installment of premium due by the terms of the installment note. On payment by the assured of all installments of premiums due under this policy, and the installment note given thereon, the liability of this company on this policy shall again attach, provided written consent of the secretary of this company be first obtained; and the policy [shall] be in force from and after such payment, unless this policy shall be void and inoperative from some other cause. But this company shall not be liable for any loss happening during the continuance of such default of payment. * * * It is further provided that no attempt, by law or otherwise, to collect any note given for the cash premium, or any installment of premium due upon any installment note, shall be deemed a waiver of any of the conditions of this policy, or shall be deemed in any manner to revive the policy; but upon payment by the assured or his assignee of the full amount due upon such note and costs, if any there be, this policy shall thereupon be in full force, unless the same be inoperative or void from some other cause than the non-payment of note." The application for the policy, and which is made a part of the contract of insurance, contains a stipulation similar to that above. It is contended for appellee that the insurance company waived all ground of forfeiture in this case, and several grounds are urged in support of this contention: First, it is claimed that it was the custom of the insurance company to notify its customers when their premium notes fell due, and that it failed to do so in this case; second, that the company never gave notice of any claim that the policy was forfeited until after the destruction of the property by fire; third, that, after the company had notice of the loss, it informed the assured, by letter from its secretary, that its adjuster would be around soon, and adjust the amount of the damage. Testimony was offered tending to show it was the custom of the appellant insurance company to give notice to its customers when their installments of premium would mature. There was testimony that such had been the practice of this company in prior dealings with the appellee, and with other persons who held its policies; and there was testimony, not denied, that the Home Protection Company had given notice of the time when premiums would mature on the other two policies held by the appellee, and that such maturing premiums had been promptly paid. It was testified that no such notice had been given as to this policy, and, if notified, the assured was able and would have paid it. This testimony was not controverted, and no explanation was offered why notice was given in the one case, and not in the other. Almost the only questions presented for revision in this case grow out of the admission of the foregoing testimony against appellant's objection, and charges of the court based upon it, to which exceptions were also reserved. There were many charges. The substance of them was that "if by the statements of its authorized agent after the making of the policy, and by its course of business with plaintiff, and others, her neighbors, she was induced to believe that defendant would notify her of the time of payment, and would not insist on a forfeiture in case of an unintentional failure to pay the premium note, and she did unintentionally fail to pay the note, then the defendant cannot in good conscience be allowed to set up the non-payment as a defense." The rule and its exception are correctly stated in May, Ins. § 356, as follows: "No notice is required from the insurer to the insured that the premium, or note given for premium, is about to become due, unless the custom and course of dealing between them has been such as to justify the insured in the belief that such notice would be given, and induce him to rely upon it to his prejudice." Helme v. Insurance Co., 61 Pa. St. 107; Insurance Co. v. Bernard, 33 Ohio St. 459. See, also, as to waiver of forfeiture, Bouton v. Insurance Co., 25 Conn. 542; McAllister v. Insurance Co., 101 Mass. 558; Buckbee v. Trust Co., 18 Barb. 541; Insurance Co. v. French, 30 Ohio St. 240; Insurance Co. v. Bledsoe, 52 Ala. 538; Insurance Co. v. Young, 58 Ala. 476. It is not our intention to deny that if a policy stipulates that it

shall be void on non-payment of premium, and there is nothing else in the transaction, such forfeiture will be enforced. What we do decide is that if an insurance company, by its habits of business, create in the mind of a policy-holder the belief that payment may be delayed until demanded, or otherwise waive the right to demand a forfeiture, this is binding on the company, notwithstanding the express letter of the policy may not have been conformed to. Insurance Co. v. Jarvis, 22 Conn. 133; Insurance Co. v. Henley, 60 Ind. 515; Williams v. Insurance Co., 19 Mich. 451; Insurance Co. v. Stoy, 41 Mich. 385, 1 N. W. Rep. 877; Howell v. Insurance Co., 44 N. Y. 276; Schmidt v. Insurance Co., 41 Ill. 295; Garlick v. Insurance Co., 44 Iowa, 553; Tayloe v. Insurance Co., 9 How. 390. See, also, as to waiver of written terms of contract, Liddell v. Chidester, 84 Ala. 508, 4 South. Rep. 426. The rulings in this case are in substantial conformity with the principles declared above, and we find no error of which appellant can complain. Affirmed.

