former volume of this journal (vol. 3, p. 636). Since then it has been announced by Dillon, Circuit Judge, in an oral opinion delivered upon the intervening petition of Hopkins, in the case of Ketchum v. The Pacific Railroad, that Mr. Justice Miller, at a late term of the United States Circuit Court for the District of Iowa, rejected all such claims, irrespective of the date at which the supplies were furnished. Indeed, in this case of Ketchum v. The Pacific Railroad, after supplyclaims to the amount of some $300,000, and other floating debts which were not contracted for supplies, had been audited and paid by the receivers, none of the parties in interest opposing, the railroad attorneys for some reason or other concluded to oppose the last claim - that of the Bremen Bank, which came straggling in at the eleventh hour. This claim amounted to some $400 or $500, while the amount of general indebtedness which had been previously paid by the receivers— we mention it to the great honor of the bondholders-amounted to $700,000. Nevertheless, this claim being opposed, the court, Treat, J., felt bound to administer the law, and it was rejected. It appears, then, to be a settled rule of the federal courts, that, no matter how recent the date at which the supplies were furnished before the appointment of the receivers, and no matter how permanent their character, as in the case of locomotives or steel rails, they can not be paid for if the beneficiaries under the mortgage before the court object. But the question still remains: Is this such a rule of equity as can permanently stand without exceptions? We do not believe that it is. Where a railroad mortgage empowers the trustees, after default in the payment of principal or interest, to take possession of the road, and operate it or sell it for the benefit of the bondholders, and they neglect to exercise this power, and after default and notorious insolvency still leave it in the hands of the company, and the company contracts debts for supplies, in order that it may be kept in operation with safety for the benefit of the public,— can the mortgagees, standing by and looking on while this is done, afterwards step in and take to themselves whatever betterments the property thus receives, without any compensation to those who have furnished them? Is not the rule of admiralty, after all, a good one to apply to a railroad thus situated? We believe it is. A railroad is not like ordinary property; it is a public agency. It must be kept in a safe condition, and must be continuously operated for the carriage of the mails, and otherwise for the benefit of the public. It can no more be suffered to stop or fall to pieces, or to become dangerous to travel, than a ship can be suffered to go down at sea with all on board. In the juncture we have named, is not the rule a good one, that he who furnishes the last assistance must first be paid? Is not the corporation to be deemed, under such circumstances, a mere tenant at will and agent of the mortgagees, and should not the material-man be treated as having given credit to the latter, and not to the former?

NOTICE RECEIVED FROM TITLE PAPERS. One of the familiar doctrines of equity jurisprudence is that which protects purchasers in good faith against the assertion of adverse claims to the property purchased. But, in order that they may be entitled to such protection, they must have purchased without notice, actual or constructive, of such claims. When the subject of the purchase is real property, the purchaser ordinarily relies upon the public records, provided by the registry laws of most of the states, for information as to the title. If, from such records, a connected chain of title appears, by a succession of deeds from the general government down to the grantor, it may be safely assumed that he is the true owner, unless there is an outstanding equity or unrecorded conveyance in favor of some one else.

The purchaser has constructive notice of the contents, not only of his own deed, but of every instrument constituting a link in his chain of title, whether such instrument comes to his possession or not. And, if the recitals in any one of such instruments disclose an outstanding title, whether legal or equitable, he will be as effectually charged with notice as though he had actual knowledge of the facts disclosed by such recital, whether the recital consists of an unqualified statement of the existence of the outstanding title, or directly refers to another instrument where the same is declared. And such purchaser, charged with notice, in this manner, of any trust subject to which the legal title was held by his grantor or any antecedent owner of the real estate, takes the same subject to such trust, and holds as trustee for the cestui que trust whose interest is disclosed by the title papers or facts to which their recitals would lead an inquirer of ordinary diligence. Hackwith v. Damron, 1 Monroe, 237; Neale v. Hagthorp, 3 Bland, 551, 586; Hagthorp v. Hook, 1 Gill & J. 270, and cases cited below.

