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to be authorized, may have extended the five | ereignty might be impinged by municipal districts wholly within the corporate limits action, and the duty of the General Assembly of the city so as to cover its entire territory. to legislate in the interest of the public welThe title of an act is to be liberally constru- | fare abrogated to the detriment of the peoed. Beresheim v. Arnd, 117 Iowa, 90, 90 N. | ple. Supervisors of Stafford Co. v. Luck, 80 W. 506; Cook v. Marshall Co., 119 Iowa, 397, Va. 223. The corporation acquires no vested 93 X. W. 372, 104 Am. St. Rep. 283. And rights or franchises granted for the purpose when this is done no doubt can arise as to of government against the state, nor is there the sufficiency of the title of the act under anything between them in the nature of a consideration.

contract. Cooley on Con. Lim. 228; Rader v. 4. A part of the independent school district Southeasterly Road District, 36 N. J. Law, of Valley Junction was in the city of Des 273. Municipal corporations, which in this Moines and therefore included in the consol state include school districts, have such powidated territory. That district had issued ers only as are conferred on them by the Gen$8.000 in bonds now held by the First Na eral Assembly, and in the absence of any contional Bank of Valley Junction. The indestitutional provision to the contrary it may pendent school district of Gilbert was in the enlarge or diminish their powers, divide their like situation with outstanding bonds in the territory into two or more districts, or consum of $2.200 in the hands of the Valley Sav solidate two or more districts into one, or ings Bank. In view of the outstanding in authorize such consolidation or separation ad debtedness of these districts it is contended libitum. Attorney General of Michigan v. that the effect of the legislation and consol Lowery, 199 U. S. 233, 26 Sup. Ct. 27, 50 L. idation thereunder is to impair the obliga Ed. 167; Board of Education of Barker Dist. tion of contracts. Substantive law becomes v. Board of Education of Valley Dist., 30 W. part of the contract when made as the meas Va. 423, 4 S. E. 644; Commissioners of Lar: ure of the obligations to perform them by one amie Co. v. Commissioner of Albany Co., 92 party and the right to enforce them by the U. S. 307, 23 L. Ed. 553; Winters v. Georgie, other. Xo change in these respects was at 21 Or. 239, 27 Pac. 1043; Wade v. City of tempted, and the act expressly disclaims that Richmond, 18 Grat. (Va.) 583; Mayor, etc., anything therein "contained shall affect the v. Shattuck, 19 Colo. 120, 34 Pac. 947, 41 Am. rights of existing creditors." It is well set St. Rep. 222; True v. Davis, 133 Ill. 532, 22 tled that the entire district as it existed prior N. E. 410, 6 L. R. A. 267; Beckwith v. Town of to division continues liable tu creditors to the Mt. Pleasant, 100 U. S. 314, 23 L. Ed. 699. sarpe extent after division as it was before. The law is thus summarized by Mr. Cooley Sterenson v. Dist. Township, 35 Iowa, 462; in his work on Constitutional Limitations, p. District Township of Clay v. District Town 228: “The creation of municipal corporatons ship of Buchanan, 63 Iowa, 188, 18 N. W. 839; and the conferring upon them of certain pow. Knoxville National Bank V. School Dist., 40 ers and subjecting them to corresponding du Iowa, 612; Kennedy v. School Dist., 48 lowa, ties does not deprive the Legislature of the 189; White Oak Dist. y. Dist. Tp., 52 Iowa, state of that general control over their citi73. 2 N. W. 965.