MCMILLAN et al. v. JEWETT.

(Supreme Court of Alabama. December 8, 1888.)

1. MORTGAGES-DEED ABSOLUTE IN FORM-SETTLEMENT-TRANSFER OF LAND. On a bill to declare a deed, absolute in form, a mortgage, it appeared that the deed was executed to secure an existing indebtedness, and future advances, and that subsequently a settlement was had, and all accounts closed by a transfer of the land, complainant reacknowledging the deed. At the same time separate leases were executed to complainant by defendants, to the land in question, and other tracts, for one year, with privilege of renewal for ten years, and of purchasing the property at a specified price. One of these leases was for a lot which complainant had not before owned. In the settlement the property was put at a fair valuation, and there was no evidence of oppression or fraud. Held, that complainant's right of redemption was extinguished by the settlement; the deed thereby becoming absolute.

2. SAME-REDEMPTION-RELEASE BY PAROL.

The deed having been originally absolute in form, and complainant's right of redemption not being expressly reserved, the settlement whereby the right of redemption was released is effectual, though by parol.

Appeal from chancery court, Mobile county; THOMAS W. COLEMAN, Judge. Bill by John F. Jewett against M. M. McMillan & Son, to have a deed declared a mortgage, and for redemption of land therein conveyed. Decree for complainant, and defendants appeal.

Pillans, Torrey & Hanaw, for appellants.

Austill & Ervin, for appellee.

CLOPTON, J. Appellee seeks by the bill to have a deed, absolute in form, declared a mortgage, and to be let in to redeem one of the parcels of the real estate therein described and known as the "Water-Street Lot." The deed expresses, on its face, a consideration of $2,000 paid, $3,000 to be paid, and such further sums of money and lumber as might be delivered to the grantor by the grantees, and conveys the tract known as the "Creek Mill Property," and his right of redemption in the "Water-Street Lot" and the "Barlow Tract." The deed was executed under the following circumstances: On May 24, 1876, complainant borrowed of defendants their four promissory notes, payable, respectively, 9, 12, 15, and 18 months after date, and, to indemnify defendants against loss on account of the notes, executed two mortgages, one on the Water-Street lot and the other on the Creek Mill property. Defendants having paid the notes which had matured, and being liable to pay the others, and also having agreed to pay a first mortgage on a part of the property, and complainant desiring future advances of money and lumber, the deed in question was executed December 1, 1877. It had its origin in a loan of notes, and an advance of money was made before all the notes had matured, and contem. plated a future advance of money and lumber. The relation of debtor and creditor existed at the time of the execution of the deed, and it must be rev.5so.no.10-10

garded as intended, when originally made, as a security for an existing and continuing indebtedness. Had there been no subsequent transactions between the parties, modifying or altering the character and effect of the deed, there could be no question of the right of complainant to be let in to redeem. Though it is a settled doctrine, from which it has been said a court of equity never deviates, that ae debtor has, so long as the conveyance is intended for security, the equity of redemption, which cannot be waived or released by a contemporaneous agreement, expressed in the mortgage or otherwise, it is equally well settled that the mortgagor may, by subsequent agreement, release and transfer the equity of redemption to the mortgagee. Such release will be maintained in equity, if supported by a sufficient consideration, and there is an absence of fraud, oppression, and undue advantage. Stoutz v. Rouse, 84 Ala. 309, 4 South. Rep. 170; Peugh v. Davis, 96 U. Š. 332. After the execution of the deed, some negotiations 'were had between the parties with a view to an erection of a mill on the Water-Street lot. On August 9, 1880, defendants sent complainant a full statement of his account and indebtedness, accompanied by a proposition that the books should be balanced to date, and future agreements should be in writing, with an assurance that, if no unseen accident prevented, they would be able to furnish the money to build the mill under a written agreement that complainant should own the property when clear of debt. After full opportunity to examine the accounts, complainant went to defendant's place of business, and, instead of the agreement suggested, a settlement was made August 11, 1880, by which the books were balanced by entering on the account a credit of the agreed valuations of the three parcels of real estate conveyed by the deed, and an instrument was signed by both parties substantially stating that all unsettled accounts to date were closed by transfer of real estate. The credits were entered in the handwriting of complainant, and the instrument was written by him. As parts of the same transaction and settlement, defendants executed to complainant three separate leases,-one to the Water-Street lot, one to the Creek Mill property, and the other to a brick store in the city of Mobile. Each lease contains similar provisions. They provide that the lease is for one year, with the privilege of renewal from year to year, for the term of ten years, upon the same terms, and confer the privilege of purchasing the property at any time during the continuance of the lease at a specified price, the amount to be paid being different as to each piece of property. The lease to the Water-Street lot contains the further provision that complainant should have the privilege of erecting buildings and new machinery thereon, with the right of removal at the termination of the lease, unless defendants purchased such buildings and machinery at a valuation to be determined by arbitration. Under this lease complainant occupied the premises until about 1882, when he surrendered possession because defendants declined to reduce the rent, and it was thereafter rented to the Donner Land & Lumber Company. The store in the city of Mobile was the property of defendants, and had never been owned by complainant. Notwithstanding this, the transaction as to each parcel of the property is substantially the same as to the right to renew the lease and to purchase the property, the only difference consisting in the price to be paid. No other deed to the property was executed, but in lieu thereof complainant reacknowledged before the judge of probate the execution of the deed in question. If the deed was intended to continue to operate as a mortgage, why was a separate lease to each piece of property made and accepted, reserving an independent and distinct right to purchase either piece? If the deed was intended to operate as a mortgage, why was the property conveyed thereby leased, in connection with the store, with the same rights and privileges of renewal and purchase? Why was the deed reacknowledged and delivered to defendants, if it was not intended to give it effect which it did not previously possess? The evidence fails to show any fraud, undue influence,

