applicable to this amended count in contract.

The defendant testified that he bought the Woronoff mortgage for $50, and took an assignment of it to himself, and that he was informed by the plaintiffs and the mortgagee that it was a good mortgage. The plaintiff's testified that the defendant was informed that the mortgage was without consideration, was invalid, and was to be discharged. After the defendant procured the assignment of this mortgage to himself, he replevied the goods of the plaintiff from the attaching officer; and, on the trial of that action, a verdict was rendered in favor of the defendant in replevin, and the plaintiff in replevin was ordered to return the goods, and, failing to do so, the officer brought suit against the plaintiff in replevin and the sureties on his bond, which action was pending when the case at bar was tried. The ruling of the court at the trial of the present case upon the effect of this mortgage and the assignment of it, and of the action of replevin, was, I think, sufficiently favorable to the defendant. The ruling of the court upon the effect of the written assignment for the benefit of the creditors of the plaintiffs, I think, was correct. That written assignment, not having been executed by the creditors of the plaintiffs, never took effect. The defendant never has had in his possession the plaintiffs' goods as a pledge under his agreement with them to advance the sum of $800. He got possession by the writ of replevin, but that was not a possession under the agree ment. That possession by the defendant might, perhaps, have excused the plaintiffs from delivering possession to the defendant if he had lent or advanced the money to them as he agreed; but, as it was a possession independent of the agreement, it has nothing to do with the measure of damages for the breach of the agreement. If the purchase of the mortgage and the replevying of the goods as assignee of the mortgage were a wrong to the plaintiffs, upon which I express no opinion, that is a cause of action distinct from the failure to lend or advance the money as agreed.

There was, I think, some evidence for the jury that the defendant made the agreement declared on in the count in contract as finally amended, and that he had broken that agreement, to the damage of the plaintiffs. What, then, is the measure of damages for the failure to advance the sum of $800 under the agreement declared on? The jury, under the instructions of the court, rendered their verdict on October 19, 1896, as follows: "The jury find for the plaintiffs, and assess damages in the sum of $1,500, and interest to date, $315.10, making $1,815.10." If the defendant had owed the plaintiffs $800, and had promised to pay it on a day certain, and had failed to do so, no matter how much the plaintiffs had suffered from this failure, they could recover only $800 and interest. Loudon v. Taxing Dist., 104 U. S. 771; Insurance Co. v. Piaggio, 16 Wall. 378. For a breach of promise to lend or advance money when the plaintiffs have parted with nothing as the

consideration for the promise, but only have made certain promises in return, the damages often are merely nominal. The reasonable cost of procuring another similar loan, or, if another loan has not been obtained, the value of the contract to the plaintiffs, or what it would have cost them to procure a similar loan on the same terms, usually has been allowed as damages. This, I think, is the correct rule. Prehn v. Bank, L. R. 5 Exch. 92; Property Co. v. West [1892] 1 Ch. 271, 277; South African Territories v. Wallington [1897] 1 Q. B. 692. See Greene v. Goddard, 9 Metc. (Mass.) 212, 232, 233; Dodd v. Jones, 137 Mass. 322; 2 Sedg. Meas. Dam. (5th Ed.) 622. Under this rule, I think, i is obvious that the damages never can be more than the amount agreed to be lent, with interest, and usually would be much less, often would be little or nothing. If A. has no property, and owes debts to the amount of $100,000, which he can settle for cash at one cent on the dollar, and B. agrees to lend him $1,000 for this purpose, which sum A. agrees to pay back with interest, it seems to me unwarrantable to hold, as matter of law, that, if B. fail to lend the money, A. can recover of B. $99,000 for the breach. Even if it were held that the value of the indebtedness which A. could discharge with the $1,000, less what he had agreed to pay B. for the loan, is the measure of damages, it still seems to me unwarrantable to hold, as matter of law, that the value of the indebtedness is $100,000. In such a case the fact that the indebtedness can be discharged by the payment of $1,000 tends strongly to show that the indebtedness is not worth more than onecent on the dollar.

