within its general power to take, it must pay a fair price therefor. Furthermore, a transaction binding a municipal corporation may be illegal and yet not ultra vires. Finally, if the corporation has power to grant a license, it may, because of large expenditure by the licensee, be equitably estopped to revoke the license, until to continue it would itself be ultra vires. But if none of these distinctions is involved, it seems clear that a municipal corporation should not be estopped to set up a claim of ultra vires, though the hardship on the other party be great.

8

An Ohio court has recently decided, however, that a city is estopped from enjoining a gas company from maintaining its pipes laid in the streets, whether the ordinance, in reliance on which the company had acted, was ultra vires or not. Darby v. Norwood, 52 Oh. L. Bul. 253 (C. P. Hamilton Co., Dec., 1906). This result is opposed alike to principle and to authority. If, as is well settled, a municipal corporation is not liable to the purchasers for value of a great issue of ultra vires bonds, the city enjoys no larger privilege if permitted to enjoin a grantee from using the pipe lines which the latter has laid in the streets. Nor do the decisions, contrary to the intimation of the present case, show equity a court so tender as to refuse its peculiar aid to further a claim of ultra vires, for it will enjoin the collection of taxes to pay void bonds.10 Those cases which allow an estoppel against a municipal corporation, when there has been long adverse user of public property coupled with large expenditures thereon," afford some analogy. But these not only are opposed by better reasoning,12 but also do not involve the more serious question of lack of power.

EFFECT OF AGREEMENTS ON THE CHARACTER OF FIXTURES. When the courts, yielding to business necessity, relaxed the common law rule that whatever is annexed to the soil belongs to the soil, and permitted tenants to remove those fixtures which they had erected for purposes of trade or agriculture, there was opened up a possibility for confusion as to the character of such fixtures during the period of annexation. Since they were chattels both before and after that period, many courts adopted the view that they never lost the character of chattels. If, it was further argued, things bearing such a relation to the land as would normally make them a part of it were allowed to retain their original characteristics because of the special relations of the parties, it followed that the same result might be achieved by agreement. Though this doctrine has been widely accepted and is convenient as between the parties, many courts which profess to recognize it

Hitchcock v. Galveston, 96 U. S. 341.

Howell v. Buffalo, 15 N. Y. 512.

7 Spencer v. Andrews, 82 Ia. 14.

8 Detroit v. Detroit City Ry. Co., 56 Fed. Rep. 867, 892, 893; State v. Murphy, 134 Mo. 548; Smith v. Westerly, 19 R. I. 437, 446.

9 German Bank v. Franklin County, 128 U. S. 526.

10 Lippincott v. Pana, 92 Ill. 24.

11 Paine Co. v. Oshkosh, 89 Wis. 449.

12 London, etc., Bank v. Oakland, 90 Fed. Rep. 691, 701; Webb v. Demopolis. 95 Ala. 116. But see 17 HARV. L. REV. 273.

1 Poole's Case, 1 Salk. 368; Shapira v. Barney, 30 Minn. 59. Contra, Guthrie v. Jones, 108 Mass. 191.

2 Hendy v. Dinkerhoff, 57 Cal. 3; Howard v. Fessenden, 96 Mass. 124; Harris v. Hackley, 127 Mich. 46. See Fitzgerald v. Anderson, 81 Wis. 341.

decline to adjust the rights of third parties on that basis. New York, however, has consistently applied it to all the situations which have arisen, except where the thing attached had become so merged in the land as to lose its identity.*