or oppression, and the weight of the evidence is that the property was estimated at a fair value. The conclusion, from the facts and circumstances, is that the settlement was a finality by which the indebtedness of complainant to defendants was satisfied and extinguished by the transfer of the real estate, and that the deed was intended thereafter to be absolute in legal effect as well as in form. By the transaction, and the terms and purport of the leases, the complainant acquired only the right of repurchase. In Murphy v. Barefield, 27 Ala. 634, a bill of sale fixing the price of each of four slaves, which contained a provision that the vendor "may redeem any or all the forementioned negroes at the valuation hereinbefore affixed to them, within the time of twelve months after this date," we held to be a conditional sale.

It is further insisted that the equity of redemption, being an interest in land, cannot be released or transferred except by an instrument in writing containing words of grant or transfer. This is unquestionably the rule, when the conveyance, either by express terms or necessary effect, reserves to the mortgagor an equity of redemption. In such case there may exist facts which will operate in equity to estop the mortgagor from asserting an interest in the property. The present deed, however, is absolute in form, and neither expressly nor impliedly reserves any interest in the grantor. His right of redemption was created by parol agreement when the deed was first made. A parol agreement concerning land may be discharged by parol, and such discharge will constitute a valid defense to a bill to redeem. The decree is reversed, and a decree will be here rendered dismissing the bill.

MEYER et al. v. Cook.

(Supreme Court of Alabama. December 10, 1888.)

1. USURY EVIDENCE.

An item included in a mortgage debt was $130, the price of a mule. The mortgagor negotiated the purchase with the owner, agreed on $102.50 as the price, and requested the mortgagee, who was advancing him means, to pay for it, which he did, and the mule was delivered to the mortgagor. The latter testified that no price was agreed on between him and the mortgagee, while the mortgagee testified that he bought the mule for cash, and sold it to the mortgagor for $130 on credit. Held, that the transaction was not a sale by the mortgagee to the mortgagor, but a usurious loan.

2. HUSBAND Aand Wife-Exchange of WIFE'S SEPARATE PROPERTY.

The equitable title to personal property for which other property, the separate estate of a wife, has been exchanged by her husband with her approval, she having no paper evidences of title, but claiming the property as her own, is in the wife, and she can recover it from the husband's mortgagee, if the latter is not a bona fide purchaser.

8. CHATTEL MORTGAGE-ON ANIMALS-INCREASE.

A mortgage of a mare is a lien on colts afterwards foaled, whether before or after the mortgagee takes possession under the mortgage, as against one having the equitable title to the mare, in favor of a mortgagee who is a bona fide purchaser for value.1

4. SAME-USURIOUS LOAN-BONA FIDE PURCHASER.

One to whom property is mortgaged to secure a usurious debt is not a bona fide purchaser thereof, and equitable defenses may be interposed against him, whether he had notice of them or not. CLOPTON, J., dissenting.