The majority of the court, having found that, under the charge of the presiding justice, the jury were permitted to find something for the value of the goods, in addition to the difference between the amount of the debts of the plaintiffs and the $1,000 which the plaintiffs had agreed to pay in discharge of the loan, have permitted the plaintiffs to remit from the principal sum of the verdict all in excess of the sum of $1,400, upon which sum, with interest from February 15, 1893, the plaintiffs, if they elect to remit, are to have judgment. It is said in the opinion, of the difference between the amount of the plaintiffs' debts and $1,000, that "this difference was stated by the judge in his charge to be $1,400, and does not seem to have been in dispute." This difference has not been found by the jury in the answers to the questions put by the court. The presiding justice charged the jury as follows: "Now, if, under these simple instructions, you find the plaintiffs entitled to recover on the count in contract, what are the damages? Well, the plaintiff's say they were in debt $2,400; that Mr. Levenson was to pay one-third of it, by which that would have been settled: and that they were to pay him, in addition to their debts, $200; so that this settlement, if it had been carried out by Mr. Levenson, would have cost

them ultimately $1,000, and by an outlay of $1,000 they would have wiped out $2,400 of debts; so that there they lost $1,400. And they say that they would have had back their property besides, and they have lost whatever those goods were worth. I don't see but that that is a fair statement of the rule of damages, provided the plaintiffs are entitled to recover, with an exception or two, to which I am going to allude." The exception or two to which he after alludes relate to the damages for the value of the goods. It seems that there was evidence that Banewur, one of the plaintiffs, and one Waterman, had taken possession of some of the goods for the value of which, under the instructions of the presiding justice, the defendant might not be liable. Under this rule, the damages to be given for the loss of goods were not damages for the conversion of goods, out damages for a loss of goods occasioned by the breach of the contract. But the goods were not lost to the plaintiffs by reason of the breach of the contract. If they had not been replevied, they would ultimately have been applied in discharge of the indebtedness, and their value, if recovered, will still be 30 applied; and, if this value is not recovered, that is the result of the action of replevin, and the action of replevin was not the natural and probable result of the breach of the contract, but was something independent of the contract. The exact amount of the indebtedness of the plaintiffs is nowhere stated in the exceptions. It is stated in the exceptions "that on or about the 4th day of November, 1892, they [the plaintiffs] had contracted an indebtedness amounting to about $2,400, and that, among their creditors, they owed the defendant for goods purchased of him." The writ is dated June 19, 1894, and the verdict was rendered on October 19, 1896, and the indebtedness is referred to in the charge of the justice at the trial as $2,400, or about $2,400, or “amounting, as it is estimated, to $2,400.” I doubt if there is any such exact determination of the amount of damages found by the jury on account of the difference between $1,000 and the amount of the indebtedness, and of the amount found by them for the value of goods lost by reason of the breach of the contract, as would justify the court in allowing the remittitur, and then permitting the verdict to stand. My principal objection, however, is to the rule of damages given for the breach of the contract, which seems to me erroneous, even if all damages for the value of the goods had been excluded. I think the exceptions should be sustained.

HOLMES and LATHROP, JJ., concur in this opinion.

JONES v. ARENA PUB. CO. (Supreme Judicial Court of Massachusetts. Suffolk. April 16, 1898.) RECEIVERS RIGHTS OF PARTIES-INSOLVENT CORPORATIONS-LIENS ON ASSETS.

1. Where a bill for the appointment of a receiver is entertained under general equity pow

ers, and no injunction issued on the filing of the bill, and the insolvent corporation continued its business as usual, and those dealing with it in the interim were not influenced by the pending suit, and no attachments or other liens were placed on its property, the rights of the parties should be adjusted from the date of the appointment of the receiver.

2. Priorities in the claims for taxes and labor. preferred by common law or statute, will be enforced in the distribution of the assets of an insolvent corporation in an equity proceeding appointing a receiver to wind up its affairs.

Field, C. J., and Allen and Morton, JJ., dis

sent.

Report from superior court, Suffolk county; Henry N. Sheldon, Judge.