So where, upon the face of the deed from the grantor, there is reference to other transactions in relation to the same property, the purchaser shall be deemed to have constructive notice of the instruments recited or referred to in his deed. Oliver v. Piatt, 1 How. (U. S.) 333, 410. This doctrine is none the less applicable where the fact of which the purchaser has constructive notice is merely the existence of a contract to convey, and the conveyance to be made is an equitable interest, and not the legal title to the property. Acer v. Westcott, 1 Lansing, 193. And where the deed, whether it be that of his immediate grantor, or of one more remote, is fraudulent on its face, one who purchases under it is a purchaser with notice of the fraud, and the land will be subject to the lien of a subsequent judgment creditor. Johnson v. Thweat, 18 Ala. 742.

In the case of Nelson v. Allen, 1 Yerg. (Tenn.) 360, 367-8, this doctrine is applied to a purchaser at an execution sale, where the transaction is classed as a conveyance by statute. The conveyance is declared to consist of the judgment, the levy, and the sheriff's deed, each of which is held

to be an essential requisite to constitute a conveyance. Upon the validity of each of these constituents must the purchaser depend to effectuate a transfer of the interest of the judgment debtor, and the absence of either would render the conveyance inoperative for the purpose of vesting such interest in the purchaser. The record of the judgment and decree forming part of the conveyance under which the property was claimed in this case, when looked into, disclosed the fact that such judgment and decree were utterly void for want of jurisdiction in the court by which they were rendered. It appeared that the plaintiff in this case was the son and heir of A. N., and, at the time of the suit in which the void judgment was rendered, was an infant of tender years, was not a party to said suit, and was never before the court; that one H. caused himself to be appointed, in Tennessee, administrator of the estate of A. N., who lived in Georgia up to the time of his death, and left no personal property there, and that he left none in Tennessee. H., in the character of such administrator, and also in the character of creditor, under color of such authority as was conferred by statute, instituted his suit to charge the real estate of the son and heir in Tennessee with the satisfaction of his claim against the ancestor, prosecuted the suit to judgment and decree, and at the execution sale became the purchaser of a tract of six hundred and forty acres of land for the price and sum of twenty-five dollars. The notice of the facts above recited, as disclosed by the record of the judgment, was held to be conclusive upon all those who held under the purchaser at the execution sale, for the reason that they could not make out their title except by reference to such sale as a necessary link to connect them with the original owner; and this involuntary conveyance was not complete without the judgment, the record of which would disclose the facts.

As a fair illustration of the remoteness of the conveyance, the recitals of which are held to be constructive notice to purchasers, it is sufficient to state that, when the title is traced to a patent from the general government, and the recitals are contained in such patent, they are held to be notice to all purchasers of the real estate. Bonner v. Ware, 10 Ohio, 465; Brush v. Ware, 15 Pet. 93.

The lien which the vendor of real estate has upon the same for the purchase-money is one which will always be protected by a court of equity, where it can be done without prejudice to innocent purchasers. And when, by reference to the deeds through which the title of the purchaser's grantor was derived, he might have learned that a former grantor had sold on a credit, and his grantee had done likewise, it was held to be his duty to inquire of all the parties,-particularly the creditor, to whom the several purchasers had respectively assumed payment of the purchase-money,-and learn whether or not the same had been paid. Not having exercised this diligence, it was held in Honore's Exr's v.

Bakewell, 6 B. Monroe, 67, 73, that the land was still charged with the vendor's lien, notwithstanding that the purchaser had no actual notice of the

same.

In Martin v. Nash, 31 Miss. 324, it was held that a purchaser, at a sheriff's sale on an execution against the original enterer, could only make out his title by reference to the books in the land office, which show the entry; and if there was an entry of assignment there, prior to the rendition of the judgment upon which the execution was based, it would amount to constructive notice and would be binding upon the purchaser.

This doctrine is frequently invoked where title is claimed under a will; as where, in Harris v. Fly, 7 Paige Ch. 421, a testator devised his farm to his son, and gave to his two daughters a legacy of one thousand dollars each, to be paid by the son, whom he made residuary legatee. The real estate was held in equity to be charged with the payment of the legacies, unless there was something in the will to rebut the presumption that the testator intended so to charge the estate devised; and a subsequent purchaser from the devisee or his grantee, who was obliged to trace his title through the will, was held to have constructive notice of the charge, and to take the land subject thereto. And where the testator, in the will under which the purchaser claimed, devised to his son fifty acres out of the north-west corner of the tract claimed by the purchaser, unless it had been selected elsewhere, and never given up, this would be sufficient to charge the purchaser with constructive notice of the claim of the son for fifty acres, because any person, on reading the will, would be led to inquire whether the devisee had got his fifty acres, and if he had taken it elsewhere than in the corner designated. The information contained in the will was sufficient to put the purchaser upon inquiry, and this would amount to notice. McAteer