zens which was before possessed. It still has But it is argued that creditors in accept authority to amend their charters, enlarge or ing the obligations of the several districts had diminish their powers, extend or limit their the right to rely on their continued existence boundaries, consolidate two or more into one, as such, and especially that they would not overrule their legislative action whenever it be dismembered to the extent of reducing any is deemed unwise, impolitic, or unjust, and to a territory smaller than four government even abolish them altogether in the legislasections in that this would embarrass, and tive discretion and substitute those which impede the prosecution of the remedies avail. are different. The right and franchise of able. The argument based on the want of such a corporation being granted for the purpower to reduce the extent of a district below | poses of government can never become such four sections has already been disposed of, vested rights against the state that they canand the contention that section 13 of chapter | not be taken away; nor does the charter con136 of the Thirty-First General Assembly, stitute a contract in the sense of the constihaving been made applicable for the adjust: tutional provision which prohibits the obligament of assets and liabilities, is not in fact tion of contracts being violated.” so requires no consideration. The contention The creditor deals with the municipality that the obligations were accepted on a sol. with full knowledge of the reserved powers emn assurance that no change in the districts of legislation which may be exercised at any would be made is equally void of merit. The time and cannot complain unless his obligapower of the Legislature cannot be defeated tion is in some way impaired thereby. The or impeded by the action of the agents or division of a school district does not relieve officers of a governmental subdivision of the j any of the property from being subject to taxstate, nor can a creditor of such subdivision ation for the payment of existing obligations, acquire any contractual right which will in- and these can be enforced through taxation terfere with the exercise of such legislative only. Meriwether v. Garrett, 102 U. S. 472, power unless its effect is to impair the obliga- 26 L.Ed. 197. No remedy is taken away or tion beld by bim. Otherwise legislative sov- | modified by this act. All those which previ

117 N.W.-2

ously existed continue unimpaired. The most i tion or creation in this way, and, this being that can be said is that the creditors may be so, there is no question of deprivation of locompelled to make the consolidated district as cal control or of self-government involved in well as the new district outside of the city the case. parties defendant in an action to enforce his 6. The legislation is said to be inimical to obligation instead of the district issuing the | the section of the Constitution exacting the bonds only or to maintain two actions in- | uniform operation of the laws and prohibitstead of one. In either event no more than ing class legislation. That its application a mere change of procedure is involved, and is limited to cities of 50,000 inhabitants and under all the authorities this does.not affect over does not subject the act to this critithe obligation in any way.

cism. See Eckerson v. Des Moines (Iowa) 5. It is urged also that the act is void (1) | 115 N. W. 185; Tutle v. Polk, 92 Iowa, 413, in that it divests school districts, taxpayers, 60 N. W. 733; Owen v. Sioux City, 91 Iowa, and citizens of the management and control 190, 59 N. W. 3. Section 2793, Code Supp. of their property rights and interests by cre 1907, obviates the objection even if it were ating a board of directors of the consolidated tenable that no provision is made for extenddistrict by legislation ; (2) in clothing such / ing the limits of the school district with the board with the power to fix and certify taxes. | expansion of city limits. We are not inclined and (3) by designating nonresidents of the to discuss again the validity of classification district as directors. It will be noticed from 1 of municipalities based on differences in popan examination of section 2 of the act that l ulation further than to say that, even though only the terms of office of the directors and the same text-books may be used generally, other officers of the district having the most different problems arise owing to density of numerous electorate continue until the terms | population which justify different legislation. by which they were elected have expired. | 7. Lastly, it is urged that the effect of the The directors and other officers of districts | act is to take private property for public use partly outside the city merely continue in au-l without just compensation. This proposition thority "over the territory lying within their as will be seen is farfetched. No such districts.” How long? Manifestly the de- thought appears in the act, and if tenable at sign was to indicate those to be temporarily | all it must be owing to its probable effect. in authority and leave the succession to office | True, upon a majority vote favorable to conas regulated by section 2802, Code Supp. 1907. solidation this is effected, and thereby the See section 13, c. 136, 31st Gen. Assem. (Laws | districts and portions within the city form a 1906, p. 99). This section as amended reads: new district. But what private property has "When any changes are made in the bound been taken? The assets are public property, aries of any school corporations the new cor- 1 and there is no inhibition in the Constitution poration shall elect a board of directors in against legis, ative disposition of public propaccordance with the new boundaries, and erty. "It is everywhere acknowledged that such new boards shall organize as provided the Legislature possesses the power to divide in section twenty-seven hundred and fifty- counties and towals at their pleasure, and apseven (2757) of this chapter. The boards of portion the common property and the com. directors in office at the time the changes mon burdens in such manner as to them may are made in the boundaries of the school seem reasonable and equitable." Com’rs of corporations, shall continue to act until the Laramie Co. v. Com'rs of Albany Co., 92 U. boards of directors representing the newly | s. 307, 23 L. Ed. 552 : Perry Co. V. comway formed districts have been duly organized, Co., 52 Ark. 432. 12 S W . 877, 6 L. R. A. whereupon the new boards shall make an 666; Atty. Gen. y. Lorey, 131 Mich, 639, equitable division of all assets and liabili 92 N. W. 289. And the sape is true of school ties of the corporations affected; and, if districts. Fitzpatrick y B. hard of Education, they cannot agree, the matters upon which 87 Ky. 138, 7 S. W. 896. Board of Ed, of they differ shall be decided by disinterested Barker Dist. v. Board of Ed. Of Y arbitrators, one selected by each board hay 30 W. Va. 430, 4 S. E. 640 But it is said ing an interest therein and if the number this they selected is even then one shall be added

