close a mortgage, a receiver having been appointed to take rents and profits, the mortgagor being insolvent and the property insufficient to satisfy the mortgage, such rents are to be applied to reduce deficiency, and do not go to the assignee in bankruptcy appointed after action commenced. N. Y. Sup. Ct., First Dep't, Gen. Term, Dec. 4, 1876. Hayes v. Dickinson.

PRACTICE.

1. Action against attaching creditor maintainable by assignee in bankruptcy. — An assignee may maintain an action against an attaching creditor to recover the value of goods sold under an execution issued after the commencement of proceedings in bankruptcy in an attachment suit begun within the period of four months before that time. U. S. Cir't Ct., Dist. of Iowa. Bracken v. Johnston, 15 Nat. Bankr. Reg. 106.

2. Opening or vacating dividend.— A register has no power to vacate or re-open a dividend for the purpose of paying a claim which was not proved and filed, or presented prior to the dividend meeting. A register has no power to vacate or re-open a dividend for the purpose of paying a claim for services rendered to the assignee which was not presented at the dividend meeting. A dividend duly made and filed in court cannot be disturbed except for some error committed by the register, apparent from his memoranda and papers on file, existing at the time of, or prior to the making of the dividend. U. S. Dist. Ct., West. Dist. of Texas. In re B. K. Smith, 15 Nat. Bankr. Reg. 97.

PREFERENCE.

1. What necessary to recover against creditor obtaining: what is insolvency: act done in fraud of bankrupt act. An assignee, in order to recover against a party who has obtained a preference, must prove that the bankrupt was insolvent, and that, being so insolvent, he procured his property to be seized by defendant with intent to prefer him over the other creditors, and that defendant accepted such preference with reasonable cause to believe that the bankrupt was then insolvent, and also knew that such seizure was made in fraud of the bankrupt law. A trader is insolvent if he is unable to pay all his debts in money as they become due in the ordinary course of business, although it appears probable that he might pay them in full if time is given him for that purpose. A confession of judgment by an insolvent debtor, actually followed by an execution and seizure of his property, is an unfawful preference within the act, if made with a view to prefer such creditor. The intent to give such preference will be presumed until the contrary is shown. A reasonable cause to believe the debtor to be insolvent is a knowledge of such facts and circumstances in regard to the matter as would put a prudent man upon inquiry. An act done in fraud of the bankrupt act is not necessarily what is known or considered as a fraudulent act, but only something, the effect of which is to evade or avoid its provisions. A disposition of property by an insolvent debtor, not made in the usual and ordinary course of business, is prima facie evidence of fraud. It is immaterial what the creditor thought or knew about the debtor's intentions in giving the preference, where he had reasonable cause, at the time of taking it, to believe the debtor insolvent. U. S. Dist. Ct., Dist. of Oregon. Webb, assignee, v. Sachs et al., 15 Nat. Bankr. Reg. 168.

2. Mortgage by partner of insolvent firm upon individual property to secure individual debt.— The principle of equity that an individual creditor of a member

of a firm is entitled to payment out of the individual property of such member, in preference to the creditors of the firm, is recognized and preserved by the general bankrupt law. Accordingly, a mortgage given by a partner on his separate property to secure an individual debt, though given within four months of the filing of a petition in bankruptcy against the firm, is not void as giving a preference over the creditors of the firm. The preference already exists, and the mortgage only substitutes a legal lien for an equitable one. N. Y. Sup. Ct., Gen. Term, Third Dep't. Hewitt v. Northrup.

TRUST.

Debt due from factor for goods sold not fiduciary.A debt due from a factor for the proceeds of goods sold is not within section 33 of the bankrupt act (Rev. Stats., § 5117), which provides that "no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in any fiduciary character, shall be discharged by any proceedings in bankruptcy." (In re Seymour, 1 Nat. Bankr. Reg. 29, disapproved; Cronan v. Cotting, 104 Mass. 245, followed.) Sup. Ct., Ala., Dec., 1876. Woolsey v. Cade.

MORTGAGE UPON RENTS AND PROFITSWHEN NOT RETROSPECTIVE.

