by the sale of the property. The absurdity of its so doing would be apparent in the case where a county had acquired such property under the circumstances here present, and the state should sell it. To do what? To retain a portion of the tax in its own treasury and to pay to the county a portion of the money derived from the sale of the county's own land. It may safely be said that when a municipal corporation acquires property under such circumstances the title which the state takes by the tax-collector's deed is merged into the larger title which the municipality holds under the trusts both for the public as distinguished from the state and also for the state as the supreme sovereign. In this case the question is not of the merger of a lien held by the county for a county tax, the question which was presented in City of Santa Monica v. Los Angeles County, 15 Cal. App. 710, [115 Pac. 945]. Here the lien itself is merged and lost in the title which the state itself has taken. The present question is, has the limited title which the state holds (limited in the sense that it is designed to operate rather as a common law mortgage--a conveyance of the title subject to divestiture at any time before sale by payment of the taxes and accrued charges by the property-owner)-been merged in the title which the municipality has acquired. The answer, we think, must be in the affirmative. The moneys which are thus made a charge upon the property are moneys of the state. The disposition and division of them is wholly a matter of state policy and it cannot be supposed that it was ever in contemplation that the controller could authorize the sale of public lands of municipal corporations for such a charge, even though the charge in its origin was a valid lien on the lands.

It is held, therefore, that the controller's order to the taxcollector to sell on May 9, 1908, was without authority of law and void, and that the sale by the tax-collector pursuant to such order is also void.

Wherefore, the judgment appealed from is affirmed.

Lorigan, J., and Melvin, J., concurred.

Hearing in Bank denied.

[L. A. No. 2747. Department Two.-February 10, 1912.] NATIONAL LUMBER COMPANY (a Corporation), Respondent, v. L. C. WHALLEY and SECURITY BUILDING COMPANY (a Corporation), Defendants; MERCHANTS' TRUST COMPANY, Appellant.

MECHANIC'S LIEN EVIDENCE SUSTAINING REPUTED OWNERSHIP OF LAND. -In an action to enforce a materialman's lien, evidence that the person for whom the building was erected and for which the material was furnished was in possession of the land with the knowledge of the owner and under a contract with him, that he held himself out as the owner of the land to the plaintiff and to others, and made contracts for the erection of the building on the land and caused the work of its construction to be begun, is sufficient to establish his reputed ownership of the land.

ID. FACTS PUTTING OWNER ON INQUIRY AS TO CONSTRUCTION OF BUILDING. The facts that an employee of the agent of the real owner, having entire charge of the selling of the tract of land of which the lot in question formed a part, informed such agent that the building had been commenced and subsequently that the work had been stopped, are sufficient to put the real owner upon inquiry as to the construction of the building and to charge him with knowledge thereof, under section 1192 of the Code of Civil Procedure.

ID. NOTE GIVEN TO MATERIALMAN NOT PAYMENT.-In the absence of a contrary agreement between the materialman and reputed owner, the giving of a note by the latter to the former to secure the payment of the amount due him did not constitute a payment of the indebtedness.

ID. WHEN NOTE OPERATES AS PAYMENT.-Whether a note, or even a check, is received in absolute payment of a debt, or merely as a recognition of the debt with an understanding as to time and terms of payment, are questions which, as between the parties, are determined by their agreement, and in the absence of an agreement to this effect the acceptance is not a payment of the debt.

APPEAL from a judgment of the Superior Court of Los Angeles County and from an order refusing a new trial. George H. Hutton, Judge.

The facts are stated in the opinion of the court.

Wm. T. Blakely, for Appellant.

R. L. Horton, for Respondent.

HENSHAW, J.-This is an action brought to foreclose a materialman's lien, plaintiff alleging that one Whalley was the owner and reputed owner of the land upon which the dwellinghouse was built, and that it furnished lumber to him, at his 'special instance and request, to the value of $676.98. The answer of the Merchants' Trust Company denied that Whalley was the owner or reputed owner, alleged ownership in itself, and set out as a separate defense that it posted the written notice of non-responsibility contemplated by section 1192 of the Code of Civil Procedure, within ten days after it had knowledge that a building was being erected upon the property. Judgment passed for plaintiff and defendant appeals from that judgment and from the order denying its motion for a new trial.

1. The lot upon which the dwelling-house was erected was one of a tract owned by defendant, of which tract the firm of Holmes-Walton Company was the selling agent. A written contract was entered into with Whalley which was in all respects a contract for purchase and sale, saving that it contained the following clause, signed by Whalley: "I agree that the above is not to be considered a contract for the sale of said land." It is unnecessary to enter into a discussion of the legal effect of this contract. Certain it is that under it Whalley entered into possession of the land with the knowledge of defendant, held himself out as the owner of the land to plaintiff and to others, made contracts for the erection of the building on the land, and caused the work of construction of this building to be begun. There was here sufficient evidence of reputed ownership.