Action by Frederick T. Jones against the Arena Publishing Company. Judgment for plaintiff, and a receiver was appointed. From a decree preferring plaintiff's judgment, certain creditors appealed. Affirmed.

S. W. Creech, for appellant, Skinner, Bartlett & Co. A. D. Chandler, for appellee receiver. W. S. Pinkham, for appellees general creditors.

ers.

BARKER, J. The first question is whether the rights of parties should be adjusted as of the date of the filing of the bill or as of the date of the appointment of the receiver. In similar bills, where the jurisdiction is given by statute, the usual course here has been to adopt the date of the filing of the bill or of the issuing of the injunction. Atlas Bank v. Nahant Bank, 23 Pick. 480; Colt v. Brown, 12 Gray, 233; Burdon v. Association, 147 Mass. 360, 17 N. E. 874; Merrill v. Insurance Co., 166 Mass. 238, 44 N. E. 144; Williams v. Association, 166 Mass. 450, 44 N. E. 342. The date of the filing of the bill has also been adopted in some instances where the bill was filed under general equity powSee Fogg v. Supreme Lodge, 156 Mass. 431, 31 N. E. 289; Garham v. Society, 161 Mass. 357, 37 N. E. 447. But in Merrill v. Insurance Co., ubi supra, it was said that the court had no occasion then to consider what the rule should be in cases where receivers are appointed under general equity powers, and we think that there is no settled rule which forbids the adoption of the date of the appointment of the receiver where the bill is entertained under general equity powers. The more usual rule elsewhere seems to be that in such cases the date of the appointment of the receiver should be adopted. High, Rec. § 136 et seq.; Beach, Rec. (2d Ed.) § 217 et seq.; Smith, Rec. § 17; Gluck & B. Rec. § 89; 5 Thomp. Corp. c. 159. Without intending to prescribe a fixed rule, we think that in the present case the adoption of the date of the appointment of the receiver will be more fair to all parties than that of the filing of the bill, and that the decree in this respect should be affirmed. There was no injunction issued upon the filing of the bill. The corporation continued its business as usual, and those who dealt with it in the interim did so without being influenced, so far as appears, by the fact that the suit was pending, and in the

interim no attachments or other liens were placed upon the property. In this particular case the only effect of holding that the proceedings should relate back to the filing of the bill would be to raise the question whether bills contracted by the corporation during the interim, not upon faith in the proceedings, but upon the ordinary credit of the corporation, should be treated as if incurred by the receiver in execution of the powers afterwards given to him, or should go wholly unpaid. The questions whether taxes and debts due to workmen for labor are entitled to priority may be considered together. The relief sought is merely the getting in and the distribution of what are known in equity as legal assets. "In the course of the administration of assets, courts of equity follow the same rules in regard to legal assets which are adopted by courts of law, and give the same priority to the different classes of creditors which is enjoined at law; thus maintaining a practical exposition of the maxim, 'Equitas sequitur legem'" (Story, Eq. Jur. § 553; Morrice v. Bank, Cas. t. Talb. 218, 220, 221); and it makes no difference whether the general rules and policy of the law to which equity conforms are stated in common or the statute law (Pom. Eq. Jur. § 425). It would be a plain injustice if a general creditor, by resorting to equity for the administration of its debtor's goods, merely for the reason that by its aid the amount to be divided would be larger, could gain a further advantage by reducing to the level of common creditors workmen, whose wages would have priority if the assets were left to be administered at law, or could thus place his own debts upon an equality with taxes which would have been paid in full had not equity intervened. The defendant corporation was subjected to our insolvency law by force of St. 1890, c. 321, and, if equity had not come in to conserve and distribute its legal assets, the wages of its workmen and the taxes due from it would have priority in the distribution of its assets by the usual agencies of common law. Those agencies could not keep its business going until the enactment of St. 1897, c. 120. For this reason only the creditors, merely to increase the amount of the fund, asked equity to interfere in behalf of all creditors alike. It would be unjust if that interference should be at the sole cost of the workmen and of the public, through depriving claims for labor and taxes of the priority of payment which they would have had if equity had not intervened. As a precedent in this commonwealth, the question is not now of great importance, as the legislature, by St. 1897, c. 400, has declared that in the settlement of estates by receivers such claims shall have priority. In the present case that statute does not control, but, without it, in administering merely legal assets because our aid has been asked for a merely incidental matter, we may say that wages and taxes shall not lose the priority they would have at law merely by

