retransfer of mortgaged premises only upon payment of debt: Cooper v. Smith, 75 Mich. 247. Where the mortgagee holds possession under an arrangement with the mortgagor, such possession does not become adverse until the debt is satisfied, or he asserts an absolute title in himself, and gives distinct notice to the mortgagor: McPherson v. Hayward, 81 Me. 329. See also Jackson v. Lynch, 129 Ill. 72; Stillwell v. Hamm, 97 Mo. 579.

HARBOR COMMISSIONERS V. REDWOOD COMPANY.

[88 CALIFORNIA, 491.]

PENALTIES ARE NOT DAMAGES, BUT ARE PUNISHMENTS imposed for breach of duty enjoined by law.

LEGISLATURE CANNOT DELEGATE TO AN EXECUTIVE BODY THE POWER TO IMPOSE A PENALTY for the violation of a rule or regulation, though the legislature fixes the maximum of such penalty.

J. H. G. Weaver and J. N. Gillett, for the appellant.

S. M. Buck, for the respondent.

GAROUTTE, J. This is an action to recover a penalty of five hundred dollars imposed by the plaintiff upon the defendant, for the violation of certain rules and regulations made by plaintiff.

Section 2568 of the Political Code provides that "the board of harbor commissioners of the port of Eureka are authorized and empowered to make such rules and regulations, and take such action, as may be necessary for the protection of navigation in Humboldt Bay."

.

Section 2569, subdivision 6, provides: "Impose penalties for violation of such rules and regulations, not exceeding, for any one violation, the sum of five hundred dollars, to be recovered by action."

Section 5 of the rules and regulations made by plaintiff, in pursuance of the above sections of the code, imposes a penalty in the sum of five hundred dollars for the violation of certain of these rules.

We do not believe the plaintiff has the power to impose a penalty as provided in the rule just mentioned.

The imposition of a penalty is in the nature of a quasi criminal proceeding, as it only follows from the violation of some law.

In United States v. Montell, Taney, 52, referring to the char acter and object of penalties, we find this language:

"It is not damages, therefore, that are intended to be se

AM. ST. REP., VOL. XXII.-21

cured, but punishment intended to be inflicted upon those who are justly and properly responsible for any improper use of the vessels' register. . . . In other words, it is a fixed penalty imposed by law as a punishment for breach of duty enjoined by law, and must be treated as such," etc.

The board of harbor commissioners is a creature of the statute, and purely an executive body, and the fixing and im. posing of penalties are matters of which the legislature alone has cognizance. An act providing that if a person does or does not do a certain thing he shall pay a penalty of five hundred dollars is legislation. And it is a cardinal principle of representative government that the legislature cannot delegate the power to make laws to any other authority or body Cooley's Constitutional Limitations, 116, 139.

Conceding that the legislature could delegate to the plaintiff the authority to make rules and regulations with reference to the navigation of Humboldt Bay, the penalty for the violation of such rules and regulations is a matter purely in the hands of the legislature.

The act of the legislature in fixing the maximum of such such penalty is of no avail; the vice of the whole matter is in not itself fixing the penalty, and in delegating such legislative power to the plaintiff.

Justice Agnew, in Locke's Appeal, 72 Pa. St. 491, 13 Am. Rep. 716, says: "The legislature cannot delegate its power to make a law; but it can make a law to delegate a power to determine some fact or state of things upon which the law makes or intends to make its own action depend. To deny this would be to stop the wheels of government."

And it would seem that the establishment of rules as to the navigation of Humboldt Bay would be simply acts of execu tive administration which the legislature could delegate to the plaintiff as an executive body under the foregoing authority; but when the executive body has made such rules and regulations, it has exhausted all the authority which the legislature had power to confer upon it.

In the case at bar, the legislature attempted to go further than in the case of Ex parte Cox, 63 Cal. 21.

Under an act of the legislature approved March 4, 1881, the viticultural health-officer, with the approval of the board of viticultural commissioners, was empowered to declare and enforce rules in the nature of quarantine, to prohibit the importation of diseased vines, etc.; and further provided that

any willful violation of these rules should constitute a misde

meanor.

The petitioner Cox was discharged upon habeas corpus by this court, he having been convicted of violating certain of these rules and regulations.

The court said: "For the purpose of local legislation, legislative functions may be conferred upon and exercised by municipal corporations; but the act before us is in no sense a conferring of powers for municipal purposes. The legislature had not authority to confer upon the officer or board the power of declaring what acts should constitute a misdemeanor."

In that case, the legislature delegated the power to the board to make the rules, but expressly provided in the act itself the punishment for the violation of such rules. But in the case at bar, the legislature not only delegated the power to the plaintiff to make the rules and regulations, but went far beyond that, and attempted to delegate the power to the plaintiff to punish for the violation of such rules and regulations. This could not be done.

Let the judgment be affirmed.

PENALTIES-DAMAGES-DISTINCTION BETWEEN: See extended note to Graham v. Beckham, 1 Am. Dec. 331, 340; Moore v. Colt, 127 Pa. St. 289; 14 Am. St. Rep. 845, and note. Sum stipulated as damages, when held to be a penalty: Carter v. Strom, 41 Minn. 522; Wibaux ▼. Grinnell etc. Co., 9 Mont. 154.

