would be that the McKenzie Lumber Company had contracted an indebtedness which it was unable or unwilling to pay. The language tends to impeach the solvency of the firm, or its integrity, or both, and is calculated to produce an impression unfavorable to the business reputation of the plaintiffs. Words of similar import have been held actionable when spoken merely, and their circulation, therefore, restricted; but when they are printed in a newspaper, with the wide and general patronage of the Denver Times, they must of necessity be much more injurious. The case of Woodruff v. Bradstreet Co., 116 N. Y. 217, 22 N. E. Rep. 354, is cited by defendant's counsel as announcing a rule which should be applied to this case; and, tested by which, the words under discussion here would not be libelous per se. That was an action for libel, founded upon the publication by the defendant of the following: "Watertown. Robinson, J. S., printer, binder and mfr., woolens. Judgment against him and C. T. Woodruff, $4,000." The court, in discussing the effect of these particular words, say: "The recovery of a judgment does not necessarily import conceded default in payment of a debt. It is a matter of frequent observation that controversies arising apparently out of an honest difference of opinion go into the courts for determination. Litigation also not infrequently comes from causes in which is involved no personal credit or default. There is nothing in the defendant's report to indicate that the judgment was produced by any cause prejudicial to the credit of the plaintiff, and there is no presumption in that respect upon the subject in aid of the action." But the court, in speaking on the general doctrine applicable to such cases, uses this language: "The plaintiff was engaged in the business of manufacturing and selling brick in the city of Watertown. It must be assumed that at the time of the publication he was in good financial and business standing, and that the publication as to him was false. His reputation in that respect was his property, and he had the right to its protection against defamation. And any published imputation against him in that relation, which could be so construed as to import insolvency, or a condition of financial embarrassment, would be ground for an action, because it is the policy of the law to afford protection to the credit of merchants and traders, for reasons which it is now unnecessary to repeat." There is a manifest difference between that case and this. There is no necessary inference from the language which was the subject of that suit that the judgment was on account of a default in the payment of a debt. To say that a judgment has been recovered against a man, without more, suggests no impugnment of his solvency or his integrity; and the plain sense of the words cannot be enlarged by innuendo. In this case, however, the words clearly imply embarrassment in

the plaintiffs' partnership business. They will bear no other construction. If they convey the truth, there must have been a suit against the firm; the suit must have been brought upon an alleged firm liability, and the property of the firm must have been taken in attachment. Not only is suspicion cast upon the solvency or integrity of the firm, but its property, which, together with its reputation, is the foundation upon which its credit rests, is said to be in the custody of an officer. The words in question explain themselves, and innuendo was unnecessary. If their natural tendency was not to impair the credit of the plaintiffs, we are at a loss to conjecture what language would have that effect. The words are clearly actionable, and for the purpose of maintaining the suit it was unnecessary to allege or prove special damages. It was therefore error to exclude the evidence of plaintiffs and instruct the jury to find a verdict for the defendant. The judgment will be reversed.

(3 Colo. App. 540)

PULLMAN PALACE CAR CO. v. FREUDENSTEIN.

(Court of Appeals of Colorado. Oct. 9, 1893.) SLEEPING-CAR COMPANY-LIABILITY TO PASSENGER -Loss oF EFFECTS.

In an action against a sleeping-car company for loss by a passenger of his coat while in his berth at night, the presumption of negligence on the part of defendant arising from such loss is rebutted by the uncontradicted evidence of the car porter that he was on duty. and engaged in watching the car, through the night, till after the loss.

Error to Arapahoe county court.

Action by Charles A. Freudenstein against the Pullman Palace Car Company for the loss of property by plaintiff while on a car belonging to defendant. Judgment for plaintiff, and defendant brings error. Reversed.

Rogers, Cuthbert & Ellis, for plaintiff in error. W. P. Hillhouse and Ralph Landon, for defendant in error.