nappens because no acquate tribunal

for the division of the assets : by the county superintendent, and the deci- | is provided for. Counsel argule to

le this proposision of the arbitrators shall be made in writ-| tion on the theory that the ba

bard of directing, either party having the right to appeal ors of those districts partly will

thin and partly therefrom to the district court." For offices without the city are to meet

ard of the proposed consolidated district the Leg-|

of directors of the consolidated district and islature may be said indirectly to nominate

apportion these between the listricts. Were as candidates the officers of the district hav this true some of the officers of

ay the new outing the largest electorate, but the choice is lying districts though living

"in the consolileft with the people. By an affirmative vote dated district might represent

& them as claimthe electors not only effect consolidation, but ed. But such is not the law as

is appears from designate the officers of the new district. section 13 of the Acts of tipe

The Thirty-First Nothing contained in the statute or Constitu- General Assembly heretoforel..?

The tion precludes the designation of officers of | board of directors of the portion

ral Assembly heretofont quoted.

lions of district a municipality at the time of its organiza- | outside of the city continue tito

outside of the city continue to act, but only

Dist.

and liabilities

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until their successors are elected. The new : Appeal from District Court, Winneshiek board of directors alone can act in equitably County; L. E. Fellows, Judge. dividing assets and apportioning the liability. Action in equity to compel defendant, a Moreover, an appeal to the district court is fraternal beneficiary association, to levy, colauthorized, and that as a matter of law is | lect, and pay over a benefit assessment. to be regarded an impartial tribunal. We Plaintiff was denied the relief prayed, and he discover no reason for not sustaining the | appeals. Affirmed. legislation assailed, and are of the opinion that defendants are entitled to exercise the

E. W. Cutting, for appellant. D. D. Aitkeu offices of directors of the independent school

and Hurd, Lenehan & Kiesel, for appellee. district of Des Moines. Affirmed.

BISHOP, J. In December, 1904, Paul C. Hexom became a member of the defendant

association, and there was issued to him, HEXOM v. KNIGHTS OF MACCABEES OF by the Supreme Tent, so-called, of the asTHE WORLD.*

sociation, a certificate of membership, or (Supreme Court of Iowa. July 7, 1908.) policy, which provided, among other things, 1. INSURANCE – BENEFICIAL ASSOCIATIONS

that at his death "one monthly rate on each SUSPENSION - ENGAGING IN PROHIBTED life benefit member, not exceeding in amount OCCUPATION.

the sum of one thousand dollars will be paid Under the laws of a beneficial association, declaring ineligible one engaged in selling in

as a benefit to Otto Hexom, bearing relationtoxicants as a beverage, and that a member by ship to him of brother, * * * provided engaging in a prohibited business forfeits all he shall have in every particular complied rights as a life benefit member, and his certifi

with the laws of said Supreme Tent now in cate shall thereby become absolutely null and void, without action on the part of the associa

force, or that may hereafter be adopted," etc. tion, a member who with knowledge of the con On January 31, 1906, said Paul C. Hexom Sequences, and without being misled by the

died, and, the claim of plaintiff as his beneassociation, engages in the saloon business, immediately stands suspended from all rights of

ficiary having been rejected by the defendant membership.

association, this action was brought. As mat[Ed. Note.-For cases in point, see Cent. Dig. ter relied upon to defeat a recovery, there is vol. 28, Insurance, 8 1894.)

pleaded by defendant certain of the laws of 2. SANE-WAIVER AND ESTOPPEL.

the association, in force at all times, as folA member of a beneficial association, under the laws of which he would by engaging in the

lows: liquor business forfeit all rights as a life bene.

