When the vendee refuses to receive and pay for ordinary goods, wares, and merchandise which he has contracted to purchase, the measure of damages which the vendor is entitled to recover is not ordinarily the contract price of the goods, but the difference between the contract price and the market price or value of the same goods at the time when the vendee had agreed to receive them: Id.

But when an artist prepares a statue or a picture of some person to order, or a mechanic makes a specific article in his line of business to order, and after particular measure, pattern, or style, or for a particular use or purpose, when he has fully performed the contract on his part, and has tendered or offered to deliver the article thus manufactured according to contract, and the vendee refuses to receive and pay for the same, he may in an action against the vendee for a breach of said contract recover as damages the full contract price of the article thus manufactured: Id.

But in such case, or in case of an ordinary contract for the purchase and sale of goods, wares, and merchandise, if the vendee refuses to accept the property, the vendor may if he choose, upon notice to the vendee, sell the property at auction, and recover of the vendee the difference between the contract price and the price for which the goods were sold: Id.

VERDICT.

Amendment of Separation of Jury.-Where the verdict of the jury is ambiguous the court may in its discretion send out the jury for further deliberation, even after they had sealed up their verdict and separated for dinner-there being no suggestion of abuse during the separation : Evans v Foss, 49 or 50 N. H.

Where the officer in charge of a jury, without the direction of the court or the consent of the parties, allowed the jury to separate after having agreed upon and sealed up their verdict to be rendered in court on its opening in the afternoon, the verdict will not be disturbed for that cause where it appears there was no intentional wrong on the part of the officer or the jury, unless there is cause to suspect that some abuse was practised: Id.

WATERS AND WATERCOURSES.

Flowage-Fishery.-For the purpose of creating a water-power, B. secured the right of flowage from adjoining landowners, and enlarged a pond previously existing upon his land so as to flow the lands of others. He then stocked the pond more fully with fish. Held, that B. did not acquire an exclusive right of fishery in the waters over land upon which he had only the right of flowage; but that the right of fishery belonged to the owner of the land flowed: Damon v. Felch, 49 or 50 N. H.

Dams without Fishways-Prescription.-Riparian proprietors maintained dams without fishways more than twenty years in a river which is the outlet of a large inland lake, thereby obstructing the passage of migratory fish between the sea and the lake. Held, that they had not acquired a prescriptive right against the public to maintain the dams without fishways: State v. Franklin Falls Co., 49 or 50 N. H.

THE

AMERICAN LAW REGISTER.

MAY, 1872.

MORTGAGES TO SECURE FUTURE ADVANCES.

THAT a mortgage is valid though no money pass at the time and the whole purpose is to create a lien for future advances or a security against loss from liabilities to be subsequently incurred, has long been firmly settled: Lyle v. Ducomb, 5 Binn. 585; Shirras v. Caig, 7 Cranch 34; Ladue v. D. & M. Railroad Co., 13 Mich. 380, and cases there cited.

How far the rights of such a mortgagee will be affected by a subsequent mortgage has been the subject of considerable discussion.

I. In the early English case of Gordon v. Graham, 7 Vin. Abr. 52, pl. 3; s. c. 2 Eq. Cases Abr. 598, it was held that the second mortgagee could not redeem the first mortgage without paying all that is due, as well the money lent after as that lent before the second mortgage was made, although according to the report of the case the first mortgagee had notice of the second mortgage; for, said Lord Chancellor CowPER, "it was the folly of the second mortgagee with notice to take such a security."

In Hopkinson v. Rolt, 7 Jurist N. S. 1209 (1861), however, this case came before the House of Lords, and the original entries in the registrar's book were most carefully and minutely examined by Lord Chancellor CAMPBELL, and the court came to the conclusion that the case had been misreported as to the fact that the first mortgagee had notice of the second mortgage, and after mature consideration it was held by Lords CAMPBELL and CHELMS

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FORD (Lord CRANWORTH dissenting), that the first mortgagee was not entitled to priority as to any advances made after notice of the second mortgage. This case has settled the law in England so far as relates to optional advances by a first mortgagee after notice of the second mortgage.

II. In this country it may be considered as settled, that where the mortgagee has bound himself to make advances or incur liabilities, such advances shall relate back and the mortgage when recorded is a valid lien for all the advances actually made, although they may have been made after notice of a subsequent mortgage or encumbrance of the same property: 3 Kent's Com. 175; Lyle v. Ducomb, 5 Binn. 585; Moroney's Appeal, 12 Harris 362; s. c. 3 Am. Law Reg. O. S. 169; Crain v. Deming, 7 Conn. 387; Wilson v. Russell, 13 Md. 495; Griffin v. Burtnett, 4 Edw. Ch. 673.

III. So also if the advances are made without notice, actual or constructive, of the second mortgage: Ladue v. D. & M. Railroad Co., 13 Mich. 393.