2. Not only was Whalley thus in possession with the knowledge of the defendant (through its agent), but the defendant is charged with knowledge of the construction of the building by Whalley. One Braun was the "tract agent" of the Holmes-Walton Company, the agency for the sale of these lots. He had an office upon the tract, visited the property daily, and from his office there was a plain view of the building in process of construction upon the land. Mr. Holmes of the Holmes-Walton Company testified that the entire selling of the tract was left to this agent, and that he was informed by the agent that the building had been commenced, and subsequently that the work had been stopped. If it can be

CLXII Cal.-8

said that these facts in any way fall short of actual knowledge, they are ample evidence of circumstances sufficient to put a prudent man upon inquiry, which, under the authorities, is enough to charge the true owner under section 1192 of the Code of Civil Procedure. (Evans v. Judson, 120 Cal. 282, [52 Pac. 585]; James on Liens, sec. 117.) They are of course, sufficient under section 19 of the Civil Code. (Moore v. Jackson, 49 Cal. 109; Santa Monica v. Hege, 119 Cal. 376, [51 Pac. 555]; Hines v. Miller, 122 Cal. 517, [55 Pac. 401]; Prouty v. Devin, 118 Cal. 258, [50 Pac. 380].)

3. Whalley gave his note to secure the payment of the amount due to plaintiff. It is contended that this note was given and received in full satisfaction of the claims of plaintiff, and thus constitutes a payment releasing the defendant. Whether a note, or even a check, is received in absolute payment of a debt, or merely as a recognition of the debt with an understanding as to time and terms of payment, are questions which, as between the parties, are determined by their agreement, and in the absence of an agreement to this effect the acceptance is not a payment of the debt. (Brewster v. Bours, 8 Cal. 502; Comptoir etc. v. Dresbach, 78 Cal. 20, [20 Pac. 28]; Savings Society v. Burnett, 106 Cal. 514, [39 Pac. 922]; Durfee v. Seale, 139 Cal. 603, [73 Pac. 435].) The note itself gives evidence that it was not reecived in payment of the debt, but was no more than a recognition of the debt and a promise to make monthly payments on account of it. The finding against payment is, therefore, justified. For these reasons the judgment and order appealed from are affirmed.

Melvin, J., and Lorigan, J., concurred.

[S. F. No. 5340. In Bank.-February 10, 1912.]

GEORGE H. BUCK, Respondent, v. D. J. CANTY, Appellant.

TAXATION-SALE BY STATE—AMENDMENT OF 1905 TO SECTION 3897 OF POLITICAL CODE-MAILING NOTICE OF SALE TO PERSON LAST ASSESSED VALIDITY OF SALE.-Under the amendment of March 1, 1905,

to section 3897 of the Political Code, it is just as essential to the validity of a sale by the state of real property acquired by it for delinquent taxes, to mail the notice required by the amendment to the person to whom the land was last assessed when his last postoffice address is known to the tax-collector, as it is to give notice by publication. Both notice by publication and by mail where the last post-office address is known are essential to the validity of the taxsale.

ID.-PROCEEDINGS FOR SALE INITIATED PRIOR TO AMENDMENT-SALE AFTER AMENDMENT TOOK EFFECT-NOTICE BY MAIL ESSENTIAL TO VALIDITY OF SALE.-A sale by the state of land acquired by it for delinquent taxes, which was actually made after such amendment took effect, is void, if the notice by mail required by such amendment was not given to the person to whom the land was last assessed, when his last post-ffice address was known to the tax-collector, notwithstanding the proceedings for the sale were initiated under such section prior to its amendment, and the only notice of sale then required by that section was given by publication and the publication thereof was completed prior to the taking effect of the amendment.

ID. POWER OF LEGISLATURE OVER METHOD OF SALE-EXTENT AND CHARACTER OF NOTICE.—The power of the legislature to control the method by which the state shall dispose of the property acquired by it for delinquent taxes is unquestioned, and involves the right to determine at any time the extent and character of notice which shall be given by the agents of the state before the right to make a sale of it shall attach.

ID.-POLICY OF AMENDMENT.-The obvious policy of such amendment to the section was to afford a better opportunity to the delinquent owner to redeem the property before actual sale by the state by requiring not only notice by publication, but the additional and more efficacious notice by mail under the condition provided for in the amendment.

ID.-OLD SECTION NOT CONTINUED IN OPERATION BY AMENDMENT-PENDING PROCEEDINGS BECOME FUNCTUS OFFICIO.-The re-enactment of section 3897 of the Political Code by the amendment of 1905, without any saving clause as to proceedings theretofore had under the old section, did not operate to continue it in force or to give it vitality for any purpose whatever, and proceedings pending under the old section became functus officio immediately after the amendment went into effect.

ID.-STATE HAS NO VESTED RIGHT IN METHOD OF SALE-CHANGE IN REMEDY.-The state has no vested or fixed right to sell property under the old section or any other section which was impaired by such a construction of the amendment. Such amendment simply affects a change in the remedial method by which the right may be exercised.