poration are part of the corporate property, held by the same tenure; and, until separated from the general mass, the interest of the stockholders therein passes with the transfer of the stock; and this irrespective of the time during which earnings have accrued. By the declaration of a dividend, however, the earnings, to the extent declared, are separated from the general mass of property, and appropriated to the then stockholders, who become creditors of the corporation, for the amount of the dividend. The relationship of the stockholder to the corporation, as to the amount of the dividend, is thus changed from one of partnership ownership to that of creditor. He therefore stands to the corporation in a dual relation, with respect to his stock, as partner and part owner of the corporate property; with respect to the dividend, as creditor upon a par with other creditors of the corporation. The severance of the earnings from the general mass of corporate property, and the promise to pay, arising from the declaration of the dividend, works this change. The earnings represented by, the dividend, although the fruit of the general property of the company, are no longer represented by the stock, but become a debt of the company to the individual who, at the time of the declaration of the dividend, was the owner of the stock. That the dividend is payable at a future date can work no distinction in the right. The debt exists from the time of the declaration of the dividend, although payment is postponed for the convenience of the company. The right became fixed and absolute by the declaration. right could, of course, be transferred with the stock by special agreement, but not otherwise. The dividend would not pass as an incident of the stock." Among other authorities sustaining the general rule that dividends belong to the owner of the stock at the time the same are declared, are the following: 2 Thomp. Corp. §§ 2172-2176; Dow v. Mining Co., 31 Cal. 630, 648; Jones v. Railroad Co., 57 N. Y. 196; Boardman v. Railway Co., 84 N. Y. 157; Cook, Stock & S. § 541; Jermain v. Railroad Co., 91 N. Y. 483; In re Kernochan, 104 N. Y. 618, 11 N. E. 149; Bright v. Lord, 51 Ind. 272, 19 Am. Rep. 732; Hopper v. Sage, 112 N. Y. 532, 20 N. E. 350, 8 Am. St. Rep. 771.

This

The essential inquiry is, when did the title to the stock pass to Clark? Was it on October 29th, when the option and stock were deposited, or was it on November 24th, the date of the acceptance, payment, and delivery? Conceding, for the purposes of this case, that the writing deposited was an escrow agreement, binding upon Campbell before acceptance by Clark, still it by no means follows that upon delivery to Clark of the stock on November 24th the sale related back and took effect as of August 29th. We are

aware of the rule, in certain cases of escrow contracts, to permit the deed to take effect by relation as of the time of the first delivery. The rule is thus stated in Campbell v. Thomas, 42 Wis. 437, 24 Am. Rep. 427: “By all of the authorities, a deed so deposited with a third person to be delivered to the grantee on the happening of some event in the future, which may or may not happen, does not pass title to the land described in it to the grantee until such event occurs, and then only from that time, or perhaps from the actual delivery of the deed to the grantee after the event has occurred. There may be exceptional cases,-as where a man delivers his deed in escrow, and dies before the conditions of the deposit are fulfilled. In such cases it has been said that from necessity, after the conditions are fulfilled, the deed must take effect by relation as of the time of the first delivery." Prutsman v. Baker (Wis.) 11 Am. Rep. 592; Taft v. Taft (Mich.) 26 N. W. 426, 60 Am. Rep. 291. But the facts of the case at bar do not bring it within any of the exceptional cases permitting title to pass as of the first delivery. This case is also distinguishable from cases where there was an absolute agreement of sale and purchase, so as to be a sale in præsenti. The cases of Currie v. White, 45 N. Y. 822, Johnson v. Underhill, 52 N. Y. 203, and Phinizy v. Murray, 83 Ga. 747, 10 S. E. 358, 20 Am. St. Rep. 342, are all clearly distinguishable from the case at bar. In so far as the case of Harris v. Stevens, 7 N. H. 454, supports plaintiff's claim to the dividends in question, the same is against the great weight of authority. Under the undisputed evidence in this case, Campbell is entitled to the dividends as a matter of law, and the trial court did not err in so instructing the jury. There was no agreement between the parties as to who should have any dividend declared before the acceptance of the offer to sell, and therefore there was nothing in this connection that should have been submitted to the jury. It was not the case of an attempted, imperfect, or ambiguous agreement as to the right to dividends on the stock sold, and there was nothing to submit to the jury in that connection. It was purely a question of law to award the funds sued for under the undisputed evidence. While there is some complaint that plaintiff was misled, in that he believed that he was buying the bank funds represented by the dividends declared and paid, it must be noted that this is not an action to rescind the contract on the ground of mistake or fraud. This disposes of many of the errors assigned, and not particularly mentioned above. There being no reversible error in the trial of the case, it is ordered that the judgment be affirmed, at appellant's cost.