v. McMullen, 2 Barr (Pa.), 32; Johnston v. Gwathmey, 4 Litt. 317. It will be noticed that a question, as to the certainty with which the particular property affected by the will was indicated, seemed to be involved in this case. "Fifty acres out of the north-west corner" would be rather an indefinite description for ordinary purposes; and is rendered still more uncertain by the conditional nature of the devise by which the ancestor's disposition of the fifty acres out of the designated corner of his farm is made to depend upon the fact that the son has not already selected his allotment elsewhere. It has been frequently held that the recitals in deeds and other instruments affecting the title to real estate do not amount to constructive notice to purchasers, unless such recitals are sufficiently clear and explicit to lead to actual knowledge. See French v. The Loyal Co., 5 Leigh. 629; Lodge v. Simonton, 2 Penn. 439. But it is not always required that the recitals shall amount to express notice of the precise land affected. It is deemed sufficiently certain, as in the case of McAteer v. McMullen, supra, if it is capable of being rendered certain. So where the codicil to a will, through

which the title to land was traced, recited the fact that the plantation and tract of land in a particular township, near to the premises of a Mr. H, was the joint property of the testator and another, the notice was held sufficiently certain, though it did not state whether the land joined that of H on the north, south, east or west side. Especially was this so, where this tract was the only one owned or possessed by testator in that township at the time of his decease, or which answered the description in any point. Lodge v. Simonton, 2 Penn. 439. And where L purchased a church and lot of H. B, who had previously executed an agreement allowing to certain denominations of Christians certain privileges and benefits in the church property, and in his deed to L declares that the same is conveyed, etc., " together with all and singular the rights, liberties, privileges, hereditaments and appurtenances thereunto belonging, in as full and ample a manner, and with all the same rights and conditions, authorities and agreements with which said H. B. and wife now hold the said premises, as regards all or any assemblies for divine worship;" it was held that the above quoted recital was full notice to the purchaser of the previous agreement made with the bodies of Christians. Bellas v. Lloyd, 2 Watts, 401. As a recital to operate as notice to purchasers, the above probably goes to the uttermost limit of obscurity. In the case of Bell v. Twilight, 2 Foster (N. H.), 500, 521, the operation of the recital is confined to the fact recited. There the second mortgage referred to a prior mortgage in which it was recited that "part of the premises above described are subject to a lease and mortgage to D. F. & C., and a mortgage to S. F., B. F., and H. F., as by reference to the Rockingham records will more fully appear." It was held that this would only amount to notice of the conveyances described, and if there were none such, would not be notice of an unregistered conveyance to D. F. and wife. So, also, in Kaine v. Dennison, 10 Harris (Pa.), 202, it is held that a recital in a deed that the same was executed in fulfillment of a trust reposed in grantor by grantee, does not amount to notice of any other trust than one in favor of the grantee. But where land was mortgaged to secure the payment of two notes, neither of which had any priority over the other, and which were due to different payees, at a sale of the land to satisfy one of them, the purchaser will be charged with notice of the lien of the other, because the mortgage under which the sale is made recites the fact. Burrus v. Boulbac, 2 Bush, 39.

A purchuser from one of two joint owners or tenants in common would, of course, have notice of the interest of his grantor's co-tenant, where such interest is shown by the conveyance to which he must look for the title of his vendor, whether the instrument be recorded or not. Campbell v. Roach, 45 Ala. 667. And a deed of release from one of the members of a partnership, to himself and partner, describing them as a firm engaged in a certain business, was considered an instrument of such singularity as to put the purchaser upon

inquiry, and so charge him with notice of the fact that this was partnership property, while a deed from a third party to the same grantees by their firm name would only give notice that they were tenants in common. Sigourney v. Munn, 7 Conn. 324. It is well settled that a second mortgagee has constructive notice of a prior mortgage, mentioned in the deed to his mortgagor. Baker v. Mathews, 25 Mich. 51.

