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tent that any number less than the whole may not amend the articles of incorporation so as to avoid the condition upon which the stock of the appellants was issued.

Neither is it important here that there are other matters contained in the laws affecting the corporation and stockholders that are not contained in the articles of incorporation which from time to time may be amended and which may fall within the reserved power of the state. A complete answer to this is that the state has not specially relegated these matters to the incorporators to agree upon as they deem best. With regard to all these the state simply provided rules or regulations in the form of laws, all of which were subject to change at any time, and they thus were not, nor intended to be, matters inhering in special contracts. But, apart from this, in what way is the state, as such, interested in private contracts, whether made between incorporators or between anybody else? True, the people of the state are interested in having the resources of the state developed, and the state has an interest in promulgating wholesome laws and in having them enforced; but whether money is obtained by one method or another, either to start a new enterprise or continue one already launched, the state has no interest whatever. Neither is it interested in whether a private corporation discharges its obligations with money obtained through assessments of corporate stock or by the sale of its property. Indeed, if the laws of this state are any indication of its policy, then it has manifested that policy in declaring that corporate stock is not assessable, unless made so by the stockholders themselves. True, the state may authorize a certain number of the stockholders to do this as it applies to future charters; but it cannot, after unconditionally authorizing a contract granting the right to hold stock unconditionally, impose limitations upon that right by changing the contract, or authorizing it to be done, without the consent of all the stockholders. contract, being wholly outside of the conditions and agreements required to obtain a corporate franchise, cannot be said to fall within the reserved power of the state to alter and amend the laws governing corporations.

Such a

In conclusion, we desire to state that, while the questions involved, in and of themselves, are of great importance to both the state and the citizen, the utility involved in settling them is of still greater importance. Both sides have, with much diligence and earnestness, fully presented all that can profitably be said upon either theory, and they have thus rendered us much assistance In determining the questions. The duty to adopt one or the other theory devolved upon us alone. We have adopted that which, in our judgment, seemed the most just and rea

sonable under all the circumstances, and in view of the state of the law upon the subject as we understand it. We feel thoroughly convinced that the conclusion reached is correct, and, entertaining this view, it could subserve no practical purpose to grant a rehearing of the case.

The application, therefore, should be, and accordingly is, denied.

MCCARTY, C. J., and STRAUP, J., concur.

(13 Idaho, 556)


Where a litigant seeks and procures a removal of a case from the state court to a federal court, and thereafter pursues his remedy in the latter court, and it is finally determined that the federal court has acted without jurisdiction and that the case has never been legally and regularly removed from the state court, and he thereafter takes up his case where he left off in the state court, the bar of the statute and rules of court limiting the time in which to pursue his remedy on appeal will be held to run against him the same as if he had never sought to prosecute his remedy in another forum.

[Ed. Note. For cases in point, see Cent. Dig. vol. 3, Appeal and Error, § 2744.] (Syllabus by the Court.)

Appeal from District Court, Ada County; Geo. H. Stewart, Judge.

Action by J. C. Mills, Jr., against the American Bonding Company and others. Judgment for plaintiff, and defendants appeal. Motion to dismiss appeal on grounds that transcript has not been filed in time required by rules of court. Motion sustained, and appeal dismissed.

Morrison & Pence and Neal & Kinyon, for appellants. W. E. Borah, H. L. Fisher, and Frank J. Smith, for respondent.

AILSHIE, C. J. The respondent has moved for a dismissal of the appeal herein on the grounds that it has not been prosecuted with diligence, and especially for the reason that the transcript has not been prepared, served, and filed within 60 days after service of the notice of appeal, as provided by the rules of this court. This is a companion case to that of Finney v. American Bonding Co. et al., 91 Pac. 318, decided at this present term. The same action has been taken in this case in all respects as was taken in that case, and the appellants are guilty of the same degree of negligence, delay, and laches in this case as in that one. On the authority of that case, both the original opinion and that on petition for rehearing, the appeal in this case must be dismissed.

Appellants cite McIver v. Florida Central & P. R. Co., 110 Ga. 223, 36 S. E. 775, 65 L. R. A. 437, as an authority in support of their contention that this court should assume

of which it was given by defendants was sold to them. may show the representations of the safesan, who made the sale; the written order be3. BILLS AND NOTES-BONA FIDE PURCHASERS EVIDENCE.