BASKIN and BARTCH, JJ., concur.

(23 Utah, 564)

SCHEIB ▼. THOMPSON. (Supreme Court of Utah. June 19, 1901.) INVESTMENT BY GUARDIAN-ORDER OF COURT -LIABILITIES-INTEREST-COMPENSATION.

1. A guardian, without authority of the court, purchased real estate with the money of his ward. The value of the real estate had somewhat depreciated when the ward became of age, and it was shown that during the ward's infancy money could be safely loaned at 10 per cent. per annum. Held, that the ward was entitled to recover from the guardian the amount invested by him in the house, with 10 per cent. interest, compounded annually.

2. Where a guardian is guilty of negligence in the management of the estate of his ward, he is entitled to no compensation.

3. Money actually paid out by guardian for court costs and attorney's fees should be allowed him on accounting.

Appeal from district court, Salt Lake county; Ogden Hiles, Judge.

Suit by John F. Scheib against James Thompson, as executor of Morris Livingston, deceased, to require an accounting for funds secured by defendant's testator as guardian of plaintiff. From the decree in favor of plaintiff, defendant and plaintiff both appeal. Modified and affirmed,

Smith & Putnam, for appellant. E. A. Walton, Albert W. Casey, and Alex McMaster, for respondent.

MINER, C. J. It appears that in March, 1888, Morris Livingston was appointed guardian of the plaintiff's estate by the probate court. Plaintiff was then a minor of 10 years, and became of age on August 26, 1900, and was substituted as plaintiff in this case during its trial. On August 16, 1898, the said guardian filed in the probate court an inventory of the ward's estate. Such estate consisted of $872 in cash in the hands of the guardian. This inventory was the last paper filed or proceeding had in the estate. No accounting was ever had or report made thereafter. Six hundred dollars of the money so coming into the hands of the guardian was by him, without any authority of the probate court, invested in the purchase of a house and lot on the 13th day of August, 1888, the deed to which was taken in the name of the plaintiff, then a minor. The money so held by the guardian could have been loaned during the period aforesaid at a rate of 10 per cent. per annum. In September, 1897, the plaintiff made a demand on the defendant, as executor, to make an accounting of the said fund, which he, as said guardian, had failed to account for, and such request was refused. The plaintiff occupied the premises with his mother, who was in very poor circumstances, from August 16, 1888, to March 16, 1889, during which time the rental value thereof was six dollars per month, and from March 1, 1895, to the time of the trial, the rental value was four dollars per month. During the period when Livingston was acting as guardian he paid

$50 for attorney's fees necessarily expended by him, $20 probate costs, and $1.70 for recording the deed to the plaintiff. Some additions had been made to the building during the plaintiff's minority, and a well was constructed on the premises at a cost of $15. The value of the real estate varied according to the condition of the times, and was shown to be from $450 to $650 during the plaintiff's minority. The plaintiff is shown to have offered during the trial to convey the property to the defendant. Plaintiff now seeks an accounting of the fund so received, with interest at 10 per cent. per annum, semiannually.

