or one entire crossing." In this case the Council had accepted the work done on the roadway—and not work done on the "full width" of the street. The resolution of the Council did not conform to the provisions of section 20, as it did not accept the full width of the street; and it may be doubted whether an acceptance of work done a street is a compliance with that section, for it seems to contemplate the acceptance of a street, when improved under such regulations as the Council may have adopted for that purpose. Those regu lations are such as specify, among other things, the character of the work to be done on a street before it shall be accepted. The acceptance of work done on a street, though it may extend over the whole width of a street, does not necessarily authorize or require the acceptance of the street.

The contract for the work was made (in form) with the plaintiff, the work was done by the plaintiff, the assessment was issued to the plaintiff, and this action was instituted by the plaintiff; and if there was a defect in the power attempted to be conferred by the plaintiff upon the President of the corporation, the matters above recited estop both the plaintiff and the city to deny the due execution of the contract; and such being the case, the defendant can not now be heard to allege that the contract was not executed by the corporation. Were the proceedings irregular in that respect, the remedy of the defendant was by appeal to the Council, as prescribed by the eleventh section of the Act as amended. (See Statutes 1869-70, p. 445.) Besides this, the resolution of the corporation, offered in evidence, seems to confer upon the President ample power to make bids and enter into contracts in behalf of the company.

Judgment and ordered affirmed.

Wallace, C. J., did not express an opinion in this cause.

[No. 5013.]

MORRISON vs. GOLD MOUNTAIN G. M. Co.

BY THE COURT.

1. The agreement, "by the parties in interest," that the plaintiff should be entitled to two thousand five hundred shares of the stock of the company, was not the agreement of the corporation sued as defendant here, for the corporation, at that time, had no existence.

2. It does not appear that the plaintiff had the legal title to the stock mentioned in the complaint.

3. It does not appear that the corporation converted the stock in controversy. The order of Baldwin, as "President of the corporation,” drawn upon himself, as "President of the corporation," followed by a refusal upon his part, and upon that of the Secretary, to deliver the stock, would not amount to a conversion of the stock by the corporation.

Judgment and order denying a new trial reversed, and cause remanded.

[No. 5470.]

PEOPLE EX REL. FRASER vs. SELFRIDGE.

BY THE COURT.

1. The right to be a corporation is in itself a franchise, and to acquire a franchise under a general law the prescribed statutory conditions must be complied with. The Civil Code (section 594) requires that the articles of incorporation shall, among other matters, "set forth *** that a majority of the members of such association * * * voted at such election,” etc. The certificate in this case altogether omits any statement in this respect, and is, therefore, insufficient to constitute the association a corporation.

2. The information avers that the claim of the defendants to be a corporation is based upon the certificate just referred to, and sets out the certificate as constituting the title of the defendants which, as we have seen, is insufficient.

3. The defect appearing upon the face of the certificate is not aided by the averment found in the answer, that in point of fact a majority of the members of the association did vote at the election mentioned in the certificate.

Judgment affirmed.

[No. 5406.]

KENNEDY vs. NUNAN.

BY THE COURT.

*

*

It is provided by section 688, Code Civil Procedure, that "all goods, chattels, moneys, and other property, both real and personal, or any interest therein of the judgment debtor, not exempt by law, * are liable to execution." The deed of trust vested or left an interest in the property in question in Thomas O. Larkin, and such interest is, under the Code, subject to sale under execution.

Order reversed.

[No. 5136.]

MCCREERY vs. SAWYER.

BY THE COURT.

1. The conveyance running to the plaintiff from the City and County of San Francisco was properly admitted in evidence.

When it was offered and admitted the defendant did not appear to have any claim to the title conferred on the city by the Act of March 8, 1866, and conveyed to the plaintiff by the deed in question, and it was, therefore, no concern of his whether the plaintiff had been rightfully determined to be a beneficiary under the Act of 1866 or not. "That was a question" (as was said here, in Le Roy vs. Cunningham) "for the Board of Supervisors, in which the defendant had no concern, inasmuch as he was not entitled to the conveyance." (44 Cal. 609.)

