We are not prepared to differ with counsel when he maintains that, if the entire equitable interest was held by Wich, he might, if there were no other legal obstacles, recover on the policy, on the hypothesis that it is unnecessary for him to hold the legal title in order to have an insurable interest to the extent of the value of the property. A very great difficulty arises from the absence of evidence tending to show that the liability of the other three on the notes was contingent on the completion of the agreement, and the payment by them of what was advanced by Wich when the property was bought. The notes are still held by McCandless, and the parties can be made to pay. What their rights may be as between themselves and Wich, and whether, on the surrender, he made an agreement which would entitle them to protection by him against the paper, is not made clear by the testimony. In any event, there was no novation whereby these three parties would be released, and Wich alone holden on the notes. The absence of the legal title would be no obstacle to his recovery. If the other three persons could be adjudged the holders of what may be termed a "dry trust," this would not lessen his insurable interest. The difficulty springs from the circumstance that when these four parties entered into an agreement which virtually made them copartners, and bought the property, and executed their notes for the purchase price, they became invested with both a legal and an equitable interest, which entirely destroys the claim that Wich's title was an equitable one to the whole property. This statement is based on the theory that Wich failed to prove any such agreement between himself and his copartners as would leave him the holder of the entire equitable title. If he is able to satisfy the jury that the copartners made an agreement sufficiently specific, exact, and certain in its terms as to exclude the legal inferences which must be necessarily drawn from the facts of the purchase and the execution of the commercial paper, which was subsequently carried out by the transfer, in May, by the three to Wich, he may possibly bring his case within the doctrine concerning the insurability of equitable titles. The case in this particular must be submitted to the jury, with apt instructions on this subject; otherwise the general verdict cannot be accepted as conclusive on this question.

There are two other matters which it may not be inexpedient to comment on somewhat more extensively than was deemed necessary by the court when the original opinion was prepared. The appellant places much reliance on the transfer, in May, by Voght, Ells, and Hess to Wich, as a breach of the condition in the policy against transfers. good many states do not regard transfers between partners as a breach of this condition in a policy. Insurance Co. v. Vaughan, 88 Va. 832, 14 S. E. 754; Insurance Co. v. Cov.39p.no.6-38

A

hen, 47 Tex. 407; Association v. Holberg, 64 Miss. 51, 8 South. 175; West v. Insurance Co., 27 Ohio St. 1; Pierce v. Insurance Co., 50 N. H. 297; Dermani v. Insurance Co., 26 La. Ann. 69; Burnett v. Insurance Co., 46 Ala. 11; Powers v. Insurance Co., 136 Mass. 108; Hoffman v. Insurance Co., 32 N. Y. 405. We should therefore be inclined to hold the deed executed in May not a breach of that condition. The case would thus turn on proof respecting the original agreement. When this matter is thus brought into the forefront of the case, and the jury are aptly instructed respecting it, the question may be definitely settled by their verdict.

The other difficulty respects the valuation of the property. In turn, this again hinges on another matter of fact, on which there is much conflict in the evidence. The company contends that the policy is void because of the overvaluation of the property. The witnesses were not in harmony on this matter of value. It is not of necessity true that the purchase price of real or personal property is of much weight in the settlement of such a dispute. The circumstances of the seller and the purchaser, and the wants or necessities of either, enter largely into the question of price. The purchasers who were called as experts and the witnesses produced by Wich were not agreed as to the value of either the buildings or the property. The special verdict of the jury does not enable us to decide between them, or to harmonize the differences in the evidence. Many special questions were submitted to the jury, and their answers would lead us to question the estimates of the owners. We do not care to express any pronounced opinion concerning it, since another jury will be called on to settle this fact. The importance of this may be wholly destroyed if the subsequent jury should decide one other matter in the plaintiffs' favor. Before the present policy was issued by the Sun Fire Office the usual application for insurance was presented to Wich for his signature. The case discloses the fact of the preparation of two applications. On this and the settlement of the facts respecting it, the whole matter of truthful or over valuation hinges. The circumstances surrounding the preparation of the application are irreconcilable, and this matter must be determined by the jury. The instruction with reference to it should be direct and specific. Wich contends that the application which was pleaded by the insurance company, and offered in evidence, was not his. His testimony tends to show that he signed the first application, which was followed by the delivery of the present policy, with probably some others. Likewise, the presentation to him of another application thereafter, and his execution of it at the request of the agent, without any knowledge whatever of its contents. The company's testimony tends to show a refusal to issue a policy on the first application, and