Defendants, in an action by the assignee of a draft against the acceptors, for the purpose of showing plaintiff's knowledge of the character of the paper it was buying, the defense being that the drafts were given for worthless jewelry. to the knowledge of plaintiff, may show that plaintiff had bought similar paper of the same party, to which the like defense had been made. [Ed. Note.-For cases in point, see Cent. Dig. vol. 7. Bills and Notes, § 1741.]

Appeal from Superior Court, Spokane County; Miles Poindexter, Judge.

Action by the Johnson County Savings
Bank against Victor A. Rapp and another, co-
partners doing business as Rapp & Lloyd.
Judgment for defendants. Plaintiff appeals.

A. E. Russell, for appellant.
Williams, for respondents.

Danson &

jurisdiction of the appeal and hear the case
on its merits. As we read that case, it does
not support the position appellants are obligeding obscure and subject to interpretation.
to maintain here. It simply holds that where
a case has been commenced in a state court
and thereafter properly removed to a federal
court, and the plaintiff was nonsuited or vol-
untarily dismissed his case in the latter
court, he was not thereby precluded from
again commencing his action on the same
case in the state court at any time prior to
the bar of the statute of limitations. It
should also be borne in mind that the McIver
Case recognizes the principle that, even
though the case be properly removed to a
federal court, nevertheless the statute of
limitations continues to run against the right
of action under the state statutes. If this is
true where there has been a proper and regu
lar removal, it must be equally true where
the removal eventually proved abortive and
without jurisdiction. If under such circum-
stances the bar of the statute runs against
the prosecution of the action in the state
court, why should not the bar run in like
manner against the prosecution of the appel-
late remedy for the review and correction of
errors? We think the law and reason of the
case, as well as the justice and equity there-
of, require that the litigant who seeks and
procures a removal, and thereafter pursues
his remedy in the federal court and is un-
successful, and then takes up his case in the
state court and prosecutes his remedy in the
latter court, should be dealt with in all re-
spects the same as if he had never invoked
the jurisdiction of another forum for the
trial of his case; and if he has abandoned
the proper tribunal, and has voluntarily spent
a portion of "his day in court" in a forum
without jurisdiction, that time should be
charged against him when he takes up his
cause before the proper tribunal.

The appeal herein is dismissed, with the costs in favor of respondent.

SULLIVAN, J., concurs.

(47 Wash. 30)

RAPP et al.

(Supreme Court of Washington. Aug. 17, 1907.)

Evidence in an action on accepted drafts by the assignee thereof held sufficient to go to the jury on the contention that plaintiff was not a purchaser for value before maturity without notice of defects.

[Ed. Note. For cases in point, see Cent. Dig. vol. 7, Bills and Notes, § 1879.]


Defendants, in an action on an accepted draft by the assignee thereof against the acceptors, for the purpose of showing, as part of their defense of failure of consideration, the condition on which the worthless jewelry, in payment



FULLERTON, J. The appellant is a banking corporation doing business at Iowa City, in the state of Iowa. The respondents are merchants doing business in this state. the summer of 1904 the Puritan Manufacturing Company, of Iowa City, Iowa, contracted to sell and deliver to the respondents certain jewelry at the agreed price of $254, to be paid for in four quarterly payments, of $63.25 each, "if the purchaser gives his four acceptances, each for one-quarter of the amount, to close the account within ten days from the date of delivery; otherwise terms are net cash 15 days, 6% discount cash 10 days." sale was made by the Puritan Manufacturing Company's traveling salesman. On the receipt of the order given the salesman by the respondents, the jewelry company shipped them certain jewelry, and at the same time drew upon them four drafts payable according to the terms of the contract of sale above quoted. These the respondents accepted on August 3, 1904. On September 30th thereafter the Puritan Manufacturing Company indorsed them and delivered them to the appellant. The drafts were not paid at maturity, and this action was brought to recover thereon. The respondents defended on the ground that the jewelry shipped them was not as warranted by the jewelry company, and was utterly worthless for any purposes for which they could use it, and that there was for that reason no consideration for the drafts. The appellant claimed to be a purchaser of the paper for value before maturity and without notice of any defect therein. On these issues a trial was had to a jury, resulting in a verdict and judgment for the respondents.

