6

by statute. Wilson v. Leary, 120 N. C. 90 (26 S. E. Rep. 630; 58 Am. St. Rep. 778; 38 L. R. A. 240). Overruling, Fox v. Horah, 36 N. C. (1 Ired. Eq.) 358 (36 Am. Dec. 48). The court say: "It is true, it was held in an opinion by Gaston, J., in Fox v. Horah, 36 N. C. 358, that by the common law, upon the dissolution of a corporation by the expiration of its charter or otherwise, its real property reverted to the grantor, its personal property escheated to the state, and its choses in action became extinct; and hence that, on the expiration of the charter of a bank, a court of equity would enjoin the collection of notes made payable to the bank or its cashier, the debtors being absolved by the dissolution. Judge Thompson (5 Thomp. Corp. § 6720) refers to this decision in accordance with the barbarous rule of the common law as 'probably the last case of its kind,' and notes that it has since been, in effect, overruled in Von Glahn v. De Rosset, 81 N. C. 467, and it is now expressly overruled by us. Chancellor Kent (2 Kent Comm. 307, note) says, 'This rule of the common law has, in fact, become obsolete and odious,' and elsewhere he stoutly denied that it had ever been the rule of the common law, except as to a restricted class of corporations. 5 Thomp. Corp. § 6730. The subject is thoroughly discussed by Gray on Perpetuities, §§ 44-51, and he demonstrates that my Lord Coke's doctrine rested on the dictum of a fifteenth century judge (Mr. Justice Choke, in the Prior of Spalding's case [1467] 7 Edw. IV., 10–12), and is contrary to the only case deciding the point (Johnson v. Norway [1622] Winch, 37), though Coke's statement has often been referred to as law. But, whatever the extent of this rule at common law, if it was the rule at all it was not founded upon justice and reason, nor could it be approved by experience, and has been repudiated by modern courts. The modern doctrine is, as held by us, that upon a dissolution the title to real property does not revert to the original grantors or their heirs, and the personal property does not escheat to the state.' 5 Thomp. Corp. 6746; Owen v. Smith, 31 Barb. 641; Towar v. Hale, 46 Barb. 361. The crude conceptions of corporations naturally entertained in a feudal and semi-barbarous age, when they were few in number, and insignificant in value and functions, by even so able a man as Sir Edward Coke, and the

fanciful reason given by him (Co. Litt. 136) for the reverter of their real estate, to-wit, that a conveyance to them must necessarily be a qualified or base fee, have long since become outworn and discredited."

Sec. 137. Miscellaneous notes. The right to loan money is included in the general powers of a corporation. Brown v. Elwell, 17 Wash. 442 (49 Pac. Rep. 1068). A corporation with legal capacity to hold property, may take and hold it in trust in the same manner and to the same extent as private individuals. White v. Rice, 112 Mich. 403 (70 N. W. Rep. 1024). Where a corporation assumes a contract for the purchase price of land, held by one of its members at the time he was taken into its organization, it is bound by the terms of the contract. Stewart v. Norman, Tenn. (39 S. W. Rep. 758). Cal. Civ. Code, § 639, construed and applied-organization of corporations for the improvement of real property. Vercoutere v. Golden State Land Co., 116 Cal. 410 (48 Pac. Rep. 375). In an action for the recovery of a proper proportion of the value of real property retained and used by a county from the territory of which the territory of another county has been segregated, it is no defense to show that said real property was originally conveyed by a deed with conditions, when thereafter the said property was dedicated as county property by a plat duly recorded by the grantor, and as such was accepted by the county, and at great expense, improved by the erection thereon of county buildings. Brown Co. v. Rock Co., 51 Neb. 277 (70 N. W. Rep. 943).

COVENANTS.

EPITOME OF CASES.

Sec. 138. Personal covenants-Covenant of husband joining in his wife's deed. A husband living with his wife on her separate real estate, who is allowed to pay the taxes, make repairs and perform such duties of care and management as are incidental to the occupation of the property and usually grow out of the marital relations, and who negotiates for her

a contract of sale which is made in her own name and check given to him for the purchase price, does not thereby acquire such possession of her real estate that his mere joinder in his wife's conveyance makes his covenants run with the land. Mygatt v. Coe, 152 N. Y. 457 (46 N. E. Rep. 949). The court say: "The rule that the covenant of a stranger to the title is personal to the covantee, and incapable of transmission by a mere conveyance of the land, must, in the absence of special facts and circumstances, apply to a husband who becomes a party to a deed by his wife conveying her own land."

Sec. 139.

Kimm v.

Covenants running with the land. Covenants in party wall contracts run with the land. Griffin, 67 Minn. 25 (69 N. W. Rep. 634; 64 Am. St. Rep. 385). Applying Cal. Civ. Code §§ 1113, 1460, it is held that a covenant against incumbrances does not run with the land. Woodward v. Brown, 119 Cal. 283 (51 Pac. Rep. 2; 63 Am. St. Rep. 108). Stipulations made by a railroad company in proceedings to condemn a right of way, for the purpose of reducing the assessment of damages against it, that it will construct crossings for the land owner and permit him to construct a switch over or from its track, constitute covenants which run with the land. Lyon v. Hammond & B. I. R. Co., 167 Ill. 527 (47 N. E. Rep. 775). A mortgage may contain, by express words to that effect, an independent covenant which runs with the land and survives the mortgage after the payment and discharge of the debt secured. Brown v. O'Brien, 168 Mass. 484 (47 N. E. Rep. 195). Covenants running with the land will pass by a quitclaim deed. Walion v. Campbell, 51 Neb. 788 (71 N. W. Rep. 737). Possession, under claim of title, is an estate sufficient for the transmission of covenants that run with the land when that possession goes by deed from one to another and is of such a character that it would ripen into title in the requiste time. Morton v. Thompson, 69 Vt. 432 (38 Atl. Rep. 88). In Iowa it is held that the use of the word "heirs" or "assigns" is not necessary to pass a covenant running with the land; and a covenant in a mortgage for the release of certain portions of the mortgaged property upon payment of a specified sum runs with the land. Gammel v. Goode, 103 Ia. 301 (72

