creditor, but under the contract. However, the mere fact that there is a contract right to a transfer will not prevent it from being a preference. National City Bank v. Hotchkiss, 231 U. S. 50. It has been held that a transfer of goods within the four-month period, according to a prior agreement, as payment for money that had been advanced to be used in their production is not a preference. Hurley v. Atchison, etc. Railroad Co., 213 U. S. 126; Sieg v. Greene, 225 Fed. 955. Cf. In re Klingaman, 101 Fed. 691. But in the principal case no part of the equipment was obtained with the money advanced by the company. The decision, nevertheless, may be justified by considering the contract as one to cut timber or, upon default, to convey the property. A default having been committed, there remains the promise to convey the mill and its equipment. This promise, although it relates partly to personalty, is specifically enforceable, for it also involves land and is indivisible. Leach v. Fobes, 77 Mass. 506; Fowler v. Sands, 73 Vt. 236. There arises then an equitable ownership in the equipment which strips the transfer of its preferential character.

BILLS AND NOTES PURCHASERS FOR VALUE WITHOUT NOTICE- BURDEN OF PROOF IN SUIT FOR CANCELLATION. - In a suit by the maker for the cancellation of a negotiable instrument shown to have been secured by fraud of the payee, the question arose as to who had the burden of proving the defendant holder a holder in due course. Section 59 of the Negotiable Instruments Law provides that "Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he or some person under whom he claims acquired the title as a holder in due course." Held, that the burden is on the defendants. Lundean v. Hamilton, 169 N. W. 208 (Ia.).

In a bill in equity for cancellation of an instrument for fraud, failure to allege that defendant is not a purchaser for value without notice is a demurrable defect. Molony v. Rourke, 100 Mass. 190. And what a party must plead he has the burden of establishing. LANGDELL, EQUITY PLEADING, 2 ed., § 185. The rules in equity should also apply to equitable defenses at law. Logically, therefore, in an action at law on a negotiable instrument by a subsequent holder, a maker setting up the defense of fraud should have the burden of establishing that plaintiff took with notice. But the rule developed that this burden be transferred to the plaintiff when fraud is shown. Its origin may have been in the principle of a discovery, the facts being peculiarly within the holder's knowledge. Cf. Lord Portarlington v. Soulby, 6 Sim. 356. In view of the pleadings the only burden shifted to the holder should be that of going forward with the evidence. Such burden, however, the courts confused with that of establishing the facts by a preponderance of evidence, owing to the dual aspect of the ambiguous term "burden of proof." See Abbott, "Two Burdens of Proof," 6 HARV. L. REV. 125; 4 WIGMORE, EVIDENCE, §§ 24832489. Thus the rule became established that this ultimate burden should be saddled upon the holder. Harvey v. Towers, 6 Ex. 656; Atlas National Bank v. Holm, 71 Fed. 489. The same interpretation is made under the Negotiable Instruments Law. Parsons v. Utica Cement Co., 82 Conn. 333, 73 Atl. 785; Leavitt v. Thurston, 38 Utah 351, 113 Pac. 77. Being settled at law this construction should be followed in equity, although the result conflicts with the pleadings. Regester's Sons Co. v. Reed, 185 Mass. 226, 70 N. E. 53; Mills v. Keep, 197 Fed. 360.

CONFLICT OF LAWS - TRUSTS INTER VIVOS - WHAT LAW GOVERNS. Two settlors, of New York and New Jersey respectively, contributed an equal amount to a fund of which they declared themselves trustees by instrument

executed in New Jersey. The fund was in New York and a New York trust company was named as alternate trustee. The New Jersey settlor died, and the New York settlor filed this bill for a settlement of accounts and a construction of the trust deed. The question arose as to what law governed the disposition of unexpended accumulations. Held, that the New York law

governed. Curtis v. Curtis, 173 N. Y. Supp. 103.

It is well settled that the validity of a testamentary trust of personalty is determined by the law of the testator's domicile at the time of his death. Whitney v. Dodge, 105 Cal. 192, 38 Pac. 636; Canterbury v. Wyburn, [1895] A. C. 89. Cf. In re Crum, 98 Misc. 160, 164 N. Y. Supp. 149. See 19 HARV. L. REV. 457. As to declarations of or transfers on trust inter vivos, the law of the situs of the res would seem to govern its validity, as that law alone can effectively create an interest in the res. See Cammell v. Sewell, 5 H. & N. 728. Green v. Van Buskirk, 5 Wall. (U. S.) 307, 7 Wall. (U. S.) 139. See also 20 HARV. L. REV. 382, 394. Where, however, it is held that the cestui que trust acquires but a right in personam against the trustee and not rights in rem, though the validity of the transfer to the trustee would be determined as above by the law of the situs, yet the validity of the trust would be determined by the law of the place of the declaration of or the transfer on trust. See 17 COL. L. REV. 467, 497. In either case the administration of a trust of personalty must be governed by the law of the place where the testator or settlor intended the trust to be administered. First National Bank v. National Broadway Bank, 156 N. Y. 459, 51 N. E. 398. See 20 HARV. L. Rev. 382, 395. See also 17 HARV. L. REV. 123, 570. As in the principal case it was clear that the settlors intended the trust to be administered in New York, and as the right of the life cestui que trust to accumulated income is a question of administration, the court properly applied New York law.