5

6

In a recent case in the Court of Appeals, one who purchased an engine, subject to the agreement that it should remain personalty until the purchase price was paid, attached it to land of which he was in possession under a contract of purchase containing a provision that whatever machinery should be attached to the land should become realty. The court permitted the seller of the chattel to recover the unpaid purchase price from the vendor of the realty. Davis v. Bliss, 187 N. Y. 77. This situation seems to test the soundness of the New York doctrine. It is evident that the person whose agreement can preserve to a fixture its character as a chattel is not the owner of the chattel, but the occupier of the land, who is to annex the chattel. If, then, that person has previously contracted with the owner of the land that the thing shall not retain its character as a chattel, the court is placed in the embarrassing position of deciding which of these promised results has been achieved; or else, since the two agreements are inconsistent, of refusing to consider either as affecting the character of the property. The only possible guide to a choice between the agreements would be the actual intent of the annexor. But the danger in permitting such a person to elect which of the two others shall be preferred is sufficiently apparent. If neither agreement is regarded, the rules applicable under normal circumstances determine the thing to be a part of the land. Therefore, if the rights of the seller of the chattel are to be contingent on its remaining a chattel, this doctrine carried to a logical conclusion must deny him any relief. But fairness demands that he be protected. He has parted with possession of his chattel on conditions to which the law usually gives effect. The vendor of the land, on the other hand, cannot properly demand as security for his purchase price anything more than his vendee equitably had in the thing, that is, an equity of purchase in the engine. It is believed that the desirable result of the present case may best be achieved by a return to the older principles of our law. After determining whether or not a thing has lost its character as a chattel, in accordance with rules to be uniformly applied regardless of personal agreements, those inequitable situations which arise may be adjusted according to recognized equitable principles."

8

LIABILITY OF PARTIES TO LOST PROMISSORY NOTES. The loser of a promissory note, if he wishes to fix the liability of an indorser, must, as usual, make demand on the maker at maturity and give prompt notice to the indorser. Whether he must simultaneously tender a bond of indemnity

3 Richardson v. Copeland, 72 Mass. 536; Wickes v. Hill, 115 Mich. 333.

4 Holmes v. Tremper, 20 Johns. (N. Y.) 29; Ford v. Cobb, 20 N. Y. 344.

6 Jermyn v. Hatch, 93 N. Y. App. Div. 175.

6 See McCrillis v. Cole, 25 R. I. 156.

7 Campbell v. Roddy, 44 N. J. Eq. 244; Hurxthal v. Hurxthal, 45 W. Va. 584.

8 Reynolds v. Ashby, [1904] A. C. 466; Fifield v. Farmers' Bank, 148 Ill. 163. See Prescott v. Wells, 3 Nev. 82, 89.

9 Bringholff v. Munzenmaier, 20 Ia. 513; Davenport v. Shants, 43 Vt. 546.

1 Hinsdale v. Miles, 5 Conn. 331.

to the maker is not so clear. If the lost note is of such a character that equities will be cut off if it reaches a bona fide purchaser, the law is well settled that a demand must be accompanied by such tender. Otherwise the maker, though free from any fault, might be compelled to pay a second time and be relegated to his remedy against the possibly insolvent loser.2 If, however, equities would not be cut off, because the note when lost was over-due, or unindorsed, or indorsed specially, there is a conflict as to whether tender of a bond is necessary. It is true that in such a case the maker would be under no obligation to pay the note when presented; but nevertheless he would be at the mercy of an unscrupulous loser who might misstate the condition of the instrument when lost, and in any event he might be subjected to a suit by the later holder, the expenses of defending which should be borne by the loser of the note. It is submitted, therefore, that to make refusal on demand wrongful, an offer of a bond of indemnity, or its equivalent, should in all cases accompany the demand. The maker will of course remain liable, even though the demand was invalid, until the statute of limitations has run. An action at law is permitted in jurisdictions which so merge law and equity that proper protection by way of indemnification can be given the defendant in such action.5 In any event there will be the basis for a bill in equity."

As to the indorser, however, since he, being liable only secondarily, is not bound to pay unless the maker is in default, the question whether a bond is necessary is very material. If it is agreed that the maker is never in default without tender of security, then of course the indorser is completely absolved. Assuming, however, that security is tendered the maker, or that the question arises in a jurisdiction which regards the maker's refusal to pay as wrongful though no bond be tendered, clearly the indorser stands as much in need of the protection of a bond as the maker. Indeed, what scant authority there is upon the point is to the effect that the indorser can in no event be held, either on the note or on the original consideration, because he needs the instrument for his remedy over against the maker. This solution seems undesirable and unnecessary. The loser should be allowed to join all parties on the note in equity, where a decree could be had that he be paid by the maker if solvent, or by the indorser if the maker were insolvent. The loser, for his part, should be required to give a bond of indemnity broad enough to protect all parties not only from loss by a second payment, but also from expenses arising from maintaining or defending a possible later action.

