White. But it is urged that if the action is considered as one to remove a trustee for misconduct in office the complaint does not contain allegations sufficient to maintain it. The failure of the defendant White to deposit the money collected by him in the Pacific Ba,nk is distinctly alleged and admitted by the motion to dismiss the complaint. The requirements of the articles of dissolution in this regard are specific, and a deliberate violation of this provision is admitted. It is difficult to see what further instance of violation of duty it would be necessary for the plaintiff to establish in USURY. 503 order to justify him in asking the Court for the removal of the trustee. Nor is this all. The articles of dissolution and the power of attorney being executed at the same time, and for the pur- pose of obtaining the same object, must be read together. The power of attorney contained the provision that weekly accounts should be rendered of his proceedings by the trustee. The plaintiff alleges the refusal to furnish such weekly accounts, and this is also admitted upon the motion to dismiss the complaint, which would seem of itself to afford an additional reason for the removal of the trustee. A delib- erate violation of the provisions of the trust by thetrustee in material respects will always call upon the Court to take action against such trusts. It may be true that in the prayer for relief the plaintiff has asked for relief which is inconsistent with the cause of action set out in his complaint. But that forms no ground of demurrer where the parties have appeared and answered. The plaintiff is entitled to such relief as the facts proved upon the trial entitle him to. The claim that causes of action have been improperly joined which do not affect all the parties to the action cannot now be raised. Such an objection must be taken by the demurrer where it appears upon the face of the complaint as in the case at bar, if it appears at all, or it is waived. The judgment appealed from should be reversed and a new trial ordered with costs of the appellant to abide the event. I concur. Charles Daniels. I concur. J. R. B. (Loftus D. Hatton, appellant, v. Harrison J. McFadden and another, respondents. Supreme Court, General Term.) USURY. Bonus Over and Above the Legal Interest jTa/fcew.— McGill, chancellor, delivered the following opinion : This is a suit to foreclose a mortgage dated September 15, 1872, made by Marie Scholer and John Scholer, her husband, to Charles Pfenning, upon lands in Hudson County, to secure 504 LEGAL AND COMMERCIAL PRECEDENTS. the payment of |1,650, in three years from its date, with interest at the rate of seven per cent per annum. Nothing- has been paid upon the principal. The interest had been paid to September 15, 1883, at seven percent per annum, to March 15, 1881, and after that date at six per cent per annum. The defense is usury. The defendant, Marie Scholer, about the time the loan was made to her, had commenced to build a dwelling upon the land in question, and finding that, because of the suspension of payment by a savings' bank in which she had deposited her money, she must borrow funds to enable her to continue the building, applied to one Paul Hurbrandt, a real estate agent, to lend her $1,500. After some negotiation Hurbrandt gave her f 1,473 of the money of Charles Pfenning, and took from her the mortgage in dispute. It satisfactorily appears that Hurbrandt retained $27 for himself, for drawing the bond and mortgage, and procuring the searches necessary to the- loan. The question disputed in the case is whether the com- plainant retained the additional |150kept from Mrs. Scholer, or knowingly allowed it to be retained by Hurbrandt. His position is that the money was kept by Hurbrandt as com- pensation for procuring the loan, and applied by him to his. own use. He denies that he shared in the amount, but does not deny that he knew of the intention by Hurbrandt. The $150 was far in excess of compensation for the services rendered by Hurbrandt in procuring the loan. If the com- plainant is beheved, Hurbrandt had $2,000 of his money for the purpose of investment upon bond and mortgage ; and if Hurbrandt is believed, all that he did in procuring the loan was to send a messenger to the complainant to ascertain if the security would be satisfactory. The charge for services is manifestly an excuse to cover the taking of a usurious bonus; and it is immaterial whether the complainant shared in it or not if he knowingly allowed its payment to be a condition ta the loan or assisted in its exaction at the time of the loan. (Borcherling v. Trefz, 1 New Jersey (L. ed.), 449; 4 Central Eeporter, 337 ; 13 Stew. Eq., 502; Demarestv. Van Denberg, 1 New Jersey (L. ed.), 236; 3 Central Reporter, 90; 15. Stew. Eq., 63.) USUEY. 505 The complainant caused Hurbrandt to be examined as a witness in his behalf in the city of Boston, and went himself to Lawrence, Mass., and brought the witness before the com- missioner who took the testimony. Upon the examination Hurbrandt answered evasively that he "guessed" the com- plainant did not get any part of the $150, and that he did not "recollect" that the complainant did share in it. Upon cross-examination he was confronted by an affidavit, made by him less than a year before, at the instance of his brother, in which he swore that the entire $150 had been retained by the complainant. Mrs. Scholer and her daughter, Mrs. Russell, testify positively to the fact that before the contract of loan was completed Mr. Pfenning was in the yard of the mortgaged premises, and told Mrs. Scholer that she must pay the ten per centum demanded or give up the loan. In corroboration of this testimony Henry Miller, a mason who was at work on the foundation of the house, says that he saw Pfenning in the yard. Charles F. Ruh, a real estate agent, testified that at about the time of the loan to Mrs. Scholer the complainant offered to transfer to him the investment of his moneys, upon condition that he, Ruh, would do as Hurbrandt had been doing — get for him a bonus often per centum upon all loans. The evidence satisfies me that the $150 was either directly retained by the complainant, or that he knew of, assented to, and assisted in, the taking of it by Hurbrandt. In either case the contract is tainted with usury, and the lender must be subjected to the penalty of the statute. (Bennett v. Hadsell, 8 C. E. Green, 174; Meeker v. Disse, 11 C. E. Green, 218; Borcherling V. Trefz, 1 New Jersey (L. ed.), 449; 4 Central Reporter, 337; 13 Stew. Eq., 502; Demarestv. VanDenberg, 1 New Jersey (L. ed.), 236; 3 Central Reporter, 90; 14 Stew. Eq., 63.) The complainant is entitled to a decree for the $1,500 actu- ally loaned, less the interest which was paid to him in excess of lawful interest on that sum without interests or costs. (Boyd V. Englebrecht, 9 Stew. Eq., 612.) (Pfenning v. Scho- ler, decided October 18, 1887, 9 Central Reporter, 195, New Jersey statute law.) 506 LmAL AND COMMERCIAL PRECEDENTS. Usury Cannot be Set up as a Defense in an Action Upon an Independent 06Msra., their executors, administrators or assigns) for which payment well and truly to be made, I do bind myself, my heirs, oxecutors and administrators, and also the said ship, ^or vessel her tackle, apparel, and furniture (and freight) firmly by these presents. Sealed with my seal ; dated this day of Whereas the above bounden A. B. has (or A. B. or B. A. have) borrowed, taken up and received of the said C. D. the full and just sum of dollars which sum is to run at Tespondentia on the said ship or vessel {here state the voyage for which the loan is made) at the rate or premium of per cent, for the voyage (or at the rate of per cent. for every calendar month the said ship or vessel shall be out on the said voyage, and so in proportion for a less time than a month) in consideration of which the usual risks of the ^eas, rivers, enemies, fires, pirates, etc. are to be on the account of the said C. D.; and whereas, for the further security of the said C. D. and said A. B. for and on the account of the owners, their executors, administrators and assigns, has agreed to, and does by these presents mortgage and assign over to the said C. D. the several goods, wares, and merchan- dise laden and to be laden on the said ship|or vessel ; which said goods, wares and merchan- dise, with their produce, are thus mortgaged and assigned over, for the security of the respondentia taken up by the said A. B. and shall be delivered to no other use or purpose whatever until payment of this bond is first made, with the premium that may become due thereon : Now the condition of the above obligation is such: that if the above bounden A. B., his heirs, executors and administrators or any of them shall well and truly pay, or cause to be paid, unto the said C. D. or to his attorneys {or to C. D. and E. F. or to their attorneys) at , legally authorized to receive the same or to the executors and admin- istrators of the said E. F. and C. D. the just and full sum of , dollars being the prin- cipal of this bond together with the premium which shall become due thereon at the expira- tion of months after the safe arrival of the said ship or vessel at her moorings in the port of , or in case of the loss of said ship or vessel, such average as by custom shall have become due on the salvage, then this obligation is to be void ; otherwise to remain in full force. Having signed three bonds of the same tenor and date either one thereof being accom- plished, the other two are to be of no effect. Executed in presence of \ [_ Signature.'] [seal.] BROKER'S ORDER— TO buy ^oj2 sell) stock. Chicago, III., 18 B., R. and S., Stock Brokers. Please (buy or sell) for my account and risk shares (description). Tliis order good until countermanded. ISignature.^ LEGAL FORMS, 547 BROKER'S RECEIPT— FOR money for stock. $ — Received of A. B. dollars, for shares stock. To be transferred to ISign&ture.} BROKER'S STATEMENT— OF account, etc. Chicaoo, III., 18 B., R and S.. Stock Brokers, etc. Bought for A. B. 100 Shares $ Commission 12^^ ■ — ■ $ Received Payment, iSignature,'} BILL OF exchange-General Form. ^ Northampton, Mass., . 18 days (or months) after sight {or date) pay to C, or order, dollars, value received on account of . (or aiitl charge to account of) To B. (at) ISignature.^ BILL OF EXCHANGE— At or After Sight. No. . New Haven, Conn., , 18 At Sight (or days after sight) pay to the order of P. E. dollars, and charge the same to the account of To D. E. at . [Signature,} BILL OF exchange-Set of foreign. 1. Exchange for £ Sterling. London. Eng.. , 18 after of this. First of exchange (second and third unpaid) pay to the order of P. E., value received and charge the same to account of To D. E. at . ISignature.