the change in the tribunal which deals with the assets. In Com. v. Phoenix Bank, 11 Metc. (Mass.) 129, the decision was upon other grounds, and this court has said, in holding that the same rule should be applied in ascertaining the balances due between a corporation whose affairs are being wound up in equity by receivers and its creditors and debtors as when its assets were to be dealt with in bankruptcy or insolvency, that equity will not permit the general rule to be affected by the question by whom or in what forum the proceedings are set in motion; and also that in ascertaining the amount due to any creditor the court will follow as far as practicable the rule established by statute in proceedings in insolvency or bankruptcy. Com. v. Shoe & Leather Fire & Marine Ins. Co., 112 Mass. 131; Com. v. Hide & Leather Ins. Co., 119 Mass. 155. Rather than to commit an injustice in the administration of the assets, the court might well decline to distribute the fund, and require the institution of proceedings in insolvency, in order that the fund might be distributed by assignees. But we think the court has power to recognize priorities which would have obtained if the assets had been administered in common-law tribunals, and that the superior court was right in so holding. The justice of the superior court gave directions upon these points which followed the insolvency statutes, and gave only such preferences as would have been given if the assets had been distributed in insolvency.

The directions upon the other questions were right. The business went on in good faith, and without being in any way affected by the pendency of the bill until the appointment of the receiver. Notes given in the prosecution of the business up to that time should be allowed whenever they mature, with the addition or rebate of interest as in insolvency proceedings. There is no reason why the claim of Skinner & Co. should have priority. The printing and binding for which they claim priority of payment was done in pursuance of a contract with the corporation made in 1891, and not at the request of the receiver, nor for the purpose of aiding the court either in keeping the business alive or administering the assets of the corporation. Decree affirmed.

FIELD, C. J. I am unable to assent to the opinion of the majority of the court concerning the priority or preference to be given to certain debts due from the defendant corporation. There was no statute in force when the suit was commenced giving priority of one unsecured debt over another, which, in terms, seems to me applicable to the proceedings. The practice has obtained in the courts of the United States in cases of receiverships of railroad corporations, particularly in suits brought by mortgagees for a foreclosure, for the court to authorize the payment as preferred debts of certain claims against the

railroad company which had accrued before the appointment of a receiver, or before the bill was filed, and these claims have been allowed, not only against income, but sometimes against the corpus of the property in the hands of the receiver. The extent to which this practice has prevailed appears in the cases cited in Beach, Rec. (3d Ed.) § 394 et seq. There is no precedent for any such practice in this commonwealth. So far as I am aware, this practice has obtained only in receiverships of railroad companies, and the decisions are not uniform upon the specific grounds on which the practice can be justified, or upon the extent to which it should be carried; and the practice has been much citicised. The practice has been defended largely upon the ground of the quasi public nature of railroad corporations, and it has not prevailed in receiverships of private corporations other than railroads. Wood v. Safe-Deposit Co., 128 U. S. 416, 9 Sup. Ct. 131; Raht v. Attrill, 106 N. Y. 423, 13 N. E. 282; Bank v. Moore, 106 Ala. 646, 17 South. 705; Kneeland v. Trust Co., 136 U. S. 89, 10 Sup. Ct. 950. In all the cases of receiverships before this court, so far as appears in the reports, there is no precedent for the allowance against a corporation of debts as preferred when the debts were due at the time when the bill was filed, unless the debts were liens on or were secured by the property of the corporation, or were entitled to a preference by the provisions of some statute applicable to the case, or by the general law. There is, I think, no general power in a court of equity to create a preference of one unsecured debt over another, when the debts existed at the time the suit was brought, and by the general law were equally entitled to be paid without priority or preference on the part of one over another. Such a power is, in its nature, a legislative power. A court of equity cannot create rights of property where none previously existed. If, by the common law in Massachusetts, there is prerogative right or priority in favor of the commonwealth, and of its municipalities for the payment of debts or taxes due them, then the taxes should be preferred; but I doubt if, in this commonwealth, either the state, county, or city is entitled to priority of payment for debts or taxes unless it is given by statute, or unless there is a lien on property. It is not contended that any such priority at common law exists in favor of the wages of operatives, clerks, and servants. It seems to me impossible to construe the special provisions of the statutes relating to insolvency concerning preferred debts as intended to be applicable to proceedings under the general equity powers of the court. The provisions of those statutes dissolving attachments, made not more than four months before the time of the first publication of the notice, etc., have been held not applicable to proceedings similar to the pres

