L. Ed. 1090; Kutzmeyer v. Ennis, 27 N. J. Law, 371; and the authorities cited in Rose v. Wollenberg, supra. The agreement was not, however, to warrant and defend the title to the land purchased by the plaintiff, nor was it to pay or discharge the judgment liens. But it was to indemnify and save plaintiff harmless from any injury or damage he might suffer by reason of such liens. The cause of action on the contract therefore did not accrue at once, and could not until plaintiff was in some way injured by its breach. This did not occur until he was entitled to bring and prosecute an action thereon, and that was only when he was compelled to pay the lien to save his property (Rowsey v. Lynch, 61 Mo. 560), and is therefore not barred by the statute of limitations."

The leading English case supporting the opinion of the principal case is Thomas v. Cook, 8 Barn. & C. 728, 3 Moody & R. 444, which was afterwards rejected in Green v. Cresswell, 10 Ad. & El. 453, but finally established in the case of Reader v. Kingham, 13 C. B. N. S. 344. See 39 L. R. A. 378, note. which says that case has been followed by the great majority of cases in England and the United States ever since, though the reasons for the adoption of such rule have not always been the same. Upon the proposition that such a promise is not within the statute of frauds,see Apgar v. Hiler, 24 N. J. Law, 812; Ferrell v. Maxwell, 28 Ohio St. 383, 22 Am. Rep. 393; Barry v. Ranson, 12 N. Y. 462; Hogg v. Thomas. 35 La. Ann. 298; Jones v. Shorter, 1 Ga. 294, 44 Am. Dec. 649; Horn v. Bray, 51 Ind. 55, 19 Am. Rep. 743; Potter v. Brown, 35 Mich. 274; Blake v. Cole, 22 Pick. 97; Oldham v. Broom, 28 Ohio St. 41; Phillips v. Preston, 45 U. S. (5 How.) 278, 12 L. Ed. 152; Sanders v. Gillespie, 59 N. Y. 558; Westfall v. Parsons, 16 Barb. 648; Harrison v. Sawtell, 10 Johns. 242, 6 Am. Dec. 337; Cortelyou v. Hoagland, 40 N. J. Eq. 1; McDaniels v. Flower Brook Mfg. Co., 22 Vt. 274; Baker v. Dillman, 12 Abb. Pr. 313; Hockaday v. Parker, 8 Jones L. 16; Dorwin v. Smith, 35 Vt. 69; Spear v. Farmers' & M. Bank, 156 Ill. 559; Jones v. Letcher, 13 B. Mon. 363. The contrary doctrine has been held in Missouri. Bissig v. Briton, 59 Mo. 204, 21 Am. Rep. 379, and in Virginia, Wolverton v. Davis, 85 Va. 64.

A PERSON WHO SIGNS A NEGOTIABLE INSTRUMENT IN BLANK BEFORE DELIVERY IS LIABLE AS AN INDORSER. In the case of Thorp v. White, 74 N. E. Rep. 592, the facts were as follows: The defendant Hannah C. Hand irregularly became a party to the promissory note set forth in the bill of complaint, as before delivery she signed her name in blank on the back of an instrument of which the defendant White was the maker, and the plaintiff the payee. Dubois v. Mason, 127 Mass. 37, 38, 34 Am. Rep. 335. According to the law relating to negotiable promissory notes before St. 1898, p. 502, ch. 533, § 64, cl. 1, took effect, she

was liable as a promisor between hereself and the plaintiff, though entitled to notice as if she were an indorser when the note was not paid at maturity by the maker. Fay v. Smith, 1 Allen, 477, 478, 79 Am. Dec. 752; Brooks v. Stackpole, 168 Mass. 537, 47 N. E. Rep. 419; Black v. Ridgway, 131 Mass. 77, 84. But after the negotiable instruments act became operative this distinction was abolished, and the effect of her signature was to make her an indorser as to all parties. Rev. Laws, ch. 73. § 81.