N the case of American Bridge Company, appellant, v. Heidelbach et al., just decided by the Supreme Court of the United States, the controversy arose out of a mortgage executed by the Kansas and Missouri Bridge Company to the appellees, as trustees, to secure the payment of the principal and interest of certain bonds issued by the mortgagor and described in the mortgage. Besides the bridge of the company, the mortgage included "the rents, issues, and profits of said bridge, as far as the same are not required to pay the necessary expenses of keeping in repair and operating said bridge, which rents, issues, and profits," it was declared, "are hereby pledged to the payment of said interest as it matures, and to the establishment of a sinking fund for the redemption and payment of the principal of said bonds," etc. It was further provided that if the interest were in default for six months, the trustees, upon the written request of the holders of one-half of the outstanding bonds, might take possession of the mortgaged premises, manage and operate the bridge, and receive and collect all rents and claims due and to become due to the company. The interest upon the bonds being in default, the trustees, on the 25th of November, 1874, filed their bill, wherein, among other things, they set forth that there was in the hands of the company a certain amount of money which ought to be applied upon the mortgage and certain claims due to the company, the proceeds of which ought to be applied in like manner. The bill prayed accordingly.

The appellant, the American Bridge Company, held a judgment for $15,435.88 and costs against the Kansas and Missouri Bridge Company, upon which an execution had been returned nulla bona. On the 11th of December, 1874, the judgment creditor filed a bill claiming priority of payment out of the money and the proceeds of the claim above mentioned. At the time of the argument of the appeal there was a suflicient fund to meet the demand awaiting below the termination of this litigation. The Supreme Court, reversed the decision of the court below, saying: "It cannot be denied that the return of the execution, the

filing of the bill, and the service of process gave the judgment creditor a lien upon the fund in question which must prevail unless the mortgagees have shown a paramount right to it. Miller v. Sherry, 2 Wall. 249; 2 Barb. Ch. Pr. (2 revised ed.) 157, note 13. The question as to the right claimed by the trustees is conclusively settled against them by Galveston R. R. Co. v. Cowdrey, 11 Wall. 460, and Gilman v. Telegraph Co., 91 U. S. Rep. S. C. 603.

Both these cases, as regards this point, present exactly the same legal aspect as the case before us. It is unnecessary to reproduce at length what was said in those adjudications.

In this case, upon the default which occurred, the mortgagees had the option to take personal possession of the mortgaged premises or to file a bill, have a receiver appointed, and possession delivered to him. In either case the income would thereafter have been theirs. Until one or the other was done the mortgagor, as Lord Mansfield said in Chinnery v. Black, 3 Doug. 391, was owner to all the world and entitled to all the profit made."

The mortgage could have no retrospective effect as to previous income and earnings. The bill of the trustees does not affect the rights of the parties. It is an attempt to extend the mortgage to what it cannot be made to reach. Such a proceeding does not create any new right. It can only enforce those which exist already. The bill of the trustees is as ineffectual as if the fund were any other property, real, personal, or mixed, acquired by the mortgagee aliunde and never within the scope of the mortgage.

STATE STATUTES REGULATING FOREIGN

AND INTERSTATE COMMERCE.

SUPREME COURT OF THE UNITED STATES-OCTOBER TERM, 1876.

FOSTER, PLAINTIFF IN ERROR, V. MASTER AND WARDENS OF THE PORT OF NEW ORLEANS.

A statute of Louisiana forbade the survey of the hatches of sea-going vessels coming to the port of New Orleans, and of damaged goods coming on board such vessels, by other persons than the master and wardens of the port of New Orleans. Held, that the statute was a regulation of foreign and interstate commerce within article 1, section 8 of the Federal constitution, and not an inspection law, and was void.

error to the Supreme Court of, the State of Louisiana.

Mr. Justice SWAYNE delivered the opinion of the court.

This controversy has arisen out of an act of the legislature of Louisiana, approved March 6th, 1869. By the first section it was made the duty of the master and wardens of the port of New Orleans to offer their services to make a survey of the hatches of all sea-going vessels which should arrive at that port, and a penalty was prescribed for the neglect of this duty. The second section declares "that it shall be unlawful for any person other than the said master and wardens, or their legally constituted deputy, to make any survey of the hatches of sea-going vessels coming to said port of New Orleans, or to make any survey of damaged goods coming on board of such ressels, whether such survey be made on board or on shore, or to give certificates on orders for sale of such damaged goods at auction, or to do any other of the acts and things prescribed by law for said master and wardens to do and perform, and the person doing such

illegal and forbidden acts, his instigators and encouragers, shall be liable and bound to pay in solido to the said master and wardens $100, with damages and costs for each of said illegal and forbidden acts so done."