Appeal from chancery court, Dallas county; S. K. MCSPADDEN, Judge. Bill by Octavia Cook to enjoin defendants, Meyer Bros., from disposing of a mare and colt, and from the further prosecution of an action at law for the property. The decree gave one colt to the complainant, and defendants appeal.

White & White, for appellants. Brooks & Roy, for appellee.

As to who has title to the increase of mortgaged live stock, see Cahoon v. Miers, (Md.) 11 Atl. Rep. 278, and note.

STONE, C. J. The general rule of law is that the offspring or increase of female animals, when they come into visible existence and are endowed with independent life, rest under the same title or ownership their dam was subject to at the time they were brought forth. Partus sequitur ventrem. Gans v. Williams, 62 Ala. 41. Hence it has been often held that if the dam, at the time of parturition, be under mortgage incumbrance, the offspring passes immediately under the same incumbrance. Hughes v. Graves, 1 Litt. 317; Forman v. Proctor, 9 B. Mon. 124; Fowler v. Merrill, 11 How. 375; Evans v. Merriken, 8 Gill & J. 39; Leavitt v. Jones, 54 Vt. 423; Gundy v. Biteler, 6 Bradw. 510; Jones, Chat. Mortg. §§ 149, 150. The attempt has been made to draw a distinction when, during the time the property remained with the mortgagor, the offspring so increased in strength and maturity as to cease to follow the dam. In such case,i t has been contended that the mortgage ceases to bind the offspring. We are at a loss to conjecture on what principle such a distinction can be maintained. We apprehend, however, that all such seeming rulings rest on an entirely different principle. The exception has been allowed only in favor of bona fide purchasers, who, finding such offspring in the possession of the mortgagor, arbiter of its own movements, and not following its dam, purchased and paid for the same without notice of the mortgage lien. Such offspring not being mentioned in any recorded mortgage, and there being nothing visible to put the purchaser on inquiry, it was ruled that it would be a fraud on him to take from him the property he had bought and paid for in good faith, and without notice. Winter v. Landphere, 42 Iowa, 471; Kellogg v. Lovely, 46 Mich. 131, 8 N. W. Rep. 699. This principle sheds no light on the present case, for Mrs. Cook does not sustain such relation to the property. The chancellor denied to complainant relief as to the mare Hester, and to the colts she dropped after Meyer Bros. obtained possession under the mortgage. He said: "It is adjudged, ordered, and decreed that the complainant has failed to establish or make out her right to the mare mentioned in said mortgage. As to said mare, defendants are innocent purchasers, and as to any colts foaled since the recovery of possession of the mare by the defendants complainant has no claim. But, as to any colt foaled between the date of the mortgage and the recovery of the possession of the mare by the defendants, the complainant is entitled to recover in this suit." Under this ruling he decreed one colt to the complainant, and from that decree defendants prosecuted this appeal.

Under the principle declared above, if the defendants were entitled to the mare under their mortgage, they were equally entitled to the colts, whether foaled prior or subsequent to obtaining possession by them. We have then to inquire whether complainant has shown an equitable right to recover the mare, for on that right must depend her claim of property in the colt. We think the testimony proves that mules were purchased by Mrs. Cook from Robbins, and paid for with effects or moneys which were of her statutory separate estate, and that no title papers were taken. The mules then were of the corpus of her statutory separate estate. Commencing, then, with one of these mules, Cook, her husband, made several exchanges, ending with the possession of the mare Hester, dam of the colt in controversy. Mrs. Cook had knowledge of and approved these several exchanges, but no paper evidences of title were given or received. She claimed the mare as her property. Under our decisions, the legal title of the mare was not in Mrs. Cook, but she had an equitable right to trade her money or effects into the mare, or to ratify the exchange, and claim the mare as equitably hers. Bolling v. Mock, 35 Ala. 727; Preston v. McMillan, 58 Ala. 84; Evans v. English, 61 Ala. 416; Pollak v. Graves, 72 Ala. 347; Kennon v. Dibble, 75 Ala. 351; Shelby v. Tardy, 84 Ala. 327, 4 South. Rep. 276. The doctrine declared above being but an equity, a secret equity, as it is phrased in the books,—it will not prevail over a bona fide purchase without notice; and it is claimed for Meyer Bros.