the preparation of the second in Wich's presence, and on the basis of information furnished by him, followed by his subsequent signature. Of course, if the jury finds these facts with the company, it would end the controversy respecting the matter of the valuation, for this would demonstrate the untruthful and misleading character of Wich's statements regarding it. A party must place a fair and reasonably truthful valuation on the property which he seeks to insure when the statements made in his application are agreed to be warranties as between him and the company. A departure from thus rule will make the contract of insurance void. We make our statements very general in this regard, so that they may not be unduly operative in the ensuing trial. We think what has been said sufficiently responds to counsel's contentions on the application for a rehearing, and will be sufficient to enable the trial court to dispose of the case without much trouble. We still conclude the judgment must be reversed, and the case remanded for a new trial.

(5 Colo. App. 432)

WALLACE et al. v. AXTELL.1 (Court of Appeals of Colorado. Jan. 14, 1895.) INSTRUCTIONS-BURDEN OF PROOF-PAYMENT OF

PLAINTIFF'S CLAIM.

1. A defendant who seeks to show that plaintiff's claim has been paid by the assignment to plaintiff of a claim against a third party has the burden of proof of showing acceptance of the assignment by plaintiff.

2. In an action to recover on a promissory note, and for rent due, the defendant filed a cross bill, claiming certain sums of plaintiff for goods sold him. On trial he introduced evidence to show that the goods were sold to a third party at plaintiff's suggestion, and that the latter had agreed to take the bill off defendant's hands. Held that, under such a conflict of the pleadings and the evidence, it was not error to instruct the jury relative to the law requiring guaranty contracts to be made in writing.

3. It is not error to charge the jury that the necessary facts must be established "to your satisfaction, by a preponderance of evidence."

Appeal from district court, Gunnison county.

Action by V. F. Axtell against M. E. Wallace and Alexander Fraser, copartners and doing business under the name of Wallace & Fraser. From a judgment for the plaintiff, defendants appeal. Affirmed.

Appellee (plaintiff below) brought suit against appellants to recover (1) upon a promissory note for $500, made by the defendants, payable to him, bearing date April 1, 1890, with interest at 1 per cent. per month from date until paid, upon which it was alleged only $30 had been paid; (2) for $200 rent due the plaintiff for use of store. The promissory note was lost. The defendants answered, admitting the making of and delivery of the note as alleged in the complaint, but alleged that they had fully paid

1 Rehearing denied February 11, 1895.

and settled the note with all the interest and charges; also admitted the renting of the store, but alleged full payment of rent, etc. The defendants also filed a cross cómplaint, alleging: "That plaintiff became and was indebted to defendants in the sum of $916.30 for goods, wares, and merchandise sold and delivered to plaintiff by defendants, at his instance and request, between the 1st day of May, 1890, and the 2d day of December, 1891, which said sum has not been paid except the sum of $778.05; and that there remains now due and unpaid to defendants the sum of $138.25. Wherefore defendants pray a judgment against plaintiff for the sum of $138.25, for their costs, and for such other relief as may seem proper to the court." The causes of action alleged in the complaint having been admitted, defendants, to make proof of payment and cross demand, undertook to establish the fact, not, as alleged in the cross complaint, of the sale and delivery to the plaintiff of the goods to the value of $916.30, or of any goods whatever, but that defendants had sold and delivered to Murphy & Doyle (a firm doing business in the vicinity) goods to that amount, for a payment of which the plaintiff had in some way became responsible. A trial was had to a jury, to which the court gave the following instructions, claimed by appellants to have been erroneous, and to which exceptions were saved: "It is claimed upon the part of the defendants that a portion of the payments alleged by them to have been made in discharge of said note, and in liquidation of said account for rent, consisted in assigning to said plaintiff their account against the firm of Murphy & Doyle, and, as a further evidence of such payment, it is also claimed upon the part of defendants that they executed and delivered to said plaintiff an order upon said firm to pay said plaintiff the amount of said account. It does not appear from the evidence, nor is it claimed by either of the parties to this action, that said account or the order has ever been paid by the said Murphy & Doyle to the said plaintiff; and the court therefore instructs you that although it may ap pear from the evidence that said account was assigned by said defendants to said plaintiff, or said order given said plaintiff, as by said defendants claimed, yet, before you would be warranted in finding that said assignment of said account or the giving of said order was a payment upon said note or upon said account for rent, it must affirmatively appear from the evidence that said assignment of said account or the taking of such order was by the said plaintiff accepted and taken in payment upon said note and the account for rent aforesaid; and you are further instructed that, as to a payment having been so made, the burden of proof rests with the defendants, and they must establish such payment to your satisfaction, by a preponderance of the evidence, before