BISSELL, P. J. In April, 1890, Freudenstein took passage on the Rio Grande road for Sargent, Colo. He was the holder of a first-class railway ticket, and bought Pullman transportation on what is called a "tourist sleeper" between Denver and Sargent. The car was "No. 462," and in charge of a porter named Allen. The tourist sleeper differs slightly from the first-class Pullman, in that they have no drawing rooms and no lavatories which interfere with the general structure of the car. As in the case of all sleepers, the berths opened on a center aisle, were provided to a certain extent with head and foot boards, which separated the occupants, and the sleepers were protected by curtains from the general view. There was nothing to obstruct the observation of the porter in charge, and he could see the entire car from door to door, and observe the move

ments and conduct of the passengers. Some evidence was offered concerning the movements of Freudenstein from the time he got on the car until the loss, but it is sufficient to state that he went to bed after his berth was made up, and hung his overcoat inside of the curtains which protected his berth, and went to sleep. Later in the night he discovered that it was gone, got up, and complained to the porter, and together they made a search to find it, and observed the passengers alighting at Salida, (which was a way station,) to see if some person had taken it by mistake. The coat was not found, and the porter was unable to explain its disappearance. Some passengers got off at intermediate stations, but what they took with them does not transpire. Freudenstein, at the trial of the case, proved the loss of the overcoat, and rested. The company moved for a nonsuit, but the motion was denied. They then put the porter on the stand, and he gave evidence that he was on duty, and engaged in continuous watch of the car, from the time it-left Denver, through the night, until after the loss. On this proof judgment was entered for the value of the coat and its contents, and the case was brought here on error. The liability of the company, if any, under these facts must of necessity spring from the terms of some express contract between the company and the passenger, or a contract to be implied from the circumstances of the accidental relation of passenger and carrier. This relation must measur ably determine the obligations of the Pullman Company, and fix the extent to which the proof must go if they are to respond to losses of this description. It is familiar learning that nothing would excuse the innkeeper or the common carrier when called on for a guest's goods, or what may have been delivered for transportation, except proof that the loss was occasioned by the acts of God or the king's enemies. They were both adjudged to be practically insurers of the property. Storms and armed enemies in open rebellion alone operated to excuse default in performance. The law to this day has practically remained unchanged. With the exceptions and reservations contained in modern bills of lading, and admitted by the courts to be binding as contracts under some circumstances, or with the force and effect of notices, agreements, or statutes by which keepers of inns seek to limit what they are pleased to term the "rigors of the common law," we have nothing to do. Without these, such servants of the public are held to a legitimate, advantageous, and entirely proper accountability; an accountability fully warranted by their status and their profits. But the groundwork of the liability was found in the facts which gave rise to the relation, and in the correlative advantages of the innkeeper and the carrier in the collection of their charges. The keeper of the inn was bound to receive the guests, and had a lien

on his guest's goods for the price of the entertainment. He furnished him food and lodging, and had the right to exclude from his house all but guests and servants of his own choosing. The carrier had the possession, sole custody, and control of goods delivered to him for carriage, could enforce his lien for freight and retain possession until it was paid, and only his employes could interfere with it during the journey. The courts in a long series of adjudications have held that the Pullman Company cannot be made liable for lost baggage on these grounds. They have held the rules governing innkeepers to be inapplicable, because of the difference in the existing conditions, The law of the carrier has been adjudged to be equally unsuitable, because the possession was not exclusive. The latter difficulty does not seem to me to be entirely insurmountable. The possession of the Pullman Company is practically as exclusive as that either of the innkeeper or the carrier. In either case, the risk of dishonest guests is always an element of danger, which cannot be eliminated. No person has access to the cars except the Pullman servants and the railroad employes. It is no substantial enlargement of the risk to hold the Pullman Company as guarantors for the honesty of these employes. No difficulty could be experienced in reducing this element of risk to an insignificant minimum. Eliminating these features, the company does practically have possession of the travelers' goods. There may not be the formal delivery, but the exclusive possession which ordinarily exempts the railroad company from liability for lost baggage is not retained by the traveler. Of course, it is conceded that if the passenger by coach leaves his coat in the seat, and it be lost, the railroad company cannot be compelled to pay for it. They never had any possession on which a liability could be predicated. No such condition exists in a Pullman car. There the company has possession; a possession not at all similar to that which is called constructive. The passenger buys a place to sleep in, and when he hangs up his coat at the invitation of the Pullman Company he ought both truthfully and legally to be held to give his garment into the possession of the company. If lost, they should be held liable. The only question is whether the loss alone is sufficient to fix the responsibility. The authorities hold otherwise. By an almost unbroken current, which has such volume and impetus that we do not feel vigorous or powerful enough to stem or turn it, courts have held that the basis of the liability is the proven negligence of the company. 3 Wood, Ry. Law, § 368 et seq.; Thomp. Carr. p. 531; Whitney v. Car Co., 143 Mass. 243, 9 N. E. Rep. 619; Hillis v. Railway Co., 72 Iowa, 228, 33 N. W. Rep. 643; Scaling v. Car Co., 24 Mo. App. 29; Carpenter v. Railroad Co., 124 N. Y. 53, 26 N. E. Rep. 277; Car Co. v. Pollock, 69 Tex. 120,

5 S. W. Rep. 814; Coach Co. v. Diehl, 84 Ind. 474; Car Co. v. Smith, 73 Ill. 360; Car Co. v. Gardner, 16 Amer. & Eng. R. Cas. 324; Stearn v. Car Co., 8 Ont. 171; The Crystal Palace v. Vanderpool, 16 B. Mon. 302.

