The remaining question presents itself: Is the result of this covenant necessarily to lessen the degree of care formerly exercised by the defendant toward the property of the public, and which the law ever enjoins upon it to exercise? In other words, are the probabilities of the destruction of the property of the public by fire communicated by defendant, not via the warehouse of plaintiff, but directly communicated, increased by reason of this covenant in the lease? It is argued that defendant's losses by fire, arising from its negligence, being materially reduced if a large number of these contracts were outstanding, it would necessarily become careless in the selection of its servants, and neglectful and overeconomical 92 in the selection of modern machinery, and thus the dangers to the public by conflagration would be multiplied. We do not see that such result would follow. It must be borne in mind that the lessees of defendant under these contracts are no part of the public. Each one of them has sold his right as one of the public, and is not in a position to complain as to the burdens cast upon him as an individual. The public here are the people holding no leases. The defendant in this case not only owes the public the same duty after the execution of the lease that it did before, but there is no reason in the world why it would not perform that duty in the same way as it had done in the past, however careful or neglectful that performance might be. Why would not this be so, for the public had the same rights and the same remedies against the defendant after as before the execution of the lease, and likewise the defendant was liable for damages in the same amount, upon the same property, and upon the same facts? It thus appears that the contract in no way changed the relations and conditions existing between the defendant and the public, and such being the fact, no reason exists for a change upon its part in the manner of the conduct of its business. While it is true that the making of this contract withdrew plaintiff as one of the public, and, it may be said, thereby reduced the proportions of the public to that extent, still it would seem the refinement of absurdity to hold, for such reason, that, the public being reduced, the care exercised by defendant toward the public would be reduced pro tanto.

The late case of Griswold v. Illinois Cent. Ry. Co. (Iowa), 57 N. W. Rep. 843, in its facts is fully analogous to the case at bar, and, upon a rehearing and reargument, a similar covenant in a lease was sustained as in no manner contravening public policy. Especially is this case valuable as precedent when we pause to consider the stringent provisions of the code of that state in

dealing with the liability of common carriers for damages to property arising from fire and other 93 causes. And doubly so in view of the further salient fact that the lease in that case upon its face appears to indicate that benefits to the lessor, in its capacity as a common carrier, would accrue by reason of the making thereof. These matters are not found in the case at bar, and to that extent the case occupies much broader ground than we are required here to take. The dissenting opinion of the learned chief justice is based, to some extent at least, upon these provisions of the Iowa code, and the further claim that the railroad company was acting in its capacity as a common carrier in making the lease, conditions which, we have already suggested, do not surround us here. The remaining objection of the learned chief justice to the validity of the judgment ordered by the majority of that court is in line with these respondents' contention, and we think unsound.

Farmer A is in the habit of burning his stubble field in the fall of the year. B leases from him a small portion of his farm for storage or residence purposes, there being a clause in the contract similar to the one here involved. Farmer A, in burning his stubble, allows the fire to escape from his control, and B's property is destroyed; or A is the owner of a powder factory, and leases to B an adjoining tract of land.. This exemption damage covenant is placed in the lease; the powder plant explodes, and B's property is destroyed. These illustrations in principle are parallel with the case at bar. Both the farmer and the factory owner owed the duty to the public of exercising a certain degree of care, one in burning his stubble field, the other in carrying on his factory. If this covenant in the present case had the effect to lessen the degree of care exercised by defendant, it had the same effect in the lease of the farmer and the powder man. If the risks and dangers to the property of the public from fire were increased in this case by reason of the covenant, they were likewise increased in those cases. Yet it would seem a gross trespass upon the rights of parties to make contracts, to hold the covenant void as against the policy of 94 the law in the hypothetical cases cited. To hold that the interests of the public were of such gravity, and were so interwoven into such a contract, as to vitiate the contract, would carry us far beyond any principle of law yet recognized by courts or law-writers.

If the doctrine enunciated by respondent be sound, then a multitude of contracts covering many and diverse subjects, and which are being entered into every day of the world, and recognized and acted upon both by parties and courts, must fall to the

ground. As a striking example, the ordinary contract of fire insurance cannot stand the test, for it cannot be gainsaid that such a contract necessarily has the tendency to lessen the care which the owner would otherwise exercise in the protection of his property from fire. Upon respondents' line of argument, such owner owes a duty to the public, possibly in the protection of his own property from fire, certainly in the protection of the property of the public, and, if his care is lessened in the performance of that duty by reason of the contract of insurance, then surely the dangers and risks to the property of the public are increased. Yet, notwithstanding this reasoning, courts everywhere have upheld this class of contracts, and repelled all assaults upon them as being opposed to the policy of the law. While it may not be found in the contract itself that the negligence of the owner in causing the fire shall be no bar to a recovery, it has been held always and everywhere that such is the law, even in the absence of express stipulation to that end; and an express stipulation, inserted in the contract in accordance with the general principle, would certainly in nowise weaken the doctrine. As sustaining this general principle, see Patapsco Ins. Co. v. Coulter, 3 Pet. 222; Columbia Ins. Co. v. Lawrence, 10 Pet. 507; Waters v. Merchants' etc. Ins. Co., 11 Pet. 213; Liverpool Steam etc. Co. v. Phenix Ins. Co., 129 U. S. 438.