The petition avers that Foster resides in the city of New Orleans, and has been and is continually violating the provisions of the act by making surveys of the hatches of sea-going vessels arriving at that port, and of damaged goods, and has been and is engaged in acting as, and performing the duties which belonged to, the master and wardens of the port.

An injunction was prayed for. It was granted by the lower court, and the judgment was affirmed by the Supreme Court of the State. A writ of error was thereupon sued out by Foster, and the case is thus brought before this court for review.

The defendants in error have failed to enter their appearance, and no brief in their behalf has been submitted. We shall, therefore, devote but few remarks to the case.

The constitution of the United States, article 1, section 8, gives to Congress the power "to regulate commerce with foreign nations, and among the several States, and with the Indian tribes."

That the provisions of this act are regulations of both foreign and interstate commerce is a proposition which requires no argument to support it. They are a clog and a blow to all such commerce in the port to which they relate. Their enactment involved a power which belongs exclusively to Congress, and which a State could not, therefore, properly exercise. In the Steamship Company v. The Port Wardens, 6 Wall. 31, it was held that a statute of a State enacting that the master and wardens of a port within it should be entitled to demand and receive, in addition to other fees, the sum of $5, whether called on to perform service or not, for every vessel arriving in that port, was a regulation of commerce, and was unconstitutional and void. If the constitutional objection was well taken there, a multo fortiori is it fatal here. The act is not in the sense of the constitution an inspection law. The object of such laws is to certify the quantity and value of the articles inspected, whether imports or exports, for the protection of buyers and consumers. Gibbons v. Ogden, 9 Wheat. 203; Brown v. Maryland, 12 id. 419; Clintsman v. Northrup, 8 Cow. 46; Bouv. Law Dict., "Inspection; " Story's Const., §§ 1017, 1024: Neilson v. Garza, 2 Woods, 290. The purpose of this act is to furnish official evidence for the parties immediately concerned, and where the goods are damaged, to provide for and regulate their sale. Master and Wardens v. Ship Hawes, 6 La. Ann. 390.

Besides the unreason and oppressive character of the act as regards shipowners and consignees, it is an in- . vasion of the rights of persons outside of these classes. If such a monopoly, sustained by such sanctions, may be validly given to the master and wardens, why may they not also, at prices not agreed upon by the parties, nor according to the market value, but at rates arbitrarily fixed by law, be authorized exclusively to load and unload ships, to furnish them with all needful supplies, and to perform all the services of consignees, commission merchants, and ship brokers, touching incoming and outgoing cargoes? Each of these imagined cases is a parallelism to the case before us, and only another step in same direction.

We hold the statute to be void.

In expressing these views we have no purpose to impugn any thing heretofore said by this court as to the

have made any curvature necessary to put herself and the tow upon a right line to the harbor. Her course could then have been laid accordingly. She could have entered just where she did enter. She could have safely passed the swells she would have encountered. Her experience as she did enter proves this to have been so. She would have avoided the shoalwater and bar south of the channel where the swells were the highest. A single line would have answered for the tow. It might have been of any length deemed proper. The tow would have had ample steerage-way, and have obeyed her helm. She could have been kept in the wake of the tug, and would have safely passed the ground-swell, as did the tug. There being ample depth of water in the channel, and being larger and heavier than the tug, she would have encountered even less of difficulty and danger. The tug need not have stopped a moment. There would have been no tension and breaking of the lines by the grounding and jerkings of the brig. The traction would have gone on in unbroken continuity until the tow was so far within the harbor as to have been out of peril. The expert testimony proves that this could and should have been done. We find no sufficient answer to this view either in the record or in the able and elaborate argument submitted by the counsel for the appellants.

RECENT AMERICAN DECISIONS.

SUPREME COURT OF PENNSYLVANIA.*
BEQUEST.

Void, cannot be enforced: gift to trustee for charitable uses.-A testator wishing to bequeath his estate to charitable uses was told that it would be invalid if he should die within a month, but that he might give it unconditionally to some person whom he could trust to carry out his wishes; Yeakle was named, and an absolute bequest was made to him. Testator died within the month, and Yeakle, being informed of his death and wishes, said he would carry them out. Held, that there was nothing in the circumstances to fasten a trust on Yeakle, and that the bequest was not within the words of the act of April 26th, 1855. charities would have had no claim, legal or equitable, to enforce payment by Yeakle, nor would he be guilty of fraud against them or the testator, if he should apply the bequest in any other way; his declaration of intention would not bind him. Schultz's Appeal.