“Sec. 281. The following persons shall not fit member, and his certificate would thereby be admitted to the association: * * * Perbecome void, while intending to engage in the

sons engaged as principal, agent or servant saloon business, and knowing the consequences, made a deposit with E., the record keeper, who

in the manufacture or sale of spirituous, vinwas the secretary and treasurer of the local ous or malt liquors as a beverage. *tent" or lodge, to cover dues for six months in "Sec. 282. Any member who engages in a advance. After he had commenced the business, E. told him he had better drop out, while at

prohibited Occupation shall thereby forfeit that work, and he replied that he did not know all rights as a life benefit member of this ashow long he would be in it, that he might be

sociation, and this certificate shall thereby only a short time, and when he quit he could

become absolutely null and void, without go right on again. With the knowledge of H., dues from the deposit were every month sent action on the part of his tent or of the asto the "Supreme Tent." Held, that the action sociation, or of any of the officers thereof," of E., in excess of his authority (the receipt of

etc. dues from members in good standing, and the forwarding of the same), and in violation of his

"Sec. 408. No benefit shall be paid on acduty to enter the suspension and report it to count of the death or disability of a member the supreme office, was a fraud on the associa

while engaged in any prohibited occupation." tion, participated in by H., so that, the knowledge of the agent not being the knowledge of

"Sec. 243. The record keeper shall be the the principal in such case, there was no waiver Secretary and Treasurer of the Tent, and it of the forfeiture by the receipt and retention of shall be his duty: * * * (3) To receive the dues; and this though there was no return

from all members the money paid on all or offer of return of the money when, after the death of H., the aysociation learned of the facts, monthly rates (due the first day of each he, as far as it appears, having no legal repre month)," etc. sentative.

“Sec. 248. The record keeper shall not re(Ed. Note.-For cases in point, see Cent. Dig.

ceive any monthly rate, etc., from any memvol. 28, Insurance, 88 1909-1911.]

ber who engages in a prohibited occupation, 3. SAME. A beneficial association does not waive the

but shall enter the suspension of such memforfeiture of a membership and of rights under ber on the records of the tent, and report the the member's certificate, through his engaging same to the Supreme Record Keeper, giving in a prohibited occupation after becoming a member, by reason of objecting to the claim,

the date and cause thereof." when presented, only on the ground that when

The answer charges that said Paul C. Hexhe became a member he was in a prohibited om on or about July 1, 1905, became engaged business; it not knowing, at such time, of the

in the business of selling intoxicating liquors change in occupation.

[Ed. Note. For cases in point, see Cent. Dig. | as a beverage, and so continued to be engaged vol. 28, Insurance, 88 1909–1911.]

up to the time of his death; that by reason

| thereof, he, said Hexom, did not remain a *Rehearing denied.