After she had signed and given the note to White, he wrote in the body of it, without her knowledge and consent, the words, "with the privilege of renewal for one year from April 30, 1904," and then delivered it to the plaintiff, who took it without knowing of this change. If such an alteration had been made by the plaintiff after delivery, and it was found to have been material, the defendant would have been relieved from performance of her promise. But if deemed immaterial, she would have been held liable. Lee v. Butler, 167 Mass. 426, 430, 46 N. E. Rep. 52, 57 Am. St. Rep. 466; Gaylord v. Pelland, 169 Mass. 356, 360, 47 N. E. Rep. 1019; Jeffrey v. Rosenfeld, 179 Mass. 506, 61 N. E. Rep. 49; James v. Tilton, 183 Mass. 275, 67 N. E. Rep. 326. It, however, becomes unnecessary to decide whether this rule should be applied where the change was made under the conditions previously stated, for either way the defendant was not discharged. See Draper v. Wood, 112 Mass. 315, 17 Am. Rep. 92. The note was put in circulation as a contract on delivery to the payee, who, upon acquiring title by its negotiation, thus regularly became a holder of it within the provisions of Rev. Laws, ch. 73, §69. Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 144, 66 N. E. Rep. 646, 97 Am. St. Rep. 426; Mehlinger v. Harriman, 185 Mass. 245, 70 N. E. Rep. 51; Baldwin v. Dow, 130 Mass. 416. By reason of her being an owner or holder in due course without notice of the alteration, under the provisions of section 141 of this chapter she can enforce payment of the note according to its original tenor.

United States is written on the New York standard form, and the interests affected by a decision involving that form of contract mount far up into the billion dollars. No decision has more seriously affected the rights of the insured, under the New York standard form of fire insurance policy, than that of Atlas Reduction Co. v. New Zealand Ins. Co., decided by the United States Circuit Court of Appeals, Eighth Circuit, April 24, 1905, and published in the Federal Reporter of August 10, 1905. The decision of the Supreme Court of the United States, on which. it rests, was not so far reaching. It affected, it is true, the power of the insurance agent and declared that his knowledge of other insurance could not be proved to show a waiver of the forfeiture declared in language similar to that used in the Atlas Reduction case. But in the Atlas Reduction case there was an indorsement such as is ordinarily used to show a consent to a chattel mortgage in the form of a loss payable clause. Merely by omitting to state that the chattel mortgage was consented to in so many words the insurance is forfeited. A chattel mortgage is not shown to be consented to by stating in the policy that the loss is payable to individuals who are in fact and to the knowledge of the insurer's alter ego, the chattel mortgagee. Had there been an indorsement on the policy in the Grand View Building case of simply "other insurance" without adding the word "permitted" and the decision had been the same, the cases would have been more alike. The cases are both of paramount importance to litigants where the New York standard form of policy is involved. With this statement the language of the court becomes more pertinent than anything the writer of this article can say at this time and the opinion so far as it is confined to the decision of the points in controversy follows. A brief statement of the facts:

This was an action at law by the Atlas Reduction Co., a Colorado corporation, George B. Dodge, and Archie M. Stevenson, upon a policy of fire insurance issued by the New Zealand Insurance Co., a New Zealand corporation, to the reduction company, upon certain

1 138 Fed. Rep. 497.

2 Northern Assurance Co. v. Grand View Building Assn., 183 U. S. 308, 22 Sup. Ct. Rep. 133, 46 L. Ed. 213.

property, real and personal-principally personal-belonging to the latter company, and connected with what was known as the "Delano Chlorination Mill." The policy contained these provisions: "This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void if the subject of insurance be personal property and be or become incumbered by a chattel mortgage. This policy is

made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements, or conditions as may be indorsed hereon or added hereto, and no officer, agent or other representative of this company shall have power to waive any provision or condition of this policy except such as by the terms of this policy may be subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions, no officer, agent or representative shall have such power or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under this policy exist or be claimed by the insured unless so written or attached." After the issuance of the policy the property insured was incumbered by two mortgages, one of the realty and the other of the chattels, executed to Dodge and Stevenson to secure the payment of an indebtedness owing to them by the reduction company. On the same day the insurance company's agent at Denver, Colo., who had negotiated and issued the policy, made the following indorsement thereon: "Subject to all the conditions of this policy, loss, if any, payable to G. B. Dodge and A. M. Stevenson as their interest may appear." Subsequently, during the term for which the policy was issued, and during the continuance of the indebtedness secured by the mortgages, the property was destroyed by fire.