The court found and decreed: "(1) That plaintiff was entitled to receive from the estate of Morris Livingston, and from the executor thereof, the sum of eight hundred and seventy-two dollars, with interest thereon at the rate of ten per cent. per annum from August 16, A. D. 1888, to the date of this finding, and the further sum of $15. (2) That defendant is entitled to set off against said amounts due plaintiff the sum of $388.90, to wit: On account of rent, $42.00; on account of rent, $275.20; for attorney's fees, $50.00; for court costs, $20.00; for recording deed, $1.70,-$388.90,-and interest on $71.70 last mentioned. (3) That defendant is entitled to a reconveyance of said real property by proper deed from plaintiff. (4) That neither said Morris Livingston, as such guardian, nor his representatives, are entitled to any commissions on account of said guardianship." From this judgment both plaintiff and defendant appeal.

We are satisfied that the decree appealed from, with the exception that compound interest is not allowed, is correct. While it does not appear that the guardian acted in bad faith when he purchased the real estate, or that he failed to make his accounting with any dishonest motive, yet it does appear that he had no order from the probate court authorizing the purchase of the real estate, nor had he ever made an accounting or report of his doings to the court, as required by law. Section 4346, Comp. Laws Utah 1888, empowers the court, on application of the guardian, or any other person interested therein, to authorize and require the guardian to invest the proceeds of the sales or any other of his ward's money in his hands in real estate, or in any other manner most to the interest of all concerned therein. An order thus obtained would protect the guardian even if misfortune were to follow such investment. But when the guardian acts upon his own judgment in making such investment, independent of an order of the court, or otherwise converts the proceeds of the estate to his own use, he takes upon himself responsibilities which the law does not permit; and is held not only to a strict accountability for the money used, but to such actual or punitive damages as may be lawfully imposed for an official neglect of his duty.

Cardwell's Case, 55 Cal. 137; Schouler, Dom. Rel. 341. Such a rule may seem to be harsh in some cases, but it is based upon reason, and for the protection of the innocent party who cannot act or speak for himself. The ward cannot speak with authority or act in a transaction of business concerning his estate. The court appointed to guard his interests was not consulted. No order being made for the investment, the guardian is properly held for a conversion of the fund, including that part not reported or inventoried. When a guardian acts in good faith, and does not use the fund for his own benefit, and makes no profit out of it, the law will not fix a penalty in the nature of punitive damages, or "smart money," but will charge him with the statutory rate of interest only; but such interest may be computed with annual rests, or compounded semiannually. In the case of In re Stott's Estate, 52 Cal. 403, it was held that the trustee was responsible for presumed profits upon money in his hands which he had used and failed to account for, and that the general rule in such cases was that he should be charged with legal interest with annual rests. 2 Redf. Wills, 886; 2 Williams, Ex'rs, 1670, and note; In re Clark's Estate, 53 Cal. 359; Miller v. Lux, 100 Cal. 609, 35 Pac. 345, 639. In the present case testimony was offered to. show, and the court found, that the guardian could have loaned the money at an average rate of interest of 10 per cent. per annum, and therefore charged him with that rate. It appears that the guardian made, or could have made, a profit to that extent from this improper use of the money and in mingling it with his own. The guardian is so charged with compound interest because of the rule that he will not be permitted to speculate or make a profit out of the funds in his hands as guardian. In re Cousins' Estate, 111 Cal. 441, 44 Pac. 182; In re Thompson's Estate, 101 Cal. 349, 35 Pac. 991, 36 Pac. 98, 508; Wheeler v. Bolton, 92 Cal. 159, 28 Pac. 558; Bradford's Heirs v. Bodfish, 39 Iowa, 681; Frost v. Winston, 32 Mo. 489.

