urged that there was no evidence which tended to show that plaintiff, when it purchased the notes, had notice of the matters now urged as a defense to the notes, and that in fact the evidence shows that plaintiff had no such notice. It appears that plaintiff's cashier testified that he made the deal with Wroughten & Co., in which the bank took these notes in suit; that neither he nor the other officers of the bank had any notice of the matters pleaded by the defendant as a defense to said notes. No objection was interposed to this evidence whereby the cashier undertook to testify to want of notice on the part of all the other officers of the bank. Nevertheless, as to them, his testimony was not conclusive, and was, at best, as to matters as to which he could have had no actual knowledge. der such circumstances we have held that the question of notice and good faith in making the purchase of notes by a partnership or bank is one for the jury. Frank v. Blake, 58 Iowa, 750, 13 N. W. 50; Bank v. Paddick, 90 Iowa, 66, 57 N. W. 687. Following these eases, there was no error in the ruling upon the motion in this respect.

Un

3. It appears that after the plaintiff had acquired the notes in suit, and after the defendant had discovered the representations regarding the horse to be false, some further negotiations were had between Wroughten & Co. and the defendant, in which the horse Cæsar Augustus was taken back by Wroughten & Co., and another horse sold to defendant. When he purchased the last horse, the defendant executed a chattel mortgage, which it is claimed secured the notes in suit. Touching this matter the court told the jury that, if the defendant took the last horse instead of Cæsar Augustus, plaintiff should recover; that if the defendant executed the mortgage on the last horse to secure the notes in suit, plaintiff should recover, unless they found that the defendant, when he signed said chattel mortgage, did not know what it was, nor that it secured said notes, and that he signed it on the representations of Wroughten & Co. that the last horse was to be paid for by defendant by application of the proceeds of other property received from the defendant and its earnings, in which event the chattel mortgage would not preclude the defendant from pleading and proving the false representations alleged, nor give the plaintiff by reason of the execution of the mortgage a right to recover on the notes. It is said that there was no such issue in the case, hence the instruction was erroneous. There was no such issue. Nevertheless both parties treated this mortgage transaction as being in the case, the same as if it had been properly pleaded. The plaintiff first drew out the evidence regarding it upon cross-examination of the defendant, and, having thus been responsible for injecting it into the case, it ought not now be heard to complain that the court erred in treating the matter as in issue. Plaintiff claims that, as this matter was subsequent to the sale of

Cæsar Augustus, and occurred long after they purchased the notes, it cannot be prejudiced by the transaction in any event. Let that be admitted, what is the situation? Plaintiff, on cross-examination of the defendant, develops facts which, if they establish what is claimed for them, would show that the defendant had, after acquiring knowledge of the fraud which had been practiced upon him by Wroughten & Co., settled with them by taking another horse in lieu of Cæsar Augustus, and therefore no longer had any right to rely upon said fraudulent representations. If this be true, it was in the plaintiff's favor, and it is in no situation to complain. If the facts did not show a settlement and waiver of the right to insist upon the fraud by the defendant, then his situation was the same as to the plaintiff as though the chattel mortgage transaction had never occurred. So, in any event, it occurs to us the instruction could not have prejudiced plaintiff. It simply afforded it a possible opportunity to secure a judgment in the event that the jury should find that the defendant had waived the fraud, and accepted another horse in lieu of the one which he claimed was not as represented. It is clear that the error, if such it was, in giving the instruction, was not only not prejudicial to the plaintiff, but favorable to it.

4. Complaint is made of the rules of law as laid down in the tenth and eleventh instructions, touching a failure of consideration, and a breach of warranty. As the jury found specially that the notes were obtained by false representations it is clear that the instructions complained of could have worked no prejudice to plaintiff, hence we give them no further consideration.

5. Lastly, it is insisted that the verdict was not warranted by the evidence. We think the evidence sufficient to justify the verdict. Perhaps the doubtful matter is as to whether the plaintiff took the notes without notice of the defenses now urged against them. As we have said before, that is a matter properly submitted to the jury, and we ought not to interfere with their finding in that respect. The burden was on the bank to show that none of its officers had notice. This, in view of our previous holdings, it did not discharge by showing such fact by one of its officers only. Affirmed.

