Wisconsin, as plaintiff claims, or by the laws of Minnesota, as it must be.

The contract was made in this state; the money coming to the hands of the bank, a domestic creditor, by virtue thereof, which the 445 plaintiff seeks to reach by this action, is within this state; and, if the contract is valid under our law, it will be enforced, even if invalid under the laws of Wisconsin. To do otherwise would simply deprive a domestic creditor of the benefit of its security valid by our laws, so that the plaintiff, a nonresident creditor, might obtain a preference.

The question then is, Do the findings of fact of the trial court justify the conclusion that the contract is fraudulent and void, as a matter of law, as to creditors? In considering this question we are to keep in mind that there is neither evidence nor finding in this case that the transaction in question was fraudulent in fact; hence it is immaterial whether the vendors in the bill of sale were insolvent or not, or whether the bank knew them to be insolvent or not.

It would be otherwise if this was an action by an assignee or receiver in insolvency to set aside the transaction as a preference. Except in such an action or proceeding, preferential mortgages and securities, if free from fraud in fact, are valid: Berry v. O'Connor, 33 Minn. 29; Bannon v. Bowler, 34 Minn. 416; Mackellar v. Pillsbury, 48 Minn. 396.

It is claimed on behalf of the plaintiff that the decision of this court in the case of Truitt v. Caldwell, 3 Minn. 257 (364), 74 Am. Dec. 764, answers the question in accordance with his contention. The doctrine of this case seems to go farther than the general trend of the decisions of the courts of other states: See Jones on Chattel Mortgages, secs. 352-356. But it does not go far enough to sustain plaintiff's claim, and is clearly distinguishable from the one at bar. In the former case there was an unconditional transfer of the legal title of the property. In the latter there was a conditional transfer of the legal title for the purpose of security only. In the former case there was no right of redemption reserved to the vendor, but a trust reserved in the surplus for his benefit, without first paying all of his debts. In the latter the property could be redeemed at any time by paying the indebtedness secured thereon. In the one case the absolute legal title was interposed between the creditors and the property of their debtor, with a resulting trust in the avails thereof to him. In the other the vendee did not acquire the absolute 440 title subject to such trust, but a lien upon it, with power of sale

and the property remained liable to the process of the court at the suit of creditors, subject to the lien of the bank.

It is true in this case that the bill of sale and contract provide for the payment to the vendors of any surplus realized from the property remaining after the payment of the indebtedness secured on the property, but the title to the surplus is exactly the same as the title to the property itself, and may be reached by creditors in the same way.

It is also true that the bank was authorized to, and did, collect the acounts, and convert the property into money, precisely as if it were the owner thereof; but it was by the contract irrevocably made the attorney of the vendors for this purpose. The exercise of this power would not prevent the vendors from redeeming the balance of the property, and the avails of what had been converted into money, by paying the indebtedness which it secured. The fact that this right was given by the contract to collect the accounts and convert the property into money would not prevent the transaction from being a valid pledge or mortgage of the property. It is immaterial in this case whether it was strictly a mortgage or pledge.

The distinctive characteristics of the transfer in the case of Truitt v. Caldwell, 3 Minn. 257 (364), 74 Am. Dec. 764, are concisely expressed in the opinion in these words, at page 266 (373): "This conveyance is not simply a transfer of property to satisfy a debt; neither is it a mortgage or a pledge to secure the claim of the plaintiffs. The grantor here has no resulting interest in the property conveyed, upon payment of the debt, as is a usual, if not necessary, incident to a pledge or mortgage. No forfeiture or power of sale is given upon the happening of any contingency, nor any language used showing an intent on the part of the grantor to convey the property as security for the payment of his debt." The case is cited, and distinguished from one similar in some respects to the one at bar, in the case of Wilcoxon v. Annesley, 23 Ind. 285, 295.

For the reason suggested, the case of Truitt v. Caldwell, 3 Minn. 257 (364), 74 Am. Dec. 764, is not here in point. The same is also true of the cases of Camp v. 447 Thompson, 25 Minn. 175, and Butler v. White, 25 Minn. 432, relied on by the plaintiff; for by the instruments construed in those cases the entire property in the lumber conveyed was intended to pass, and did pass, to the respective vendees, and no property therein was reserved to the vendor, or intended to be; hence it was correctly held that the instruments were not mortgages. Such being the

case, the question here under consideration is to be determined on principle.

According to the findings of fact by the trial court, the transaction in question had none of the elements of an assignment for the benefit of creditors, which creates a trust vesting the legal title in the assignee, and placing the property beyond the reach of creditors, except the right to share in the distribution of the trust estate.

Neither was the transaction a conveyance of property in trust for the use of the person making the same: Gen. Stats. 1894, sec. 4218. It created no trust, but a lien to secure an indebtedness; and, as already suggested, the mere fact that the vendors were insolvent, and the bill of sale included all of their firm property, did not render the transaction void as a matter of law. Such facts would be competent and cogent if the transaction were assailed for fraud in fact.

Upon principle and authority, we hold that if the members of a copartnership, in good faith, solely to secure their debts to one or more, but not all, of their creditors, transfer to them, by bill of sale or otherwise, the firm property, reserving to themselves the right of redemption, the conveyance is not an assignment for the benefit of creditors, but a mortgage, and a valid security, except in insolvency proceedings, even though the debtors were then insolvent, to the knowledge of the mortgagees, and the transfer covers all of the copartnership assets: Jones on Chattel Mortgages, sec. 355; 1 Cobbey on Chattel Mortgages, secs. 101, 102; Union Bank v. Kansas City Bank, 136 U. S. 223; May v. Tenney, 148 U. S. 60; Rainwater etc. Co. v. Malcolm, 51 Fed. Rep. 734; Eureka etc. Works v. Bresnahan, 66 Mich. 489; Warner v. Littlefield, 89 Mich. 329; Cutter v. Pollock, 4 N. Dak. 205, 50 Am. St. Rep. 644. It follows that the conclusions of law by the trial court in this case are supported by the findings of fact.