The plaintiff and cross appellant contends that the interest should have been compounded annually. For the reasons given, we concur in this view. The judgment and decree must be modified so as to charge the defendant and appellant with interest at the rate of 10 per cent. per annum with annual rests. Section 4327, Comp. Laws Utah 1888, requires annual inventories and reports from the guardian to the court. When such accountings are to be so rendered, interest may be properly computed annually for sums not reported. Jones v. Ward, 10 Yerg. 160. In such cases this is the rule independent of the statute. State v. Richardson, 29 Mo. App. 595; Bradford's Heirs v. Bodfish, 39 Iowa, 681; Frost v. Winston, 32 Mo. 489; Stark v. Gamble, 43 N. H. 465; Davis v. Combs, 38 N. J. Eq. 473; In re Eschrich's Estate, 85 Cal. 98, 24 Pac. 634.

The defendant, as appellant, complains that the legal fees or statutory commission was not allowed the guardian. Such compensation is only properly allowable to a trustee or guardian who faithfully and honestly discharges the duties of his office. When such guardian converts the estate, or is guilty of gross negligence and failure in the management of the estate, compensation should be refused. In re Thompson's Estate, 101 Cal. 349, 35 Pac. 991, 36 Pac. 98, 508. The money actually paid out by the guardian for court costs, attorney's fees, and for recording the deed was properly allowed. The amount of rent, as allowed, was supported by the proof. The complaint was properly in the record as part of the judgment roll.

Upon a careful examination of the questions raised, we are not able to find any reversible error in the record. The judgment and decree of the district court must be modified so as to charge the appellant (executor) with interest at 10 per cent. per annum, compounded annually. As so modified, the judgment is affirmed. Costs to be paid by appellant, as executor.

BASKIN, and BARTCH, JJ., concur.

(7 Idaho, 742)

DAVIS et al. v. DEVANNEY. (Supreme Court of Idaho. June 11, 1901.) JUDGMENT-VALIDITY-ADVERSE POSSESSION. 1. Upon appeal, a judgment which is not supported by the pleadings and findings will be reversed.

2. A prescriptive title cannot be founded upon use and occupation which is not adverse to the title of the owner, but which is under permission of such owner.

(Syllabus by the Court.)

Appeal from district court, Lincoln county; C. O. Stockslager, Judge.

Action by C. W. Davis and Thomas Marren against James Devanney. Judgment for defendant, and plaintiffs appeal. Reversed.

L. L. Sullivan, for appellants. Guy C. Barnum, for respondent.

QUARLES, C. J. This action was commenced by the appellants, as plaintiffs, to quiet the title claimed by them in and to a certain ditch and dam, and to obtain a perpetual injunction restraining the defendant, respondent here, from interfering with their use and occupation of said ditch and dam. The answer denies title in the appellants, and, among other things, alleges: "That the defendant built and constructed said ditch and dam, and is, and has always been, the owner thereof exclusively for seven years last past; and said plaintiffs, nor either of them, nor their predecessors in interest, nor any of them, have ever had any interest in, or right or title to, said ditch or dam, but said defendant has always been the sole and exclusive owner thereof, as alleged above."

The trial court found that the ditch and dam in question were constructed in the year 1886 by Charles Copeland under the employment of S. B. Calderhead; that in the year 1891 said Calderhead sold the same to the said Copeland; that from May 5, 1894, respondent used said ditch for the purpose of irrigating his lands, and had kept the same in repair; that from 1886 to the commencement of the action said Copeland, and his successors in interest, had used said dam and ditch; that the plaintiff C. W. Davis purchased the lands of said Copeland, together with his interest in and to the waters conveyed by means of said dam and ditch; that the plaintiff Thomas Marren purchased onehalf of the interest of said Davis in said dam and ditch, but does not find the date of said purchase. The court then finds in the twelfth finding of fact that the defendant, James Devanney, "has used said dam and ditch for the purpose of irrigating his said lands, as aforesaid, for six (6) years last past," and that said Devanney had rebuilt and repaired said ditch and dam each and every year for the past six years for said purpose. The court then finds as conclusion of law as follows: "That all of these parties, to wit, C. W. Davis, Thomas Marren, and James Devanney, are owners jointly of said ditch and dam down to the west line of C. W. Davis' land, it being the land entered by Copeland; that James Devanney is the sole owner of the ditch which passes through his land herein described, and to all of said ditch situated on his land; that, before said Thomas Marren shall be permitted to take of the waters flowing through said ditch, said James Devanney shall be supplied with the amount of water heretofore decreed to him." Judgment was rendered in conformity with said conclusion of law.

