Mortgage—Foreclosure.—A mortgage on real estate in Illinois, given to secure the payment of two negotiable notes, contained a covenant that on default of interest both notes should become due at once. The United States Circuit Court allowed a bona fide purchaser of the notes and mortgage before maturity to foreclose, on default of interest, for the entire sum, without reference to equities against the mortgagee. In this they follow the rule of the United States Supreme Court at the same time noticing the fact that the Illinois Supreme Court would allow any defence which would be good between the original parties. Swett v. Stark, 31 Fed. Rep. 858.
Negligence—Bank Directors.—Bank directors are trustees for depositors as well as stockholders, and are liable to both for losses resulting from their neglect of duty. Delano v. Case, 24 Rep. 432 (Ill.).
It is difficult to consider the directors of a bank as trustees for the depositors. The depositors are simply creditors of the corporation; the directors are the agents of the corporation. This being so, the directors are liable only to the corporation for their breach of duty. But they may be liable to the depositors indirectly through the corporation in case of its bankruptcy. That is, the right of action vested in the corporation against its agents is an asset which can be reached by the depositors by a bill in equity to compel the corporation to reduce it to possession. And equity will go farther and join the directors in the suit, thus avoiding multiplicity of actions.
A remedy in tort is not ordinarily given in such cases, except in the absence of other remedy.
Partnership—Liability in Joint Enterprise.—Four companies owning steamboats put the business of obtaining custom for their boats in the hands of a corporation called the Kountz Line. Each company conducted its own affairs, and received from its agents, the Kountz Line Corporation, all the earnings of its own boat. One of the boats, loaded with goods insured by the plaintiff, was lost through unseaworthiness. There was no evidence that the owner shipped the goods on the faith of an existing partnership. Held—The plaintiffs can recover from the other three companies of the Kountz Line on the ground that they held themselves out to the public as partners, and are liable as such. Sun Ins. Co. v. Kountz Line, 7 Sup. Ct. Rep. 1278. Reversing 10 Fed. Rep. 768.
Partnership—Voluntary Associations.—Certain persons, among whom were the defendants, by voluntary contributions ranging from fifty cents to five dollars, formed the “Bridgeport Coöperative Association,” an unincorporated society, for the purpose of providing meat to members and others at cost. On the failing of the concern, it was Held—That defendants were liable individually for the debts contracted by the concern. If the plaintiffs had sued the Association under its assumed name they could have had execution upon the Association property only. The defendants here could have interposed a plea in abatement, and compelled all the members to be joined; but, not having done so, they are liable. The question is determined by the law of agency. Davison v. Holden, 10 Atl. Rep. 515 (Conn.).
Promissory Notes—Accommodation—On Demand.—The fact that a note is an accommodation note is a good defence against a holder for value, who acquired the note after it was due. A demand note is due after a reasonable time, and that is, in most cases, a question for the jury. Bacon v. Harris, 36 Alb. L. J. 282 (R. I.).
Purchaser for Value without Notice.—One who buys property subject to an unrecorded chattel-mortgage, and credits the purchase price upon a debt due from the vendor is not a bona fide purchaser for value, and is liable on a suit to foreclose. Overstreet v. Manning, 24 Rep. 445 (Tex.).
Right of Way.—When land is divided into lots, and a plat is recorded, a conveyance of lots describing them by a reference to the plat carries to the grantee a right of way over the streets therein indicated, even when the fee in the streets remains in the grantor. Chapin v. Brown, 10 Atl. Rep. 639 (R. I.).
The opinion reviews the authorities, and a note collects cases on the dedication of streets to public use by recording such a plat.
Sale by Sample—Caveat Emptor.—Worsted coatings were ordered of cloth manufacturers to equal in quality and weight samples previously furnished. By reason of the mode of manufacture the goods were unfit for their purpose, on account of “slipperiness”—a lack of cohesion between