The court says: "One claim of the plaintiffs is that the allegations of the complaint are to the effect that the giving of the chattel mortgage was consented to by the insurance company, acting through those in superior authority, such as the board of directors, and not through subordinate agents, whose power was restricted by the terms of the policy, and that it was not necessary that consent so given be indorsed upon or added

to the policy. But, whatever might have been the effect of consent so given, but not indorsed upon or added to the policy, we think the allegations of the complaint are not reasonably susceptible of the interpretation suggested, and that they mean nothing more than that consent to the chattel mortgage was given at the time and place when and where the loss payable indorsement was made upon the policy and by the agents who made that indorsement. The real and controlling question is: What, in view of the plain and unambiguous stipulations in the policy, is the meaning and interpretation of this loss payable indorsement? Obviously, the words used therein must be read in the light of the purpose which actuated the parties in stipulating that policy could be modified, or any provision or condition thereof waived, only by a writing of equal dignity and credit with the policy itself. In this policy it was plainly stipulated that, if the subject of insurance be personal property, and be or become incumbered by a chattel mortgage, the entire policy, unless otherwise provided by agreement indorsed thereon or added thereto, should be void; that the policy was made and accepted subject to the stipulations and conditions therein, together with such other provisions, agreements, or conditions as should be indorsed thereon or added thereto; that in respect of any provision or condition which by the terms of the policy it was within the power of an officer, agent, or other representative to waive, the power to waive the same could be exercised only by a written indorsement upon or addition to the poliey, and that no privilege or permission affecting the insurance should exist or be claimed by the insured unless so written or attached. The loss payable indorsement renewed, and in effect reiterated, all of these stipulations by declaring that it was made 'subject to all the conditions of this policy. It is plain, therefore, that the indorsement was written upon the policy in pursuance of a mutual and expressly declared purpose to make the policy with the indorsement a complete repository and memorial of the entire agreement, and to preclude any resort to parol evidence. Effect should be given to this purpose so far as it can reasonbly be done, and to that end especial care should be taken to find in the indorsement, and in the policy of which it is part,

the means of its proper interpretation. The fact, as alleged in the complaint, that the indorsement was written upon the policy on the same day that the chattel mortgage was executed, is not material, because at most it would only tend to show that the agents of the company knew of the chattel mortgage when the indorsement was written. There being no allegation of fraud or mutual mistake, and this being an action at law, what the agents may have known, and even what they may have said, is of no importance, because by the stipulations of the policy they were powerless to waive any provision or condition or to affect the rights of the parties except by a writing indorsed upon or added to the policy. Whatever was not so indorsed upon the policy or added to it was the same as if not done, because it was not authorized, and was to be without effect. The proper determination of the question whether the incumbrance created by the chattel mortgage was assented to by the company's agents depends entirely upon the true meaning and interpretation of the loss payable indorsement placed by them upon the policy. That indorsement reads: "Subject to all the conditions of this policy, loss, if any, payable to G. B. Dodge and A. M. Stevenson as their interest may appear.' Could the insurance company, consistently with a purpose to insist upon and enforce all the conditions of the policy, agree to pay the loss, if any, to Dodge and Stevenson as their interest may appear? If it could, that is plainly what was done. The indorsement does not mention the chattel mortgage, it does not describe Dodge and Stevenson as chattel mortgagees, and it does not show that the attention of the parties was directed to the chattel mortgage. All this is conceded, and the contention of the plaintiffs, as stated in the brief of counsel, is this: "The language of the indorsement is absolutely broad and embracive. The language is, "As their interest may appear.” This is limited only by their ability to make their interest appear. Whatever interest they may be able, by proper proofs and in the proper manner, to make it appear that they possess, necessarily comes within the meaning and terms of this indorsement. The greater includes the less, and if, at the time of the loss, their interest is made to appear to be that of mortgagees, such interest is neces