CONSTITUTIONAL LAW - CONSTRUCTION, OPERATION, AND ENFORCEMENT OF CONSTITUTIONS - FEDERAL POWER OVER LANDS OF UNITED STATES WITHIN A STATE. Section 2296 of the United States Revised Statutes provides: "No lands under the provisions of this Act shall in any event become liable to the satisfaction of any debt or debts contracted prior to the issuing of the patent therefor." The entryman contracted debts, some before the issuing of the final certificate, others after it but before the issuing of the patent. Held, that the statutory exemption covers all these debts. Ruddy v. Rossi, U. S. Sup. Ct., No. 17, October Term, 1918.

For a discussion of this case, see NOTES, page 721.

CRIMINAL LAW - HOMICIDE - THREATS - THREATS TO TAKE THE LIFE OF THE PRESIDENT. An act of Congress made it an offense punishable by fine of $1,000 or imprisonment not exceeding five years, or both, knowingly and wilfully to make a threat against the President. 39 STAT. 919, c. 64. An indictment was brought under this act charging John Stobo with making a threat in the following language: "The President ought to be shot and I would like to be the one to do it." The indictment did not allege that the threat was addressed to any one, or that it was uttered with intent to menace the President, or that any one heard it. Held, that the indictment fails. United States v. Stobo, 252 Fed. 689 (Dist. Ct., Del.).

For a discussion of threats under this statute, see NOTES, page 724.

EQUITY

EQUITABLE EASEMENTS OR SERVITUDES

INTENTION OF PARTIES.

In developing a tract of land for the sale of building lots, the owner installed a sewage system according to a plan, the system being operated by a pumping plant on the owner's land. By an agreement with the village the owner agreed to run the plant as long as the system should be in use. After a number of

lots had been sold, the defendant bought the tract and continued to sell lots, but discontinued operating the plant, which resulted in an overflow of sewage dangerous to public health. In an action by the village to determine who was to bear the expense of operation, held, that the defendant must bear it. Village of Larchmont v. Larchmont Park, 173 N. Y. Supp. 32.

Equity, in order to carry out the intention of the parties, will enforce agreements restricting the use of land for the benefit of other land on the theory that an equitable easement or servitude has been created. Smith v. Young, 160 Ill. 163, 43 N. E. 486; Peck v. Conway, 119 Mass. 546, 549; Tulk v. Moxhay, 11 Beav. 571. Accordingly, if the intent appears from a deed referring to a plat, the intention will be enforced. White v. Tide Water Oil Co., 50 N. J. Eq. 1; Chickhaus v. Sanford, 83 N. J. Eq. 454, 91 Atl. 878; Smith v. Young, supra. The same is true when the deed does not refer to the plan. Briggs v. Sea Gate Ass'n, 211 N. Y. 482, 105 N. E. 664; Tallmadge v. The East River Bank, 26 N. Y. 105. In the principal case, the plan of the sewage system was to confer a benefit on the land sold by allowing sewage to flow to the pumping plant. An equitable servitude having thus arisen, the defendant alone must bear the expense of abating the nuisance caused by the overflow, not only as to the lots sold by him, but also as to those sold by his predecessor since he bought the servient estate with notice. Whitney v. Union Railway Co., 11 Gray (Mass.) 359; Tallmadge v. The East River Bank, supra. And it follows that if the village had not brought the action, the purchasers of the lots could have maintained a suit for specific performance of the equitable servitude. Tulk v. Moxhay, supra; Tallmadge v. The East River Bank, supra. CONCLUSIVENESS.

- JUDICIAL ADMISSIONS

EVIDENCE The complainant brought a bill in equity to enjoin the infringement of his label, alleging similarity and confusion. The defendant answered and counterclaimed to enjoin the complainant from infringing the former's label, admitting the complainant's averment of similarity and confusion, but alleging and subsequently proving his own label to be the elder. The lower court reasonably found that on the evidence offered there was no confusion. Held, that the averments in the bill are conclusive against the complainant on the counterclaim. Wrigley v. Larson, 253 Fed. 914 (Circ. Ct. App.).