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member of the association until the date of , association he was engaged in the clothing
his death, but his certificate became and was business. Early in June, 1905, he made ap-
and still is void and of no effect. In the re plication for a saloon license, and about the
ply filed, plaintiff does not put in issue the middle of that month proceeded to fit up a
allegations of the answer, nor does he ques- building or room to be used for saloon pur-
tion the sufficiency thereof as stating a de poses. On July 1, 1905, he opened his doors
fense-complete on its face-to his action, and thereafter conducted a saloon business,
On the contrary, he seeks to avoid the ef selling intoxicating liquor, down to the time
fect thereof by pleading matters in estoppel. of his death. On June 26, 1905, Hexom paid
First, it is alleged that on June 26, 1905, in advance to one Erickson, record keeper
said Hexom paid to the proper officers of the of the local tent, the sum of $7.80, which sum
local tent of which he was a member the sum was sufficient to meet all monthly payments
of $7.80 as full payment in advance for all to become due and payable to the association
dues, assessments, and monthly rates due and during the period from July 1, 1905, to Feb-
to become due for the period from July 1, ruary 1, 1906. Thereafter Erickson paid out
1905, to February 1, 1906; that said officer, of the same local tent dues $1.50, and each
as agent for the association, retained said month remitted to the Supreme Tent the sum
money, and in making his monthly remit of $.90. At the time of such deposit made by
tances to the Supreme Tent included therein Hexom with Erickson, the latter did not know
for each and every month of said period the what business the former was engaged in, but
sum prescribed by the laws of the association later did know of the opening of the saloon,
as the monthly rate and assessment due to and knew that Hexom was thereafter con-
be paid by said Hexom, and this was done | tinuously engaged in conducting the same.
with full knowledge, on the part of said of Quoting from a stipulation of facts, this ap-
ficer, of the business in which said Hexom pears: “That at one time before becoming
was engaged; that the defendant received engaged in the business of selling intoxicating
and retained the dues, rates, etc., so paid to liquors, said Hexom asked said Erickson
it each month, and has not returned to said that, in case he should go into the saloon
Hexom nor to plaintiff any part thereof. business if that would hurt his policy, and
Second, it is alleged that, when the claim that in reply Erickson told him, yes, it would,
under the certificate in question was present that if he did his policy would be void; and
ed to the defendant association, its board of that at another time, after Hexom started
trustees took action thereon and resolved in the saloon business, Erickson told him he
**that the claim does not appear to be a valid had better drop out while at that work, and
one," inasmuch as from correspondence on that in reply Hexom told Erickson he did not
file it appeared that said Hexom was engaged know how long he would be in it, that he
in the saloon business at the time of his ad might be in the business only a short time,
mission; whereas, in his application he gave and when he quit he would go right on again.
his occupation as clerk in a clothing store. He said he knew that while in the business
The resolution further provided that plain- his policy was void.” Erickson did not en-
tifl be notified accordingly and given permis-, ter the suspension of Hexom on the records
sion at a time fixed "to show cause why this of the local tent, nor did he advise the Su-
claim should be allowed, at which time by preme Tent officers of the change of occupa-
atlidavit as he deems himself entitled to." tion.
And plaintiff says that at the time of said We are agreed that on the case thus made
action the said board and the defendant as the court correctly ruled against the con-
sociation had full knowledge and information tention for waiver. A waiver is the inten-
concerning the business of said Hexom dur tional relinquishment of a known right, or
ing the period from July 1, 1905, down to such conduct as warrants an inference of
his death. It is then alleged that, relying such relinquishment, and, where conduct is
upon the said action of the board of trustees, relied upon to constitute waiver, it must ap-
plaintiff employed an attorney and caused pear that the insured was induced by the
to be prepared and submitted to defendant, association to do or omit some act which he
at the time fixed, affidavits showing conclu- would not otherwise have done or omitted.
sively the correctness of the application state 3 Am. & Eng. Ency. 1089, note. It is not the
ment. On these facts and on the failure of intention of the insurer, but the effect upon
defendant to rely upon a forfeiture of mem the insured, which gives vitality to the estop-
bership because of the engagement by Hexom pel. May on Insurance, $ 507. All our cases
as a member in a prohibited business, plain | proceed on this theory. Bailey v. Association,
tiff asserts that the forfeiture was waived, 71 Iowa, 689, 27 N. W. 770; Tobin v. Society,
and defendant is estopped to assert the same. 72 Iowa, 261, 33 N. W. 603; Moore v. Con-
These are the matters of controversy which ductors, 90 Iowa, 721, 57 N. W. 623 ; Trotter
were submitted to the court below, and on | v. Grand Lodge, 132 Iowa, 513, 109 X. W.
this appeal we shall consider and dispose of 1099, 7 L. R. A. (N. S.) 569. In the case be-
them in the order of their statement.

fore us there is no contention—and there 1. Respecting the first, the evidence shows could not well be in view of the fact stipulahis state of facts: That at the time Paul | tion in the record-that Hexom engaged in

Hexom became a member of the defendant | the saloon business either in ignorance of