} No. . BILL OF LADING— Domestic. For Freight, Adams Express Company. Received of {consignor or shipper's name). Value dollars. ( or asked and not given.) For which this Company charges iffive itinount). Marked (consignee's name and other directions, marks and figures). Which it is mutually agreed is to bw forwarded to ouragenoy nearest or most convenient to destination only and tliere deliveretl to other parties to complete the transportation. It is part of the consideration of this contract and it is agreed that the said Express Company are forwarders only and are not to be held liable or responsible for any loss or damage to said property while being conveyed by the carriers to whom the same may be by the said Express Company intrusted, or arising from the dangers of railroads, ocean or river navigation, steam, fire in stores, depots, or in transit, leakage, breakage, or from any cause whatever, unless, in every case, the same be proved to have occurred from the Iraud or gross negligence of said Exprews Company or their servants; nor in any event shall the holder hereof demand beyond the sum of fifty dollars at which the article forwarded in hereby valued, unless otherwise herein expressed or unless specially insured by them, and so specified in this receipt which insurance shall constitute the limit of the liability of the Adams Express Company. And if the same is intrusted or delivered to any other express company or agent (which said Adams Express Company are hereby authorized to do) such company or person so selected shall be regarded exclusively as the acrent of the shipper or owner, and as such alone liable, and the Adnms KYnressCompanv shall not be, in any event, responsible tor tiie negligence or uou-perlormance of QJiy such Company or yerson, and the shipper and owner hereby severally agree that all the Rtipulntions and conditions in this receipt contained shall extend to and inure tothebenefitof emli and every i-ompany and per- son to whom the Adams Express Company may intrust or deliver the above described prop- erty for transportation, and shall define and limit tlie liability therefor of such other company or person. In no event shall the Adams Express Company be liable for any loss or damage, tinless the claim therefore shall be presented to them in writing, at this office, within thirty davs after this date; in a statement to which this receipt shall be annexed. All articles of glass or contained in glass, or any of a fragile nature, will be taken at shipper's risk only, and the shipper agrees that the Company shall not be held responsible for any iiyury by breakage or otherwise nor for damage to goods not properly packed and secured for trans- portation. It is further agreed, that said Company shall not, in any event, be liable for 548 LEGAL FORMS. any loss, damage or detention caused by the acts of God, civil or military autiiority, or by rebellion, piracy, insurrection, or riot, or tlie dang-ers incident to the time of war, or by any rioters or armed assemblage. If any sum of money besides the charge for transportation, is to be collected from the consignee on delivery of the above described property, and the same in not paid within thirty days from the date hereof, the shipper agrees that this Com- pany may return said property to him at the expiration of that time, subject to the con- ditions of this receipt, and that he will pay the charges for transporatation both ways, and that the liability of this Company for such property while in its possession for the purpose- of making such collection, shall be that of warehousemen only. Freight paid (or collect). For the Company. [Sign&ture.l BILL OF LADING— Foreign. Freight, Money etc. American European Express. New York, N. Y., U. S. A., , 18 Keeeived of One Box ( or package, etc.) Value $ Numbered and marked as in the margin, to be forwarded by us only to , , as per address in " Marks and numbers ". It is agreed, and is part of the consideration of this contract, that said Company are- not to be held responsible, except as forwarders, nor for any loss or damage arising from danger of fire, at sea or on shore, accidents from machinery, boilers, steam, leakage, or any other accidents or dangers of the seas, rivers and steam navigation, of whatever nature or kind soever, or by dangers of railroads, restraint of prinnes or potentates, or for any cause whatever, unless the same be proved to have occured from the fraud or gross negligience of ourselves, our agents or servants, and we, in no event, be liable beyond our route, as herein receipted. Valued under fifty dollars, unless otherwise herein stated. Not accountable for specie, jewelry or precious stones, unless value is declared. Not accountable for leakage or breakage. Contents unknown. Marks and numbers. Freight, % Insurance, $ [SigBatare.] Total, $ i)uties and customs charges payable by consignee at destination. For F. S. and Company, Fowarders, ISignature ofAgent."} CONDITION— To Indemnify on Paying a Lost Note or Bill. Whereas a promissory note for dollars made by (or a bill of exchange- drawn by , upon , ) bearing date at the day of , and payable months after the date to the order of , at and indorsed by , and which is now the property of the above bounden A. B. has been lost (or destroyed) and cannot now be produced by him; and whereas at his request and upon his promise to indemnify and save the harmless the said C. D. in the premises, and to deliver up the said note, when found to the said C. D. to be cancelled the said C. D. has this day paid unto the said A. B. the sum of , dollars the receipt whereof the said A. B. doth hereby acknowl- edge in full satisfaction and discharge of the said note: T^ow the condition of the above obligation is such: that if the above bounden A. B. and E. F. their heirs, executors, or administrators, or any of them shall well and truly indemnify and save harmless the said C. D. his executors and administrators from and against the said note ( or bill ) any and all damages, costs, charges and expenses and all actions of suits, whether groundless or otherwise by reason of said note (or bill) and also deliver or cause to be delivered up the same when and so soon as the same shall be founds to be cancelled then this obligation is to be void, otherwise to remain in full force. A. B. [SEAL.] E. F. [SEAL.] CONTRACT— General Form. With Liquidations Damages etc. This agreement made this day of , A. D. , by and between A. B. or , as party of the first part, and L. M. of , as party of the second part witnesseth: That said party of the first part for the consideration hereinafter mentioned cove- nants and agrees with said party of the second part, to (here state the agreement.) In consideration of which said party of the second part covenants and agrees with said party of the first part to (here state the agreement). And for the true and faithful performance of each and all the covenants and agree- ments above mentioned said parties bind themselves each to the other in the sum of , as liquidated damages to be paid by the failing party. In witness whereof, the parties to these presents have hereunto set their hands, the day and year first above written. A. B. L. M. LEGAL FORMS. 549 CONTRACT— Charter Party. General Charter. This charter party, made and concluded upon in the city of , the day of » in the year of our Lord oue thousand eifj,ht hundred and between M. R. of the of , of the burtheu of tons or thennibouts, reptiHter measurement now lying la the harbor , of the first part and S. R. of the Kecond part, witnewtietih. That party of the first part agrees on the freighting aud chartering of the whole of the- said vessel with the exception of the deck, cabin and necessary room for the crew and for storage of provisions, sails and cables or sufficent room for the cargo hereinafter mentioned unto said party of the second part for a voyage from P. unto , on the terms following: The Raid vessel shall be tight, staunch, strong and in every way fitted for such voyage and receive on board during the aforesaid voyage the merchandise hereinafter mentioned and no goods or merrhondise shall be laden on board otherwise than from the said party of the second part doth engage to provide and furnish to the said vessel . And to pay to the said party of the first part, or agent, for the use of said vessel during the- voyage aforesaid (§ ,) . It is agreed that the lay days of loading and dis- charging the vessel shall be as follows, commencing from the time the captain reports himself ready to receive or discharge cargo : , And that for each and every day» detention by default of said party of the second part, or agent. , dollars per day» day by day shall be paid by said party of the second part, or agent to said party of the first part, or agent. The cargo or cargoes to be received and delivered alongside within. reach of vessel's tackle. A commission of , per cent, upon the gross amount of this charter payable by the vessel is due to , upon the signing thereof. To the true and faithful performance of all and every foregoing agreement we the said parties do hereby bind ourselves, our heirs, executors, administrators and assigns- each to the other in the penal sum of . In witueas whereof we hereunto set our hands the day aud year first above written. Signed in the presence of \ M. R. / S. R. CONTRACT— Employment. Clerk or Worltman. This agreement, etc, witnesseth : That A. B shall ent«r the service of C. D. as clerk (nr whatpvpr capacity it m&y be). That said A. B. shall faithfully, honestly, and diligently perform the duties of in the of said C. D., and well and truly obey all the reasonable commands and wishes- of said C. D. during the space of from this date. That he will guard the interests and keep the secrets of his employer, absenting himself only upon said employer's consent. That said C. D. in consideration of said services for said A. B. pay him a yearly sum of five hundred dollars, in equal quarterly payments on the first days of January etc. In witness whereof the parties to these presents have hereunto set their hands, the day and year first above written. A. B. C. D. CONTRACT— Sale. stock and Good Will with Restraint. This agreement etc.,, witnesseth : That said A. B. for tlie consideration hereinafter mentioned shall sell to said C. D., al^ the stock of goods, wares and merchandise belonging to said A. B., now in the store occupied by him in , together with all furniture and fixtures thereunto appertaining and also all goods, wares and merchandise bought or contracted for by said A. B. and lintended forsaid store togetherwith the goodwill of the business heretofore carried on there I by said A B. That said stock of goods, wares and merchandise shall be inventoried by said A. B. at its original costs for carriage or transportation, and making deduction for depreciation in value from damage, ware, tear or other causes. That all the furniture and fixtures shall be inventoi-ied at their fair cash value. The said inventory shall be completed within days from the date hereof and the property above specified thereupon immediately delivered to said C. D. That said A. B. shall not at any time hereafter within from said place of business now occupied by him engage directly or indirectly, either as agent, principal, servant or otherwise in carrying on, conducting, or being interested in said business of That said C. D. in consideration thereof shall pay said A. B. the sum of dollars^ as follows: dollars upon the delivery of said goods, wares, merchandise, furniture and fixtures, dollars on the day of next in full payment thereof which Bum shall by the promissory note payable at and bearing interest at the rate per cent, per annum from date until paid. In witness whereof, the parties to these presents have hereunto set their hands, the day snd year first above written. A. B. C. D. 550 LEGAL FORMS. CONTRACT— Insurance. Renewal of Policy. INSTTBANCE COMPANY OP No. . In coneideration of the sura of dollars received of A. B, as premium on policy No. , for' doUarB, the same is continued in force for the term of , from the , day of , A. D. 18 , at noon until the day of A. D. IS , at noon. Place, , 18 Insurance Company. {^Signature ofAgent.