SALISBURY ▾. SCHOOL DIST. OF HIGHLAND TP.

(Supreme Court of Iowa. April 9, 1897.) SCHOOL SITE-CONDEMNATION-MEASUREMENT.

Under Code, §§ 1825, 1826, providing that not exceeding one acre shall be taken by condemnation proceedings for the location of a schoolhouse, and that the site must be on a public highway, the acre may be so measured as to be exclusive of the road.

Appeal from district court, O'Brien county; George W. Wakefield, Judge.

Action to quiet title to certain land alleged to

have been erroneously condemned for school purposes. Demurrer to defendant's answer was overruled, and, the plaintiff failing to plead further, his petition was dismissed, and he appeals. Affirmed.

H. H. Crow, for appellant. Peck, Artherholt & Ingham, for appellee.

In

LADD, J. The plaintiff became the owner of the S. W. 4 of section 29, township 95, range 40, in O'Brien county, in 1888. A public highway had been established along the section lines south and west in 1877; and in 1887 an acre, exclusive of highways, in the southwest corner of said land, was condemned for the school purposes of the defendant. The statute provides that not exceeding one acre shall be taken by condemnation proceedings for the location and construction of a schoolhouse. Code, § 1825. The question involved is whether, in setting apart this acre, it shall be so measured as to include the road to its eenter, as claimed by plaintiff, or be exclusive of the road, as contended by defendant. other words, a strip of land 2 rods wide and 16 rods one way and 10 rods the other is in dispute. The 33 feet to the center of the highway had already been condemned to the public use, and the defendant can only use it for the purpose of ingress and egress in common with the public. The site must be on some public highway. Code, § 1826. This means that it must be on the line of the road, so as to facilitate the use of the school property. It may be presumed that any interference with the owner's use of the road was taken into consideration in assessing the damages. The title acquired is for school purposes only, and, doubtless, in the event of the vacation of the highway suggested by the appellant, all would revert to the owner of the fee. The statute allows the condemnation of a full acre, and we are not inclined to ingraft thereon limitations not authorized merely because of possible contingencies. Affirmed.

EAGLE MANUF’G CO. v. CITY OF DAVENPORT.

FRENCH v. SAME.

(Supreme Court of Iowa. April 9, 1897.) MUNICIPAL CORPORATIONS - PAVING ASSESSMENTS -SALE TO AVOID ASSESSMENT-VALID

ITY-NOTICE.

1. The "commencement of the work" from which Act 23d Gen. Assem. c. 14, provides that the lien of paving assessments shall attach, is not the letting of the contract, but the performance of labor or the furnishing of material under it; the word "work" being used in that sense in the preceding sections of the act.

2. A conveyance of a strip two feet wide along one side of a city block, made after the letting of a contract for paving the street on which such strip abutted, and for the sole purpose of avoiding the paving assessment on the balance of the block, to a grantee who knew the facts and was paid to accept the conveyance, is void for the purpose of assessment.

3. A sale of land in good faith for value is not rendered void by the fact that one of the reasons therefor was to so divide the grantor's land as to reduce the paving assessment there

on.

4. A two-foot strip abutting on the street along one side of a city block was fraudulently, conveyed in order to relieve the block of a paving assessment. A portion of the block, including such strip, was subsequently sold to a corporation, before the lien of the assessment attached. An officer of the corporation who was a son of the owner of the block, made the sale for her, and had negotiated the previous conveyance. The president of the corporation, who made the purchase for it, was also a son of the owner, and had frequently consulted with his brother as to their mother's business. The president testified that he knew of the previous conveyance, and its purpose. Held, that the corporation took with such notice of the fraud as would render the land purchased by it subject to the assessment.

Appeals from district court, Scott county; P. B. Wolfe, Judge.

Actions in equity to enjoin the collection of a special tax levied on account of the paving of a street. There was a hearing on the merits, and a decree in favor of the plaintiff in each case. The defendant appeals from each decree. Decree in favor of Eagle Manufacturing Company reversed. Decree in favor of Frances W. French affirmed.