If the indorser, though not in default, agrees with knowledge of the facts to pay the loser, it is generally held, without much regard for the difficulty as to consideration, that the loser may enforce the agreement. If, as in a

2 See 2 Daniel, Neg. Inst., 5 ed., §§ 1480, 1481, and cases cited.

8 Wade v. New Orleans Canal, etc., Co., 8 Rob. (La.) 140; Welton v. Adams & Co., 4 Cal. 37. Contra, Citizens Nat'l Bank v. Brown, 45 Oh. St. 39. Cf. 11 HARV. L. REV. 125. See also First Nat'l Bank of Denver v. Wilder, 104 Fed. Rep. 187.

Greeley v. Whitehead, 35 Fla. 523.

5 Fales v. Russell, 16 Pick. (Mass.) 315; First Nat'l Bank of Denver v. Wilder, supra.

6 Hansard v. Robinson, 7 B. & C. 90.

Tuttle v. Standish, 4 Allen (Mass.) 481. But cf. Savannah Nat'l Bank v. Haskins, 101 Mass. 370. Cf. also Smith v. Rockwell, 2 Hill (N. Y.) 482.

8 Champion v. Terry, 3 B. & B. 295.

Burgettstown Nat'l Bank v. Nill, 213 Pa. St. 456. See 3 L. R. A. (N. s.) 1079 n.

recent Michigan case, the indorser actually pays, since the transaction is then executed, the difficulty as to consideration drops out, and the indorser has no redress against the loser. Rogers v. Detroit Savings Bank, 110 N. W. Rep. 74. If, however, the indorser paid in ignorance of the facts, a court would doubtless reach the opposite result. The merit of the loser in such a case could hardly be said to be equal to that of the indorser, and therefore the doctrine of prior equities would have no application.

8

WHETHER A POWER TO SELL INCLUDES A POWER TO MORTGAGE. Whether a power of sale be given to an agent, mortgagee, trustee, executor, or life tenant, the factor determining the extent of the power conferred should in all cases be the intent of the donor. If no absolute intent appears on the face of the power, the presumption may vary according to the character of the estate created, the purposes of the power, and the status of the donee.1 If the donor retains an interest in the proceeds of the authorized sale, the fair presumption is that the estate was intended to be converted absolutely, and on this ground neither a power of attorney to an agent to sell nor a power of sale mortgage will authorize a mortgage or other encumbrance on the estate. When land is conveyed or devised to trustees or executors, the old English rule that a mortgage, being a conditional sale, was impliedly authorized, has been modified, so that now the generally accepted rule is that in such cases a power of sale authorizes a mortgage only when the purpose is to pay off debts or charges on the land, or to raise a specific fund: 5 if the intention of the settlor or testator can be fulfilled as well or better by a mortgage, the mortgage is authorized. The presumption in favor of an actual sale seems justified; for the obvious expectation was that the cestui or estate should receive an adequate price for the land, and this may be defeated if a mortgage is given and foreclosed. If the trustee is to re-invest the proceeds of the sale on similar trusts, it is well settled that a mortgage is a breach of duty; and although in some cases a mortgage may be for the benefit of the cestui, the courts have applied the rule strictly. If an absolute power of sale in fee is given to a life tenant, there can be no valid objection to a mortgage; the tenant has all the beneficial interest in the power and should have sole control over the exercise and interpretation of it. The remainderman should not be heard to object that he receives an encumbered estate instead of none at all. But if the tenant is to take only a life interest in the proceeds of the sale, then the injury to the remainderman should be decisive; 2 for a vested remainder in an unencumbered estate should not without his consent be turned into a mere equity of redemption. The fiduciary situation of the life tenant in regard to the proceeds should be sufficient to invalidate a mortgage.