It is first assigned that the court erred in refusing to sustain the appellant's challenge to the sufficiency of the evidence; it being contended that the respondents' evidence was insufficient to constitute a defense. But we

think the court properly submitted the matter to the jury. On the question of the value of the goods, the respondents testified that they were not as represented, and that all they were able to sell of them were returned by the purchasers after a short time because of their inferior quality; and other witnesses, called as experts in the jewelry line, testified that the goods were worthless for the purposes of legitimate trade. On the question of the knowledge of the appellant of this failure of consideration the evidence is not so direct. Still we think it sufficient to sustain the verdict. While it is true the president of the appellant bank did testify in his examination in chief that the bank purchased the drafts after they had been duly accepted by the respondents, without notice or knowledge on his part of any defects therein, yet on cross-examination he admitted that he knew the character of the business the drawer of the drafts was engaged in: that the bank had purchased large quantities of their paper, and had had a number of lawsuits over it where the defense was failure of consideration. His evidence, moreover, leaves a doubt whether there was any actual purchase of the paper-whether the pretended purchase was not rather a scheme to aid the seller of the goods than an engagement in ordinary trade. When, in connection with this, it is remembered that the business of the seller was hardly legitimate that it was, in fact, little better than obtaining money by false pretenses-it is rather too much to say there is no evidence from which the jury could rightfully draw the conclusion that the bank official did not testify truthfully in his direct statement. The evidence was sufficient to go to the jury, and the challenge was properly denied.

It is next assigned that the court erred in admitting, over the objection of the appellant, evidence relating to the representations of the traveling salesman of the Puritan Manufacturing Company. But this was a necessary part of the respondent's case. They were obligated to show the condition on which they purchased the goods, in order to show a failure of consideration. This evidence was directly in point for that purpose. The written order, which the appellant urges represents the entire contract, was at best obscure, and subject to interpretation. The interpretation put thereon by the salesman to induce a sale could be properly put in evidence to show a failure of consideration.

The testimony of the witness Hoyt as to a similar transaction with the appellant bank was admissible as tending to show knowledge on the part of the bank of the character of the paper they were purchasing from the Puritan Manufacturing Company.

The judgment appealed from is affirmed.

HADLEY, C. J., and MOUNT and CROW, JJ., concur.

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junction, where the complaint alleged he owned Plaintiff was entitled to a preliminary inand had been in peaceable possession of an easement to maintain a pipe line to convey oil; that defendants wrongfully and maliciously tore up 4.000 feet of the pipe, and mutilated and rendered it useless, with intent to wantonly prevent the exercise of the easement: that defendants threatened to, and would, if not restrained, prevent plaintiff by force from relaying the pipe line which was essential in the continued marketing of plaintiff's oil, and that the damage from such wrongful acts would be irreparable: that plaintiff's actual damages already sustained | were $7,500, the answer admitting the tearing up of pipe, and merely raising the issue of the ultimate title and property rights of the parties, showing that plaintiff, if he should finally prevail, would not be irreparably damaged by the acts temporarily enjoined, and it not appearing plaintiff's use of the pipe line pendente lite would be of any serious detriment to defendant. [Ed. Note. For cases in point, see Cent. Dig. vol. 27. Injunction. §§ 305, 306.]

In Bank. Appeal from Superior Court, Santa Barbara County; J. W. Taggart, Judge. Action by the Brookshire Oil Company against the Casmalia Ranch Oil & Development Company and others. Defendant company appeals from an order denying its motion to dissolve a temporary injunction. firmed.

W. H. Chapman and Henley C. Booth, for appellant. appellant. Richards & Carrier and McD. R. Venable, for respondent.

MCFARLAND, J. This is an appeal by the defendant the Casmalia Ranch Oil & Development Company from an order of the superior court denying said defendant's motion to dissolve a temporary injunction. The injunction was issued upon the complaint in the action, and the motion to dissolve was based entirely upon the complaint and the answer of the defendant filed to the complaint. No showing was made on the motion other than what appeared on the face of the said pleadings.

It is averred in the complaint, which was filed March 2, 1905, that on February 24, 1905, and for more than 30 days prior thereto, plaintiff was the owner and in the peaceable possession of an easement and privilege granted to it by the owner of certain lands subject to said easement "to construct and maintain a pipe line for the conduct of oil" from certain oil lands in the vicinity owned by plaintiff across the said lands subject to said easement to a certain station on the Southern Pacific Railroad, and, being in the peaceable possession of said easement and privilege, the plaintiff prior to February 24, 1905, had constructed a line of oil pipes four inches in diameter across the said lands; that on said February 24, 1905, in the ab