^ COxXTRACT— Insurance. To Effect or Procure Insurance. [See Title Assignment Post] This apjeement etc.. witnesseth : That [Stating tbe causes that make insurance necessary). That said A. B. will becauee of said premises insure or cause the same to be insured in euch companies aa C. D. shall designate. That in default of said insurance on or after the day of , said C. D. may effect the same at the costs and expense of said A. B. and all costs and charj^es proper and neces- sary in effecting the same tot^ether with interest thereon at the rate of per cent, per annum shall be a Hen upon nnd charge against said , to be included in and become a part of any judgment effected against the same by reason of the premises. In witness whereof, the parties to these presents have hereunto set their hands, the day ■and year first above written A. B. C. D. DEED— Conveyance Warranty. With Full Covenants. This indenture made this day of in the year , between A. B. of -county, in the State of (and W. B. his wife) of the first part and C. D. of , in the State of , of the second part witnesseth : That the said party (or parties) of the first part, in consideration of the sum of dollars lawful money of the United States, to him (or to them) paid by the said parties of the second part, at or before the (sealing and) delivery of these presents, the receipt whereof is hereby acknowledged and the said party of the second part his heirs, executors and administrators, forever, released and discharged from tbe same by these presents: has and by these presents does (or do) grant, bargain, sell, alien, remise, release, convey and confirm unto the said party of second part, and to his heirs and assigns, forever, all (here follows the description of these premises) together with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in anywise appertaining, and the reversion and reversions, remainder and remainders, rents, issues and profits thereof; and also all the estat*, right, title interest I dower and right of dower) property,po.ssession, claim and demand whatsoever, both in law and in equity, of tbe said party (or parties) of the first part, of, in and to the above granted premises, and every part and parcel thereof, with the appurtenances. ■ To have and to hold and singular the above granted premises together with the appur- tenances and every part thereof.untothe said party of the second part, his heirs and assigns forever. (If there is any encumbernnce state it thus: subject, however, to a certain indenture of mortgage for dollars, and dated , and i-ecorded in the office of , in mortgage record at page ,and also subject etc.) And the said A. B. (naming only the party who warrants) for himself, bis heirs, executors and administrators, does covenant, promise nnd agree, to and with the said party of the second part, his heirs and assigns, that the said A. IJ. at the time of the (sealing and)deliv- ery of these presents, is lawfully seized in his own rights, (or otherwise, aa the case may be) of a good, absolute and indefeasible estate of inheritance, in fee simple, of and in all and BinguTar the above granted and described premises, with the appurtenances if conveyed subject to encumbrance say, subject as aforesaid, and has good right, lull power and lawful authority to grant, bargain, sell and convey the same in manner aforesaid. And that the said party of the second part, his heirs and assigns, shall and may at all times hereafter peaceably and quietlybave, hold, use, occupy, possess and enjoy the above granted premises, and every part and parcel thereof, with the appurtenances, without any let, suit, trouble, molestation, eviction or disturbance of the said party (or parties) of the first part, his (or their) heirs or assigns, or of any other person or persons lawfully claiming or to claim the the same; and that the same now are free, clear, discharged and unencumbered of and from all former grants, titles, charges, estates, judgments, taxes, assessment and encumbrances of what nature or kind, (if conveyed subject to an encumbrance say, except as aforesaid). And also, that the said party (or parties) of the first part, and his (or their) heirs, and all and every other person or persons whomsoever, lawfully or equitably, deriving any estate, right, title or interest of, in or to the above granted premises, by. from, under or in trust for him, (or them) shall and will at any time or times hereafter, upon the reasonable request, and at the proper costs and charges in the law, of said party of the second part, his heirs, assigns, make, do and execute, or cause or procure to be made done and executed, all and every such further and other lawful and reasonable acts, conveyances and assurance in the law for the better and more effectually vesting and confirming the premises hereby , granted;or intended so to be in and tothesaid party of the second part, his heirs and assigns, forever, as by the said party of the second part, his heirs and assigns, or his (ortheir) counsel learned In the law, shall be reasonably devised, advised or required. And the said A. B. {name party who warrants) and his heirs, the above described and hereby granted and xeleased premises, and.every part and parcel thereof, with the appurtenances, unto the said LEGAL FORMS. 551 ■party of the second part.hia heirs and assigns, against the said partioa of thp first part and tneir heirs, and against all and every person ajid peraona whomsoever, lawfully claiming or to claim the same, shall and will warrant, and, by these presenta forever defend. In witness whereof, the said party (or parlies) of the first part lias (or have) hereunto «et fns hand and seal (or their hands and seals) the day and year first above written. Signed, sealed, acknowledged and delivered \ in the presence of witnesses / [.Signatures.^ [seals.! GUARANTY OP PERFORMANCE. For a good and valuable consideration by us received we, the undersigned, do hereby guarantee a faithful compiiance with the terms of the above agreement upon the part of the said A. B. S. R. /BEAL.l T. Y. XSEAL./ INVOICE. ^o ■ Springfield, Mass.. , 18 Uereive and forward, subject to conditions of bill of lading attached, as follows ; Marks. Number and description of packages, "Weight, ISigaature ofsbipper.l LEASE— Surety. [Suretyship, Agreement.] In consideration of the letting of the premines above described, and for the sum of one dollar!, the undersigned, do hereby become surety for the punctual payment of the rent. and performance of the covenants in the within written aj^reement mentioned, to be paid and performed by the within named tenant; and if any default shall be made therein I do hereby promise and agree to pay on demand, unto the written named landlord, such sum -or sums of money as will be sniticient to make up such deficiency, and ftiUy satisfy the con- ditions of said agreement, without requiring any notice of non-payment, or proof of demand being made. Given under my hand and seal, this day of , A. D. 18 ISurety'a Signature.^ [seal.] LEASE— General Form. This (agreement, conveyance, indenture or) lease, made this day of .between A. B. of party of the flrst part and C. D., of .party of the second part, witnesseth : That the said party of the first part does by these presents lease to the said party of the second part the following described property, to wit; {here describe the property) To have and to hold the same to the said party of the second part, from the day of to the day of And the said party of the second part covenants and agrees with the party of the first part to pay the said party of the first part, as rent for the same, the sum of dollars. payable as follows, to wit ; (state the times and terms of payment) The said party of the second part further covenants with the said party of the first part, that at the, expiration of the time mentioned in this lease, peaceable possession of the saicl premises shall be given to said party of the first part, in as good condition as they now iiri» the usual wear, inevitable accidents, and loss by lire excepted; and that upon the non-pny- ment of the whole or any portion of the said rent at the time when the same is abovi-^ promised to be paid, the said party of the first part may at his election, either distrain for said rent due, or declare this lease at an end, and recover possession as if tlie same was held by forcible detainer ; the said party of the second part hereby waiving any notice of such elec- tion, or any demand for the possession of said premises. The covenants herein shall extend to and be binding upon the heirs, executors and administrators of tlie parties to this lease. In witness whereof, the parties her-eto have hereunto set their hands and affixed their seals the day and year first above written. [Signature oflessorJ] [seal.] [Signature of lessee. "] [seal.] LEASE— Farm. [Year to year. Mode of Husbandry, etc.. Memorandum,] This agreement, conveyance and indenture or lease made ihis day of , between A. B.. of , of the one part and C. D., of , of the other part, witnesseth: That said A. IS. lets, and the said C. 1). agrees to take and hold of him as tenant, all that, etc., situate, etc. From day of next ensuing, upon the terms following that is to say : Said tenant shall be deemed as tenant from year to year; That said tenant enter and take possession of said prendses on nfext ; That either party may determine the tenancy by a notice in writing, nioutlis 'before the expiration of any year from the day of next preceding; That said tenant shall go out of possession at the expiration or termination of his term; That the rest of said premises shall be dollars per annum, payable in half yearly payments on, etc., without deduction on account of any tax or assessment nowin existence or hereafter to be imposed, except, etc., which is to be paid by the said C. D. ; 552 LEGAL FORMS. That the said tenant agrees to cause the following repairs to be made, (here state what repairs) and to keep the buildings in a tenatftable repair ; That said tenant agrees to keep the gates and fences in good repair, said tenant finding^ rough timber or fencing stuff; That said tenant shall not lop or cut any oak etc. on the estate, except such as h,ave usually been lopped, and t^hose only to be used for making and repairing the fences to the estate etc.; That said tenant shall not mow any grass or meadow land above once in any one year of his tenancy, and if he breaks up any old meadow or old pasture lands, .unless with the said landlord's consent, in writing then he shall pay the further yearly rent of dollars for every acre so broken up and after that rate for any part of an acre. That said tenant may crop the arable land in each year as follows, viz : one equal third part thereof with wheat or barley, one other third equal part with beans, pease, clover, op oats, etc., and the remaining third part to lie in fallow. That said land shall not be cropped with wheat twice, or barley twice, in any period of three years. That the said tenant shall use and consume on the farm aU hay and straw made an* grown thereon. That said tenant shall use and spread dung and manure arising or made on the farm, in such manner as that every acre in tillage of the farm aforesaid may be well mannred once in every three years of his tenancy {except that all hay and wheat straw on the farm uncon- sumed at the expiration of the tenancy may be purchased by the landlord or succeeding tenant, at a fair valuation by two indifferent persons, one to be named by each party). That said tenant shall leave on the premises, without compensation, not only all cut and white straw arising upon or from the premises and remaining unconsumed thereon at the expiration of his tenancy, but also all dung and manure arising or made on the farm,. and then remaining unconsumed. That said tenant shall keep clean, by well hoeing twice at the least and weeding all the- land whilst cropped with beans, pease, clover, etc. That said tenant shall endeavor to prevent any injury by persons, cattle or sheep, to any of the hedges, or trees, or fences, and to preserve the same, and not to do any injury to tim- ber or any other trees in taking such loppings as before allowed to him ; That said party shall not crop or sow any of the land with rape, fiax, hemp, etc. Thataaid tenant shall not underlet or assign the premises or any part thereof, except etc. That said tenant on quitting the farm shall receive such pecuniary compensation for improvements in fencing etc., as to arbitrators one of which arbitrators shall be nominated by each party and if either neglect to nominate his arbitrator the other party made nom- inate both arbitrators shall award, which arbitrators shall abate according to the benefit derived by the tenant from such repairs, improvements and additions, and take into consid- eration how far, at the expiration of the tenancy, they may be beneficial to the estate. In witness whereof, the parties hereto, have hereunto set their hands and afi5xed their seals the day and year first above written. A. B. C. B. LEASE— Ground. This (agreement, conveyance, indenture