sarily included in the terms of this indorsement.' Doubtless this would be a proper interpretation of the words 'as their interest may appear,' if they stood alone or were controlling. They are plainly prospective, and refer, not to an interest existing at the time when the indorsement was written, but to such interest as may appear at the time of the loss, if any, without regard to the character of the interest, or the time when it may have arisen. The interest referred to is not an interest in the property insured, but is an interest in the payment of the loss, whether predicated upon an interest in the property or otherwise. In this respect the terms of the indorsement may be properly said to be 'broad and embracive.' But the question under consideration is not solved by merely ascertaining the meaning of the words 'as their interest may appear.' They do not stand alone, and are not controlling. By the plain terms of the indorsement the consent to pay the loss to Dodge and Stevenson was made 'subject to all the conditions' of the policy. This qualifying clause means that the consent was given upon the express condition that the conditions of the policy were not thereby abrogated or waived, but that they should have effect and be respected in like manner as if the indorsement had not been made. It means that a loss, to be payable to Dodge and Stevenson under the indorsement, must be one which, under the conditions of the policy, would be payable to the insured, and that whatever, under those conditions, would defeat the insured's right to payment in the absence of the indorsement will equally defeat it in the presence of the indorsement. True, if the terms of the indorsement were conflicting—that is, if the appointment of Dodge and Stevenson to receive payment of the insured's loss, if any, was necessarily inconsistent with any condition in the policya familiar rule would require that, to the extent of the inconsistency, controlling effect should be given to that appointment, rather than to the qualifying clause. But is there any such conflict! If not, effect must be given to both the appointment and the qualifying clause, if it can reasonably be done, as it is not permissible to assume that any of the words of the indorsement were employed carelessly, or to no purpose. In respect of this the contention of the plaintiffs is

that by the use of the words 'as their interest may appear' it was assumed and recognized that Dodge and Stevenson had or might have an interest in the payment of the loss, if any should occur, and therefore that consent was impliedly given to any act by which an interest had been or should be acquired, even though it be one which otherwise would avoid the policy; in other words, that consent was impliedly given to any sale of the property insured which had been or should be made to Dodge and Stevenson," and to any chattel mortgage of the personalty which had been or should be given to them, and to any sale to them of the property which had been or should be made on legal process, and to any assignment to them of the policy which had been or should be made. It is not easily conceivable that an indorsement which so distinctly declared a purpose to insist upon and enforce 'all the conditions' of the policy was really intended to abrogate or waive so many of them. Moreover, it was not essential that any act violative of the conditions of the policy should have occurred or should occur to give Dodge and Stevenson an interest in the payment of the loss. They were creditors of the insured and mortgagees of the insured realty, both of which were consistent with the conditions of the policy, and either of which gave them a sufficient interest in the payment of any loss sustained by the insured to support the loss payable indorsement. There was therefore no necessary inconsistency between the assumption and recognition in the indorsement that Dodge and Stevenson had or might have an interest in the payment of such loss, and the express reservation to the company of the right to insist upon and enforce all the conditions of the policy. In these circumstances it cannot be reasonably said that the words 'as their interest may appear' impliedly gave consent to any act violative of the conditions of the policy. A more reasonable view of the office performed by these words is that they define the contingency in which and the extent to which-consistently with the conditions of the policy-the insured's loss, if any should be sustained, was intended to be made payable to Dodge and Stevenson. Without these words in the indorsement, the whole loss would be payable absolutely to Dodge and Stevenson without