E. M. Sharon, for appellant. Bills & Hass, for appellees.

ROBINSON, J. In the year 1886, George H. French became the owner of block numbered 123 in Le Claire's Ninth Addition to the city of Davenport. He died testate in the year 1888, and Frances W. French became the executrix of his will. That gave to her a life estate in the property described, and by subsequent conveyances she became its owner in fee simple. On the 7th day of January of the year 1891, the paving committee of the defendant presented to its city council a report which recommended that designated portions of certain streets which were specified be paved during that year. The report was adopted, and resolutions which provided for paving according to the recommendations of the committee were also adopted on the same day. On the 26th day of the same month, after due notice, contracts for the paving contemplated by the resolutions were awarded. On the 2d day of May, 1891, a resolution was adopted which provided for the issuing of paving bonds on each of the contracts, and bonds to the amount of $71,500 were issued in accordance with that resolution. A part of the paving provided for by the resolutions and contracts to which we have referred was of that portion of Front street which is adjacent to the block specified. That has the general outline of a truncated triangle. The west side is 216.6 feet ir length; the north side, bounded by Fourth street, is 305.5 feet in length; and the southeast side is 365.4 feet in length. In addition, there is a side at the east end 14.1 feet in length. The block was

divided into two parts by a railway side track, which entered the block on the north boundary line 53 feet west of the east end, and thence extended in a southwesterly direction on a line slightly curved, crossing the west boundary line 62.5 feet north of the southwest corner. On the 7th day of April, 1891, Mrs. French conveyed to E. C. Westwood a part of the block next to Front street, two feet in width, and extending the entire length of the block on that street. On the 22d day of the same month she conveyed to the Eagle Manufacturing Company all of the remainder of the block, which was between the part conveyed to Westwood and a line parallel with, and six feet south of, the railway track. The outline of the block, the adjacent streets, the location of the side track, and the parts conveyed, are shown by the following plat:

the objections was that the objectors did not own, and had not since the paving was ordered, or since work thereon had been commenced, owned, any part of the block which fronted or abutted on the part of Front street, which had been paved. The objections were overruled, and the tax for paving the part of that street upon which the block abutted was assessed upon the entire block at the rate of $3.53756 for each front foot. No attention was paid to the depth of the block. These actions were brought to enjoin the enforcement of the tax against the portions of the block now owned by the plaintiffs. The district court rendered a decree in each case granting the relief asked. 1. It will be observed that no part of the block abuts on Front street, excepting the strip which was conveyed to Westwood; and we are required to determine whether the

The paving was completed in accordance with the contracts in the latter part of the year 1891. On the 4th day of November of that year the city engineer presented to the city council a report and plat which showed the amount of paving tax to be assessed on the lots and land abutting on the streets where paving had been done. Notice to all persons having objections to the plat was published, and in due time the Eagle Manufacturing Company and Mrs. French filed objections to the assessment of the paving tax on the portions of the block in question which they then owned. The substance of

conveyance to him, and the subsequent one to the Eagle Manufacturing Company, were effective to cut off the right which the defendant would have had, if they had not been made, to assess the tax against that portion of the entire block within 150 feet of Front street. The paving was done under an ordinance of the defendant, not set out, but which was similar to chapter 14 of the Acts of the 23d General Assembly; hence the provisions of that act will be treated as applicable and controlling. The act provides for the paving and curbing of streets, and for the assessment of the cost thereof "upon