or) leasee made this day of , by an* between A. B. of , party of the first part, and C. D. of , party of the second part witnesseth : That the said party of the first part for and in consideration of the covenants and agreements hereinafter mentioned, to be kept and informed by the party of the second part, has demised and leased to the party of the second part all those premises situated in the of , in , county, and State of , known and described as follows, to wit; {here give tlie description of the premises). To have and to hold the above described premises, with the appurtenances, unto the party of the second part, from the day of , for, during and until the day of And the party of the second part, in consideration of the leasing of the premises afore- said, does covenant and agree with the party of the first part. That he will pay to the party of the first part as rent for said leased premises at the- office ,in .the sura of {state the annual rent) April, July, October and January^ {or otherwise) in each yeiir. That the said party of the second part will pay or cause to be paid, all water rates and all taxes and assessments that may be laid, charged or assessed on said demised premises, pending the existence of this lease. That if any time after any tax, assessment or water rate shall have become due or pay- able, the party of the second part, or his legal representative, shall neglect to pay such water rates, tax or assessment, it may be lawful for the^party of the first part to pay the- same at any time thereafter, and the amount of any and all such payments so made by the party of the first part shall be deemed and taken, and are hereby declared to be so much additional and further rent, for the above demised premises, due from and payable by the party of the second part; and may be collected in the same manner, by distress or other- wise as is hereinafter provided for the collection of other rents to grow due thereon ; That the whole amount of rent reserved, and agreed to be paid for said above demised premises, and each and every instalment thereof, shall be and is hereby declared to be a valid and first lien upon aoy and all buildings and improvements on said premises, or that may at any time be erected, placed, or put'on said premises by said party of the second part, or his heirs, executors and administrators or assigns and upon his or their interest iik this lease, and the premises hereby demised. LEGAL FORMS. 533 That whenever, and as often as any instalment of rent or any other amoiint above B.S. County of j On the day of in the year one thousand eight hundred and before me personally came , to me known, and known to me to be the individual described in, and who executed the foregoing instrument, and acknowledged that he executed the same. i MORTGAGE— Personal Property or Chattel Mortgage. Know all men by these presents: That I, A. B., of , in consideration of the sum of dollars to me paid by C. D., of , by these presents do gi'ant, transfer and assign unto the said C. D. all the goods and chattels, wares, effects and merchandise men- tioned and specified in the schedule hereunder written: To have and to hold, all and singular, the said goods, chattels wares, effects, and merchandise, unto the said C. D., his executors, administrators and aswigns forever. Provided, nevertheless, that if l.the said A. B., ray executoFH, administrators or assigns, or any of them do and shall well and truly pay unto the said C. D., his exei-utors. adminis- trators or assigns, the sum of , with legal interest for the same, on or before the day of , then these presents and evei*y clause, article and thing herein contained flhall cease and be void ; otherwise to be in full force. In witness whereof the said parties to these presents have interchangeably set their hands and seals hereunto. Dated this day and year first above written. ISignatureaofwitDetises.} ISignatures.} [heals.] NOTE — Promissory — General Form. $ . Washington, D. C, , 18 -■ days after date, for value received, I promise to pay to P. E. or bearer (or order dollars. ISignatureJ] NOTE— Promissory— Guaranty. [To be Indorsed on Note.] For value received I guarantee the payment {or collection, or collectibility) of the within note. , 18 iSignatare.^ NOTE — Promissory — Judgment. [Common Form, With Waiver.] $ , MOKTPELIER, VT., , 18 after date promise to pay . or order, dollars, with interest at the rate of per cent per annum from maturity until paid, and without defalcation. And do hereby confess judgment for the above sura with interest and costs of suit, a release of all errors and waiver of all rights to inquisition and appeal, and to the benefit of all laws exempting real or personal property from levy and sale. ISignature.'] [seal.] NOTE — Promissory— On Demand. $ . Buffalo, N. Y., , 18 On demand I promise to pay P. E. or order (or bearer) dollars, for value received. ISignature.'} NOTE — Promissory — Payable at a Particular Place. $ . RiCBMOND, Va.. , 18 days after date I {or we. or either of us, or we jointly or severally) promise to pay to the order of P. E. at the Bank in J {or other place^ designating it) dollars with interest. Value received. ISignature.^ PARTNERSHIP— Contract. [General Form.] This agreement, made and entered into by and between A. B., C. D., E. F. and G. H., witnesseth : That said A. B., C. D., E. F. and G. H. shall associate themselves 'together in the trade of buying, wholesaling and retailing all sorts of goods, wares and merchandise belonginf? to the trade and business of LEGAL FORMS. 557 That said partnership shall continue from the date of this agreement for and during "the term of ten years next ensuing. That to this end and purpose the said A. B. has contributed as stock the sum of one thousand dollars; and said C. D. tlie sum of one thousand dollars; and the said E. b\ the sura of one thousand dollars: and the said (i. H. the sum of one thousand dollars; to bo used and invested, and employed in common between them to their general advantage in the management of said business. That said parties shall not at any time hereafter use, follow, or exercise said business or occupation, or any other, during said term, to their private benefit or advantage, but shall, at all times during said term, with their utmost skill and ability, conduct and act only for theirmutual advantage with said stock and for its increase. That said parties shall discharge all rents and expenses of said business equally between them. That all profit, gain and increase that shall arise by reason of said joint business shall be equally divided between tliem share and share alike. That all losses ami decrease that shall happen in said business, by reason of bad debtai or otherwise, shall be borne and paid enualiy between them share and sliaro alike. i That there sliall be kept, during said term and joint business, just and true books of account, wherein each of said parties shall enter and set down the mone.v by him received and expended, the goods and merchandise by him bought and sold, and all mattes and things concerning said partnership, so that either of said partners may at any timff have ft'ee access thereto. That said partners shall once every three months, upon the request of any of them, make and render to each other, or to his legal representatives, a true and perfect account of all profit and gains by them made and of all losses sustained; and also of all receipts, disbursements and other things whatsoever concerning said partnership, and thereupon shall cancel, adjust, pay and deliver unto each other their equal shares of the profit so made if any. That at the end of said term of ten years if said partnership be not sooner determined, in which ease the said partners or their survivors shall nmke a final and true account of all things aforesaid, and in all things well and truly adjust the same. That upon making such account of stock, goods, wares and merchandise, and the profit, gain and increase thereof which remain the same shall be equally divided between them or their survivors share and share alike. In witness whereof we have hereunto set our hands this day of iSiguatures ofwituessesA A. B. C. D. E. F. G. H. PARTNEKSHIP— Notice of Terms of. [Partnership Notice.] Notice is hereby priven that A. B., C. D., E. F. and G. H. as partners, under the name "(or firm) of B. and D. will, on the day of . commence the business of , and on the day of , said partnership will terminate. The names of the general partners and their respective places of residence are as follows : A. B., , county. State of ; C. D., , county. State of The names of the special partners and their respective places of residence areas follows: E. F., , county. State of , and G. H., , county. State of The amount of the capital which each of said special partners has contributed to the common stock of said partnership is as follows: E. F., dollars, and G. H., dollars. Date , [Ojfida/ Signature.^ [seal..] State of , county, ss. P. P. being duly sworn, says that he Is the printer of (oris in the employ of J. K., the printer of) the , a newspaper published in , and of general circulation in said county ; and that the notice, of which the annexed is a true copy, was published for consecutive weeks in said newspai)er, commencing on the day of P. P. Subscribed to and sworn to before me, this day of lOfficial Signature.^ [seal.] PARTNERSHIP— Notice of Dissolution. [Dissolution of Partnership.] The partnership heretofore existing under the name of B. & D. wherein A. B., of , county. State of , and C. D„ of , county. State of , were general partners, and E. F., of , county. State of , and G. H., of , county. State of were special partners, is this day of , A. D, , dissolved by mutual consent. The affairs of the Arm will be adjusted by C. D. at , etc. A. B. C. D. E. F. G. H. 36 558 LEGAL FORMS. POWER OF ATTORNEY— GENEKiLL. Know all men Tsy these preaents: That I, A. B., of , have made, constitnte* and appointed, and by these presents do make, constitute and appoint CD. of my true and lawful attorney in fact, for me, and in my name, place and stead, to {here insert the power conferred). That I give unto my said attorney flill power to do every thing whatsoever requisite and necessary to be done in the premises, as fully as 1 could if personally present, with full power of substitution and revocation, hereby ratifying and tonflrming all that iny said attorney shall lawfully do, or cause to be done, by virtue hereof. In witness, whereof 1 hereunto set my hand this day of ISignatttre.'} PROTEST— General Form. • [Copy of Bill { or Note) and Indorsement, etc."] United States of America, State, (commonwealth, or territory, etc.,) county, ss. On da,y of , A. D., at the request of A. B., the holder of the original bill of exchange {or promissory note) of which the above is a true copy. I, N. P., a notary public in and for said county of , presented the same to B. E., the drawer (or maker) therein named, (or if payable at a particular place, Ray at , in said State, (commonwealth, or territory) and demanded acceptance (orpayment) thereof, which was refused. Whereupon I, the said notary, at the request aforesaid, did protest, and b,y these pre.sent8 do solemnly and publicly protest, as well against the drawer {or maker and indorsers) of the said bill (or note) as against all others whom it does or ma.v concern, for exchange or re-exchange, and all costs, damages and in terest accrued, and to be hereafter incurred for want of accept- ance (orpayment) of the same: And on the same day I served due notice of the protest aforesaid upon the following named persons by depositing such notice in the post-office at , in said State (com- monwealth or territory) in a sealed envelope, with the postage prepaid addressed to said as follows : A notice for , directed to A notice for , directed to In testimony whereof I have hereunto set my hand and affixed my notarial seal, the day and year aforesaid. Protest fees dollars. ISignature of Notary Public.