CONTRACT.

The

Construction of: agreement to complete unfinished work.-Le Van contracted to construct elevators for defendant according to a plan specified; before the work was finished Le Van abandoned it; plaintiff contracted to finish the work as "per contract" with Le Van: should the amount exceed $1,000, Le Van agreed "to assume the excess." The court charged that the plaintiffs had put themselves into the shoes of Le Van and defendant could make any defense against them which he could have made against Le Van. Held to be error. Philadelphia Hydraulic Works v. Schenck.

CORPORATIONS.

1. Subscriptions for stock: rules governing.—(1.) A subscription to the stock of a public corporation prior to the procurement of its charter is absolute and a

* From advance sheets of 30 P. F. Smith (80 Penn. St. Rep.).

condition attached is void. (2.) Commissioners to receive subscriptions are not the agents of the corporation but of the public, under limited and definite powers which every subscriber is bound to know. (3.) After a corporation is organized it may receive subscriptions for stock on conditions which it is bound to perform. (4.) After organization, one subscribing without condition cannot set up an unlawful act of the directors to avoid his subscription. (5.) Whenever a power which the subscriber cannot control, intervenes to alter a material point in his contract without his assent, it works his release. Caley v. Philad. and Chester Co. R. Co.

2. Release of subscriber by act of company.-A subscription paper set out the termini of a railroad and the route over which it would be constructed. Held, that this was an agreement that the termini and the route should be as stated; and if the company materially changed them, a subscriber would be released. Ib. 3. Explanation of written instrument by parol testimony.-Ambiguities in a writing may be explained, varied, added to or contradicted by parol, where it is shown that but for the oral stipulations the writing would not have been executed. Ib.

4. When principal bound by act of agent.-A party seeking to enforce a contract made by his agent is bound by his declarations made at the time, although he has exceeded his authority. (Indiana, etc., Turnpike Co. v. Phillips, 2 Penn. 184; Manheim, etc., Plankroad Co. v. Arndt, 7 Casey, 317, followed.) Ib.

INSURANCE.

Fire policy: conditions avoiding policy: what is not violation of condition: hazardous business.- A policy of insurance provided that the risk of property insured should be determined by the rates annexed, and if the risk should be increased as contemplated by a by-law annexed, the rates should be evidence of the additional risk. The by-law provided that if the insured devoted any part of the insured building, or one located by him near it, "to a more hazardous business," the policy should be immediately void. The insured for light introduced gasoline, named as increasing the risk; he afterward removed it; subsequently, the building was burned. Held, the policy was not void. In the absence of a stipulation to that effect, the validity of the policy depended on the state of the premises at the time of the loss. Lighting with gasoline was not devoting the building to a more hazardous business. Mut. F. Ins. Co. of Chester County v. Coatesville Shoe Factory.

NEGLIGENCE.

1. Fire set by sparks from locomotive: contributory negligence.-Where a barn, quite near the track of a railroad, was negligently burned by sparks from a locomotive, held, not evidence of contributory negligence that the owner suffered the roof to be in such condition as that it was more liable to take fire than if it had a secure and safe roof. Phila. & Read. R. R. Co. v. Hendrickson.

2. Mutual duties of landowners and railroads.- The owner of property near a railroad must take all risks of a proper and careful use of the road. When a railroad company uses the most approved spark arresters, and proper care and vigilance in running its engines, an adjacent landowner has no remedy for injury to his property by fire thrown from a locomotive. Where actual negligence in running an engine is proved, and loss results, the mere condition of the landholder's

property is no defense. In order to hold a landholder for contributory negligence where injury is done to his property by fire from an engine on a railroad, he must have done some act or omitted some duty which is the proximate cause of the injury occurring with the negligence of the railroad company. Farmers may cultivate and use their farms and improvements as is customary amongst farmers, and are not bound to exercise unusual means to guard against the negligence of railroad companies. Ib.

3. Proximate cause: fire communicated by railway locomotive. Sparks from defendants' engine fired a railroad tie, from which rubbish left by the defendants on their road was fired, communicated with plaintiff's fence next to the road, and spread over two fields, burned another fence and standing timber six hundred feet distant from the road. Held, that the proximity of the cause was for the jury. In such case the jury must determine whether the facts constitute a continuous succession of events so linked as to be a natural whole, or whether the chain is so broken as to become independent, and the final result cannot be said to be the natural and probable consequence of the negligence of defendants. The rule for determining what is proximate cause is, that the injury must be the natural and probable consequence of the negligence, and that it might and ought to have been foreseen under the circumstances. (Pennsylvania Railroad Co. v. Kerr, 12 P. F. Smith, 353, distinguished.) Pennslyvania Railroad. Co. v. Hope.