Admissions in the pleadings amount to a waiver of proof of the facts pleaded. They are conclusive against the pleader on the issue in which they occur. Paige v. Willet, 38 N. Y. 28; S. W. Broom Co. v. Bank, 52 Okla. 422, 153 Pac. 204. But on another issue in the same cause the pleadings may not be used as admissions. Nye v. Spencer, 41 Me. 272; Ayres v. Covill, 18 Barb. (N. Y.) 260. Neither could such judicial admissions be used in a subsequent suit as admissions by a party. Allegations were not at common law supposed to be necessarily truthful, but merely served the purpose of raising an issue. Starkweather v. Kittle, 17 Wend. (N. Y.) 20. Even with the development of chancery pleading, bills were not admissible in a subsequent suit. Kilbee v. Sneyd, 2 Molloy ((Ir. Chanc.) 186; Durden v. Cleveland, 4 Ala. 225. To-day, however, pleadings in law and equity are not considered fictitious, as they must be signed or sworn to, and are competent evidence in subsequent suits. Pope v. Allis, 115 U. S. 363; Elliott v. Hayden, 104 Mass. 180. Such averments are then certainly competent evidence on another issue in the same cause. State v. Firemen's Ins. Co., 152 Mo. 1, 52 S. W. 595; Derby v. Gallop, 5 Minn. 119. In equity, moreover, the defendant does not separate his pleas into negative and affirmative. The answer is treated as homogeneous. See LANGDELL, SUMMARY OF EQUITY PLEADING, § 68; 3 WIGMORE, EVIDENCE, § 2122. There is, then, practically only one line of pleading, and the averments of the complainant in the present case are therefore conclusive against him.

FIXTURES REMOVAL OF — ANNEXATION BY CONDITIONAL BUYER TO REALTY OF ANOTHER, SUBJECT TO A MORTGAGE.-A conditional buyer of steam boilers and radiators annexed them to the realty of another which was subject to a prior mortgage. The mortgagee, who was ignorant of the conditional sale, brought this suit of foreclosure. Held, that the boilers and radiators are subject to the mortgage. Realty Associates v. Conrad Construction Co., 173 N. Y. Supp. 25.

When an owner of realty annexes thereto fixtures which he bought on a conditional sale, and then subsequently mortgages the land, the fixtures are held to be subject to the mortgage, either because a bona fide purchaser cuts off an equitable estate or because of a judicial dislike for secret liens. Horn v. Clark Hardware Co., 54 Colo. 522, 131 Pac. 405; Bank v. Wolf, 114 Tenn. 255, 86 S. W. 310. Contra, Falaenau v. Reliance Steam Foundry Co., 74 N. J. Eq. 325, 69 Atl. 1098; Adams v. Interstate Building Association, 119 Ala. 97, 24 So. 857. As to the rights of prior mortgagees, opinions differ. Some jurisdictions allow such mortgagees to treat the fixtures as subject to the mortgage, regardless of the possibilities of removal without impairing the realty. Clary v. Owen, 15 Gray (Mass.) 522; Fuller-Warren Co. v. Harter, 110 Wis. 80, 85 N. W. 698; Tippett & Ward v. Barham, 180 Fed. 76. Other states hold that the agreement between the vendor of fixtures and the mortgagor of the realty is valid against a prior mortgagee only if removal of the fixtures is possible without damaging the realty. Blanchard v. Eureka Planing Mill Co., 58 Ore. 37, 113 Pac. 55; Detroit Steel Cooperage Co. v. Sistersville Brewing Co., 233 U. S. 712. This seems the better view, since the mortgagee's security is not impaired. Though in the principal case the mortgagor was not the conditional buyer, yet as the annexation of chattels to the realty by one having no right, title, or interest in either, makes them part of the realty, and as in the principal case they could not be removed without impairing the mortgagee's security interest, the case seems well decided. See Peck-Hammond v. School District, 93 Ark. 77, 123 S. W. 771; Goddard v. Bolster, 6 Greenleaf (Me.) 427.