sence of plaintiff and its officers and agents, the defendants wrongfully, maliciously, and without any right whatever tore up about 4,000 feet of said pipe, and mutilated and rendered the same useless; and that, by reason of said acts, plaintiff suffered actual damage on account of pipe destroyed in the sum of $2,500, and damage by loss incident to the prevention of the conduct of oil from the oil lands of plaintiff to said railroad station in the sum of $5,000. It is also expressly averred that in doing these acts defendants were guilty of oppression and malice, and that they did said acts with intent to wantonly, oppressively, etc., prevent plaintiff in the exercise of his said easement, and that plaintiff was entitled to receive as vindictive damages the further sum of $10,000. It is also averred that defendants threaten to, and will, if not restrained by the court, prevent plaintiff by force from relaying and re-establishing its said pipe line and easement during the pendency of this action, that said line is essential to the continuance of the marketing of the oil products from plaintiff's land which are constantly being produced from wells thereon, and that the damage to plaintiff from said wrongful acts will be irreparable. The prayer is for damages in the sum of $17,500, and for a final injunction restraining defendants from continuing said unlawful acts, and for a temporary injunction during the pendency of the action. Upon this complaint, duly verified, the court granted the preliminary injunction enjoining defendants from preventing or in any way interfering with, the construction and maintenance of said pipe line, and from removing any part of the same until further order in the premises.

In the answer the ownership and possession of the alleged easement is denied; and it is also denied that defendants "wantonly, maliciously, and oppressively" tore up the oil pipe as alleged in the complaint, but it is not denied, and is admitted, that defendants did actually tear up said pipe, etc., and it is not denied that defendants will prevent plaintiff from relaying said line. There are also denials of the amount and the irreparable nature of the damages suffered, and of some other of the averments of the complaint. It is also averred-and appellant relies greatly on this averment-that on November 25, 1897, George B. Arellanes was the owner in fee of a certain tract of land, which may be called for brevity the "Juan Arellanes Rancho"; that this is the land which plaintiff claims to be subject to its alleged pipe line easement; that on said November 25, 1899, Arellanes, as party of the first part, executed to C. C. Morehouse and others, as parties of the second part, a certain written instrument. of which a copy is attached to the answer marked "Exhibit A"; that this instrument was duly acknowledged and was

on December 2, 1899, duly recorded in Book 2 of Leases in the office of the recorder of Santa Barbara county, in which county said land is situated, and has ever since remained a record in said office; and that afterwards, on December 2, 1899, the said Morehouse and others, parties of the second part to said instrument, by a written instrument executed, acknowledged and duly recorded, assigned to defendants herein, the said Casmalia Company, all the right, title, and interest which said Morehouse and others had by virtue of said instrument of February 25, 1899, which is called a "lease."

It is contended by appellant that said instrument of February 25, 1899, vested the lessces therein named with full possession of all the surface of the Arellanes rancho, so that neither the lessor nor any other person could enter upon any part thereof without the consent of the said lessees except as trespassers, and that, therefore, the plaintiff herein could not subsequently to the execution of said lease acquire the easement asserted in the complaint, or any right or privilege whatever in said land adverse to appellant. Respondent contends that this lease, on its face, gives to the lessees only the right, for a term of years, to produce petroleum and other hydrocarbon substances from said land, and to drill and operate oil and gas wells thereon, and to use such part of the land, and to lay and operate such pipe lines, etc., and to have such rights of way, as should be necessary to carry on said business of producing oil, etc., from said land; but did not give said lessees any possession of any part of said land not used by them in said business. We need not, however, examine into this matter, because it goes only to the question of title which is to be determined on the final decision of the case on its merits, and not to the propriety of the refusal of the court to dissolve the temporary injunction. The verified averments of the complaint show a clear case for the equitable interposition of the court by a preliminary injunction. The answer does not in any way change the basis upon which rested the equitable considerations which led the court to grant the injunction. The answer merely raises the issue of the ultimate title and property rights of the parties in the premises involved in the action. It does not deny the facts upon which the equitable right to an injunction pending the determination of the issue of title rested. It does not show that plaintiff, if it should finally prevail in the action, would not be irreparably damaged by the acts of appellant which are temporarily enjoined. A court will sometimes hesitate to grant a preliminary injunction, even upon a strong showing of the plaintiff, when it appears that the injunction may seriously injure or disturb the use of the property or possession of the defendant; but there is no consideration of that kind in the case at bar. It nowhere appears that, even if appellaut

should finally prevail, the continuance by plaintiff of the use of the pipe line during the pendency of the action would be any serious detriment to appellant, or would in any material way interfere with the exercise of whatever rights in the premises appellant has by virtue of said lease, or that it obstructs appellant in anything it has done, or has to do, in carrying out its right of prospecting for and taking oil, etc., from said land. On the other hand, if respondent should finally prevail, it is apparent that, in the absence of the preliminary injunction, it would have unjustly suffered great and irreparable damages. We think that the case presents an exceedingly proper one for the employment of the aid of a preliminary injunction, and that no reason appears for disturbing the ruling of the court in refusing to dissolve it.