N. E. 369; Merrill v. Insurance Co., 166 Mass. 238, 44 N. E. 144. Those statutes, I think, were passed solely with reference to the statutory proceedings in insolvency, and the repeal of those statutes would have no effect upon the present proceedings. The subject of the settlement of estates by receiv ers is now regulated by St. 1897, c. 400, which was passed after the present suit was begun, and after the time had expired for the proof of claims. Whether, in the present case, a court of equity should not have declined to take jurisdiction on the ground that the proper remedy was in insolvency, I do not consider. See White v. White, 169 Mass. 52, 47 N. E. 499; Pond v. Railroad Co., 130 Mass. 174. It is true that equity usually follows the law in the distribution of legal assets; but this means the general law, whether it is common law or statutory law. Provisions of statute applicable to special proceedings are not a part of the general law. Many of the provisions of our statutes relating to insolvency were, in their origin, derived from the practice of courts of equity, and in the marshaling of assets and securities equity now often adopts a procedure analogous to the procedure in bankruptcy or insolvency. Bank v. Woodward, 137 Mass. 412; Franklin Co. Nat. Bank v. First Nat. Bank of Greenfield, 138 Mass. 515; Merchants' Nat. Bank v. Eastern Railroad, 124 Mass. 518; Com. v. Shoe & Leather Fire & Marine Ins. Co., 112 Mass. 131. But that the wages of operatives, clerks, and servants should be preferred is no part of the general doctrine of equity concerning the general marshaling of assets and securities. In the administration in equity of the assets of a partnership, although the firm debts are preferred to the individual debts of the partners in the distribution of the firm assets, I am aware of no decision which prefers debts due to operatives, clerks, and servants for wages unless the preference is authorized by statute. The contention in the present case must be that a court of equity has the power to create preferences in such a suit as the present according to its opinion of what, on the whole, is equitable, and that in the exercise of this power it is equitable to follow the statutory provisions relating to estates in insolvency. Pub. St. c. 157, § 104. I agree that if a court of equity has the power in the case of insolvent corporations, there are strong reasons of policy why it should follow in this respect the statutes relating to insolvency; but I have found no authority for the existence of any such power in the case of receiverships of private business corporations, such as the defendant company. I think that, where there is no lien, and no statute authorizing priorities which can be construed as applicable to the proceedings, and the priorities are not sanctioned by the general law, debts due to operatives, clerks, and servants for wages are not entitled to priority in proceedings in eq

uity. It has been considered in Massachusetts that, when statutes creating priorities cannot be construed so as to be applicable to proceedings in equity, courts of equity follow the maxim that equality is equity. Ellis v. Railroad Co., 107 Mass. 1; Bank v. Colt, 1 Gray, 382; In re Heywood [1897] 2 Ch. 593; Lyon v. Tax Receiver, 52 Mich. 271, 17 N. W. 839; In re Ranger (Com. Pl.) 26 N. Y. Supp. 866; Com. v. Phoenix Bank, 11 Metc. (Mass.) 129. See American Loan & Trust Co. v. Northwestern Guaranty Loan Co., 166 Mass. 337, 44 N. E. 340.

ALLEN and MORTON, JJ., concur in this opinion.

WILHELM v. CITY OF DEFIANCE. (Supreme Court of Ohio. March 1, 1898.) MUNICIPAL CORPORATION-CONSTRUCTION of SideWALK BY PROPERTY OWNER - LIABILITY FOR NEGLIGENT CONSTRUCTION.