^ [NOTABIAL SEAL.] RECEIPT— Account Generally. f . HOLYOKE, Mass., , 18 Received of A. B. the sum of dollars on account (for ) . [.Signatnre.l RECEIPT— In Full op all Demands. $ . Albany, N. Y., . 18 Received of A. B. the sum of dollars in full of all demands against him. ISignature.^ RECEIPT— Interest. Received this day of , of C. D. dollars In full, for one year's interest of one thousand dollars, due me the day of , on a bond of said C. D. dated the day of iSlgnatare.i RECEIPT— Rent. $ . St. Loms, Mo., , 18 Received of A. B. the sum of dollars, one month's rent due this day for dwelling house in Street, in ISignatare,^ WILL— Real and Personal Estate. I. A. B., of the town of , in the county of , State of .(merchant), declare this to be my last will and testament. 1. I give and bequeath to my wife, C. B., dollars, to be used by her in lieu Of dower. 2. To m.y son. B. B., dollars, (which said several legacies T direct to be paid within after my decease). 3. T give and devise to my son, E. B., aforesaid, liis h6li*8 and Assigns, all (here desig- nate property), together with all the hereditanieutaand apijurtenaiices thereunto belonging or in any wise appertaining; to have and to hold the premises above described to the said E. B., his heirs and assigns forever. LEGAL FORMS. 559 4. I give and devise all tlie rest, residue and pemaiiider of ray real property, of every name and nature wliatsoever, to my said daughter, M. B., and my daugtiter. O. B., to be divided equally between them, sliare and share alike. 5. 1 give and bequeath all the rest, residue and remainder of my personal property, of "what nature or kind soever, to my said wife, C. B. 6. I hereby appoint E. B. the sole executor of this will, revolting all former wills by me made. In witness whereof I, (name of testator,) have to this ray last will and testament, con- eisting of sheets of paper, subscribed my name (and set my seal) this day of .18 Subscribed by the testator in the presence of [Signature, with Bea/.] each of us (or acknowledged by the testa- tor to each of us to have been subscribed by hira), and at the same timedeclared by him to us to be his last will and testament, and thereupon we, at the request of the testator, sign our names hereto as wit- nesses, this day of ,18 , at ISignature and a,ddresses ofwitnesses.l SPECIAL CLAUSES TO BE INSERTED IN A WILL IF DESIRED. [For Pecuniary Legacy.] 1 bequeath to my said wife the sura of dollars, (to be paid to her within month after my death.) [For Legacy of Debt.] T bequeath to A. B. any debt which at the time of my decease shall be owing from hira to me, together with any interest then due thereupon. [ For Legacy of a Share under another Person's Will.] And whereas under the will of (name) I am entitled to a share in his residuary personal estate, I bequeath the said share to (name.) [For Bequest of the Good T\'ill of a Business.] I give and bequeath the good will and benefit of the business of which 1 am now carrying on at , and also all my capital and property which shall be employed therein at my decease, and also the leasehold premises situate and being No. , at , aforesaid, wherein the said business is now being carried on, for all my term and interest therein unto m.v son , absolutely. [For Legacies to Executors.] And I do hereby nominate and appoint the said C. D. and E, V. executors of this will. And I bequeath to such of them as shall act in the execution of this my will the sum of dollars apiece. [Bequest to a Corporation.] I give and bequeath to (stating if possible tlie fall name of the corporation, or, if not certainly known, describing it), at , the sum of dollars to be appUed to the uses of said Society, (or college, orotherwise. Any particular object, such as tbeendowment of a professorship, may be here stated). [For Direction that Legacies shall be Paid Free from Duty.] And I direct that all legacies given by my said will, or any codicil thereto, shall be paid free from legacy, duty or tax. [For Declaration that Money Advanced by the Testator during his Life to his Chil- dren shall be Deducted from their Portions or Shares of his Estate.] I declare that all such moneys as T have or shall have advanced to any of my said chil- dren, or as shall be owing to me from any of them at my decease, shall be considered as part of my residuary estate, and shall be deducted from his, her or their respective shares. [Direction as to Payment of Annuities.] And I direct that the said annuity of dollars to be paid, clear of all deductions, except legacy, duty, or tax, by equal half-yearly payments, the first payment to be made at the end of six calendar months from my death. [Devise to Executors in Trust, with Power to Sell, etc.] I give and devise all ray real and personal estate, of what nature or kind soever, to C. D. and E. F., my executors hereinafter appointed, in trust, for the execution of ray will. ■with power to sell and dispose of the sarae, at public or private sale, at such times, and npon such terms, and in such manner as to them shall seem meet. (Provided, however, that no part of my real estate shall be sold until after the expiration of years from my decease.) 560 LEGAL FORMS. WILL— Codicil to— General Form. [Revoking several Legacies.] "Whereas I» A. B., of , have by my last will and testament In writing, duly executed, bearing date, etc., given and bequeathed to, etc. Now I, the said A. B., being desirous of altering my said will in respect to the said lega- cies, do therefore make this present writing, which I will and direct to be annexed as a codicil to my said will, and taken as part thereof; and I do hereby revoke the said legacies by ray said will given to , and I do give to each of them the said and the sum of dollars only; and I ^ve unto etc. And I do ratify and confirm my said will in everything, except where the same is hereby revoked and altered as aforesaid. In witness whereof I have hereunto set my hand this day of 18 Subscribed by the testator in the presence of each of us (or acknowledged by the iSignature, with or without sealJ} testator to each of us to have been sub- scribed by him), and at the same time declared by him to us to be a codicil to be annexed to his last will and testa- ment, and thereupon we, at the request of the testator, sign our names hereto as witnesses, this day of , 18 , at ISignatureB of witnesses,'} GLOSSARY. Adfilnm aquse. — To the middle of the stream. Ad damnum.— To the damage. Adjudication. — The act or process of trying and determining judicially. Ad quern. — To which. A fortiori. — ^With stronger reason. Agister. — One who takes in cattle and horses to pasture at a certain rate. Aliunde. — From another place. Ancil/Lary. — Auxiliary. Ante. — Before. Appellant. — One who removes a cause from a lower to a higher tribunal. Appellee. — The defendant in an appeal. Assignee. — A person to whom an assignment is made. Assignor. — A person who transfers an interest. Assumpsit. — A contract or promise, express oy implied, oral. or written, not under seal, founded on a consideration. B. Bona £de. — In good faith ; in reality. C. Caveat emptor. — Let the buyer beware. Caveat venditor. — Let the seller beware. Cestui que trust. — He who is the real and beneficial owner of property held in trust. Chattel. — Every kind of property except real estate. Chose. — A thing personal property. Consensus facit legem. — Consent makes the law. A contract is law between the parties having received their consent. Consignee. — The person to whom goods or other things are delivered in trust for sale or superintendence. Consignor. — One who sends, delivers or commits goods or other things in trust to another for sale or superintend- ence. Consuetudo debet esse certo.—A. custom ought to be certain. Comity. — The extension of civilities to communities. (561) 562 GLOSSARY. Complainant.— One who commences a legal process by a complaint. Cum onere.—With the burden. D. De facto. — From the fact. Dejure. — From the law. Delegatus non potest delegare.— A. delegate or deputy cannot appodnt another. Z?icta.— Opinions but not adjudications. Demurrer.— A stop or pause by a party to an action for the judgment of the court on any question as to the truth of the matter alleged by the opposite party. Descriptio personae. — Description of the person. Donatio causa mortis. — Gift in anticipation of immediate death. Duress. — Personal restraint or fear of personal injury or imprisonment. E. Easement. — A liberty, privilege or advantage without profit, which one proprietor has in the estate of another proprie- tor, distinct from the ownership of the soil, as a way, water-course, etc. Enure.— To serve to the use or benefit of Equality is equity. Equities. — Fair claims. Equity follows the law. " looks upon that as done which ought to be done, " suffers not a right without a remedy. Estoppel. — A stop. Et ah — And others. Et seq. — And the following. Ex aequo et bono. — Agreeably to what is good and right. Ex delicto. — From the crime. Ex mero motu. — Of his own accord. Ex necessitate. — From the necessity. Ex nihilo nihil At. — From nothing nothing comes. Ex nudo pacto non aritur actio. — No action arises on a con- tract without a consideration. Ex parte. — One side only. F. Fiat justitia ruat caelum.— Let justice be done though the heavens fall. Fiduciary. — One who holds a thing in trust for another. Flfa. — That you cause to be done. Frans est celare fraudem. — It is a fraud to conceal a fraud. OLOSSART. 563 G. Oabnishment. — Legal notice to one to appear and give information to the court on any matter. Grantee. — The person to whom a grant is made. Gkantor. — The person by whom a grant is made. H. Habendum. — One of the formal parts of a deed; its office is to limit or define the estate granted. Is so called because it begins with the words "to have." I. 7c? certum est quod cerium reddi potest. — That is certain which may be rendered certain. Ignorantia excusatur, non juris sed facti. — Ignorance of fact may excuse, but not ignorance of law. Impotentia excusat legem. — Impossibility is an excuse in law. Incolas domicilium facit. — Residence creates domicile. Index animi sermo. — Speech is the index of the mind. Indicia. — Discriminating mark; signs. Indorsee. — The person to whom a note or bill is indorsed or assigned by indorsement. Indorser. — The party by whom a note, bill or check is indorsed. In fra. — Below. In ipsis verbis. — In this language or words. Injurio non prasumitur. — A wrong is not presumed. In lieu. — Instead. In pais. — Matter of fact as distinguished from that of record. In personam. — ^In person. In praesenti. — At the present time. In propria causa nemo judex. — No one can be judge in his own cause. In re. — In the matter of. In rem.— Against the thing or property. Inter alia. — Among other things. In terrorem. — As a warning. Inter sese. — Among themselves. Inter vivos. — Between the living. In toto et pars continetur. — A part is included in the whole. In transitu.— On the passage. Inure. — See Enure. J. J. — Judge. Judicis est jus dicere non dare.— It is the duty of a judge to declare the law not to enact it. 564 GLOSSARY. Juratores sunt judices facti. — Jurors are the judges of the facts. Juro publico anteferendo privatis — Public rights are to be preferred to private. Ij. Lata culpa dolo aequiparatur. — Gross negligence is equal to fraud. Law construeth every act to be lawful when it standeth differ- ent, whether it be lawful or not. Law construeth things according to common possibility or intendment. Law construeth things to the beet. " " " with equity and moderation. " disfavoreth improbabilities. " favoreth charity. " " common right. " " diligence, and therefore, hateth folly and negli- gence. Law favoreth honor and order. " justice and right. " life, liberty, and dower. " mutual recompense. " possession where the right is equal. " public commerce. " " quiet. " speeding men's causes. " things for the commonwealth. " truth, faith, and certainty, hateth delays. " wrong, hath new inventions and innovations, of itself prejudicelh no man. respecteth matter of substance more than matter of circumstance. Law respecteth possibility of things. " " the bonds of nature. Lawful, things are well mixed unless a form of law oppose. Le contrat fait la loi. — The contract makes the law. Leges bumanae nascuntur vivant et moriuntur. — Human laws are born, live and die. Leges posteriores priores contrarias abrogant. — Subsequent laws repeal prior conflicting ones. Lex domicilii. — Law of residence. Lex loci rei sitse. — The law of the place of situation of the thing. Lex succurit ignoranti. — The laws succor the ignorant. GLOSSARY. 