you would be warranted in finding that the assignment of said account or the execution and delivery of said order was a payment, as by the defendants in this case claimed." "The court further instructs you that, under the pleadings and evidence in this case, any promise or statements on the part of the plaintiff to guaranty the payment of the account of Murphy & Doyle to the defendants in this case would not, as to said plaintiff, create any liability on said account; the law being that every special promise of a person to answer for a debt, default, or miscarriage of another must be in writing, subscribed by the party making such promise, before any liability is created thereby or any action can be maintained thereon." The jury found for the plaintiff in the sum of $833. Judgment upon the verdict, and an appeal to this court.

Sprigg Shackleford, D. T. Sapp, and Thos. C. Brown, for appellants. S. D. Crump and Alex. Gullett, for appellee.

If it was

REED, J. The original indebtedness upon both note and for rent was admitted by the pleading. The only issues to be determined by the jury were those of payment. The cross complaint and its claim for a balance of $138.25 seem, very properly, to have been abandoned, as there was no evidence tending to show that any goods were sold by the defendants to the plaintiff. intended to cover the sale of the goods to Murphy & Doyle, such sale must have been specially pleaded, as no recovery could have been had for the sale of goods to Murphy & Doyle under the allegation in the cross complaint. It is impossible from the course pursued upon the trial to determine upon what theory defendants sought to establish the claim against Murphy & Doyle as payment of the claim of plaintiff. If upon the theory that the goods were sold and delivered to Murphy & Doyle upon the order and credit of plaintiff as a guarantor, and the goods not having been delivered or charged to the plaintiff, there not having been an instrument in writing signed by the plaintiff, it was void, under the statute of frauds. The trial judge appears also to have been at a loss in regard to the theory of the defense, and gave the fourth instruction to cover the case if plaintiff was claimed to be a guarantor. Complaint is made of this instruction. It is contended in argument that it was misleading; that the court was misled as to the issues being tried; "that there was no claim made by the pleadings; that there was a guaranty," which was true, as the pleadings failed in any way to mention the Murphy & Doyle indebtedness; that "there was no argument by counsel with reference to a guaranty; not a scintilla of evidence of guaranty. What induced the trial court to give such an instruction we are unable to guess." It was probably owing to the first

testimony offered, that of appellant Fraser, -"that plaintiff had induced the firm of Wallace & Fraser to trade with Murphy & Doyle, and had agreed to take the bill off the hands of defendants at any time." This would seem to have been relied upon as a guaranty. If not, I am in the same mental situation counsel think the trial court was in. I really do not know what issues were being tried.

The claim against Murphy & Doyle was pleaded and treated by defendants as the debt of appellee, although the goods were sold and delivered to Murphy & Doyle, and charged to them. Fraser testified that appellee, in advance, induced the sales by agreeing to take the bill off their hands at any time. This was probably "what induced the trial court to give such instruction" (No. 4), although the attempt to establish a guaranty seems to have been abandoned, and very properly, by counsel, as (1) it was void, under the statute of frauds; (2) it could not be admitted under the plea of payment, which was the only plea; it must, to have been admissible, have been pleaded as a set-off or counterclaim. After Fraser's evidence, the instruction was properly given, and it is not amenable to the criticism indulged in by counsel in regard to it.

Subsequently, defendants by their evidence attempted to establish a novation or substitution, by which the note and rent of appellants was paid by the debt of Murphy & Doyle; but an examination of the evidence will show that it fell far short of the legal requirements. What was apparently attempted to be proved was a new contract substituted for the old, whereby the debts from appellants were discharged, and the debt of Murphy & Doyle substituted: "A novation takes place by the intervention of a new debtor, where another person becomes debtor in my stead, and is accepted by the creditor, who discharges me from the original debt." Pothier, Oblig. No. 546. "When several persons are mutually indebted to each other, they may, by agreement amongst themselves, vary their respective liabilities, and substitute one debt in the place of another. By a mutual contract and arrangement between all the parties interested,-creditor, debtor, and payee,-the original debts are extinguished, and the annihilation of those debts is a sufficient consideration for the promise to pay the new debt." 2 Add. Cont. 1226; Tatlock v. Harris, 3 Term R. 180; Fairlie v. Denton, 8 Barn. & C. 400; Guichard v. Brande, 57 Wis. 534, 15 N. W. 764. To establish the claim against Murphy & Doyle, as payment of the claims of plaintiff, it was necessary to show the participation in and joint action of the three parties, the plaintiff, the defendants, and Murphy & Doyle, and that, by the mutual contract of all, the plaintiff took the claim against Murphy & Doyle, in the place of those against appellants, released the latter,

and canceled the obligations, and that Murphy & Doyle agreed to pay appellee instead of appellants. It will readily be seen that no such transaction was proved; hence that there was no payment, but that appellants, if it could have been legally established, had only a claim against the plaintiff that could have been made available as a set-off or counterclaim.