2. The motion for nonsuit, as made in the court below, when the plaintiff rested, was but a repetition in another form of the objections made to the conveyance—“that the plaintiff had not proved title or right of possession to the

demanded premises." The motion assumed that the conveyance made by the city to the plaintiff was inoperative, because it had not been shown by evidence dahored the deed and its recitals, that the plaintiff was a beneficiary under the Act, and it also assumed that the defendant was in a position to liti⚫gate that question.

The views we have expressed under the first point are decisive against the appellant upon this point.

3. It is next claimed by the appellant, in his printed points, that he offered to show that “he was in the actual bona fide possession of the demanded premises on the eighth of March, 1866, and claimed a right under the Act of Congress of that date."

The Bill of Exceptions, as found in the record, however, does not support the claim of the appellant in this respect. Its language upon this point is as follows: "In defense, defendant offered to prove that they had been in the actual, exclusive, and adverse possession of the demanded premises for five years and upward next before the filing of the complaint herein.”

The offer, as thus made to the court below, was objectionable in two prominent particulars :

1. It did not state that such possession as the defendant had was bona fide. 2. Inasmuch as the action was commenced in December, 1873, the offer, as made, did not carry the possession of the defendant, such as it was, as far back as the eighth day of March, 1866. The offer, as made, was not, therefore, an offer to show that the defendant was, or might justly claim to be, a beneficiary under the Act of Congress of March 8, 1866, and was for that reason properly excluded by the court below.

4. The last point made by the appellant is, that he "should have been allowed to prove five years adverse possession."

The only plea found in the record upon which it is claimed that this proof was admissible is as follows: " 'Further answering, this defendant avers that he is and was at the time of the filing of the complaint in this action, and for more than five years immediately prior thereto, the owner, seized in fee, and entitled to the possession of the lands and premises in the first count of said complaint described, and of every part thereof."

It is obvious that this defense, as thus pleaded, is not a plea of the statute of limitations.

Judgment affirmed. Remittitur forthwith.

[No. 5437.]

SEDGWICK vs. SEDGWICK.

BY THE COURT.

The third subdivision of section 1880, Code Civil Procedure, as amended in 1874, provides that the following persons can not be witnesses: "Parties to an action of proceeding, or in whose behalf an action or proceeding is prosecuted, against an executor or administrator, upon a claim or a demand against the estate of the deceased." This action is brought by the executrix, and is brought upon a demand, not against, but in favor of the estate, and, therefore, does not fall within the above-cited provision. The Court erred in excluding the testimony of the defendant.

Judgment and order reversed, and cause remanded for a new trial.

U. S. District Court,

FOR THE DISTRICT OF CALIFORNIA.

JOHN LLOYD, ASSIGNEE, ETC., vs. J. H. STROBRIDGE.

BANKRUPTCY-INSOLVENCY-PREFERENCE-NOTICE.

WHAT CONSTITUTES NOTICE OF INSOLVENCY.-Where the bankrupt executed a mortgage to secure a previous indebtedness in pursuance of an oral promise made at the time the indebtedness was contracted, to give such security if required, and at the time the mortgage was demanded requested to be allowed to secure other creditors by the same instrument, such request was notice to the preferred creditor of the existence of those debts and the bankrupt's inability to meet his demands, and security accepted under these circumstances is a preference and in fraud of the Bankrupt Act, and it is not necessary for secured creditors to have accurate and detailed information as to the resources and liabilities of the bankrupt.

CONSTRUCTIVE NOTICE.-Preferred creditors are chargeable with knowledge of such facts as could be known by the slightest inquiry.

IGNORANCE OF LAW CAN NOT BE PLEADED.-It is not necessary that the creditor should know that the law prohibited him from accepting the preference. It is enough if the creditor knows such facts and circumstances as bring the act within the prohibition of the law, and make it a fraud in legal contemplation.