565 Lex uno ore omnes alloquitur. — The law speaks to aJl with one mouth. Lex vigilantibus non dormientibus subvenit. — ^Law assists the wakeful not the sleeping. Lien. — Legal claim. Locus contractus regit acture. — The place of the contract governs the act. Locus penitentiae. — Place for repentance. Longa possessio est pads jus. — Long possession is the law of peace. M. Magna culpa dolus est. — Great neglect is equivalent to fraud. Melior est causa possidentis. — The cause of the possessor i» preferable. Mesne. — A process or action introduced into a suit or inter- vening between the beginning and end of a suit. Mobilia personam sequntur, immobilia situm. — Movable things follow the person; immovable their locality. Mobilia sequntur personam. — Jlovables follow the person. Mors omni solvit. — Death dissolves all things. Mortgagee. — The person to whom a mortgage is made or given. Mortgagor. — The person who conveys real property as security for debt. N. Necessitas est lex temporis et loci. — Necessity is the law of a particular time and place. Ne exeat. — Let him not depart. Nemo prsesumitur molus. — No one is presumed to be bad. Nihil dat qui non babet. — ^He gives nothingwho has nothing. Nisi. — Unless. Non est. — Is not. Non facias malum ut inde veniat bonum. — ^Tou are not to do evil that good may come of it. Non est regula quin fallat. — There is no rule but what may fail. Nudum pactum. — A mere agreement; a contract made with- out any consideration and therefore void. Nugatory. — Of no force, ineffectual. Nulla bona. — No goods. Nullus commodum capere potest de injuria sua propria — No one shall take advantage of his own wrong. 0. Obiter. — ^An opinion expressed by a court, but which not being necessarily involved in the case, loses the force of an. adjudication. 566 OLOSSABT. Omne qnod infprHAcatnr solo credit. — Every thing belongs to the soil which is built upon it. Omnis consensas tollit errorein. — Eveiy consent removes error. Onus. — The burden. Optima enim est legis interpivs consaetndo. — Usage is the best interpreter of law. P. Per capita. — By the head. Per contra. — Contrariwise. Per stirpes. — ^Eoot of a race. Posf;.— After. Preponderance. — ^An outweighing, superiority of weight. Prima facie. — On the first view. Prior tempore potior jure. — He who is first in time is preferred in ri^ht. Probanai necessitas incumbit illi qui agit. — The necessity of proving lies with him who sues. Proces verbal. — A written statement. Pro rata. — ^According to the rate or proportion. Pro tanto. — For so much. Q. Quod ad jus natnrale attinet omnes homines sequales sunt. — All men are equal as far as the natural law is concerned. Quo warranto. — ^An ancient writ still in use directed against any person or corporation who usurp any office, fran- chise, or liberty calling upon them to show by what authority they support their claim. E. Ratibabitio mandato aeqniparatur. — ^Ratification is equal to command. Referee. — A person to whom has been referred a matter in dispute in order that he may settle it. Repleader. — A second pleading or course of pleadings. Replevin. — To take or get back by a writ for that purpose goods wrongfully taken and retained. Res denominatur a principaliori parte. — A thing is named from its principal part. Res gestae. — The subject-matter. Respondent. — One who answers in certain suits on appeal. Respondentia. — Shipping contract given as security on goods for loan of money. S. Scientia utrius que par pares contrahentes facit. — Equal knowledge on both sides makes the contracting parties equal. GLOSSARY. 567 Scienter . — Knowing! j . Scintilla. — An iota ; the least particle. Scribere est agere. — To write is to act. (Seine facias. — Cause it to be Itnown. Semper sexus masculinus etiam fac minimum continet. — The male sex always includes the female. Servitia personalia sequuntur personam. — Personal services follow the person. Sui generis. — Of its own kind. Supra . — Above. T. Tantum non est quantum verdi passunt. — Things are worth what they will sell for. Testamenta latissimam interpretationem habere debent. — Wills ought to have the broadest interpretation. Tort. — A form of action for a wrong or injury. Traditio loqui facit chartum. — Delivery makes the deed speak. •♦ Trover. — An action to recover damages against one who found goods, and would not deliver them to the owner on demand. U. Ubi supra. — Where above mentioned. Ultra vires. — Beyond authority in case of corporations. Usus est dominium Sduciarum. — ^A use is a fiduciary owner- ship. V. Vendee. — The person to whom a thing is sold. Vendor. — Seller. Venire facias de novo. — A- new writ to correct error. Verba intentioni, non e contra debent inservire. — Words ought to be made subservient to the intent, not contrary to it. Verbatim. — In the same words. Vire et uxor consentur in lege una persona. — Husband and wife are considered one person in law. Virtute officii. — By virtue of office. Vis legibus est inimica. — Force is inimical to the laws. Volenti non St injuria. — He who consents cannot receive an injury. Voluntas reputabatur pro facto. — The will is to be taken for the deed. W. Waives. — Abandons ; forsakes. When no time is limited, the law appoints the most con- venient. ' 568 GLOSSARY. When the common law and statute law concur, the common law is to be preferred. When the foundation fails, all fails. When the law gives any thing, it gives a remedy for the same. When the law presumes the affirmative, the negative is to be proved. When two titles concur, the best preferred. Where there is equal equity, the law must prevail. Where two rights concur, the more ancient shall be pre- ferred. INDEX. A. Accounts. Book; assignable to 6ona fide creditors 11 Running; judgment for part of ruuuing account bars recovery of the remainder , 11 Memorandum-book entries not admissible to prove payment of a debt 12 Stated; when an account stated deemed couclusive 12 Rendered; when an account rendered becomes an account stated 12 Opening of account stated and settled 12 Stated; when binding on debtor 13 Admission of books as evidence ; entries when not made at time of sale 14 Running, bar by limitations begins to run from last item 14 Check in payment of balance stated; conclusive admission 15 Copies of account-books not receivable in evidence 15 Omitted claims in settlement ; effect of. 15 Accounts between partners; interest not allowed 16 When an account stated and accepted may be disputed 16 When an error in account stated may be corrected without re-opening the whole account 17 Promise to pay account stated bars corrections 18 Books of accounts in evidence ; how accounts of other parties protected from inspection 18 Check remitted in full payment of account; credit as part payment; course of debtor and creditor under such circumstances 19 Administrators. See Executors ; 315 Agency. False representations of agent, when bind principal 20 Application for insurance; agent's fraud 21 Investment by agent; questionable act 21 Power of sale does not include power to pledge; no lien on wrongly hypothecated goods 21 Authority of agent to procure purchaser 22 " " receive payments 22 Statements made by agent no proof of authority 24 " " how far conclusive 24 Agent cannot take commission from both sides 25 " bind principal by outside statements 26 General and special agency 26 Diversion of funds by agent 29 Commissions; both sides paying 30 Agent merely introducing purchaser 30 Custom bearing on commission; evidence of trade custom 31 Bight of agents to sell without license 311 Statements by salesman; effect of. 538 (569) 570 INDEX. Animals. , page. Cruelty to; right to destroy 32 Injuries by dogs 32 Estrays; title of taker 32 Estrays 33 Trespassing 33 " Distress and sale of. 34 Infections .t 84 Vicious; iujuries by 35 Bailment of. 36 Cattle brands , 36 Recording brands 36 Texas fever act 37 Condemnation and destruction of; due process of law 37 Assignments. identification of assigned stock of goods ; delivery of instrument fixes date; proper description of assigned property 37 By a surviving partner 38 Fraudulent transfers before general assignment; right of general assignee 38 Business continued by assignee; employment of assignor as clerk 39 Assignment made in different state from that of the location of real estate 40 Assignment made in different state ft-om location of personal property 41 Specific lien of creditors on assigned merchandise; goods fraudu- lently bought by insolvent; title remains in vendor 42 Wrongful interference with sale by assignee 44 Assigument laws of the different states 45-113 Attachments. Payment of attached funds after service of process; check drawn be- fore, effect of; law of place 113 Priority of second mortgage over subsequent attachment 114 Valid discrimination against non-resident or foreign corporation; attachment without security 115 Preference of attachment creditors over non-resident assignee 115 Confiict between federal and state jurisdiction 116 Attachment laws of the different states 121-170 B. Bailment. See Custody of Animals 36 Property 283 Banks and Banking. National bank powers; purchase of draft with bill of lading 170 Bank not affected by private information or acts of director; position of directors as agents of bank 171 Certification of assistant teller; authorization of. 172 Acceptance and certification 173 Power of cashier to certify 174 Certification not made at banking house 175 Certification ; acts of Congress 175 Bonds of bank officers; obligation of sureties 176 Removal of officers 178 Transfer of stock 180 Depositor's pass-book; entries; negligence of depositor in examining; loss of remedies 181 INDEX. 57X . PAOB. Collections through banks; duty and liability of banks receiving paper for collection 184 Responsibility for acts and defaults of sub-agents 184 Purchase of commercial paper by bank; bpik no power 188 Accommodation note to be paid when payee agrees to pay 189 Check on bank not an assignment of funds 192 Eights of depositors 193 Bills, Checks and Notes. A foreign discharge in bankruptcy not always a defense to a bill of ex- change in the hands of an American holder 196 Qualified and special indorsements 197 See Notes 395 Bills op Exchange. Form of; oral acceptance 197 Acceptance by agent of company 198 Form by which agent only is bound 198 See also Bills, Cheeks and Notes 196 Drafts 309 Bills of Lading. Indorsement of; effect 199 Restriction of liability to invoice value 200 Negotiation of Duplicate bills; imperfect title of holder 201 "Shipped in good order and condition; acknowledgment in bill; effect of. 201 Title of holder without indorsement; pre-existing debt a good consid- eration 202 As collateral ; insecurity of hona fide holder when bills are false and no property ejiipped 204 Railroad bill of lading; no property shipped; right of bonaSde trans- feree of 209 Forged bills of lading; purchase of the accompanying draft; indorse- ment for cojjection ; no warranty of genuineness 210 False bill of lading; carrier not bound unless goods actually received.. 