INSURANCE WHETHER CHANGE IN INTEREST, TITLE, AND POSSESSION SHERIFF'S SALE CONSTITUTES. The plaintiff insured real property subject to a mortgage lien against loss by fire, the policy to be void for change in interest, title, or possession. Loss occurred after judgment of foreclosure and the sheriff's sale, but before the expiration of the statutory period allowed for redemption. Held, that the policy was not avoided by the foreclosure or sheriff's sale. Collins v. Iowa Manufacturers' Ins. Co., 169 N. W. 199 (Iowa). Hostility of the bench to forfeitures in insurance has polarized the decisions construing conditions as to changes in interest, title, and possession in favor of the insured. So a binding contract for the sale of land is not such a change of title as will avoid a policy. See I AMES, CASES IN EQUITY JURISDICTION, 242, note. The bent of the courts is evidenced by recoveries allowed for loss between the adjudication and appointment of trustees in bankruptcy. See 21 HARV. L. REV. 531. On the other hand change of the equitable ownership ought to be recognized as a change of interest. Skinner v. Houghton, 92 Md. 68; Gibb v. Philadelphia Co., 59 Minn. 267. But see VANCE ON INSURANCE, $161. This should be so not only in the ordinary contract for the sale of land, but also when a court of equity confirms a contract of sale made by a master, or where there is a sheriff's sale. See 13 HARV. L. REV. 223. See FREEMAN, LAW OF EXECUTION, 2 ed., § 326. In the latter situation equities may be cut off before the sheriff's deed is executed. See II HARV. L. REV. 131. But where statute allows a period for redemption following the sale, the equitable interest of a mortgagor or his purchaser would seem unaffected by the sale until the expiration of the prescribed period. See IOWA CODE, §§ 4044, 4045, 4289. See 2 POMEROY, §§ 1190, 1227, 1228. Accordingly the principal case

is supported by the great weight of decision. Wood v. American Fire Ins. Co., 149 N. Y. 382, 44 N. E. 80; Stephens v. Illinois Mutual Fire Ins. Co., 43 Ill. 327.

CONTROL BY CONGRESS

INTERSTATE COMMERCE FEDERAL STATUTE AGAINST SHIPPING LIQUOR INTO STATES WHICH PROHIBIT ITS MANUFACTURE AND SALE. A federal statute prohibits the shipment of intoxicating liquor into states which prohibit its manufacture and sale (39 STAT. L. 1069). Defendant was convicted under this statute for carrying intoxicating liquor for his personal use from Kentucky into West Virginia, which prohibited the manufacture and sale of liquor but did not prohibit its importation for personal use. Held, that the statute was not unconstitutional. United States v. Hill, 39 Sup. Ct. Rep. 143.

The power of Congress to regulate interstate commerce is limited only by the constitution of the United States. Hipolite Egg Co. v. United States, 220 U. S. 45. It extends to absolute prohibition. Lottery Case, 188 U. S. 321. Means may be adopted for its exercise that have the quality of police regulations, even though the states have police power over the same subject within their boundaries. Hoke v. United States, 227 U. S. 308. The statute is therefore constitutional unless it involves such an unreasonable and arbitrary discrimination between states as to constitute a denial of due process of law. A statute prohibiting the sale of liquor to Indians for a limited time after they had lost the character of tribal Indians has been held a reasonable exercise of the power to regulate commerce with the Indian tribes. Dick v. United States, 208 U. S. 340. And likewise a statute prohibiting the sale of liquor in a portion of a state inhabited partially by tribal Indians. Ex parte Webb, 225 U. S. 663. A statute taxing corporations has been held not an arbitrary discrimination between classes of persons. Corporation Tax Cases, 220 U. S. 107. The principal case goes slightly further than these, as the statute goes beyond the state policy which is the basis for the distinction, but this basis is nevertheless a sound one, and on the whole the discrimination does not seem an unreasonable

one.

ABUSE OF PRIVI

LIBEL AND SLANDER - PRIVILEGED COMMUNICATIONS LEGE. —A bank depositor requesting blank checks received some with the name of an association faintly stamped above the line for signature. The depositor, oblivious to the stamp, signed and distributed the checks. The bank returned the checks to the payees, with "Forgery" written upon them, and an attached slip marked "Signature Incorrect. The depositor brought action for libel and slander against the bank. Held, that he may recover. Schwartz v. Chatham & Phenix National Bank, 172 N. Y. Supp. 762.

The charge "Forgery" is actionable per se as imputing an indictable offense. Herzog v. Campbell, 47 Neb. 370, 66 N. W. 424. A libellous publication reasonably impressing one as designating the plaintiff renders the defendant liable. The King v. Clerk, 1 Barn. 304. That the plaintiff is not named by the defendant is immaterial if intrinsic evidence makes apparent the allusion to him. Van Ingen v. Mail & Express Pub. Co. 156 N. Y. 376, 50 N. E. 979. Accusation of an illegal drawing by the plaintiff on the association's funds is reasonably to be inferred from the charge. Communications between banks and payees of checks drawn thereon, concerning their validity, are, on principle, privileged. Christopher v. Akin, 214 Mass. 332, 101 N. E. 971; Rotholz v. Dunkle, 53 N. J. L. 438, 22 Atl. 193. But a privilege exceeded is a privilege lost. Payne v. Rouss, 61 N. Y. Supp. 705; Smith v. Smith, 73 Mich. 445, 41 N. W. 499. In the absence of a privilege or where one is exceeded no malice need be shown. POLLOCK, Torts, 7 ed., 600; 23 HARV. L. REV. 218. The charge "Forgery" in addition to the notification "Signature Incorrect," was