The constructive notice by which purchasers are affected is not limited in its operations upon them merely for the purpose of binding them by prior conveyances. Its effect has been extended to subsequent transactions in relation to the same property. As where several tracts of land are included in one mortgage, and are subject to sale in satisfaction of the debt secured by the mortgage, in the inverse order of their alienation, the release of a tract subsequently conveyed, valued at more than the debt, would prevent the mortgagee from foreclosing on a tract previously aliened, provided he had notice of such prior alienation, at the time of the release. Such notice would be implied from the recitals in the release, which mention a bond and mortgage of the previously aliened tract, given by the alienee as further security to the mortgagee. Guion v. Knapp, 6 Paige, 35. This plainly carries the operation of notice of this character further than the constructive notice from registration; for it is held in a case (Howard Ins. Co. v. Halsey, 4 Seld. 271,) where the same doctrine is maintained as in Guion v. Knapp, that the mortgagee, when applied to for a release, is not bound to examine the records to see whether any of the tracts have been aliened or not. Stuyvesant v. Hall, 2 Babb. Ch. 151; George v. Kent, 7 Allen, 16. But no merely collateral recitals will affect a purchaser; as where, in a deed to one piece of land, the title to another piece is mentioned, and the purchaser subsequently becomes the purchaser of the other piece, the recitals in his first deed will not amount to constructive notice of the title to the second purchase. The recitals are notice of the facts recited only so far as they refer to the title of the property affected by the instrument. Boggs v. Varnen, 6 W. & S. 469.

This doctrine receives its most frequent application in cases involving the title to real estate; but this is only an incident of the manner in which property of a permanent nature is conveyed. "The same principles have been held to apply to all cases of personal property where the title is necessarily derived by deed or other writing. Christmas v. Mitchell, 3 Iredell, 535. And it was also held in this case that he must look to those documents themselves, and not trust to the statements of third parties as to their recitals. As a further illustration of this point, see, also, Hill v. Simpson, 7 Ves. Jr. 152, where one of two executors transferred to his bankers certain stocks held by the testatrix in her lifetime as executrix, alleging that they were his by the will of the testatrix, and the bankers received them as security for

1. NEGLIGENCE-EMPLOYER NOT LIABLE FOR NEGLIGENCE OF CONTRACTOR IN PERFORMANCE OF WORK UNDER CONTRACT.-While a master is responsible for injuries arising from the negligence of his servant, a party who has contracted for the doing of certain work for his use and benefit is not liable for injuries arising during the performance of such work.

2. MASTER AND SERVANT-WHEN THE RELATION DOES NOT EXIST BETWEEN EMPLOYER AND EMPLOYED.-One who contracts to do a specific piece of work, furnishing his own assistants and executing the work either entirely in accordance with his own ideas, or in accordance with a plan previously given to him by the person for whom the work is done, without being subject to the orders of the latter in respect to the details of the work, is clearly a contractor, and not a servant; and a person injured by his negligence in the performance of the work would have no right of action against the party for whose benefit the work is being done.

APPEAL from the Circuit Court of Cook County; the Hon. HENRY BOOTH, J., presiding.

Hitchcock & Dupee, for the appellants; W. W. Perkins, and Hunter & Page, for the appellee.

SHELDON, J., delivered the opinion of the court:

This was an action upon the case, brought by Johnson against defendants, Hale, Moss and Rowe. The declaration alleges that Rowe was erecting a building upon certain premises which he owned; that he employed Hale and Moss as his contractors and servants in such erection; that Hale and Moss employed Johnson, the plaintiff, as a day-laborer and servant upon the building, and that he was working there under their direction and control; that while he was so engaged, there was an unsafe wall on the premises liable to fall; that this was known to each of the defendants, but not to plaintiff; that Hale and Moss, with the consent of Rowe, ordered plaintiff to excavate near this wall; that while he was so laboring, through the negligence of defendants, and without any negligence on his part, the wall fell upon him and crushed his arm, which had to be amputated, etc.

A verdict was found and judgment entered against all the defendants. There was clearly error in rendering judgment against defendant Rowe.

*To appear in 80 Ill. Rep.