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the prohibitory law of the association on the rest. Whether or not as matter of fact Hexsubject, or in reliance upon any custom, prac om knew that Erickson was making monthly tice, or conduct on the part of the association, remittances from the deposit fund to the its officers or agents, whereby he was induced supreme office is not disclosed by any evidence to believe that his rights as a member would directly addressed to the point; but counsel not be jeopardized thereby. He knew that for plaintiff say that he did know, and we the business in which he was about to engage think it fairly inferable from the evidence was on the prohibited list, and that the pen- that such was the fact. If, then, the conduct alty of engaging therein was a forfeiture 1 of Erickson amounted not only to a breach of his membership, and he acted in the prem- 1 of duty, but to fraud, and Hexom was advisises solely on his own motion and responsi- i ed thereof--and more especially if he became bility. In this situation, and giving force to a party thereto—there is no theory on which the law of the association, as we should, it he could advantage himself from the fact of is clear that the moment Hexom opened the the payments made, or on which bis benefici. door of his saloon for business he stood sus ary can convert the same into a defensive pended from all the rights of membership shield as against a declaration and claim of in the association. So far there is no dispute forfeiture. It is elementary that a principal in the authorities. Holiday v. Association, cannot be estopped by the fraudulent acts of 103 Iowa, 178, 72 N. W. 448, 64 Am. St. Rep. bis agent, where the fraud is known to or 170; Mortensen v. Association, 124 Iowa, 277, participated in by the other party to the con99 N. W. 1059; Schmidt v. Maccabees, 97 tract. In such cases the knowledge of the Wis. 528, 73 X. W. 22; Abell v. Woodmen, agent is not the knowledge of the principal, 96 Jinn. 494, 105 N. W. 65, 906; Bacon on nor is the principal bound by the tainted Benefit Societies, $ 325.

transaction. Hummel v. Bank, 75 Iowa, 689, From this it follows that, to make out a 37 N. W. 934; Steel Co. v. County, 126 Iowa, case of waiver, plaintiff is driven to depend 606, 102 7. W. 536; Van Buren County v. upon the conduct of the local record keeper, Surety Co. (Iowa) 115 X. W. 24. Erickson, in retaining the deposit of money in A simple analysis of the evidence will bis bands, and making monthly remittances make clear the fraud and the participation therefrom to the supreme office of the associa of the insured therein. Hexom made the detion, after it became known to him that posit with Erickson after he had formed his Hexom had embarked in the saloon business. plan to engage in the saloon business. At the That out of this no waiver arose we think time, he knew of the prohibition contained is clear. To begin with, every lawyer knows in the law of the association. We say this that a principal is not bound by any act of because every member of such an association his agent done in excess of the authority is presunied to know the law thereof in force granted to such agent. This is the general during the period of his membership. Hobbs rule, and in every case reported in the books, v. Association, 82 Iowa, 107, 47 N. W. 983, 11 making a departure therefrom, it will be L. R. A. 299, 31 Am. St. Rep. 466; Fitzgerald found that the unauthorized act was within V. Association, 106 Iowa, 457, 76 N. W. 809. the apparent scope of the agent's authority, He made the deposit without disclosing his and the circumstances thereof were such as purpose to engage in such business, and from to work an estoppel. Now, here, as we have this it is not difficult to reach the conclusion seen, the authority vested in Erickson, as that he expected the monthly rates, etc., to record keeper, was limited to the receipt of be forwarded by Erickson, notwithstanding monthly rates, assessinents, etc., due from the the law of the association on the subject. members of the local organization in good Later he talked with Erickson, and, on being standing, and to forward the same to the told that he had better drop out, he replied supreme record keeper, and it was his duty "he might be in the business only a short to enter the suspension of all members en time, and when he quit he could go right on gaging in a prohibited occupation, and make again." Here is plainly evinced a proposal report thereof to the supreme office of the that monthly remittances should be kept up association. When therefore he accepted by Erickson, and that the supreme officers from Hexom, standing in suspension, monthly of the association should not be advised of rates and assessments—and this, in effect, he the change of occupation. This latter we did by appropriating from the moneys depos- must conclude, because confessedly it was ited with hiin an amount sufficient to pay well understood by both Hexom and Erickson such rates and assessments—be not only act that, if knowledge of the situation should ed outside of the limits of his authority, but, | reach the supreme office, the payments would as we think, his acts amounted to a fraud be refused, and a cancellation of the certifiupon the association whose officer or agent cate ordered. As a result of the conference, he was. Under other circumstances, perhaps, Hexom, knowing, as he says, that his policy this might not be conclusive of the rights of was void, left his deposit money in the hands Hexom and his beneficiary; but, in view of of Erickson, and the latter, knowing, also, the facts shown in the record, we think Hex- | that under the law the policy was no longer om was a party to the fraud, and, this being in force, continued to make remittances, and true, there is no possible ground on which | did not communicate to his superior oflicers the contention for waiver can be made to a word respecting the altered situation. In

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