The order appealed from is affirmed.


(151 Cal. 553) TRINITY COUNTY BANK et al. v. HAAS et al. (Sac. 1,463.) (Supreme Court of California. July 26, 1907.) 1. MORTGAGE-CONSTRUCTION-NONPAYMENT


A note and mortgage, being parts of one transaction, are to be read together, and the mortgagee may rely on the provision in the mortgage making the principal due for nonpayment of interest at his option, though the note contains no such provision.

[Ed. Note. For cases in point, see Cent. Dig. vol. 35, Mortgages, §§ 214, 215.]


Where a mortgage provides that, on default in payment of interest, at the mortgagee's option the whole debt shall become due, the mortgagee need not, before commencing a foreclosure action, notify the defaulting mortgagor of his election to declare the principal due.

[Ed. Note. For cases in point, see Cent. Dig. vol. 35, Mortgages, § 1209.]

3. SAME.

Where a mortgage provides that, on default in payment of interest, at the mortgagee's option the whole debt shall become due, the principal sun does not become due ipso facto upon default in interest payment, but the clause gives the mortgagee a mere option which he may take or waive, and the option is lost if before it has been exercised the mortgagor pays or offers to pay the overdue interest.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 35, Mortgages, § 1209.]



Under the express terms of Civ. Code, § 1500, where a mortgagor's tender of interest was refused, a deposit in a bank of good repute of the amount to the mortgagee's credit, with notice thereof to the mortgagee, amounted to payment of the interest.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 39, Payment, § 24.]


A mortgagee cannot be held to have exercised an option under the mortgage entitling 91 P.-25

him to declare the whole debt due on default in payment of interest until by some outward act beyond a mere mental determination or a direction to his own agents he has manifested an election.

[Ed. Note. For cases in point, see Cent. Dig. vol. 35, Mortgages, § 1209.]


Where the complaint in a foreclosure ac tion alleges that the plaintiffs "elect" to declare the whole debt due for default in payment of interest, proof may not be made of an election made before the commencement of the action.

Department 1. Appeal Appeal from Superior Court, Trinity County; James W. Bartlett, Judge.

Action by the Trinity County Bank and another against F. G. Haas and others. Defendants appeal from a decree foreclosing a mortgage and from an order denying a new trial. Reversed and remanded.

William C. Bissell, for appellants. D. J. Hall and H. R. Given, for respondents.

SLOSS, J. The defendants appeal from a decree foreclosing a mortgage, and from an order denying their motion for a new trial.

On January 11, 1904, the defendants F. G. Haas and Emily E. Haas made and delivered to plaintiffs their promissory note for $5,969.73, payable one year after date, with interest thereon at the rate of 1 per cent. per month from date until paid, said interest payable quarterly, and, if not so paid when due, to be added to the principal and to bear interest at the same rate as the principal sum. On the following day said defendants executed and delivered to plaintiffs a mortgage of real property to secure their note. The mortgage provided that, "in case default be made in the payment of the said principal or any installment of interest as provided, then the whole sum of principal and interest shall be due at the option of the said parties of the second part (the payees), or assigns." On September 6, 1904, the defendants F. G. and Emily E. Haas conveyed to the defendant Joseph Elliott the greater part of the mortgaged premises, Elliott assuming the payment of the mortgage debt.

The first installment of interest, payable on April 11, 1904, was paid when due. This action was commenced October 17, 1904, the plaintiffs alleging in their complaint that no further interest had been paid, and "default having been made in the payment of the sum of interest due July 11th, 1904, plaintiffs, in accordance with the terms of said mortgage, elect to declare the whole of said principal sum and interest thereon from April 11th, 1904, now due and payable." The answers allege that all interest due upon said note or by said mortgage "has been heretofore paid, and that the principal sum of said note and mortgage is not yet due." The court found against the plea of payment, found that plaintiffs had, on or about the 3d day of October, 1904, elected to declare the principal and interest due, and, as has been stated,

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