Plaintiffs prepared, served, and filed a bill of exceptions, setting forth all of the evidence heard, and which bill of exceptions contains specifications of error and specifications wherein the evidence is insufficient to support the findings of fact and the judgment. Plaintiffs appealed from said judg ment, which appeal was taken and perfected within 60 days from the entry of judgment.

It is contended by the appellants that, inasmuch as the answer contained no prayer or demand for affirmative relief, the judgment rendered is not supported by the pleadings. Appellants also contend that the findings of fact do not support the judgment. The court does not find that the defendant constructed the dam and ditch as claimed by him, but finds adversely to the contention of the defendant upon this point. The court does find that said defendant had used said dam and ditch for the last six years, but does not find that he used the same under, and claimed any right adversely to, the title asserted by the plaintiffs and their predecessors in interest. The evidence discloses the fact that the defendant's use of said ditch

was as follows: For about two years under a contract to purchase the lands now owned by plaintiffs, and to which said ditch appears to be appurtenant, from one Frank Gooding, but which contract to purchase was never completed, but was canceled. For the next succeeding two years, another party, spoken of in the evidence as "the little Frenchman," held said land and ditch under a contract to purchase the same from said Gooding, but this contract was never completed, and the lands reverted back to said Gooding; but while said Frenchman held the same the defendant used said ditch and lands with his permission. Then for about two years following, Pat Devanney, a son of the defendant, held said lands and ditch under contract to purchase from said Gooding, but this contract was never completed, and said land and ditch reverted back to said Gooding; the defendant using the ditch during the two years that his son held the same. The evidence shows that plaintiffs purchased from said Gooding. While the finding of fact that the defendant used said ditch for six years is correct, it is apparent from the evidence that such use was a permissive one, and not such as possesses any of the elements of adverse user upon which a title by prescription could be founded. The pleadings do not support the judgment. The findings of fact are incomplete, and do not support the judgment. A title by prescription cannot be obtained by permissive use and occupation. For the foregoing reasons, the judgment is reversed, and the cause remanded to the district court for further proceedings consistent with the views herein expressed. Costs are awarded to the appellants.

SULLIVAN, J., concurs.

STOCKSLAGER, J., did not sit at the hearing, and took no part in the decision.

(7 Idaho, 737)

YATES v. SPOFFORD. (Supreme Court of Idaho. June 10, 1901.) NOTE HOLDER FOR VALUE-BURDEN OF PROOF.

1. A suit on a promissory note payable to A. B., agent, and by him sold, indorsed, and delivered before maturity and for a valuable consideration, can be maintained by the holder.

2. Where the answer admits the execution of the note, but denies that plaintiff is the owner by purchase before maturity for a consideration, and alleges want of consideration in the holder, the burden of proving such allegations is on him.

(Syllabus by the Court.)

Appeal from district court, Ada county; George H. Stewart, Judge.

Action by John E. Yates against Judson Spofford. Judgment for plaintiff. Defendant appeals. Affirmed.