212 Bonds. Invalid issues 213 c. Carriers. Connecting lines ; special contracts of first carrier do not enure to the benefit of second 214 Liability of first carrier 216 Delay in delivery ; negligence 216 Duties and liabilities of connecting line; strike 216 Rights and liabilities of connecting lines 217 Special conditions limiting liability; shipper's right to reject them 217 Limiting liability; when limitation is reasonable 218 Evidence; declaration; res gestie 218 Goods delivered under contract 218 Right to limit liability of. 219 Limiting liability 220 Negligence of carrier 222 The "negligence clause" 222 Rule of damages for non-delivery; stipulation that invoice value shall shall govern 225 Damage to cargo; liability of carrier 225 572 INDEX. ~~~~ PAOB. What vessel must provide; right of passenger ;. 226 Illegal rates paid to carrier; the law's delays 227 Goods shipped at " owner's risk " 228 ^'Released" rates of transportdftion 228 Limited passage ticket; when good; rights of holder 231 Live stock shipments; negligence; burden of proof; limiting liability; mistake by the consignor 232 Injuries to livestock k 233 Delivery of freight , 233 Delay in transportation; of livestock; negligence of caring for cattle. 234 Checks. Payment attempted to be rescinded: check charged, when paid 235 Payable to false order; indorsement in assumed name 236 If indorsement does not pass title the drawers are estopped from deny- ing title of bona. Me holder 237 Irregularities of. 238 Is check an assignment of fiind in bank ; can check-holder enforce pay- ment 239 Adjudications in conflict 239 Forged and altered .'. 240 Consequences of paying forged notes 241 If signature is genuine but amount fraudulently altered, bank is pro- tected 242 Effect of usage; clearing-house 242 A foreign discharge in bankruptcy not always a defense to a bill of ex- change in the hands of an American holder 196 ■Qualified and special indorsements j 197 See also Bills of Exchange 197 Collections. Through banks; duty and liability of banks receiving paper for collec- tion 184 Commission. Cannot be taken by agent from both sides 25 Payable by usage 31 Contracts. Particular forms construed ; duration of engagement where no fixed term is specified 250 When written are necessary 251 Reformation of; right lost by long delay; lease dated on Sunday 251 Acceptance without notification 251 " varying from terms of. 252 Insufficient writing or matter 252-254 Refusal to perform ; action for breach 255 Who ma.y terminate contract 257 Notice of intention not to perform contract, when no breach 257 Oral evidence to vary written contract 258 Corporations. Control by legislature over 261 Conveyance to trustees 263 Relation of corporation to its licensees 263 Liability of stockholders 265 " bank stockholders....'. : 268 Validity of proceedings 269 Contract of official without naming the corporation 270 Title to dividends; stock transactions 271 INDEX. 573 PAOB. Sale of shares; seller's option 271 Rights of stockholders 273 Right to dividends 275 When stockholders not liable; payment of capital in property 277 Liability of directors 279 Crops. Lien for services .' 281 Advances on 281 Landlord and tenant 282 Priority of liens on 282 Executors and administrators 282 Dower 283 Custody of Property (Bailment). Gratuitous care of ; loss without negligence; bailee not liable 283 Bailment defined; degrees of care required 284 Custom. Commissions ; payable by 31 Usage; what establishes 531 D. Debtor and Creditor. Payment by paper security; substitution of security 287 When note is payment ; different in different states... 289 Debtor's conveyance to wife and children 290 Sureties of debtor, how protected 290 Creditor's right to injunction and receivership 291 Deeds. Deed intended as a mortgage 293 Deeds exchanged by agreement 294 When written instrument cannot be reformed 294 Deed must be delivered 294 Dower right and interest conveyed 295 When unrecorded deed good against judgment creditors 296 Boundaries of land 297 Extent of boundary in deed 298 Contradictory parts in deed 299 Delivery of deed to effect transfer of property; when treated as mort- gage 300 Definitions or Terms. What constitutes " one calendar month " 307 Fellow-servants 308 Landing goods 308 Mercantile partnership 308 Glossary oi^ terms 539 Dogs, injuries by 32 Drafts. Payment of acceptance 309 Bills, checks and notes 196 A foreign discharge in bankruptcy not always a defense to a bill of ex- change in the hands of an American holder 196 Qualified and special indorsements 197 Bills of exchange; form of; oral acceptance 197 Acceptance by agent of company ; form by which agent only is bound 198 37 574 INDEX. Drummers. paob^ Right to sell without license 311 E. Employer and Employke. Liability of employer for injuries to employee; fellow-employee's negli- gence 312 When employee not liable for iryuries by negligence of fellow-employee. 313 Execution. Sale of land on, when it defeats mortgage or deed jointly made by husband and wife of bis property 314- Executors (Administrators). Wife divorced from deceased in his life-time does not become entitled in any way to repi-eseiitation in or distribution of, the estate 315- Judgment obtained against them in their representative capacity, does not justify an action to set aside conveyance by the deceased because fraudulent 316 ExecutOi'S should, as a duty, in order to pay the creditors, in the case of a fraudulent transfer of real estate by the deceased, seek to re- claim the real estate 31& When not excused for neglect of duty although passive in the adminis- tration 31& Liability of, for loss sustained by|the estate 816—317 When only they may loan money on real estate in a different state 316-317 Obliged to complete and carry out contracts of the deceased; when not liable for loss sustained 316-31T Having power to continue the business and to inakerepairs and deduct expenses of all kinds should charge same to those interested in the income of theestate 316-317-282 May complete work of decedent 282 r. Farm Law. Crops; things partaking of the nature of realty; requisites of sale 317 lien for services 281 advances on 281 landlord and tenant 282 priority of liens of. 282 executors and administrators 282 dower 283 Reaping machine, and delivery when complete 318 Laborer quitting employment; damages 319 Ice on navigable waters ; riparian owners 320 " non-tidal " 320 Public ownership to ice on great ponds ;.. 320 Running waters, ponds, backwater, pollution, etc 321 Mortgages on timber 322 priority of; property of mortgaged animals 380 insuffioient description '. 381 priority of same depending on consideration and recording 389 Animals 32-37 cruelty to; right to destroy 32 injuries by dogs 32 estrays; title of taker 32 estrays 33 trespassing 33 INDEX. 57r Animals, (Continned) page. trespassing, distress and sale of. 34 infections 34 vicious; injuries by 35 bailment of 36 cattle brands 36 recording brands 86 Texas fever act 37 condemnation and destruction of; due process of law 37 Boundaries of land 297* Kiparian rights ,. 459 ownership; title to soil under water; fresh water streams; navigable and non-navigable streams; rail- road companies, etc 459 alluvion 462 right of ice 46ii accretions 463 use of water j 46a Forms. Acknowledgment 541 Arbitration ; submission agreement 541 " award 541 Assignment; with conditions; with power of attorney 541 " account 542 bill of sale 542 bond 542 " debt 542 " insolvent debtor .")42 543 " insurance policy 544 " money on account 544 " mortgage of i-eal property 544 Authentication; copy of account 544 " cop.v of record 544 Bill of sale; general form with warranty 544 Bank form ; negotiable note 545 " non-negotiable note 545 " certificate of deposit 545 " protest notice; general form 545 Bond of obligation ; general form 545 " " annuity 545 " " indemnity 546 " " respondentia bond 546 Broker's order; to buy or sell stock 546 " receipt for money for stock 547 " statement of account, etc 547 Bill of exchange; general form 547 " at or after sight 547 " " set of foreign 547 Bill of lading; domestic 54:7 " foreign 548 Condition; to indemnify on paying a lost note or bill 548 Contract; general form 548 " charter-party 549 " employment 549 " sale 549 " insurance; renewal of policy 550 " " to clfoet or TDrocure 550 576 INDEX. PAOB, Deed; conveyance warranty 530 Guaranty of performance 551 Invoice 551 Lease 551 " surety 551 " general form 551 " farm 551 " ground lease 552 Mortgage, etc. ; bond secured by a mortgage 554 " of real property 554 " " " discharge or release 555 " " " release of a part 555 " " " satisfaction of mortgage upon real or personal property 555 " of personal property 556 Note, promissory; general form 556 " " on demand 556 " " guaranty to be indorsed on note 556 " " payable at a particular place 556 " " judgment note 556 Partnership; contract; general form 556 " notice of terras of partnership notice 557 " " dissolution 557 Power of attorney 558 Protest; general form 558 Receipt; account generally 558 " in full of all demands 558 interest . 558 " rent 558 Will; general form; with various bequests and services 558 " codicil to ; general form ; revoking several legacies 560 Fraudulent and False Representations. When director of a bank liable for false statements 323 •Clear and strong evidence necessary to rescind contract for false state- ments 324 Release obtained by misrepresentation; when contract avoided without returning the consideration 325 Of agent when bind principal 20 ■See also Contracts 250 G. Gifts. Gift made in expectation of death ; bond and mortgage pass by man- ual delivery 326 " donatio causa, mortis 327 " inter vivos 329 " delivery 329 Property not in existence 330 Guaranty and Suretyship. Written guaranty on oral condition precedent; when signer of, bound. 330 Cancellation of guaranty on execution of renewal; effect of. 331 Delay in realizing money on check; discharge of surety on debt thereby left unpaid 332 Joint maker in form shown to be only surety; discharge of surety by extension to principal debtor 333 INDEX. 577 ^^~^~~~'^~~~~~~^~^~^~~~^^~~ PAGE. Guarantor's right to notice that his offer of guaranty is accepted; formal notice not always necessary 333 Effect of oral promise to become surety ; conflict of authorities 334 H. Highways and Streets. Time necessary to complete dedication of land as highway 335 Liability of municipality for obstructions 335 Right of way; railroad to take public street 336 Husband and Wife. Wife having joined with her husband in deed or mortgage, subordinate to judgment against husband, may have dower interest restored to her — 340 Real estate held in name of both ; survivor takes title to the whole 340 Wife divorced from husband forfeits all right to representation in his estate 315 Where husband joins in written consent of wife to sell policy of insur- ance upon his life but for her benefit, the purchaser obtains good title thereto 34.S-34T Insurance (Fiee). Temporary breach of condition suspends insurance ; revival on cessa- tion of breach 342 Rights of mortgagor where mortgagee takes out policy 343 Insurance (Liee). Policy for benefit of wife can be validly sold if she give a written con- sent, although she had children of her own 343 Where the assured, by the terms of his policy, warrants the truth of his answers in his application, compliance with the warranty is vital to the validity of the policj 344-347 False statements in the application, in the absence of mistake, constitutes a breach of warranty, and will forfeit the policy.... 