Let us look at another class of contracts which have been sustained by the courts, but sustained wrongfully, 95 if the soundness of the argument advanced by respondents can be maintained. Courts have sustained contracts made by common carriers with insurance companies, whereby property under their control, and in transit, has been insured against negligence of their employees: California Ins. Co. v. Union Compress Co., 133 U. S. 387; Phoenix Ins. Co. v. Erie etc. Transportation Co., 117 U. S. 312. Following respondents' line of argument, surely such contracts would have a tendency to lessen the care otherwise exercised by common carriers in the transportation of goods, and would thereby trespass upon the rights of the public, and, so trespassing, would render void all contracts of that character. But the courts, after careful investigation, have arrived at a contrary conclusion.

To support the invalidity of this contract, counsel rely upon an act of the legislature found in the statutes of 1891, page 473, which declares a party guilty of a misdemeanor who starts fires in certain localities (without first taking certain precautions), whereby the property of an adjoining or contiguous owner is injured, damaged, or destroyed. If for no other reason, this act of

the legislature cannot be relied upon to assist respondents' case, for it was passed subsequent to the making of the contract, and, if the contract was valid when made, no subsequent act of the legislature can render it invalid. It is laid down as an elementary principle in Greenhood on Public Policy, that, if a contract conform to the public policy of the state when made, a change in public policy will not avoid it.

We conclude that the line of reasoning indulged in by respondents to support the invalidity of this contract is more specious than sound; that the interests of the public in the contract are more sentimental than real; and that such a contract violates no statute, conflicts with no principle of law, and in no way infringes upon public policy.

96 For the foregoing reasons the judgment and order are reversed and the cause remanded.

Van Fleet, J., and Harrison, J., concurred.

Hearing in Bank denied.

THE CASE of King v. Southern Pac. R. R. Co., 109 Cal. 96, was an action to recover the value of plaintiff's goods, stored by him in the warehouse owned by Stephens, and, with it, destroyed by fire under the circumstances mentioned in the principal case. Although King was paying storage on his goods, he had charge of the warehouse as the agent of Stephens, the owner, at the time of the fire. At the trial, the defendant offered to prove that the plaintiff had actual notice of the covenant in the lease to Stephens exempting the defendant from liability for property destroyed by fire. Under objection, defendant was not allowed to make the proof. The ruling of the court in this regard formed the main ground for appeal after judgment for the plaintiff. The appellate court decided that King, as a bailor of goods stored in the warehouse, had a right to recover from the railroad company for their loss by fire, caused by its negligence, and that it was immaterial whether such bailor had notice or knowledge of the existence of the covenant in Stephens' lease or not. "He was in no sense in privity with Stephens. His right to recover grows out of, and is based upon, the fact that he was lawfully entitled to store his goods in the warehouse, without regard to the exemption clause of the lease made by the owner, and that, while so stored, they were destroyed through the negligence of the defendant's employees."

LANDLORD AND TENANT-COVENANT AGAINST LOSS BY FIRE." Damages by the elements" excepted from a lessee's covenant to repair include destruction by fire without the lessee's fault: Van Wormer v. Crane, 51 Mich. 363; 47 Am. Rep. 582.

CONSTITUTIONAL LAW.-ALL CONTRACT OBLIGATIONS are protected from impairment by the state legislature by the provisions of the federal constitution: People v. Common Council, 140 Ñ. Y. 800; 87 Am. St. Rep. 563, and note.

VAN SANDT v. ALVIS.

[109 CALIFORNIA, 165.]

HOMESTEAD.-AFTER A MORTGAGE IS MADE to secure the purchase price of land, no homestead can be carved out of the property so as to impair the rights of the mortgagee.

HOMESTEAD — MORTGAGE OF-STATUTE OF LIMITATIONS.-If a purchaser of land, after giving a mortgage thereon for its purchase price, declares a homestead upon the mortgaged premises, and then applies to the mortgagee for an extension of time, and gives a new note and mortgage upon the homestead premises for the amount of the debt without his wife joining therein, the second mortgage is void as against the wife, but the first mortgage, having been satisfied only for the purpose of giving effect to the second one, is, in equity, deemed to be and remain in force until the demand secured thereby is barred by the statute of limitations, and, as to the part not so barred, it may be foreclosed against the homestead.

Nicol & Orr, and Baldwin & Thompson, for the appellant.

J. H. and J. E. Budd, for the respondent.

166 SEARLS, C. This is an action to foreclose a mortgage upon the homestead of the defendants. Plaintiff had a decree of foreclosure, adjudging his claim, to the extent of two thousand four hundred and ninety-five dollars and twenty-eight cents, to be a lien upon the homestead and a personal judgment against defendant G. P. Alvis for the residue of indebtedness found due to plaintiff. Defendants appeal from so much of the decree as relates to the lien upon their homestead. The appeal was taken within sixty days after judgment, and the record contains a bill of exceptions.

The facts, as admitted by the pleadings and found by the court, may be summarized as follows: A. A. Van Sandt, plaintiff's tes tator, was the owner of certain lands situate in the county of San Joaquin, state of California, which, on the first day of October, 1883, he sold and conveyed to the defendant C. P. Alvis, for the sum of five thousand dollars, receiving in payment therefor one thousand dollars in cash and four promissory notes for one thousand dollars each, payable at one, two, three, and four years, with interest at eight and one-half per cent per annum, and, if not paid, the interest to be added to the principal and draw like interest, and, to secure the payment of said several promissory notes, said 167 Alvis executed to his grantor, said Van Sandt, a mortgage upon the land so conveyed to him, which mortgage was duly recorded. Thereafter, and on the twenty-ninth day of June, 1886, defendant C. P. Alvis made and recorded a declaration of home