N. W. Rep. 531). Citing, Vawter v. Crafts, 41 Minn. 14 (42 N. W. Rep. 483). The interest of a covenantee in a covenant which runs with the land passes to a purchaser at a foreclosure sale made under a mortgage executed by such covenantee. Baker v. Bradt, 168 Mass. 58 (46 N. E. Rep. 409).A covenant against incumbrances runs with the land, and, where the mortgage contains such a covenant, an action upon it can be maintained by a purchaser at a foreclosure sale under the mortgage. Security Bank v. Holmes, 68 Minn. 538 (71 N. W. Rep. 699). Following Security Bank v. Holmes, 65 Minn. 53 (68 N. W. Rep. 113; 60 Am. St. Rep. 495).

Sec. 140. Covenants of warranty. Where a grantee to whom land has been conveyed by warranty deed reconveys to his grantor with covenant of warranty, the warranties are mutually extinguished. Green v. Edwards, 15 Tex. Civ. App. 1005 (39 S. W. Rep. 1005). Where a grantee in a deed covenanting against taxes, after the delivery to him of a deed, and upon the same day, executed to his grantor a mortgage in which he expressly agreed to pay all taxes "then subsisting," it is held that in the absence of fraud or mistake that the covenant in his mortgage to pay the taxes may be held to supercede the original covenant of his grantor and release the latter from liability on account thereof. Frank v. Cobban, 20 Mont. 168 (50 Pac. Rep. 423). An action for the breach of the covenant of warranty in a deed of real estate is maintainable by the grantee, although the deed in question and the mortgage back from the grantee to the defendant, are part of the same transaction, and contained the same covenants of warranty, and although the relation of mortgagor and mortgagee still subsists between the parties. Harrington v. Bean, 89 Me. 470 (36 Atl. Rep. 986). Citing, Hardy v. Nelson, 27 Me. 526; Hubbard v. Norton, 10 Conn. 422. A grantee in a warranty deed, who subsequently discovers that the title to the land is outstanding in the government, is under no obligation to advise his grantor of that fact, or to enter the land to obtain title, and the fact that his son subsequently enters the land and acquires title from the government and evicts his father, does not prima facie show a collusive eviction so as to defeat an action by the father for a

breach of the warranty. Frix v. Miller, 115 Ala. 476 (22 So. Rep. 146). The United States is a person within the meaning of a covenant against "all and every person or persons whomsoever claiming, or to claim the same." Giddings v. Holter, 19 Mont. 263 (48 Pac. Rep. 8).

Sec. 141.

Covenants against incumbrances. A covenant against incumbrances is, in effect, that the premises then are free from incumbrances; and if any incumbrance exist the covenant is broken and a cause of action exists in favor of the covenantee. Bellamy v. Chambers, 50 Neb. 146 (69 N. W. Rep. 770). A wife's inchoate interest which may ripen into title in case she survives her husband, is an incumbrance on the land previously conveyed by him alone within the covenant against incumbrances. Crowley v. C. N. Nelson Lum. Co., 66 Minn. 400 (69 N. W. Rep. 321). The fact that a grantee of a city lot cannot obtain proper sewer connections for his building without the payment of a municipal assessment which had not become a lien on the property at the time of the conveyance, does not constitute a breach of covenant against incumbrances. Bumstead v. Cook, 169 Mass. 410 (48 N. E. Rep. 767; 61 Am. St. Rep. 293). Where in a deed or a mortgage, it is recited that the real property therein described is sold or mortgaged subject to certain specified existing incumbrances, such recital qualifies a subsequent covenant of seisin, quiet enjoyment, and of general warranty, and they do not cover or embrace the encumbrances mentioned. Walther v. Briggs, 69 Minn. 98 (71 N. W. Rep. 909). A special warranty following a general covenant against incumbrances will not limit such covenant. Duroe v. Stephens, 101 Ia. 358 (70 N. W. Rep. 610). Citing, Morrison v. Morrison, 38 Ia. 73; King v. Kilbride, 58 Conn. 109 (19 Atl. Rep. 519); Bender v. Fromberg, 4 Dall. 436; Brown v. Tomlinson, 2 G. Greene 525; Alexander v. Schreiber, 10 Mo. 460; Duvall v. Craig, 2 Wheat. 44; Rowe v. Heath, 23 Tex. 614; Crum v. Loud, 23 Ia. 219. A warrantee is not entitled to recover for a breach of warranty on account of incumbrances, the validity of which is involved in litigation, and which he voluntarially paid over the objection of the warrantor, before the latter had exhausted all of his legal remedies. Tuggle v. Hamilton, 100 Ga.