Damages as a punishment or example should not be awarded in civil actions for a tort punishable under the criminal law: State v. Grove, 77 Wis. 448; Howlett v. Tuttle, 15 Col. 454. A failure to charge the jury that exemplary damages are given by way of punishment cannot be complained of by a defendant against whom a judgment for such damages has been rendered: Mayer v. Duke, 72 Tex. 445.

LEGISLATURE, POWER OF: Lawton v. Steele, 119 N. Y. 226; 16 Am. St. Rep. 813. The legislature cannot delegate its authority to make laws by submitting the question of their enactment to a popular vote; but the legis lature may confer a power upon a municipal corporation, and authorize its acceptance or rejection by the voters of such municipality: Johnson v. Martin, 75 Tex. 35; State v. Rapp, 39 Minn. 65.

[IN BANK.]

NATIONAL BANK V. UNION INSURANCE COMPANY.

[88 CALIFORNIA, 497.]

INSURANCE. IN CONSTRUING A POLICY OF INSURANCE, the court should lean against that construction which imposes upon the assured the obligation of a warranty. INSURANCE.

IN DETERMINING WHETHER A STATEMENT IN A POLICY OF INSURANCE IS A WARRANTY on the part of the assured, the entire policy must be considered, and if, from the whole, it appears that such statement was not intended as a warranty, it will not be so construed. INSURANCE. UNINTENTIONAL MISSTATEMENT BY AN ASSURED will not be treated as a breach of warranty rendering his policy void, when the policy itself declares that fraud, false swearing, misstatement, or concealment of a material fact by the assured shall render this policy void. INSURANCE. CHANGE IN THE POSSESSION OF THE PREMISES Insured will not avoid a policy of insurance made payable to a mortgagee, if he was not aware of such change, and the policy provided that it should not affect him, unless he should fail to give notice thereof after the change became known to him.

INSURANCE. MORTGAGEE IS STILL PROTECTED BY A POLICY OF INSURANCE MADE PAYABLE to him, though he has foreclosed the mortgage and purchased the property at the sale, if the mortgagor retains the right to redeem from the sale.

MORTGAGE IS NOT FORECLOSED UNTIL THE MORTGAGOR'S RIGHT OF REDEMPTION IS CUT OFF.

INSURANCE. MORTGAGE IS NOT PAID BY THE PURCHASE OF THE MORTGAGED PREMISES BY THE MORTGAGEE at the foreclosure sale thereof, and an insurance made payable to him therefor continues in force after such sale.

Smith and Pomeroy, for the appellant.

Denson and Oatman, and Add C. Hinkson, for the respondent.

FOOTE, C. On the twenty-seventh day of December, 1886, the appellant, a fire insurance company, issued to the Johnston Brandy and Wine Manufacturing Company a policy of insurance against loss or damage by fire, upon certain property therein mentioned, to the amount of three thousand dollars. On the face of this policy was attached the following indorsement:

-

"Loss (if any) payable to National Bank of D. O. Mills & Co., as herein provided.

"It is hereby agreed that this policy, as to the interests of the mortgagee or trustee only therein, shall not be invalidated by any act or negligence of the mortgagor or owner of the property insured, nor by occupation of the premises for purposes more hazardous than are permitted by the terms of this policy,

nor by any change in title or possession of the property insured; provided, however, that whenever the said mortgagee or trustee shall become aware of any act or negligence of the mortgagor or owner which would, except as to such mortgagee or trustee, invalidate this policy, or of any occupation of the premises for purposes more hazardous than are permitted by the terms of this policy, or of any change in title or possession of the property insured, he will at once notify this company thereof; and provided, also, that he will on demand pay to this company the additional premium charged by this company on account of any increased risk for the entire term of this policy; and failure to so notify this company, or to so pay said additional premium, shall avoid this contract."

It further appears that there was an indorsement made thereon that on the 2d of March, 1887, the National Bank of D. O. Mills & Co. had notified the insurance company that it, as mortgagee, had instituted a suit for foreclosure on the property embraced in the policy, and that the same had been accepted by that company without prejudice to the policy.

On the 25th of May, 1887, the same insurance company issued a policy of insurance of the same character and to the same parties, and the loss made payable in the same way and upon like conditions, for the sum of two thousand dollars. It appears that the property insured was destroyed by two successive fires in the month of September (about the 3d and 20th, in the year 1887), and that the value of the building and other property burned at said times was fully equal in value to the amount of the insurance.

The National Bank of D. O. Mills & Co., to whom the loss was made payable, and who held a mortgage for six thousand dollars on this property, brought this action to recover for the loss, interest, and costs, and obtained judgment as prayed for; from which, and and an order denying a new trial, this appeal is taken.

The appellant urges, in support of its contention, that the first finding of the trial court, "that all and singular the averments of the complaint are true," and the second finding, "that all and singular the matters and things stated in defendant's amended answer and the general averments, and both of the general and special defenses therein set forth, are untrue, excepting," etc., are unsupported by the evidence.

The point made in this behalf is, that at the time of the is suing of the policy dated the 25th of May, 1887, it was made