While we concede that the law has been thus settled, and that negligence must be shown before the plaintiff can recover, we do not agree with counsel as to what will discharge that duty. It is insisted that there must be positive evidence of a want of care, as by proof of the absence of a proper and sufficient number of servants, a lack of the watch which the cases decide the company must maintain, or some equivalent testimony showing the positive omission of what the law has imposed as a part of the duty which the company owes the traveler to whom it has sold accommodations. This does not coincide with our views of the relative duties of the passenger and the carrier. The Pullman Company has assumed a specific obligation by the sale of a ticket which entitled the traveler to a place to sleep. It was sold with the intention that it might be used for that purpose. When the berth is thus applied to the purposes for which it was sold, the company impliedly agrees that it will use due care to protect the property of the traveler. The passenger is sold a place to sleep in, which the vendor knows is to be used for that purpose. His personal belongings are taken to his apartment with the knowledge and assent of the seller. Thus this property is in the place provided by the company, put there with their consent and approbation, and practically surrendered to their control and care. When loss is shown it does appear that the company was guilty of negligence sufficiently to entitle the loser to recover. The breach occurs the instant the property is lost. To prove the loss is at least to make prima facie proof of the negligence of the company. It is enough to put the company to proof of due care and the maintenance of a proper supervision of the car and its occupants. The burden is then cast on them to prove watch or whatever else may be necessary to establish due care and want of negligence on their part. To shift the burden of this onto the traveler puts him to such a positive disadvantage that nothing short of an imperative necessity would lead us to accept this conclusion. The present case was brought within this rule. The plaintiff proved loss and rested; nonsuit was denied, and the defendant produced evidence which, if credited, entitled them to judgment. This proof has been fully stated. The porter in charge of the car was put on the stand, and testified to an absolutely continuous watch during the entire night. must be taken as true, for there was nothing to contravene it. We have no alternative but to accept it as veracious. It establishes due care on the part of the company. The known and well-understood conditions of modern travel show the impossibility of ex

This

act knowledge of the property of the departing passenger who may leave at an intermediate station. If the company is permitted to escape the absolute liability of the innkeeper, such care and diligence as is consistent with proven and well-understood conditions can only be exacted. In the present case the company discharged this duty. The negligence which alone justifies a recovery against them is not established by the evidence, and the judgment against them cannot, therefore, be sustained. What a subsequent trial may disclose cannot be foreseen. The judgment will therefore be reversed, and the case sent back for a new trial.

(3 Colo. App. 545) COLORADO LAND & WATER CO. V. ROCKY FORD CANAL, RESERVOIR, LAND, LOAN & TRUST CO. (Court of Appeals of Colorado. Oct. 9, 1893.) IRRIGATION APPROPRIATION OF WATER ABANDONMENT-SUBSEQUENT CONVEYANCE-EFFECT. 1. An irrigating canal company filed the statement required by law and plat, by which it declared its intention to construct a canal 70 miles long for irrigating purposes, taking the water from a certain river at a specified point. In the first six months thereafter it spent a small sum in construction, at the end of which time it made an executory contract of sale, but, the purchaser failing to perform, the sale was never consummated. During the two years following the date of such contract, such company made several attempts to sell, but did nothing towards construction. Held, that the incipient right of such company to take water from such stream had lapsed and reverted to the state.

2. Where such company, at the end of such two years, sold and conveyed its rights to another company, which had, prior to such conveyance, constructed an irrigating canal from a point on such river near the initial point of the proposed canal of the grantor, and running some distance parallel with the latter, but finally diverging several miles therefrom, the grantee acquired no rights by such conveyance, and its rights as an appropriator of the waters of such river do not relate back to the time when the grantor filed its statement and plat.

Appeal from district court, Pueblo county.

Proceeding under the statute to determine the priorities of certain irrigating canal companies as appropriators of the waters of the Arkansas river. From a judgment fixing the date of appropriation by the Rocky Ford Canal, Reservoir, Land, Loan & Trust Company prior to the appropriation by the Colorado Land & Water Company, the latter appeals. Affirmed.