448 2. But it is urged with earnestness and undoubted candor that the findings of fact in this case are not sustained by the evidence. We have attentively considered the record, and find that they are, and so hold.

The motion by plaintiff for additional findings of fact was rightly denied, for they were immaterial, in our view of the case. Order affirmed.

DEBTOR AND CREDITOR-PREFERENTIAL MORTGAGES.A debtor in failing circumstances may prefer one creditor to another by giving him adequate security for his debt, to the exclusion of others. Every mortgage necessarily tends to hinder and delay

creditors other than the mortgagee, but, if fairly and honestly made, it is neither an unjust nor unlawful interference with the rights of others, within the terms of a statute making conveyances void if intended to hinder or delay creditors: Sabin v. Columbia Fuel Co., 25 Or. 15, 42 Am. St. Rep. 756. Chattel mortgages executed at the same time by an insolvent debtor to certain of his creditors, giving them priority, but not allowing them to prorate, if made in good faith to secure bona fide debts, will not constitute a fraudulent assignment for the benefit of creditors preferred as against those not preferred, although such mortgages cover all the assets of the mortgagor: Note to Monaghan Bay Co. v. Dickson, 39 Am. St. Rep. 708.

DEBTOR AND CREDITOR-PARTNERSHIP PREFERENCES. While a partnership is in the active management of its affairs, the members thereof may prefer one of their creditors to others, or in the absence of statutory prohibitions, execute a formal assignment for the benefit of their creditors, in which some of such creditors may be preferred to others: Note to Smith v. Smith, 43 Am. St. Rep. 373.

GRAY V. TIMES NEWSPAPER COMPANY.

[71 MINNESOTA, 452.]

LIBEL-RETRACTION-BURDEN OF PROOF.-If, in an action for newspaper libel, the defense is, that the article was published in good faith, and that the defendant published a full and fair retraction as provided by statute, the burden of proof is upon him to establish such defense.

LIBEL BY NEWSPAPER-GOOD FAITH-MISTAKE.-In an action to recover for a newspaper libel, the question of good faith of defendant, and whether the falsity of the published article was due to his mistake of the facts, is for the jury to determine, unless the evidence to establish the defense is undisputed, and there is no reasonable ground for drawing different conclusions therefrom.

LIBEL BY NEWSPAPER-RETRACTION.-If, in an action for newspaper libel, the defense of a retraction is set up, the question whether the published retraction was full and fair, as required by statute, is ordinarily one of law for the court.

LIBEL-RETRACTION-WHAT IS NOT.-A published retraction of an original libelous newspaper article which does not refer thereto, nor admit, nor even suggest, that the defendant ever published it, or that he desires to or does retract it, or that he ever had any part in giving publication to the defamatory statements, is not a fair and full retraction, as required by statute, and is not a defense to an action for libel founded on the original libelous article nor does such retraction bar the recovery of compensatory damages.

LIBEL. THE RETRACTION OF A LIBELOUS NEWSPAPER ARTICLE required by statute to constitute a defense, must clearly refer to and admit the publication of the article complained of, and directly, fully, and fairly, without any uncertainty, evasion or subterfuge, retract the alleged false and defamatory statements therein.

H. V. Mercer, for the appellant.

A. B. Jackson, for the respondent.

454 START, C. J. The defendant is the proprietor and publisher of the "Minneapolis 455 Times," a daily newspaper hereinafter designated as the "Times," and this is an action for publishing therein a libel of the plaintiff.

The record discloses substantially these facts: The plaintiff James E. Gray, a young man of good reputation, about 10 o'clock on the evening of August 10, 1897, was riding his bicycle along the boulevard near Lake Calhoun, in the city of Minneapolis, when he was stopped by two men waiting by the roadside, holding wheels, who shot him through the arm, knocked him senseless, robbed him of his money, and left him lying unconscious across his wheel, where he was afterward found and cared for. The defendant next morning published in the "Times" an account of the robbery, which was substantially correct. But on August 19th it published in the "Times" another article, which, so far as it related to the plaintiff, was this:

"FAKING THE HOLD-UPS.

"Police Have Enough to do Without This Annoyance. "Two or Three Cases Where Robberies Were Complained of, and Never Occurred.

"Fake hold-ups seem to be the regular order of the day now. The police are considerably disgusted, for, fake or no fake, they receive the usual amount of roasting from the public, who argue that the policemen and detectives are not doing their full duty.

"Within the past few days the first fake case of note was that of a young man named Gray, who claimed to have been held up by two men on bicycles while he was riding his wheel on Lake Calhoun boulevard, shot in the arm, sandbagged, and robbed of about $5. Gray's case bore evidence of sincerity, yet upon looking it up the police believe that no hold-up took place; their real theory being that Gray was shot in a row over a woman with whom he was bicycle riding. Detective Hoy has a witness who claims to have seen the whole affair.

"If the department can find a way to do it, it is not improbable that some people who claim they are held up on the street and robbed, when a robbery or attempted robbery never occurred at all, may be made an example of, as a warning to others."

The plaintiff served notice upon the defendant, specifying the statements therein which he claimed to be false and defamatory. The defendant in the next issue of its paper published an article of the purport following: