the plaintiff, without finding that the defendant knew the falsity of the statement which was the basis of the action, yet the court expressly held that the action to recover back, would lie, under the circumstances.12

In an early English case, "the late husband of the defendant had effected a policy on his life in the Argus Assurance Company. He died in October, 1840, leaving the defendant his executrix, not having (by mistake), paid the quarterly premium on the policy, which became due on the 3d of September, preceding. In November, the ordinary of the office informed two of the directors that the policy had lapsed by reason of the non-payment of the premium, and one of them wrote upon the policy the word "lapsed." In February, 1841, the defendant, as executrix, applied at the office for, and received from the same, payments of the sum secured on the policy. The directors had forgotten that the policy had lapsed. The action was sustained.13

It appears that in all these cases stated at length above, the full amount was recovered.

Oshkosh. Wis.

FRANK C. HADDOCK,

12 Hartford Live Stock Ins. Co. v. Matthews, 102 Mas`. 221.

13 Kelly v. Solari, 9 Mees. & W. 54; See also, N. Y. Ins. Co. v. Statham, 93 U. S. 24; Dermo't v. Jones, 2 Wall. 1; Pearson v. Lord, 6 Mass. 81; Stuart v. Sears, 119 id. 143; Welch v. Goodwin, 123 Id. 71; Mer. Ins. Co. v. Abbott, 131 id. 397.

1. Railroad Companies-Mortgage-Lien-Contract -Conflict of Laws.-Where half of the purchase price of railroad cars had been paid, and notes given for the balance, and the cars removed from one State to another, and placed upon the road of the company under its contract with a party to construct and equip certain parts of the road at a fixed price, a contract (that on the failure of the purchaser to pay the deferred payments the company should have the right to resume possession of the property, and sell it for the payment of the debt, and, in event it failed to pay the purchaser, was still to be liable, and that no right or title to the cars should pass to the purchaser until the whole was paid) made by the builder of the cars with the agent of the railroad contractor is in the nature of a mortgage,and creates a lien upon the cars as between the parties; but the title to the cars passes to the agent of the contractor, and the lien of the builder is not good against innocent purchasers and creditors, unless the contract is filed for record according to the laws of the State where the cars are taken.

2.. Record.-The lien of the builder for the purchase price of cars made in another State, and brought into the State of Kentucky, is governed by the laws of Kentucky, and is good against creditors and innocent purchasers only when recorded as required by the law of that State.

*S. C., 1 Southwestern Reporter, 414.

Appeal from Fleming circuit court.

Lincoln & Stephens and O'Hara & Bryan, for appellant, Barney & Smith Manuf'g Co.; Wm. J. Hendrick, for appellee, Theodore Hart, Receiver, etc.

PRYOR, C. S., delivered the opinion of the

court.

In the month of March, in the year 1877, appellant, the Barney & Smith Manufacturing Company, doing business in the state of Ohio, entered into the contract with one A. P. Berthoud to construct for him the two cars in controversy, being at the price of $2,400 payable in installments. The sum of $1,400 was paid when the contract was made, and Berthoud's note executed for the balance, which seems, or the greater part of it, never to have been paid. By the terms of the contract it was agreed that, on the failure of the purchaser (Berthoud) to pay the deferred installments, the company (now appellant) should have the right to resume possession of the property, and sell it for the payment of the debt; and, in the event it failed to pay, Berthoud was still liable to the appellant therefor. It was also stipulated that no right or title to the cars should pass from or vest in Berthoud until all the purchase money was paid, and on full payment, and not before, the title to the cars, and the absolute property and possession thereof, should vest in Berthoud, the party of the second part.

The cars were constructed for the purpose of being used on the Covington, Flemingsburg & Pound Gap Railroad, in the state of Kentucky; and when finished by the company were delivered to Berthoud, and by him brought to Kentucky, and placed upon and used on that railroad. A man by the name of Quintard had contracted with this Pound Gap Railroad Company to construct and equip several miles of the road, and in the settlement of the accounts of Quintard, the value of these cars were charged to him as a part of the equipment of said road, and credited to Berthoud.

A short time after the cars had been placed on the road, many of the laborers and contractors who had worked on this road in its construction, and who had not been paid by Quintard for their services, instituted actions against him and the railroad company in the Fleming circuit court. and obtained general attachments, that were levied on the property of the company and Quintard, including the cars in controversy; the road being then operated by Berthoud, who was, as the proof clearly indicates, the mere agent of Quintard, the original contractor. The actions against Quintard were consolidated, and proceeded to trial under the name of Mason. Shannahan & Co. v. Covington, Flemingsburg & Pound Gap Railroad Company and Quintard. A receiver was appointed, who afterwards resigned, and another substituted, and, by an agreement with each, Berthoud was permitted to operate the road, with the cars upon it, as if no suit had been instituted; Berthoud agreeing that on the first of

March, 1879, he would deliver up to the receiver the rolling stock, loose materials, personalty, and all the property now on the track of said railroad, and belonging to the same, without any further notice. Berthoud was in fact operating the road under the direction of the receiver from the time the court placed the road in his possession.

After the institution of the various actions in the Fleming circuit court, the appellant (manufacturing company) instituted an action in the United States circuit court for the district of Kentucky against Berthoud, to recover from him the possession of the cars, under its contract. The marshal, by a process from that court, seized the two cars, and, before removing them they were taken from him by the receiver. Appellant's action against Berthoud in the district court was still prosecuted, and, Berthoud failing to appear, a judgment by default was entered, and the marshal again seized the cars; and, when this was done, the receiver in the Fleming circuit court instituted his action as such against the marshal, and regained the possession. When the action in the Fleming circuit court by the receiver against the marshal was called, the appellant, (manufacturing company) by its petition, asked to be made a defendant in lieu of the marshal, which was done, aud then, by motion had the case transferred to the United States circuit court, at Covington, for trial.

The receiver, by an order of the Fleming circuit court, was directed to prosecute the action, and when the case was transferred to the district court such party submitted to the jurisdiction of that court; and, the law and facts having been submitted to the judge, a judgment was rendered adjudging that the receiver was entitled to the cars, and gave costs against the appellant. In that action, transferred from the Fleming circuit court to the United States district court, the appellant filed an answer setting up title by reason of its judgment by default in that court against Berthoud; and, by an amended answer, set up title in its own right against Berthoud, and all others claiming to be the original and absolute owners of the property. On the entire pleadings an is-ue was raised, and the title of the appellant brought directly in question, and the judgment rendered as heretofore stated.

After that judgment the appellant, conceiving that its only effect was to restore the possession of the cars to the receiver of the Fleming circuit court, on the ground that he had been unlawfully deprived of them by the marshal, filed its petition in the consolidated attachment suits' pending in the Fleming circuit court, and asked to have the cars sold, and the proceeds of sale applied to the payment of its unsatisfied debt. In this assertion of right the appellant is met-First, with the judgment rendered in the district court in bar of any further claim of title; and, secondly, that, under the contract between the appellant and Berthoud, the title as to creditors and purchasers

passed from the appellant, because the contract, being in the nature of a mortgage, had never been recorded.

Whether the judicial determination of the United States circuit court was in favor of the receiver on the question of title, or merely restored to him the possession of the property, the state court having first obtained jurisdiction, we shall not stop to inquire, as, in our opinion, the title to the property passed to the purchaser, Berthoud, the lien retained by the contract on the part of the manufacturing company being in the nature of a chattel mortgage. The statute of this state provides that "no deed of trust or mortgage, conveying a legal or equitable title, to real or personal estate, shall be valid against a purchaser for a valuable consideration, without notice thereof, or against creditors, until such deed shall be acknowledged or proved according to law, and lodged for record." Section 10, c. 24, Gen. St.

In this case $1,400 of the purchase money was paid to to the appellant by Berthoud, his note executed for the remainder, and the cars delivered to and brought from the State of Ohio to the state of Kentucky by him, and placed upon the road of the company under the contract with Quintard to construct and equip certain parts of the road at a fixed price. That it was a sale of the cars to Berthoud is manifest, and the reservation of title in the vendor was simply to create a lien by the appellant as against any purchaser or creditor of the vendee. It was a lien for the purchase price, or a part of the purchase money, that could be enforced between the parties, but did not affect the right of creditors unless recorded, as provided by the statute. All the appellant could have done under the contract was to regain the possession, and sell the property to satisfy the unsatisfied claim. The vendee had agreed that the vendor should sell instead of the chancellor, and but for this provision of the contract a court of equity would have been called on to enforce the lien. Appellant has made its vendee the ostensible owner, had received more than half the purchase money, and when the cars had been transferred to an adjoining state, and placed upon the track of the railroad company, the appellant, with this evidence of the lien in its pocket only, is now insisting that no title ever passed to its vendee, or that it has a prior equity against the claims of creditors. To so hold would be to disregard the the plain provisions of the statute, enacted to prevent fraud, and protect the rights of creditors and purchasers; and, as said by this court in the case of Greer v. Church, 13 Bush, 430, the title in such cases will be treated as being where the nature of the transaction requirer it should be. The cases of Vaughn v. Hopson, 10 Bush, 337, and Greer v. Church, ubi supra, settle this question..

In the case of Heryford v. Davis, 102 U. S. 235, on error to the circuit court of the United States for the western district of Missouri, the manufacturer of cars agreed to loan to B., for hire,

certain cars, to be used on its road, and at the same time took notes from B. for the value of the cars, with certain bonds of the company as collateral security for the payment of the notes; the latter to have the privilege, at any time during the four months, (the period of hiring,) to purchase the cars, on the payment of the notes; and that, until such payment is made in full, B. shall have no right, title, claim, or interest in the cars, except as to their use for hire. In default of payment, A. was to sell the cars for so much as might be needed to pay the amount due on the notes, and the balance, if any, to be paid over to B.; and, when all the notes are paid, A. agreed to give B. good and sufficient bill of sale. The cars were delivered to B. without the contract having been recorded, and C., obtaining a judgment against B., levied on the cars. The supreme court held that the title to the cars passed to B., and that, to protect them from seizure and sale by C., the contracts should have been recorded as provided by the laws of Missouri.

A similar decision was also rendered by the supreme court in the case of Hervey v. R. I. Locomotive-works, on error to the circuit court for the southern district of Missouri, reported in 93 U. S. 664.

It is insisted that Berthoud was not indebted to any of the creditors of Quintard, or the railroad company, and, the title being in him, his property should not be subjected to pay another's debt. The question is not raised by Berthoud, and, during the entire litigation, he has made no claim to these cars, or interposed, by any pleading in the Fleming circuit court, to show title in himself, or that he had any interest in the litigation. His testimony might have shed some light on the subject, and, although anxious to prevent creditors from making their debts by the sale of the cars, he fails to testify as to title in himself, or to speak at all with reference to the claims of others. The suits had been pending in the state courts since March, 1877, by these creditors claiming that the cars belonged to Quintard or the railway company. He made no claim in his own right, but undertook to operate the road as the agent of the receiver. In February, 1878, long before the appellant sued Berthoud in the United States circuit court, as the agent of Quintard or for himself, he made out an account against the railroad company for these cars, that was allowed. All the rolling stock was charged to the company, or transferred to it, and not until February, 1879, was the claim of the appellant asserted against Berthoud. Quintard had agreed to construct and equip this road. The cars and rolling stock was upon it, being used for purposes of transportation. No claim was set up all this while by Berthoud. That he was the agent of Quintard, or connected with him in the contract, is evident, and equally as manifest that they charged the railway company with these cars long before any claim was set up by the appallant. So, whether the cars

belonged to the railway company or to Quintard is immeterial. If to the railroad, it was an innocent purchaser; if to Quintard, his creditors can subject them. As to whether or not the cars were liable to the claims of attaching creditors, as against the lien of the appellant, must be determined by the law of this state. While the lien may be valid by the laws of Ohio against creditors and purchasers, it has no such effect in this state. Green v. Van Buskirk, 5 Wall. 310. Judgment affirmed.

NOTE.-A sale may undoubtedly be made upon condition that the title shall not pass until the purchase money has been paid. And an agreement of that character is valid, although the goods are not in existence when the contract is made.2 And in cases of this character, the vendor is protected against attaching creditors.3 The protection of the vendor, in such a case, is put, by Williams, C. J., in a Connecticut case, upon the ground that when the vendee comes into possession of property known to belong to another man, it is incumbent upon persons disposed to deal with it, to ascertain its status. "Whether, therefore, the vendee had borrowed it, or bought it, or hired it, is a matter of inquiry, and ought to be ascertained by him who proposes to trust his property on the faith of this appearance."

The vendor, however, must, as against third persons, show that the vendee has not complied with the conditions of the sale. Upon this condition the secret lien of the vendor is good against the creditors of the vendee. As to bona fide purchasers for a valuable consideration without notice, the principle is different. The rule is well established and without exception, that when it becomes necessary that one of two innocent parties shall suffer a loss, it must fall upon him who by his act rendered the loss possible.

There can be no doubt, that when personal property is transferred from one State to another, its liability to seizure and sale must be wholly determined by the laws of the State to which it has been carried. It might well happen, therefore, that when the property has been so removed, the contract, which was in Ohio a conditional sale, might, in Kentucky, because of its registration laws, and their operation on secret liens, be held an absolute sale-but with a chattel mortgage attached, and therefore, without the prescribed registration, invalid against creditors or subsequent purchasers.-[ED. CENT. L. J.]

1 Benjamin on Sales, 3d ed., p. 286, note; and cases there cited.

2 Benner v. Puffer, 114 Mass. 376.

3 Strong v. Taylor, 2 Hill, 326; Hussey v. Thornton, 4 Mass. 405; Bennett v. Pritchard, 2 Pick. 512; Vincent v Cornell, 13 Fick. 294; Fairbanks v, Phelps, 22 Pick. 355; Hart v. Carpenter, 24 Conn. 427.

4 Forbes v. Marsh, 15 Conn. 384.

5 Leighton v. Stevens, 19 Me. 54; Leigh v. Mobile, etc.. Co., 58 Ala. 165; Van Duzor v. Allen, 90 Ill. 499.

6 Green v. Van Buskirk. 5 Wall. (72 U. S,) 310.

1. AGENCY.-Agent's Authority- Warranty—Evidence-Sufficiency-Sale.-The fact that the vendor of a steam-boiler, through his agent, furnishes the vendee, at the time of the sale, with his pamphlet descriptive of such boilers, in which durability is advertised as an essential quality, is evidence from which the agent's authority to warrant durability may be inferred. From evidence that, after the sale of a boiler by the vendor's agent, but before payment, the vendee claimed the agent warranted its durability, which claim the vendor neither admitted nor denied, but received the purchase price, it is competent to find such a warranty. Smilie v. Hobbs, S. C. N. H., July 30, 1886; 5 Atl. Rep., 711.

2. ASSIGNMENT.-Partial Assignment of Debt may be Enforced in Equity-Not in Fraud of Insolvent Law. A bill in equity may be maintained to enforce the partial assignment of a debt. A. had made a contract to erect a school-house for the city of N., but became insolvent, and, in order to secure funds to enable him to complete his contract, made an assignment to C. of $600, which was a part of the sum to be due to him from the city of N. upon the completion of the school-house, and C. thereupon advanced him certain sums of money. Held, that the assignment was not in fraud of the insolvent law, and could be enforced in equity. James v. City of Newton, S. J. Ct. Mass., Sept. 8, 1886; 8 N. East. Rep., 122.

3. ASSIGNMENT FOR BENEFIT OF CREDITORS.Goods Held to Secure Advances made by Insolvent-Right of Assignee-Death of one PartnerPower of Survivor to Execute Deed of Assignment-Improperly Uniting Actions-Recovery of Insolvent's Goods-Settlement and Distribution of Insolvent Estate.-The assignee of an insolvent warehouseman properly has the possession of goods previously consigned to the warehouseman, to secure advances made to the consignor. Surviving partner has the power of executing a deed of assignment for the benefit of the firm's creditors. An action by an assignee to recover the possession of personal property cannot be united in an action to settle and distribute the estate of his assignor. Atchison v. Jones, Ct. of App. Ky., Sept. 11, 1886; 1 S. W. Rep., 406.

4. CONFLICT OF LAWS.-Insolvency-Jurisdiction— Discharge in Another State.-A defendant's discharge under the insolvency law of Massachusetts, is no bar to a suit in New Hampshire, on a contract made in that State before the insolvency, when the plaintiff has not resided there since the insolvency

proceedings were begun, and has not submitted to the jurisdiction of the insolvency court. Norris v. Atkinson, S. C. N. H., July 30, 1886; 5 Atl. Rep., 710.

5. CONSTITUTIONAL LAW.-State Quarantine Laws - Commercial Relations-Congressional Interference-Acts of Congress-Fee for Inspection-Preference of Port.- The system of quarantine laws established by statutes of Louisiana is a rightful exercise of the police power for the protection of health which is not forbidden by the Constitution of the United States. While some of the rules of that system may amount to regulations of commerce with foreign nations or among the States, though not so designed, they belong to that class which the States may establish until Congress acts in the matter by covering the same ground or forbidding State laws. Congress, so far from doing either of these things, has, by the Act of 1799, c. 53, Revised Statutes, and previous laws, and by the recent Act of 1878, 20 U. S. Sts. 37, adopted the laws of the States on that subject, and forbidden all interference with their enforcement. The requirement that each vessel passing a quarantine station shall pay a fee fixed by the statute for examination as to her sanitary condition, and the ports from which she came, is a part of all quarantine systems, and is a compensation for services rendered to the vessel, and is not a tax within the meaning of the Constitution concerning tonnage tax imposed by the States. Nor is it liable to constitutional objection as giving a preference for a That port of one State over those of another. section (nine) of the first article of the Constitution is a restraint upon powers of the general government and not of the States, and can have no application to the quarantine laws of Louisiana. Morgan, etc. Co. v. Board of Health, S. C. U. S., May 10, 1886; 22 Rep., 417.

6. CORPORATIONS.-Action by Stockholders, when Entertained-Equity.-A court of equity will not entertain an action by stockholders against the directors of the corporation and others, for the purpose of compelling the defendants to an accounting, obtaining the appointment of a receiver, and to restrain the collection of an assessment on the capital stock, on the ground of conspiracy, fraud and embezzlement by the defendants, if it appears that the plaintiffs, at the time they, in writing, requested the president and directors to institute the action on behalf of the stockholders (which request was refused), were aware that they had no cause of action against said directors, at least, and that the real object which they had in view in instituting the action was not stated to the directors; for in such case it is clear that the request to the directors; for in such case it is clear that the request to the directors to institute the action was not an earnest, but a simulated one. Bacon v. Irvine, S. C. Cal., July 27, 1886; 11 Pac. Rep., 646.

7.

Execution of Instruments by-Authority of Officers-Mortgages-Foreclosure-Attorneys' Fees. Where instruments, purporting to be executed by a corporation, have affixed to them the corporate seal, and are proved to be signed by the proper officers, such officers must be presumed not to have exceeded their authority, and the burden to prove the contrary is on the party disputing the due execution of the instruments. Where facts and circumstances surrounding the execution of instruments by the officers of corporations show the existence of proper resolutions of authoriza

8.

tion, and support the presumption of their authoritative execution as shown by the corporate seal being thereto affixed, as well as the proved signatures of the proper officers, the fact that such resolutions do not happen to appear in the proper book of the corporation will not be held absolutely to disprove their existence, and make null and void such instruments. Where the resolutions of a corporation, authorizing loans and mortgages, did not give authority to have attorneys' fees secured in the latter, a court in actions for the foreclosure of the mortgages properly declines to allow any. Schallard v. Eel River, etc. Co., S. C. Cal., July 13, 1886; 11 Pac. Rep., 590.

Franchises-Power to Extend Operations -Taxation-Exemption by Charter Manufacturing Company.-An act of the legislature giving a corporation power to extend its operations does not change its character or attributes, and therefore is not a new franchise. A corporation taxed, under the New Jersey law of 1884, for State purposes, is not liable for the payment of the same, upon showing exemption by its charter, and that it is a manufacturing company. State v. Society, etc., N. J. Ct. Chancery, Sept. 24, 1886; 5 Atl. Rep., 724.

9. CORPORATIONS-Municipal Corporations-Lien for Street Improvements-Complaint― Necessary Averments-Apportionment Between Lot Owners -Constitutional Law-Rules of Pleading-Legislature Assuming Judicial Functions.-A petition seeking a lien for street improvements is defective which only alleges that the ordinance authorizing the improvements was duly passed by the general council. This is a mere legal conclusion, and all the facts entitling the contractor to his lien must be alleged and proven. A petition seeking a lien for street improvements must contain an allegation that the apportionment between the lot owners was made by the council as the law requires. The act of legislature of Kentucky of March 24, 1882, providing that all courts of Jefferson county shall take judicial notice of the passage, approval, contents, and publication of each ordinance of the city, held invalid, as making a petition to depend upon the legislative instead of the judicial judgment. Johnson v. Ferrell, Ct. App. Ky. Sept. 14, 1886; 1 S. W. Rep. 412.

10.

-. Stockholders - Liability of.-A statute provided that members of every incorporated manufacturing company should be liable for all debts of the corporation until the whole capital stock was paid in and certain certificates filed. Held, that this liability extended to all persons who were stockholders when the debt was contracted, and also to all persons who were stockholders when the liability was enforced by legal process, but not to persons becoming stockholders after the debt was contracted, and ceasing to be stockholders before the liability was enforced. Another statute gave to a stockholder paying such debt of the corporation an action for contribution against the stockholders "originally liable" with him for the debt. Held, that all persons who were stockholders when the debt was contracted, and also all persons who were stockholders when the liability for the debt was enforced, could be made to contribute. Executors and administrators may effectively plead the special statute of limitations of three years, in their favor, to an action against them for such contribution. Trustees holding stock in trust are liable to contribute from the

trust funds in their hands. Married women are also liable to contribute, the liability being statutory and incident to the ownership of stock. No record is required to perfect the transfer of stock, unless such record is required by the charter or by-laws of the corporation. When outstanding notes of a corporation were paid by the proceeds of bonds issued by the corporation to others than the note holders. Held, that the debt represented by the bonds was contracted as and when the bonds were issued. Sayles v. Bates, S. C. R. I. July 10, 1886; 2 N. Eng. Rep. 633.

11. DEED-Exception and Reservation From—Property Conveyed by Inference.-As a deed of property carries with it that without which the property granted would be useless in the hands of the grantee, so, also, an exception or reservation in a deed works in favor of the grantor. Green Bay, etc. Co. v. Hewitt, S. C. Wis. Sept. 21, 1886; 29 N. W. Rep. 237.

12. EMINENT DOMAIN-Action of Trespass-Jury of View-Waiver-Former Recovery-Timber Act of 1824.-When one invested with the right of eminent domain enters upon and appropriates the land of another, without complying with an existing statutory requirement to make compensation or tender a bond, the land owner may recover in an action of trespass such damages for the unlawful entry and damages to the property as have been suffered to the time of bringing suit, or bond filed and approved in the event of such being done before suit brought. A land-owner whose land has been unlawfully entered upon by or under the right of eminent domain, may either proceed by action of trespass for the unlawful entry, or may waive his right to so proceed, and submit his entire case to the jury of view, but if he does the latter he is bound by it. A gas and water company, invested with the right to take property under a power of eminent domain, entered upon land without first making compensation or tendering a bond; after being in possession it cut timber; later a bond was filed by the company; later an action of trespass for the unlawful entry was commenced against the company. Held, that it was proper to show on the trial of such action that on the hearing before the viewers, the plaintiff has submitted the question of the value of the timber cut, and asked that the damages sustained therefor, be allowed, and that the jury of view had so allowed. When the cutting of timber is a mere incident to the taking of land for a public use the timber act of 1824 does not apply. Bethlehem, etc. Co. v. Yoder, S. C. Penn. March 29, 1886; 6 East. Rep. 838.

13. EQUITY-Accident and Mistake - Reforming Deed-Trust.-Where lands were intended to be conveyed to one in trust to another, but, by mistake, the intended trustee was given an absolute deed, and execution upon a judgment against him was issued, and the land in question was advertised to be sold to satisfy the execution, an action brought by the intended cestui que trust to reform the deed to the intended trustee so as to show the former's title will be sustained. Sullivan v. Bruhling, S. C. Wis. Sept. 21, 1886; 29 N. W. Rep. 211.