IV. But where there is no obligation on the mortgagee and such advances are optional with him, and he has actual notice of the subsequent mortgage, such subsequent mortgage takes precedence of all advances made after notice: Boswell v. Goodwin, 31 Conn. 74; s. c. 3 Am. Law Reg. N. S. 79; Nelson's Heirs v. Boyce, 7 J. J. Marsh. 401; Ladue v. D. & M. Railroad Co., 13 Mich. 380; Ward v. Cooke, 2 C. E. Green 93; Frye v. Bank, 11 Ills. 381; Bank of Montgomery's Appeal, 12 Casey 170; s. c. sub. nom. Parker v. Jacoby, 3 Grant 300; Ter Hoven v. Kerns, 2 Barr 96.

V. Whether under the various recording or registering acts of this country, the record of the second mortgage is such notice as to bring the mortgagee within the last rule, is still an unsettled point.

In Vermont in the case of Mc Daniels v. Colvin, 16 Vt. 300, decided in 1844, a mortgage for a specified sum "and also what I may owe on book account," was held as against a subsequent mortgage to be a valid lien for items of book account incurred subsequently to the recording of the second mortgage. It was indeed still further intimated in this case that the second mortgagee must not only give actual notice of his mortgage to the first mortgagee but must expressly notify the latter not to increase

hia mortgage by future advances in derogation of the lien of the second. This extent of the rule, however, has not been followed, and we doubt if it would now be insisted upon even in Vermont. See remarks of REDFIELD, J., in 3 Am. Law Reg. N. S. 91-2.

In Connecticut in the case of Rowan v. Sharp's Manufacturing Co., 29 Conn. 282, in January 1852 R. had entered into a written contract with S. to advance to the latter $40,000 for a specific purpose, and took the legal title to certain land as security. Subsequently, in 1854 S. made a mortgage of the same property to a third person, who had notice of the agreement between R. and S. This mortgage was put on record at once, but actual knowledge of it did not come to R. until December 1855. In October 1856 the advances amounted to $75,000, and S. failed. On a bill by the mortgagee to redeem, it was held that the legal title being in R. the recording of the mortgage was no notice to him, and all advances made prior to actual notice were a prior lien to the mortgage, and further that after actual notice. R. still had a right to make all advances necessary to enable S. to carry out the original contract. The tendency of the court would appear to have been towards the rule adopted in McDaniels v. Colvin, but in a subsequent case in the same court where the point arose directly upon a mortgage, SANFORD, J., indicated his disapprobation of that rule, but the court not being unanimous. on that point disposed of the case on other grounds, leaving the question still open in that state: Boswell v. Goodwin, 31 Conn. 74.

In New York it appears to have been thought at one time by Chancellor KENT that the mere execution of a second mortgage or deed would prevent the lien of advances after that: Brinkerhoff v. Martin, 5 Johns. Ch. 326-7; Craig v. Tappin, 2 Sandf. Ch. 90; but this eminent jurist in his Commentaries subsequently conceded that the advances might be made after the second mortgage if they were made as "a constituent part of the original agreement,” 4 Kent 175; and the rules as laid down already (supra, II., III., and IV.) are now well settled in New York as in other states. In Truscott v. King, 6 Barb. 346, it was expressly held that under the recording acts the constructive notice of a recorded instrument is prospective only and not retrospective; and that the recording of a mortgage was not therefore notice to a prior mortgagee or holder of a judgment to secure advances, so as to affect in any way the lien of his advances subsequently made

This case upon a review in the Court of Appeals was reversed, 2 Selden 166, but on the distinct ground that it was wrong on the facts, the security having been given for certain specified advances which had all been repaid prior to the second judgment, and therefore the mortgage having fulfilled the whole of the purpose in the contemplation of the parties when it was made, could not be afterwards revived as security for a different obligation, to the detriment of intervening rights of third persons. The ground of the decision below was therefore left untouched, EDMONDS, J., saying in his opinion that he was inclined to think the principle established was right but it was not decisive of the case. And in the subsequent case of Robinson v. Williams, 22 N. Y. 380, it appears to be assumed that actual notice of the second mortgage was necessary to affect advances subsequently made under a prior one: Opinion of DAVIES, J., p. 386. It may therefore be considered that the weight of authority in New York is against treating the recording of the second mortgage as equivalent to notice to the first mortgagee, though perhaps the law is not yet conclusively settled.

In New Jersey a very distinguished jurist, Chancellor GREEN, held that the recording of the second mortgage was not notice to the first mortgagee: Ward v. Cooke, 2 C. E. Green 93; and the law appears to be held in the same way in Kentucky: Nelson's Heirs v. Boyce, 7 J. J. Marshall 401; and in Maryland: Wilson v. Russell, 13 Md. 495; though in the latter case the decision is not expressly in point, as the first mortgagee was bound to make the advances.

On the other hand, in Spader v. Lawler, 17 Ohio 371 (decided in 1848), it was for the first time held expressly (though the Pennsylvania cases mentioned infra had previously tended the same way), that the first mortgagor was bound before making his (optional) advances to take notice of a junior mortgage recordedin other words, that the record of the second mortgage was equivalent to actual notice to the first mortgagee. READ, J., who delivered the opinion of the court, appeared to entertain doubts whether, under the statutes of Ohio, a mortgage for future advances was valid at all, inasmuch as the statute "makes the recording a part of the execution," (p. 378), and stated that the court were "all agreed that the clause for future advances, if allowed any legal effect whatever, should be narrowly guarded and restricted.