The evidence shows that Hale and Moss were contractors, engaged in jobs of this sort; that in this case they undertook to excavate for the foundations of a building for Rowe, and were to be paid a percentage upon the cost of the labor; that they employed and paid all laborers themselves; that they alone exercised supervision of the work; that plaintiff was employed by them as a day-laborer about the work at the time he received the injury complained of. It does not appear that Rowe had any connection whatever with the excavation which was being done, after the making of his agreement with Moss and Hale, further than to pay them the stipulated price when the work was finished.

While a master is responsible for injuries arising from the negligence of his servant, it is the doctrine that a party who has contracted for the doing of certain work for his use and benefit is not liable for injuries arising in the performance of such work. Scammon v. City of Chicago, 25 Ill. 424; 2 Hilliard on Torts, p. 537, § 11; Wharton on Negligence, § 181, and cases cited by these authors. Shearman and Redfield, in their work on Negligence, in discussing the subject of who are contractors or servants, in § 77 lay it down that "one who contracts to do a specific piece of work, furnishing his own assistants, and executing the work either entirely in accordance with his own ideas, or in accordance with a plan previously given to him by the person for whom the work is done, without being subject to the orders of the latter in respect to the details of the work, is clearly a contractor and not a servant."

We have no doubt that Hale and Moss here occupied, as to Rowe, the position of contractors, and not servants. It is not enough to charge defendant Rowe, for plaintiff to prove that he has suffered loss by some event which happened on Rowe's premises. He must also prove that Rowe violated a duty resting on him toward the plaintiff. There is no pretense of that, more than is supposed to arise from the alleged negligence of Hale and Moss or their foreman; but plaintiff having been employed by Hale and Moss, and they being contractors, and not agents or servants of Rowe, there was no privity whatever between Rowe and plaintiff. There is no ground of liability as respects Rowe.

Appellee urges that this objection should not be considered because it is raised here for the first time; that it should have been raised in the court below by demurrer, motion in arrest of judgment, or on motion for a new trial; and that, not having been so done, the objection was waived. The objection does not go to the sufficiency of the declaration, but of the evidence. While the declaration does speak of Hale and Moss as contractors, it also charges that they were servants of Rowe. All the counts allege personal negligence on the part of each defendant, which, if proved, would sustain the judgment. So that there was no ground of demurrer, or for a motion in arrest of judgment, in this respect.

As to not suggesting the objection in the motion for a new trial, one of the causes assigned under the motion was, that the verdict was contrary to the evidence. This covered it. The evidence did not support the verdict which was rendered. A motion for a new trial upon this ground having been overruled, the decision may be here reviewed.

The judgment being unauthorized as against the defendant Rowe, it must be reversed. This renders it unnecessary to consider the question as to whether there is any liability as respects the contractors, Hale and Moss. The judgment is reversed and the cause remanded.

JUDGMENT REVERSED.

SERVICE OF PROCESS-FOREIGN CORPORATION-ACT OF MARCH 3, 1875.

STILLWELL ET AL. v. THE EMPIRE FIRE INSURANCE COMPANY.

United States Circuit Court, Eastern District of Arkansas.

Before HON. JOHN F. DILLON, Circuit Judge.

Plaintiffs, citizens of the State of Arkansas, brought suit against the defendant, a corporation created under the laws of the State of Illinois, on a policy issued by it in the State of Arkansas upon property there situated. A statute of this state requires every insurance company, not of the state, to file with the auditor a written stipulation, agreeing that all legal process affecting them, served on the auditor or agent within the state, should have the same effect as if served on the company; and the summons in this case was served as required by the act. Held, that such service was not sufficient, the defendant not being by virtue of the act an "inhabitant" of, or "found" within the state, as required by the Act of March 3, 1875.

The plaintiffs, citizens of the State of Arkansas, brought this action in this court against The Empire Insurance Company, a corporation created under the laws of the State of Illinois, to recover under a fire policy issued by the defendant in the State of Arkansas upon property therein situate, and which is alleged to have been destroyed by fire, so as, by the terms of the policy, to impose a liability upon the defendant company. The summons was served upon the local agent of the company residing at Little Rock, and also upon John Crawford, Esq., the Auditor of the State of Arkansas. By the legislation of the State of Arkansas, it is provided that "No insurance company, not of this state, nor its agents, shall do business in this state until it has filed with the auditor of this state a written stipulation, duly authenticated by the company, agreeing that any legal process affecting the company, served on the auditor, or the agent specified by the said company to receive service of process for the company, shall have the same effect as if served personally on the company within the state." Gantt Dig., § 3561, as amended, Laws 1875, p. 190. It is admitted that the summons was served as required by this act. The company has entered no appearance, and the case is before the court on a motion for a default for want of an answer.