344r-34T Where the requirements are distinctly stated to form the condition of issuing a policy, courts and juries cannot disregard them... 344-34T Where a new policy is issued subject to the conditions of the orig- inal, although it contains no forfeiture clause for the non-pay- ment of notes for interest on notes for premiums, the law im- plies a right for the company to insert such a clause 344-347 Forfeiture for non-payment is a necessary means of protecting insurance companies from embarrassment 344—347 Assignment of policy when written consent of husband and wife is by statute necessary, is valid where the parties join together in the instrument of assignment ; this act constitutes a written consent 347—348 The fact that there are children does not affect the validity where the wife is the assured. The interest of the children does not vest until the death of the mother, when her legal representa- tives must join the husband in order to make a valid sale of the policy of insurance 347—348 Benevolent insurance, recent cases of. 348 Benevolent society insurance 349 Change of beneficiary 353 Insurance (Marine). On cargo "until safely landed;" discharge on lighter 355 578 inde:^. Insurance (General). page. Agent's false representation...., , , 20 Interest. Rate of interest stipulated and after maturity there is a statutory change of interest; effect of 357 What constitutes usury 358 Investment. By agent of principal's funds when liable 21 Injuries. By dogs 32 J. Judgment. Prior to conveyance or mortgage of the debtor made jointly with his wife, nullifies her release of dower right, by sale on execution 340 Ib a contract 360 L. Lease (see Landlord and Tenant). A lease giving the landlord a Hen on goods and fixtures without re- stricting tenant to sell goods and keep the money therefor, is a fraud as to bona fide creditors of the tenant, although made before tenant's assignment for the benefit of creditors 361 The assignee of tenant for the benefit of creditors has the right to sell the goods on premises, although landlord had a lien at the time of* execution of lease which would have been valid between the parties. 361 Tenant who waives written notice required by lease, to continue on inere£|,sed rent, is liable to pay rent for balance of term of lease 363 Lease under seal prevents statute of limitations from barringan action for rent as like for an ordinary debt 363 Action by tenant against landlord for latent defects 363 Effect of growing crops on mortgage or deed (Arkansas) 282 Legacies. See Gifts 326 License and TAjfATioN. Taxation not license 365 Right to sell without license 311, Liability of- investment by agent 21 Liens. When no mechanics lien , 24 M. Miscellaneous (See also Addendum). Damages arising from injury, considered 367 Statute of limitations ; some cases 370 Evidence; by witness on transaction with a decedent 371 Money wrongfully paid 373 " paid Toluntarily 373 " " by mistake 874 Nuisance 374 Perjury 374 Physicians 375 INDEX. 579 PAOE. Revenue,' customs 375 " internal ..„.. 376 Sunday 376 Warehousemen 377 Abusive postal card , , 530 Reward, effect of offer 530 Custom and usage, what establishes ; 531 Condemnation of land proceedings 531 Business signs 532 Instruments (important papers), loss of. 533 Payment not under duress 534 Quarantine regulations 535 Residence and domicile, how acquired 536 Agency, statements by salesmen, effects of. 538 •Glossary, definitions of important law terms 561 MORTQAGE. General remarks 377 The record of an assignment of a m ortgage is, under the recording act, constructive notice to all persons of the right of the assignee 378 A subsequent purchase is not included in the exception made in favor of the " mortgagor, his heirs or personal representatives," so as to invalidate payments made by either of them to the mortgagee 378 Chattel; made by a minor is voidable 379 " mortgagor in possession, when void 379 " priority of ; property of mortgaged animals 380 " insufficient description 381 " in fraud of creditors; sale of stock 383 " notes secured by separate note-holders secured by one mort- gage 385 " preference or priority of 386 Real; priority of same depending on consideration and recording 389 " wood and timber cut and removed ; mortgagee's right 322 " when deed may be treated as 322 N. Negligence. General remarks 390 In delaying to enforce claims 391 Erroneous report by mercantile agency ^ 392 Approaches to premises must be in a safe condition 393—394 The "negligence clause" 222 Of carrier 222 " in live stock shipment 232 " " transportation 234 " " caring for cattle 234 " employer 313 " employee 313 " warehousemen 377 Notes. Law of place controls 395 Negotiability of. 395 Illustration and discussion of forms of. 395 Neglect to sue principal, and extension of time, when no release to in- dorser or surety 397 Note intended as a testamentary gift; when revocable 398 Conditions that will destroy negotiability of.... 399 580 INDEX. PAGE. Stipulation for collection expenses affecting negotiability of. 400 Validity of note dependent upon place of delivery of. 401 Indorser before utterance is joint maker, (Michigan) 401 Valid notice of protest 402 What constitutes a bona, fide holder 402 Indorsements, some that are peculiar 403^ Successive accommodation indorsers 404 Payee's position after indorsement 404 Alteration of immaterial words 405 Maturity of, during epidemic ; time of demand and protest 405 Indorsers before delivery, liability of. 406- Non-negotiable to be rendered by suit 40* Holder of to use effort to collect note and collateral 410 Accommodation when payee agrees to pay same 18^ A foreign discharge in bankruptcy not always a defense to a bill of ex- change in the hands of an American holder 196 Qualified and special indorsements.... 199' Form of oral acceptance 197 Acceptance by agent of company ; form by which agent only is bound. 198 See also Drafts 309-311 " Checks 235 " Bills of Exchange 19T P. Partnership. General remarks ; important points on 419 Benefits received from and recognition by 420 Common en^rprise constitutes 420 Share in profit and loss when not 421 Effect of holding out one as 421 Trading and non-trading 421 Contract of effect on creditors 421 A provision in a copartnership agreement assigning to one of the partners the duty of conducting the financial settlement may not be construed as abrogating or dividing the gen- eral partnership authority, and giving to the one absolute and exclusive control over the finances of the firm. Such an intention must be clearly and distinctly expressed. A settle- ment made by other members of the firm with one indebted to it is valid and binding upon the firm 421 If fraud is established in an action to set aside the settlement, the comj)laining partnerisnot entitled to set the settlement aside, or to recover the debt which was discharged, or his proportion thereof; but to recover the damages sustained by him, which can only be the diminution of his partnership share produced by collusive waste of the firm assets, and this ascertained by a partnership accounting; he has a right to be re-instated in a position as though the debt was hon- estly discharged, and he received his share after paying the firm debts 422 Liabilities of retiring partner 422 Authority of one partner 427" Share of profits by agreement with one member of a firm as to his profits, does not make the party a member of the firm 42T Effect of will on partnership , 429 Creditors cannot hold one not a partner who agrees with a partner of a firm to indemnify such partner against firm debts 432 Who entitled to liquidate 435 Accounts between partners, interest not allowed 16 INDEX. 581 PAQB. Patents. Protection dependent on obtaining letters patent 439 Limitation of action for infringement on 440 Invention or discovery required ; novelty 441 Invention 444 Utility 447 Anticipation 447 Infringement 450 Combinations r « 450 Damages 452 Pbincipaii. When bound by false representations of agent 20 " liable for investment by agent 21 Not bound by outside statements of agent 26 Peddlers. Bight to sell without license 311 R. Beal Estate. Aliens, when and how they can hold 454 Mortgage and dower in Alien's land 454 When deed to be treated as mortgage 454 Authority of real estate agent; none to make binding contract of sale. 22 Held in name of husband and wife; survivor takes title to the whole... 340 Receivers. Authority confined to the state appointing 456 Duties of. 456 Property sold by, when subject to liability 456 Liability of to suit 457 Power to make contracts 457 Duty to defend suit 459 Reparian Rights. Ownership; title to soil underwater; fresh water streams; navigable and non-navigable streams; railroad companies, etc 459 Alluvion 462 Eight to ice 463 Accretions ; 463 Use of water 463 Boundaries of land 297 BoADS AND Ways. Highways ; prescription ; what constitutes evidence of acceptance by public; right of owner to timber, etc 464 Obstructions 464 Liability for injuries 465 Duties of municipal corporations; liabilities of. 465 s. Sales. To overcome the presumptive of honest motives where a fair considera- tion has been paid by the purchaser, strong evidence of fraud is required 466 Conditional or installment sales 467 Bale of futures 468^69 Dealing in futures 468-469 Suit on sale in name of assignee 470 582 INDEX. PAoa. A pledge is not delivery as in a sale 470 Wrongful sale by party in possession 471 Seller (vendor) may sue purchaser (vendee) when the latter refuses to accept goods before shipment 471 Shipping. Variation between charter-party and bill of lading; charter-party con- trols : 472 Demurrage: variant terms in charier-party and bill of lading; expla- nation by parol 474 Delivery at wharf ; whether ship is bound to deliver at her own dock, or may go elsewhere in port 476 Bottomry or disbursement draft ; nature of the lien ; lien of this kind dependent on three conditions 477 Statements. Of agents when not binding principal 26 " no proof of authority 24 " how far conclusive 24 T. Telegraph Messages. Liability of company for errors in transmission; requirements of com- pany 480 Failure to deliver message; damages 481 Delay " " " 482 Trade-Marks. Some pointd'considered 484 Trade Unions and Contracts. Trade combinations and conspiracies; a remedy 485 JBestraint of trade, contracts affecting ; subject reviewed exhaust- ively 485-495 Traveling Salesmen. Bight to sell without license , 311 Trusts and Trustees. A trustee (director of a company) cannot, as such, purchase property in which he has an individual interest. The law lays down a whole- some rule forbidding such transactions, iiTCspective of their fair- ness 496 A trustee is liable for the loss of funds caused by the misuse of his co- trustee, where be had the means to prevent or protest against the improper use of the funds. Negligent acts by omission are charge- able in a less degree to those of the wrong-doing trustee 496 Trustees liable for signing a report of corporation, knowing the same to be untrue. A recovery can be had by a creditor from the trust- ees on such a state of facts 497 Increased value of securities in hands of trustees for life beneficiary (or tenant) of one inures to the benefit of the ultimate owner of the same 498 Trustees under a will are obliged to complete the contracts of their testators 498 As a general rule the.v cannot invest in mortgages on real estate situ- ated in another state from wh^ch they reside and derive their au- thority 498 INDEX. 583 Trustees entitled to deduct from the income of beneficiaries or life ten- ants the cost of running the business under directions given in the will of their testator 498 Fiduciary accounts ; payments to 499 Removal of, for cause 500 u. Usury. Bonus over and above the legal interest taken 503 Usury cannot be set up as a defense in an action upon an independent obligation 506 V. Vendor and Purchaser. Executors empowered to sell real estate are obliged to perform their contract 509 Where a widow's dower is an incumbrance, the purchaser may deduct from the contract price the gross cash value of the dower right 509 Where the widow joins in the sale, without reserving her dower right, she must look to the proceeds of the sale as a substitute for her dower right 509 When purchaser not liable for interest on unpaid contract price... 509-510 When vendor liable to pay for use and occupation of premises contracted to be sold 509-510 W. Warranty. A substantial deviation fatal where a compliance is a condition of the contract 510 What necessary to constitute 510 Caveat emptor. 511 Implied 512 " To give satisfactioa " 512 Wills. What law governs..........^ 513 Capacity to make 513 Undue influence 514 Intoxication 515 What competent evidence of undue influence 516 Powers of sale under m............. 516 KF 88»* .5 051 Author Vol. Olmsted, Edwaxds Keeler Title Copy Precedents, legal and commercial a Taook 1 of rof Of cncG . ... Date Borrower's Name iiillll; Hill ■MM^ iiiflMHiiiiHIiUilti' riitiUnHUkUiii