any showing of an interest on their part or of its extent. They are words of restriction, not of enlargement. The purpose and effect of loss payable indorsements upon policies of insurance have frequently been considered in the courts, and, in the absence of some provision to the contrary, it has been quite uniformly held that such an indorsement is a mere appointment of a payee to receive payment of the insured's loss, and does not create a new contract of insurance with the payee, or abrogate or waive any condition of the policy. The conclusion, enforced by the plain terms of the policy and of the indorsement, and by settled rules of decision, is that the purpose and effect of the indorsement was to make Dodge and Stevenson the simple appointees of the insured to receive payment of any loss payable to the insured under the original policy, and to receive it not absolutely, but to the extent of any interest which at the time of the loss they might have in such payment, consistently with the due observance by the insured of all the conditions of the policy; that the indorsement did not in terms or by implication consent to the incumberance created by the chattel mortgage, and that in consequence the policy was avoided by that incumbrance."

It has been quite generally held that though a waiver is required to be indorsed a parol waiver is valid.3 Notwithstanding these decisions and many others the federal courts adopt a new theory of construction and add confusion worse confounded to an already pitiful situation. No doubt the state courts will refuse to be bound by this last federal decision as they have the former1 and then this situation presents itself: By removal of a cause to the federal court an insurance company wins; by failure to remove it loses.

The insurance press are fond of striking at companies and individuals purporting to furnish advice to the insured as to how to make their contracts of insurance valid. In view of these decisions an expert insurance lawyer is a necessity to those who carry large lines of insurance to advise as to indorsements if nothing else.

St. Paul, Minn.

ROBERT J. BRENNEN.

8 16 American & English Ency. Law, p. 935, note 5, p. 950, notes 2, 3 and 4, p. 951, note 3.

460 Cent. L. J. 488.

CORPORATIONS - RELIEF GRANTED MINORITY STOCKHOLDERS ON GROUND OF FRAUD.

GLOVER V. MANILA GOLD MIN. & MILL. CO.

Supreme Court of South Dakota, July 6, 1905. Fraud in management of mining corporation by officers and directors, gives right to stockholder to bring action for appointment of receiver and incidental relief and all transactions growing out of same subjectmatter may be joined in one action, where, by such fraud, an attempt is shown to depreciate the stock of company.

CORSON, P. J.: This is an appeal by the defendants from the order overruling defendants' demurrer to the complaint. The complaint is

quite lengthy, and we shall only give the substance of the same. The plaintiff, for himself and all others similarly situated who may choose to unite with him, alleges that the Manila Gold Mining & Milling Company is a corporation duly incorporated and organized under the laws of this state, transacting business in the county of Lawrence; that said defendants C. M. and F. H. Woodbridge and I. A. Webb are directors in said mining company, the said C. M. Woodbridge being president, F. H. Woodbridge being secretary, and I. A. Webb superintendent thereof; that the capital stock of said mining company is $1,500,000, divided in 1,500,000 shares, of the par value of $1 per share; that 750,000 shares of said stock have been placed in the treasury of said company to be sold and disposed of for the purpose of raising funds with which to develop the same, for the purpose of purchasing other property and patenting the same, and making such improvements as might be deemed necessary and expedient; that the plaintiff and said C. M. and F. H. Woodbridge and I. A. Webb are owners of an equal amount of the stock of the said company, being 175,000 shares each; that the defendants C. M. and F. H. Woodbridge and I. A. Webb have had and still have and exercise entire control and supervision of the business of the said corporation, being the majority of the board of directors, which, under the by-laws of such company, constitutes a quorum for the transaction of business of the said corporation; that sald corporation is the owner of a portion absolute, and the remainder held in trust for said company, of 31 mining claims situated in the Germania mining district, in said county, and fully described in the complaint, and that the said mining company has now and has been for some time past the owner and in the quiet and peaceable control and possession of all of the above-described mining ground; that prior to the year 1903 a large amount of work had been done and performed on said ground, disclosing valuable mineral deposits therein, proving said ground to be of great value, but that for the year 1903 only about $500 worth of work had been done altogether on said claims, which is not sufficient to constitute the annual representation