1 See McMillan v. Cox, 109 Ga. 42, 49.

2 See Bloomer v. Waldron, 3 Hill (N. Y.) 361, 367.

See Mills v. Banks, 3 P. Wms. 1, 9.

4 See cases collected in Lewin, Trusts, II ed., 497.

634.

Loebenthal v. Raleigh, 36 N. J. Eq. 169; Stroughill v. Anstey, 1 De G. M. & G.
See 19 HARV. L. REV. 64.

6 Patapsco Guano Co. v. Morrison, 2 Woods (U. S.) 395. See First Nat'l Bank v. Nat'l Broadway Bank, 156 N. Y. 459, 471. But cf. In re Lueft, 109 N. W. Rep. 652 (Wis.).

7 Kent v. Morrison, 153 Mass. 137.

The exception in favor of a purchase-money mortgage given to the settlor at the time of the conveyance is not in conflict with these principles. It may be justified either on the ground that the donor of the power has expressly authorized the mortgage by accepting it, or by the rule that the conveyance and mortgage should be construed as one instrument, and that therefore only an equity of redemption was in fact conveyed. Accordingly, a recent Maryland case held that when land was settled in trust for A for life, remainder over, with a power in A to convey the fee and to invest the proceeds on similar trusts, a purchase-money mortgage made by A to the settlor was good, although a second mortgage given by A to the assignees of the first mortgage was invalid. Stump v. Warfield, 65 Atl. Rep. 346. It seems settled that a power of sale does not include the right to exchange," partition, 10 contract to sell on credit," or transfer gratuitously; 12 and following these analogies a power of sale should be construed strictly so as to make a mortgage valid only when exceptional circumstances indicate an implied authority.

RECENT CASES.

ANIMALS TRESPASS ON REALTY BY ANIMALS STRAYING FROM HIGHWAY. The defendant's cattle, while being driven along a public highway, escaped without negligence on the part of the driver and went upon the adjoining unfenced lands of B, over which they passed to the unfenced lands of the plaintiff. Held, that the plaintiff may recover for the trespass. Wood v. Snider, 187 N. Y. 28.

At common law the owner of cattle was bound to keep them from straying on another's land, whether that land was fenced or not. Tonawanda R. R. Co. v. Munger, 5 Den. (N. Y.) 255. This strict rule has been modified in the case of land adjoining a highway, when the driver of the cattle is not negligent. Tillett v. Ward, 10 Q. B. D. 17; Hartford v. Brady, 114 Mass. 466. A possible explanation of the exception is that, since the owner of the cattle is unable to fence against straying, the law casts the burden upon the adjoining owner. The purpose of a fence is to restrain cattle from straying rather than to prevent trespassing by those of the adjoining owner. See Hurd v. Rutland & B. R. R. Co., 25 Vt. 116. The highway exception, however, only applies when the cattle are rightfully on the highway. Mills v. Stark, 4 N. H. 512. It would therefore follow that the exception should not be extended to a remote owner, for, as the cattle are not rightfully on the adjoining owner's land but there only with a justification, their further trespass on the lands of the remote owner is not excused by the want of a fence. See Lord v. Wormwood, 29 Me. 282.

BANKRUPTCY DISCHARGE PARTNER'S LIABILITY BARRED BY INDIVIDUAL DISCHARGE. -The defendant had been discharged in voluntary individual bankruptcy proceedings, his schedule including a debt to the plaintiff, who was properly notified. No mention was made in the petition, schedule, or discharge, of firm liabilities. Held, that, conceding the debt to the plaintiff to be a firm obligation, the defendant's liability on it was discharged by the individual discharge, whether there were any firm assets or not. New York Institu

Coutant v. Servoss, 3 Barb. (N. Y.) 128. Cf. Boies v. Benham, 127 N. Y. 620. • See Woodward v. Jewell, 140 U. S. 247, 253.

10 Cf. Paget v. Melcher, 42 N. Y. App. Div. 76. 11 See Repetto v. Baylor, 61 N. J. Eq. 501, 506. 12 Stocker v. Foster. 178 Mass. 591.