OF PROMISES TO GIVE SECURITY.-An oral promise made at the time the debt is contracted to give security if required cannot be executed after the debtor has become insolvent.

HOFFMAN, J.

It cannot, I think, be doubted that the bankrupt was in a condition of utter insolvency at the time he executed the mortgage which the bill seeks to set aside.

The real questions in the case are: Did the defendant have reasonable cause to believe that the bankrupt was insolvent, and did he know that a fraud on the Act was intended?

1. The notes given for the original advances by defendant had remained unpaid for about two years.

No part of the interest had been paid, except $600, which was credited on account of interest then due, and which was the price of some horses sold by the bankrupt to the defendant. The latter states that he supposed that the interest accruing on other indebtedness was kept down by the profits arising from the milk ranchos which the bankrupt was operating. But he was fully aware that the latter was unable to pay the interest on the notes held by himself. He was also aware that the bankrupt owed debts to a very considerable amount, which he was unable to pay; for he was urged by the bankrupt to accept a joint mortgage to himself and two other creditors, which he refused, and insisted on the fulfillment of the bankrupt's promise, to give him a first mortgage on the distillery premises.

That the defendant had no accurate and detailed information as to the resources and liabilities of the bankrupt may be admitted.

But the request of the bankrupt, to be permitted to secure other creditors in the instrument to be executed to the defendant, was notice to him of the

existence of those creditors, and of the bankrupt's inability to meet their demands. The circumstance that he demanded the mortgage which the bankrupt had promised to execute to him at any time when "he felt scared or dubious about his loan," and the fact that he asked for security, and not for a payment of a long over-due debt, indicate a knowledge on his part of his debtor's inability to satisfy his indebtedness.

The bankrupt seems to have entertained sanguine and, perhaps, visionary expectations of success in his distilling operations under a patent in which he was interested, and hoped to extricate himself from his embarrassments by forming a stock company, and obtaining, by the sale of the stock, the means of paying his debts and carrying on his business.

But this project seems to have failed-at least so far as the defendant and his friends were concerned, and it was only on their definitive refusal to embark in the enterprise that the promised security was exacted.

The slightest inquiry would have apprised the defendant of the bankrupt's real condition; for he seems to have been known, to almost all who had dealing with him, except the defendant, to be “hard up,” or impecunious.

The defendant had no right to willfully close his eyes to facts, the existence of which he could have ascertained by the slightest effort.

I think that all the circumstances of the case, taken together, lead irresistibly to the conclusion that at the time this defendant received his mortgage he not only had reasonable cause for believing, but was morally certain, that the debtor was insolvent.

If so, it follows that he knew, or is charged with the knowledge, that he had no right to give a preference to any of his creditors, and that in doing so he committed a fraud upon the Act. Of course it is not meant that either of these parties was guilty of any moral delinquency. They no doubt considered it fair and just that the debtor should redeem the promise made when he obtained his advances, to give security if required. But if the law forbade his fulfillment of that promise, and if in doing so he has given a preference, the transaction is in fraud of the Act, and must be annulled.

It is not necessary that the creditor should know that the law prohibited him from accepting the preference, for, otherwise, ignorance of the laws could always be set up as a defense of the transaction. It is enough if the creditor knows such facts and circumstances as bring the Act within the prohibition of the law, and make it a fraud in legal contemplation.

If I am right in these views, the security given in this case can only be sustained by virtue of the previous promise of the bankrupt to execute it.

Whatever may be the law in England, it is settled in this country that a general promise, made at the time the debt is contracted, to give security if required, cannot be executed after the debtor has become insolvent.

Bank of Leavenworth v. Hunt, 11 Wall, 394.

In re Graham, 3 N. B. R., 370.

Ex parte Ames, 7 N. B., 233.

In re Jackson Manfacturing Co., 15 N. B., 445.

And this is for the obvious reason that such a promise is merely a promise to give a preference if a preference should be called for.