Objections are ably and elaborately urged in argument to the third instruction. The error assigned is, "that the court erred in charging the jury in the third instruction, the same being misleading." In argument, counsel say: "While we think the third instruction contained the correct legal proposition, it was so unfortunately worded as to mislead the jury," etc. In the supplemental argument it is discussed at great length; the discussion being confined to the closing paragraph, which is: "The burden of proof rests with the defendants, and they must establish such payment to your satisfaction, by a preponderance of the evidence, before you would be warranted in finding that the assignment of said, account, or the execution and delivery of said order, was a payment, as by the defendants in this case claimed." The criticism is too technical, refined, and subtle for me to grasp it. It is contended that the court should not have said "to your satisfaction." It might possibly be open to the charge of tautology. The jury, if honest, as juries are supposed to be, could not have been satisfied of the fact unless there was a preponderance of the evidence. The jury were to judge of the preponderance, and, if found, it must or at least should have been satisfactory. A careful examination of the charge fails to show it erroneous in any respect.

The first and second instructions are discussed at considerable length in the supplemental argument, although not excepted to, nor errors assigned upon them. I have carefully examined them, and do not think the criticisms warranted. The judgment of the district court will be affirmed. Affirmed.

1. A trust deed executed by a corporation to secure its bonds on a herd of cattle running on the range is a chattel mortgage, under Colo. Act 1883, defining chattel mortgages and providing that it shall embrace all such bills of sale, trust deeds, and other conveyances of personal property as shall have the effect of a mortgage or lien thereon.

2. A chattel mortgage on a herd of cattle and horses is void, as against attaching creditors of the mortgagor, where he is given the right thereunder to dispose of the stock from time to time, as the cattle become fit for beef and the horses unproductive and useless, and apply the proceeds to his own use and benefit.

Appeal from district court, Eagle county.

Replevin by William A. Johnson, purchaser at the trustee's sale under a trust deed executed by the South Park Land & Cattle Company upon certain personal property as security for its bonds, against William T. Roberts, sheriff, who levied upon such property under an attachment. From a judg ment for plaintiff, defendant appeals. Reversed and remanded.

This case was tried to the district court on a stipulation which admitted the facts to be as stated, to wit: "It is hereby agreed and stipulated by and between the parties hereto that the following are the facts material to the issues herein: First. On or about September 8, 1887, the South Park Land and Cattle Company, a Colorado corporation, filed for record in the office of the county clery of Fremont county, at Canon City, in said county and state aforesaid, a certain instrument in writing (copy of which is hereto annexed, but the authority of the company to execute the same and the resolution o. it or its board of directors empowering its president or secretary to execute the same is not admitted by the defendant), whereby it conveyed to one T. M. Harding, as trustee, certain chattel property, including the property herein in dispute, to secure the payment of certain bonds of the company (the authority to give which not being admitted), amounting to sixty thousand dollars, due in ten years after September 1, 1887, and bearing interest, payable semiannually on the first day of March and the first day of September in each year; provided, that, upon default either in the payment of the interest on said bonds or any of it, as in said instrument conditioned, the holder of any of said bonds, there being sixty of them, for one thousand dollars each, might direct the trustee in said instrument or chattel mortgage mentioned to forthwith sell and dispose of said property, or so much thereof as was necessary to pay said bonds, after giving certain notice of the time and place of the said such sale. Second. That one George Westlake was, on or about March first, 1890, the holder of thirteen of said bonds, and the interest due thereon at said date was not paid, nor was it paid at the expiration of ninety days thereafter; upon which said default said Westlake directed said trustee, Harding, to sell and dispose of said property, and apply the proceeds agreeably to the terms of said mortgage. Third. In pursuance of such direction, said trustee proceeded to advertise a sale of said property, according to the provisions of said mortgage, on the 31st day of July, A. D. 1890, to take place at Canon City, Fremont county, Colorado, on the 7th day of October, 1890, which said sale was adjourned until October 17, 1890, at which time the said property was sold by said trustee, Harding; and W. E. Johnson, plaintiff herein, at such said sale became and was the purchaser of said chattel property. Fourth. On