J. H. Richards and C. C. Cavanah, for appellant. Wyman & Wyman, for respondent.

STOCKSLAGER, J. This action is based upon a promissory note, to wit: "$136.75. Boise, Idaho, April 28th, 1899. Six months after date, for value received, I, we, or either of us, promise to pay to the order of Harry Timmons, agent, one hundred thirtysix and 75/100 dollars, at the Capital State Bank of Idaho, Limited, Boise, Idaho, without defalcation or discount, with interest at the rate of 6 per cent. per annum from maturity until paid, both before and after judgment. It is also stipulated that, should this note be collected by an attorney, whether by suit or otherwise, per cent. shall be allowed the holder as attorney's fees. [Signed] Judson Spofford." By the complaint it is shown that this note was sold, indorsed, and delivered to plaintiff by Harry Timmons before maturity for a consideration, and that he is still the owner and holder thereof. The answer denies that on the 28th day of April, 1899, or at any other time, defendant made, executed, or delivered to Harry Timmons this note or any other note. Admits that the defendant executed the note, but alleges that there was no consideration of any nature or kind for the execution of said note, all of which was well known to said plaintiff prior to the time such note came into the possession or under the control of said plaintiff. Alleges that Harry Timmons was agent of the Equitable Life Insurance Company of New York at the time of the execution of said note; that said note was executed and delivered to the said Harry Timmons as the agent of the said Equitable Life Insurance Company, and was given with the distinct understanding that the same was to be for the premium of the life insurance policy to be executed and delivered by said Equitable Life Insurance Company for $5,000, and that the same was to be delivered to this defendant within 10 days from April 28, 1899, or, upon failure so to do, the said note was to be returned to this defendant; that the said life insurance policy was never delivered to defendant,— all of which was well known to plaintiff prior to the time of his alleged ownership of said note, and all of which more fully appears by a written contract made by the said Harry Timmons, agent of the said Equitable Life Insurance Company, which contract is as follows: "Boise City, Idaho, April 28th, 1899. Received of Judson Spofford two notes of even date herewith, aggregating two hundred and twenty-six and 75/100 dollars, in full for first annual payment $5,000 insurance in the Equitable Life of N. Y.; said notes to be returned if policy is not delivered to him in ten days from this date; policy to take effect from this date. Harry Timmons, Special Agent." Upon the issues thus formed this cause was tried, a jury having been waived. Plaintiff offered in evidence the note above referred to, to which defendant objected. The note was read in evidence, and marked "Plaintiff's Exhibit A." Plain

tiff rested. The defendant moved for a nonsuit, which motion was overruled. The defendant refused to offer any evidence. The court rendered judgment for the face of the note, with interest and costs. Defendant alleges the following errors: "First. The evidence introduced in said cause is insufficient to justify the decision of the court, as follows: The note introduced in evidence shows that the same was made payable to Harry Timmons, agent, and not to Harry Timmons as an individual, and shows that Harry Timmons as an individual indorsed said note to the plaintiff, and that such note was not indorsed in the name of the true owner, and that there is no evidence to show any consideration given by the plaintiff for the assignment of such note, and there is no evidence to show that the plaintiff is the owner or holder of such note, and the note shows upon its face that Harry Timmons was not the owner of such note. Second. The note shows on its face that Harry Timmons was not the payee of such note. That such note also shows that the same was never indorsed by the payee of said note. That such note shows that the plaintiff is not the legal owner or holder of such note. Third. The court erred in overruling the objection of the defendant to the introduction of said note in evidence. The court erred in holding that Harry Timmons was the payee of said note. The court erred in holding that said note was indorsed to the plaintiff. The court erred in holding that plaintiff is the legal owner and holder of such note. The court erred in overruling the motion of defendant for nonsuit."

It will be observed, from the above statement of the pleadings, facts, and errors relied upon by appellant, that the question presented to this court is, was there error in the order of the court below overruling defendant's motion for a nonsuit? The record shows that the only evidence introduced on behalf of respondent was the note in question; that the defendant then moved for a nonsuit, which being overruled, he neglected and refused to offer any testimony to sustain his answer, and relies upon this motion for a reversal in this court. Appellant calls our attention to a number of authorities to establish that Timmons was not the real owner of the note at the time he sold it to plaintiff, by reason of said note being made payable to Harry Timmons, agent. If such were the fact, it would have been a good and valid defense to this action; and, under his answer, we apprehend the trial court would have permitted him to prove such fact. The court recites in the judgment, to wit: "The plaintiff having introduced certain documentary evidence, and the defendant refusing to offer any evidence, and the evidence being closed, the cause was submitted to the court for consideration and decision," etc. We think, when the plaintiff introduced the note in evidence, he made a