N. & J. Erb, and Benjamin & Barnes, for the plaintiff; U. M. Rose and E. W. Kimball, special appearance, for the defendant.

DILLON, Circuit Judge:

By the Judiciary Act of 1789 (§ 11), it was provided that no civil suit shall be brought in the circuit court against any person, by any original process or proceeding in any other district than that whereof he is an inhabitant, or in which he shall be found, at the time of serving such process or commencing such proceeding. This provision was re-enacted, without change, in the Act of March 3, 1875, § 1. The question before the court comes precisely to this: Was the defendant company, under the facts appearing in the statement of the case, an inhabitant of, or found in this district, within the true meaning of the above provision, relating to the jurisdiction of the circuit court?

If we were not foreclosed by the decisions which have been made upon the nature and powers of corporations, and as to the effect of the Judiciary Act in question, we should feel strongly inclined to hold that the true doctrine is, that for jurisdictional purposes a corporation is a citizen of the state by whose authority it was created, and an inhabitant of any other state under whose laws it established a place of business, and, as respects suits growing out of such business,

agreed, as in this case, to submit itself to the jurisdiction and laws of such state. When corporations, created by foreign governments or by other states, come into this state and establish an agency for the transaction of their business therein with the citizens of this state, justice to the latter requires that such corporations should, as respects contracts here made and acts done in the prosecution of such business, be subject to the laws and jurisdiction of the state.

The reasonableness of the provisions of the law of this state, requiring foreign insurance companies doing business therein to submit to the jurisdiction of the courts of the state, is manifest. Lafayette Ins. Co. v. French, 18 How. 404; s. c., 5 McLean, 461. But the question is, whether this has the effect to make such companies "inhabitants" of the state, or "found" within it, in the meaning of the aforementioned provision concerning the jurisdiction of this court. In view of the decisions of the supreme and circuit courts, we are obliged to resolve this inquiry in the negative. These decisions treat a corporation as strictly local and necessarily confined as to personality, so to phrase it, to the territorial jurisdiction of the state which creates it. In the leading case on this subject (The Bank of Augusta v. Earle, 13 Pet. 588), Chief Justice Taney expressly says "that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created; where that law ceases to operate, and is no longer obligatory, the corporation can have no existence. It must dwell in the place of its creation, and can not migrate to another sovereignty," although it has power, when authorized by its charter and by comity, to make contracts and incur obligations in another state. This language, and the principle which it asserts, have been frequently approved by the same court in subsequent cases coming down to a quite recent date. Applying this doctrine, the circuit courts have held, under the Judiciary Act, that they could acquire no jurisdiction over the corporation of another state by service of process upon its officers passing through or found within it, on the principle that the officers are not the corporation, and finding and serving them is not equivalent to finding and serving the corporation itself. Day v. The Newark India Rubber Co., 1 Blatchf. 628.

This view is undoubtedly sound. But the same doctrine has been extended and applied to cases like the present, in which the state only allows a foreign corporation to do business on the express condition of agreeing to be sued in the state, and that such suits should have the same effect as if process had been served personally upon the corporation within the state. It was so held by an eminent judge-Mr. Justice Nelson-in Pomeroy v. The New York and New Haven R. R. Co., 4 Blatchf. 120. And the same result was reached in the Southern and Atlantic Tel. Co. v. New Orleans, etc., R. R. Co., 2 Cent. L. J. 88. This view of the law has been generally accepted and acted upon by the profession, and this is the third case in seven years in this circuit in which it has been attempted by the service of original process on the agents of foreign corporations to acquire jurisdiction over the corporations themselves.

The circuitous process has been adopted of bringing such suits in the state courts and then removing them to this court. This discloses a defect in the jurisdiction of the circuit courts; but it is one which has existed since the organization of such courts. It was not changed or remedied in the act of 1872, providing for the first time for service in certain cases out of the jurisdiction, nor by the act of 1875, which so greatly enlarged the jurisdiction of the circuit courts. The decisions to which we have referred were well known to the profession and to Congress, when the acts o 1872 and 1875 were passed; and as no change was mad