NEGOTIABLE INSTRUMENT.

Not subject to set-off in hands of third parties.-A note was made to Minsker for value, by Young & Worth; Barber, a member of the firm, discounted it, and it was indorsed to him; the note was protested, and afterward indorsed, for value, by Barber to plaintiff, he having no notice that Barber was a member of the firm. Held, that the state of accounts between Barber and the firm was not a ground of defense against the note. The indorsee of overdue commercial paper takes it subject only to the defenses connected with the note itself, and not to claims or setoff independent of the note. Young v. Shriner.

RESCISSION OF CONTRACT.

Proof of fraud or mistake must be clear and palpable.- Nothing but fraud or palpable mistake is ground for rescinding an executed contract. A partner sold his interest in the firm to his fellows; in a proceeding about six years afterward, to rescind the sale, he alleged that his interest had been represented by one of them as being of less value than it was. Held, that as partner he had a right to examine the books, etc., and not having availed himself of the means of information he had no ground for relief. Partners bought the interest of a fellow, through a third person, concealing that the purchase was for them. Held, that was not per se fraudulent and the court would not avoid it. Geddes' Appeal.

TRUSTS.

1. Life interest and remainder: duty of trustee. -A testator gave to a trustee real estate and bank stocks in trust to pay the income to his daughter half-yearly during life, and "immediately after her decease," he gave the property bequeathed, etc., to a granddaughter and two grandsons; "or such of them as may be living, their heirs and assigns." The trustee having died, his executors settled an account; during the hearing in the account before the auditor, the cestui que trust

died. Held, that the trust then terminated and that all the income from that time passed to those in remainder. The trustee had no active duties to perform to the remaindermen, not even to convey the estate passed directly by the will to the remaindermen; the trustee succeeding the deceased trustee was not entitled after the death of the cestui que trust to receive the corpus of the trust. Stokes' Appeals.

2. When trustee not entitled to commissions. - The bank stock bequeathed in trust remained unchanged until the death of the cestui que trust; the second trustee collected the dividends-without having possession of the certificates-and the rents of the real estate. Held, that he was not entitled to commissions on any of the corpus of the trust. (McCausland's Appeal, 2 Wright, 466, followed.) Ib.

WILL.

Construction of: what is not a trust.-A testator gave the residue of his estate to his executors in trust to pay the net income to his wife, so long as she shall remain my widow and my children shall be under age, to be used and applied by her to the maintenance, support and education of my children who may be under age, but without being called upon to give any account of the manner in which she may have applied it, as it is my wish that she shall have the absolute control of its use and disposition so long as she shall remain my widow." Held, that this did not create a sub-trust in the wife, but was only an expression of confidence in her as to the use and disposition of the income. The income was to be paid to her without legal responsibility for its use and disposition, with absolute control and without being called to give any account of her application of it. The wife could not be called to account unless she should be guilty of malversation. Biddle's Appeal.

RECENT ENGLISH DECISIONS.

ATTORNEY AND CLIENT.

Solicitor's lien for costs in proceedings to wind up corporation. The defendant, a solicitor, was employed by one H. (who was a director and promoter of a limited company then in liquidation), with the privity of three other persons, the holders as nominees of H. of certain shares in the company, to take proceedings in connection with the winding-up of the company. H. deposited with the defendant the certificates of the shares for the purpose of enabling him to carry out his instructions, and the defendant received from the liquidator of the company certain checks in respect of the shares standing in the names of those persons. In the meantime H. transferred to the plaintiffs his interest in the shares, with notice of the lien and charge of the defendant thereon for his costs, and the defendant, acting upon the retainer of the plaintiffs, continued the proceedings, and ultimately received from the liquidator four several checks payable to H. and the other three persons respectively. In an action to recover these checks, held, that the defendant was entitled, as against the plaintiffs, to a lien upon them for his costs of all the proceedings against the company in respect of the shares. Gen. Share and Trust Co. v. Chapman, L. R., 1 C. P. D. 771.

ESTATE OF INHERITANCE.

Scotch lease heritable.- A lease in Scotland is heritable, not moveable or personal, as in England, but descending to the heir of the lessee. Whether the lease be in perpetuity or for a term of years the descent