A municipal corporation, having in the proper mode provided for the construction of a sidewalk, and notified the owner of abutting land, may require of him the construction of a sufficient walk in front of his premises, and upon his default may itself construct such walk, and assess the cost thereof upon his land; but it cannot recover from him indemnity on account of a judgment recovered against it for injuries occasioned by such owner's negligent construction of the walk.

(Syllabus by the Court.)

Error to circuit court, Defiance county. Action by the city of Defiance against Adam Wilhelm. A judgment for defendant in the court of common pleas was reversed on error in the circuit court, and he brings error. Reversed.

The city of Defiance filed its petition against Wilhelm in the court of common pleas, alleging, in substance, that he was the owner of lot 1, abutting on Clinton street, in said city; that an ordinance of the city required the owners of lots abutting upon the streets of said city to construct and maintain in front thereof good and sufficient sidewalks (when constructed of wood, to be 6 feet in width, and laid with good, sound pineboard planks, not less than 6 nor more than 12 inches wide, and 11⁄2 inches thick, and free from sap and unsound knots, on white or burr oak stringers, etc.); that on November 7, 1889, the council of said city adopted a resolution declaring it to be necessary to improve the walk in front of Wilhelm's lot in accordance with the provisions of the general ordinance relating to wooden sidewalks, and that notice thereof was personally served upon Wilhelm; that Wilhelm thereupon took upon himself the work of constructing and repairing said walk, but constructed it in a negligent manner, and of unfit and defective materials, and left it in an unsafe and dangerous condition, in consequence whereof one Martha L. Sammis, while lawfully passing along said walk, without fault on her part

sustained severe injuries, for which, in the court of common pleas, a judgment had been awarded her against the city for $1,500, and $103.53, the costs of suit; that, before the trial of her said action against the city, Wilhelm was notified of the pendency of said action, and that the city would require him to indemnify it for all damages which it might be adjudged to pay her; and that it paid the amount of the judgment so recovered by her, and demanded of Wilhelm that he reimburse it, which he failed to do. The prayer of the petition was for a judgment for the amount which the city so paid to Mrs. Sammis. In the court of common pleas a final judgment was rendered in favor of Wilhelm on his demurrer to the petition. On a petition in error by the city, the circuit court reversed the judgment of the common pleas.

Henry & E. H. Newbegin, for plaintiff in error. Edwin A. Latty, for defendant in er

ror.

SHAUCK, J. (after stating the facts). In Morris v. Woodburn, 57 Ohio St. 330, 48 N. E. 1097, we held that if the owner of a lot abutting upon a street of a municipality, for the use of his property, constructs a vault under the sidewalk, over which he negligently places and maintains a defective covering. he is liable directly to a foot man injured thereby, notwithstanding the omission by the municipality of the duty imposed upon it by statute to keep the street in repair. And since the decisions in City of Chicago v. Robbins, 2 Black, 418; Id., 4 Wall. 657,-it seems to be the settled law that, if a municipal corporation is held in damages for its failure to keep a sidewalk in repair by removing the source of danger so created by an abutting owner for his own personal ends, it may, having given him notice of the pendency of the suit against it, recover from him the amount which it is adjudged to pay because of his tort. But it is not assumed that the grounds upon which recoveries were sustained in those cases are available here. The opinion of the circuit court in the present case (12 Cir. Ct. R. 346) shows that it was mindful of the fact that the statute imposes upon the municipality, and not upon the abutting owner, the duty of keeping the streets and sidewalks in repair, and free from nuisance. It is conceded that the law imposes upon such owner no duty with respect to the walk, whose mere omission could be asserted as the foundation of an action against him. According to the view there taken, Wilhelm, having assumed the duty of constructing and maintaining the walk, thereby became bound to exercise due care in the selection of materials, and reasonable skill in constructing and repairing the walk; and by his failure in respect thereto he actively created the dangerous place, and negligently left it unguarded, whereby he be came directly liable to the person injured, or