the property fronting or abutting on said improvement." Section 12 contains the following: "Said assessment with interest accruing thereon, shall be a lien upon the property abutting upon the street or streets upon which any said improvement is made, or upon such improvement from the commencement of the work, and shall remain a lien until fully paid, and shall have precedence over all other liens except ordinary taxes, and shall not be divested by any judicial sale, provided that such lien shall be limited to the lots or lands bounding or abutting on such street or streets, or on such improvement and not exceeding in depth therefrom 150 feet." It is important to determine the time when the lien of the assessment in question must be regarded as having attached to the property subject to it. It is contended on the part of the appellant that it attached when the resolution ordering the paving to be done was adopted, or at the latest when the contract for it was entered into. It is the general rule that taxes are not liens upon property, unless made so by statute, or by virtue of authority conferred by statute. Jaffray v. Anderson, 66 Iowa, 718, 24 N. W. 527; Cooley, Tax'n, 445 et seq. And that is true of special assessments made on account of the improvement of streets. 2 Dill. Mun. Corp. § 659; 24 Am. & Eng. Enc. Law, 76. Where a tax or special assessment is made a lien, the time at which the lien attaches must be ascertained from the statute or other authority which provides for it, and in this case it attached at "the commencement of the work." Is the adoption of a resolution directing that certain paving be done, or the letting of the contract therefor, or both, with the various preliminary steps which lead to them, the commencement of work, within the meaning of the statute? It is undoubtedly true that there are many good reasons, independent of the statute, for making the lien of the assessment commence with the letting of the contract for making an improvement, if not from the adoption of the resolution ordering it; and it is also true that legislative intent, if properly expressed, is controlling. We must gather that intent in this case from the statute itself. Section 2 of the statute refers to paving and curbing of streets and the construction of sewers, and authorizes contracts "either for the entire work in one contract or parts thereof in separate and specified sections." Section 3 provides for a notice to bidders, which shall state as nearly as practicable "the extent of the work, the kind of materials to be furnished," and "when the work shall be done." Section 5 makes it the duty of the city engineer "to furnish proper grades and lines, and see that the work is done in accordance with the ordinances and regulations of the city, with respect to said grades and lines." Section 6 provides for the issue of bonds "from time to time as the work progresses." Section 9 provides for the payment, on requi

sition, of money received from the sale of the bonds, upon proof "that work has been done or materials furnished to the amount of said requisition." In each of these cases the word "work" is used to designate labor, or the product of labor and material com. bined, required to make the improvement as separate and distinct from the acts of the agents of the city preliminary to, and which terminate in, the formal execution of the contract. The word is next found in that part of section 12 which we have set out, and we are of the opinion that it is there used as in preceding sections to designate that which is required of the contractor to perform his part of the agreement. It follows that the lien of the assessment for an improvement made under the act in question attaches from the time when labor is first done or material is first furnished by the contractor in the making of the improvement after the contract is made. The record submitted to us fails to show when the work in question was commenced. A resolution adopted by the city council of the defendant on the 2d day of May, 1891, to authorize the issue of bonds, recites that "work has been commenced and is progressing" under the contracts. But, if that be treated as competent evidence to show the commencement of the work, it does not show that it was commenced before the deeds of Mrs. French to Westwood, and to the Eagle Manufacturing Company were executed, and there is evidence on the part of the plaintiffs that nothing had been done under the contract for paving the part of Front street in question when the last of the two deeds was delivered. We therefore conIclude that the work is not shown to have been commenced, within the meaning of the statute, and that the lien of the assessment in controversy is not shown to have attached, when the deeds of Mrs. French took effect.

2. It is insisted, however, that the deeds were executed for the purpose of evading the lien of the assessment, and that, as against the defendant, they are fraudulent and void. The avowed purpose of the deed to Westwood was to defeat the assessment on all of the block excepting the part conveyed to him. Mrs. French was represented, in all of the transactions which ended in the giving the deeds, by her son, Judge French. He attempted to compromise the claim of the defendant for the assessment which would be made if the improvement should be completed, on the basis of paying according to the area of the block, but his offer was rejected. He then went to Chicago with a deed executed by Mrs. French for the Westwood strip (excepting that a blank was left for the name of the grantee), was introduced to Westwood, who was a practicing lawyer of Chicago, and said, "Can I transfer you two feet of a block over in Davenport?" and Westwood answered, "What in the world will I do with it?" French replied:

"I know what you can do with it. I will sell you a two-foot strip, and I will personally take an option on that property. I will lease it for a year, and take an option to lease it for another year; and I want an option to buy it, and I will pay you $41 for it now. That is what you can do with the property." Westwood said: "What will I have to pay?" French answered: "You will have to pay $25." Westwood then asked for an explanation, and French told him the condition of the lot, and what the defendant was proposing to do. Westwood then consented to take the deed, and was paid $41, of which $25 were returned. It thus appears that Westwood was paid $16 to accept the deed. There is not now, and never has been, any attempt to conceal the fact that the conveyance to Westwood was intended to defeat the assessment in question upon all of the block not conveyed to him. Το justify the conveyance, it is said that the entire block was worth but about $3,000; that the assessment in question amounts to $1,292.62; that the paving of Fourth street on the north side of the block has been agitated, and that, if it is done, the assessment therefor on the block would be $2,090; and that the two assessments would amount to more than the entire value of the block. The case thus suggested would be one of much hardship, which might well be provided against by legislative enactment. But the question we are required to determine is whether the conveyance to Westwood should operate to relieve the portions of the block not conveyed to him from the assessment actually made. The transaction was not designed to be of any benefit to the grantor, excepting as it might enable her to evade the payment of a valid assessment. The grantee had no use or desire for the strip conveyed to him, and had to be paid money to induce him to accept it. The strip, considered by itself, had little or no practical value. It is said it is valuable to sell to the owner of the adjoining part of the block, or to the defendant, to add to the street, or to erect thereon bill boards for advertising purposes. It is plain, however, that Westwood did not accept it on account of its intrinsic value, but for the money paid him, and for what he might receive in addition if it should be taken from him under the option reserved. The entire transaction on the part of the grantor, from its inception to its close, was for the sole purpose of defeating the collection of a valid claim which it was known would accrue. The defendant had incurred an obligation by its contract for the paving when all of the block within 150 feet of the street appeared to be liable for its proper share of the cost of the improvement; and, while no lien upon the block was then created, the conveyance to Westwood, if given effect, would operate as a fraud upon the defendant, for the reason that it was not made in good faith, nor

was it a legitimate transaction. In law, it was fraudulent, and a court of equity will not interpose to give it effect; and the defendant, for the purposes of the assessment in question, may treat it as void. See Dougherty v. Miller, 36 Cal. 83.

3. We are next required to consider the effect of the conveyance to the Eagle Manufacturing Company. It was not a part of the transaction with Westwood, although it may have resulted in part from that transaction, and it may have been designed in part to protect the remainder of the block from assessment. But the company was at the time trying to acquire more property, and bought that adjacent to what it owned, whenever offered, on the best terms it could obtain. It had leased the part of the block north of the side track, and used it for a lumber yard. The part south of the side track not conveyed to Westwood was not accessible from a street, excepting at one point on Fourth street. Judge French proposed to sell it to the company, and accepted therefor its offer of $400. In view of its situation, that price does not appear to have been an unreasonable one for the grantor to accept. The part sold was a substantial portion of the block, large enough to be used for ordinary business purposes. It was leased by the company to a lessee which erected there on a shed in the summer of the year 1891, which it has since used as a storehouse. It is not unlawful for a person to buy and sell property with reference to taxes which may be levied upon it. Liability for taxes is always an element affecting the value of taxable property which is considered by the careful investor. Nor is it unlawful for a person to so use property, or to divide it in such a manner, as to reduce the burden of his taxes upon it, provided the use or division be in good faith, for legitimate purposes, and not merely a subterfuge to defeat a proper and valid assessment. Applying these rules to the conveyance to the company, we conclude that the evidence fails to show that it was invalid or made for an illegal purpose, but that it was a reasonable and proper business transaction.

4. The effect of the conveyance remains to be determined. We have seen that the conveyance to Westwood was in law fraudulent. and of no effect as against the assessment in question. The company was represented in the purchase it made by its president, George W. French. He knew that the paving had been ordered. He states that be knew of the conveyance to Westwood when the purchase was made, but that he did not inquire why the conveyance had been made. He does not deny that he knew the object it was designed to accomplish. He and Judge French were brothers. They owned twothirds of the capital stock of the company, both were officers of it, and they occupied the same office. They conferred together in regard to important matters which pertained