or about August 25, 1890, the said T. M. Harding, as such said trustee, took possession of the home ranch of said company, located in Park county, Colorado, and took such possession as he could by taking possession of the headquarters of the said company, of the personal property included in the said chattel mortgage; the stock therein described being at large upon the public range. He gathered none thereof, and did not reduce the same to actual personal possession. The property herein in dispute was at that time in Eagle county, and no actual possession was then or ever taken of it by said Harding, or the plaintiff herein, until after the commencement of this replevin suit. Also, said Harding, on or about said August 25th, went to the town of Alma, Park county, Colorado, and notified Joshua Mulock, general manager and agent of said company, that he had taken possession of the mortgaged property, as trustee, on account of the aforesaid default in interest payment on said bonds; to which statement said Mulock made no reply. Fifth. The principal office of said company was by its articles of incorporation declared to be at Canon City, Fremont county, Colorado. Sixth. The judgment of $6,252.45, besides costs, in the Park county (Colorado) district court in favor of one Chauncey I. Gumaer, and against said South Park Land and Cattle Company, upon which the execution issued under which defendant herein justifies his levy, includes a claim of $5,650.30 assigned to him by said Joshua Mulock, general manager and agent of said cattle company, which amount said Mulock claimed to be due him from said company for moneys advanced to and services rendered for said the South Park Land and Cattle Company.

Seventh.

On September 10, 1890, in the district court of Park county, Colorado, one Chauncey I. Gumaer began suit to recover of and from said the South Park Land and Cattle Company, $6,172.94, interest, and costs, and at once caused attachment writs in aid thereof to issue to Park and Eagle counties against the property of said company therein. By virtue of such writ to Eagle county, defendant herein, W. T. Roberts, sheriff of said Eagle county, on or about September 13, 1890, at said county, and not elsewhere, attached and took possession of said property herein in dispute as the property of and belonging to the said the South Park Land and Cattle Company; the same being found in possession of the said company's agent and having been taken therefrom. Afterwards, and on or about October 28, 1890, said Gumaer, in said above action in said Park county district court, recovered, in due form of law, judgment against the said the South Park Land and Cattle Company for the sum of $6,252.45 and costs, and thereupon special execution issued in due form of law upon the aforesaid judgment from the office of the clerk of said Park county district

court to defendant herein, as sheriff of said Eagle county, commanding him to sell the stock herein in dispute and theretofore attached by him as aforesaid; and upon defendant proceeding to advertise for sale said property, under said writ, plaintiff herein instituted this replevin suit, and took possession of said property from defendant, and still retains it. Said judgment is now in full force and wholly unsatisfied. Defendant was, when he served said writ, and yet is, sheriff of said Eagle county. Eighth. Actual possession of the particular stock in this suit in dispute was never taken by said trustee, or by plaintiff, at any time prior to the commencement of this suit; no demand for a delivery of the same was made by the plaintiff, or by any one for him, upon defendant, before commencement of this action. Ninth. There was and is no record of said mortgage in Eagle county, neither did defendant or judgment creditor Gumaer have actual notice of the existence of said incumbrance. Tenth. Property is in possession of plaintiff, and returns thereof cannot be had. Its value is $1,200."

The trust deed which is referred to in the stipulation contained the following clauses: "And also the entire herd of stock cattle and horses belonging to the said party of the first part, and consisting of about seven thousand (7,000) head, branded with the IM on the left hip or side, now ranging in said Park, Chaffee, and Fremont counties, Colorado; the said party of the first part, however, reserving the right to sell or dispose of from said herd, from time to time, all beef and unproductive cattle and horses, but in no event to decrease the herd by any such sale or disposal to a less number than seven thousand." "Provided, always, that, until default shall be made in the payment of the principal or interest aforesaid, the party of the first part may remain in the possession of the said premises and property and proceeds thereof."

In the chapter concerning chattel mortgages contained in the act of 1883 there occurs this quotation: "The provisions of this act shall be deemed to extend to all such bills of sale, trust deeds and other conveyances of personal property, as shall have the effect of a mortgage or lien upon such property."

On this record the court below adjudged the title to be in the purchaser at the chattel mortgage sale, and rendered judgment accordingly; and the sheriff prosecutes the appeal.

Charles A. Wilkin, for appellant. R. T. McNeal, for appellee.

BISSELL, P. J. (after stating the facts). When a party who has never been in possession of personal property brings replevin, he must undoubtedly show some kind of a title, resulting from a general or special property in it, which gives him the right of possession