Gerry & Rittenhouse and Charles Hartzell, for appellant. Charles E. Gast, H. A. Dubbs, and John H. Voorhees, for appellee.

REED, J. This is an appeal from the decision of the district court establishing priorities to water of different irrigating canals taking water from the Arkansas river. The controversy arose between the canals, respectively, of the parties to this suit on appeal. It appears that the proceeding was

under the statute, embracing a large number of ditches. The testimony was taken before a referee, which, with his finding of facts, was filed in court. It was found by the referee that the date of appropriation of water by appellant was April 10, 1889; that appellee made its appropriation of water January 6, 1890; that appellant's number as to priority was 50, that of appellee 52,to which report exceptions were taken by appellee. On hearing, the finding of the referee was reversed. The date of appellee's appropriation was fixed as by the referee, while that of appellant was fixed as of June 9, 1890, and the Rocky Ford canal was given priority No. 50, and appellant's canal No. 52. It is claimed that the decree is erro

neous.

The initial poiuts or headgates of the respective canals at the Arkansas river are practically the same, or within short distances of each other, both being near the junction of Boone creek with the Arkansas river, in Pueblo county,-the canal of appellant taken out on the north side of the river, running in a general northeasterly direction, length about 70 miles; the canal of the appellee taken out on the south side of the river, running in a general southeasterly course, length about 80 miles. As to the dates at which appellee's company was organized, made its appropriation of water, commenced actual construction, and the time of the completion of its canal, there is no controversy whatever; the facts appear to be conceded. The questions presented are those in regard to the appellant. As established by the evidence, the facts appear to be: Some time in the year 1889 certain parties became incorporated as the Colorado Land & Canal Company, and on the 2d day of July of that year filed the statement required by law, and plat, by which it declared its intention to construct a canal for irrigating purposes, taking water from the Arkansas river at or near the junction of Boone creek with the river. By the plat filed, of which it is said in the certificate, "hereby declares that the said plat accurately shows the proposed line of the said canal and the subdivisions of land through which it passes," it is shown that from the initial point of the canal, as located, to Jones' point, a distance of 23 or 24 miles, the land was barren and nonirrigable; from that point on, its course northeasterly was good arable land to be covered by the canal. Prior to the 28th day of December, 1889, the Colorado Land & Canal Company had expended, as shown by the evidence, the gross sum of about $3,471, of which sum about $2,650 had been spent in field work, preliminary surveys, platting, office work, and incidental expenses, and, after location and platting, the sum of about $780 was spent in grading or construction on the line. On the 28th day of December, 1889, the Colorado Land & Canal Company entered into an executory contract or mem

orandum in writing with one T. C. Henry, by which it agreed, for the sum of $10,000 to be by him paid on certain contingencies, at some indefinite, subsequent time to convey or transfer to him all of its capital stock, and contained a stipulation that no title should pass until the payment of the $10,000, and delivered to the said T. C. Henry the plat, field notes, and data of its proposed canal, and allowed the said Henry to take possession of its proposed line of canal, as surveyed and staked. Thereupon the Colorado Land & Canal Company withdrew from its possession, stopped all operations in the way of construction, and abandoned and surrendered the same to Henry. On April 21, 1890, a deed was made by the canal company to Mr. Henry in accordance with the contract. The deed was not delivered. The papers were placed in escrow, and were to be void and inoperative if Henry failed to comply with his contract. He made failure, and at some subsequent time the deed was delivered to the grantor and canceled. The Colorado Land & Water Company (appellant) entered upon the line of canal as platted by the canal company, but, as shown by the evidence, not for the purpose of construction upon the line as designated and platted, and only using the surveyed line as the basis, or as data, from which it could locate another line more satisfactory to itself. Taking Jones' point as the initial or base, a point to the north of the original line, some ten chains distant, was taken, such point being about six feet higher than the original line. From such point the survey was made westerly at a greater elevation, to connect such point with a point for the reception of water at the Arkansas river. This new alignment and greater elevation carried the head of the ditch some threequarters of a mile above the junction of Boone creek with the Arkansas river, the proposed initial point as established by the canal company. A survey of the proposed canal to be constructed by the Colorado Land & Water Company was also made from Jones' point northerly and easterly. While from Jones' point to the river the two lines, as established, were of necessity nearly parallel, and but short distances apart, after entering upon the irrigable land from Jones' point the two lines were in no manner identical or parallel, the line of the Colorado Land & Water Company (upon which the canal was subsequently constructed) diverging rapidly to the north from the location of the canal company, and its course and alignment northeasterly continuing to diverge to the north, until, at points near the terminus of the survey and plat of the canal company, it was several miles north of that line. The line as surveyed by the canal company ended near the center, east and west, of Otero county; the line of canal of the water company, as constructed, was continued far to the north and east, through the

northern part of Kiowa county, to near the eastern line of such county. It is established by the evidence, and conceded, that after the filing of its plat by the Colorado Land & Water Company the work of construction upon its line was entered upon and vigorously prosecuted. The canal is 70%1⁄2 miles in length, 55 of which was completed in October and November, 1890, and the balance-151⁄2 miles-in July, 1891. Water was first turned in on the 29th day of August, 1890. The appellant became incorporated January 18, 1890. It will be observed that the contract between the canal company and Mr. Henry was made before the incorporation of the water company; it bears date December 28, 1889. On the 24th of October, 1891, some 15 months after the completion of the greater portion of its canal and the appropriation of water under its charter, the water company, by a new contract of purchase, secured from the canal company a deed of the supposed rights of the canal company.

The principal contention of the appellant is that, by reason of Mr. Henry's transactions with the canal company and its subsequent purchase, it succeeded to its rights, and as such successor its priority to the water should be carried back to the inception of the supposed rights of the canal company, and thus antedate the appropriation made by the appellee; consequently, that the court erred in finding the date of its incorporation and the filing of the necessary certificates as the inception of its acquired rights. The two important questions for determination are: First. What, if any, rights had the canal company acquired by its incipient steps? Second. Did the water company succeed to such rights? Mr. Henry may have contemplated the formation of a company to construct a canal as afterwards constructed by the company that was formed, and, finding the ground occupied by the canal company, entered upon the negotiation to remove the obstruction, resulting in the memorandum of agreement executed December 28, 1889; but at that time, and for several months after, until June of the ensuing year, appellant's corporation had no existence. The agreement with Mr. Henry was followed by the deed to him, as grantee of the canal company, executed April 21, 1890, but such deed was not delivered, and was subject to defeasance on the failure of Mr. Henry to pay at a specified time. Such failure occurred; the deed was canceled, the date of the cancellation occurring in December, 1890, or January, 1891. No assignment or transfer of any kind was made by Mr. Henry to the company after its organization. By the failure of Mr. Henry to perform, the contract lapsed, and the canal company was fully reinstated in all its former rights, so far as Mr. Henry and his company were concerned. The intention of Mr. Henry to cre ate a company, and give to it ultimately any

benefits that he individually had secured from the canal company, could not, even if the conveyance had become operative, invest the water company with any property or rights acquired by Henry; they could only pass by conveyance. There was no privity between the canal company and the water company. Henry having failed to complete his purchase, nothing passed from the canal company to either Henry or his company. These propositions need no authorities for their support. The right to priority through the canal company, therefore, cannot be based upon any contract or conveyance through Mr. Henry, but must, if it have any basis, rest upon the delivery to Mr. Henry of the map of its survey, the delivery of the possession of the line, and the abandonment of the work of construction. The delivery of the plat invested the water company with no property. The abandoning of the enterprise and work of construction by the canal company could not inure to the benefit of the water company, for, if it resulted in the forfeiture of its initial rights, it would revert to the state, not to another corporation. It would again become the property of the state, subject to appropriation by the first comer complying with the law. It may be conceded that at any time, while prosecuting its work of construction with proper diligence, a corporation of this kind may sell and dispose of such rights as it may have, and a grantee succeed to them, and take the benefit of any right secured by the grantor from the state or others, and thus become a legal successor, but, in order to be such, the grantee must succeed in the same right, and the prosecution must be substantially of the same enterprise. In other words, it must succeed to the charter rights of the grantor and prosecute the enterprise under the same franchise, and in accordance with the statement and certificate of its organization. No corporation acquiring, independently from the state, a franchise to construct a canal, and completing such enterprise in accordance with its own stipulations and declarations, can claim as successor of another corporation acting under a different franchise. The right of both is derived from the state, the same source,-and the fact that two canals of different corporations are nearly parallel in their alignment, and their contemplated purpose the same, does not alter their relation. The water taken and applied by appellant was the water designated in its certificate. There was no pretense that it was the water of the canal company, for, long after its appropriation and application of water by the water company, the ownership of the right to water in the canal company was recognized, and negotiations were being carried on to acquire it, culminating in the conveyance as above stated. Consequently, we conclude that the water company took nothing from the canal company prior to the deed of Oc