contract to which the sugar desired under the order was to be applied. That on the face of the written contract here in question, under the date of October 8, 1920, he made the following entries of delivery orders: No. 9279-30 bbls.; No. 9280-30 bbls.; No. 9281-30 bbls. That on the same date, October 8, 1920, he sent a copy of each of the three delivery orders to Page & Shaw, on each of which appeared the words, "Sept. Contract," the words "30 bbls.," "price 22.50," and in the right-hand lower corner of the first delivery order were the words "Order No. 9279," on the second one "Order No. 9280," and on the third "Order No. 9281." The copies of the three delivery orders, which were sent to and received by the defendant, were put in evidence; also letters showing that, immediately upon receipt of these delivery orders, the defendant wrote the plaintiff that it had no outstanding existing contracts for September, that it had received in September the entire amount of sugar for which it had contracted with the plaintiff for delivery in September.

The position taken by the defendant at that time was the same that it later took at the trial in defense of the action on the first count, viz.: That it had received and paid for all the sugar it had contracted for delivery in September.

It further appeared that the defendant received five shipments of sugar of 30 barrels each, the first one on September 10th, the second and third on September 23d, the fourth on September 27th, and the fifth on September 28th, making a total of 150 barrels, which shipments it claimed were made and intended to apply to the contract in question calling for delivery of 150 barrels in September, or as soon thereafter as is possible. It also appeared that on June 7, 1920, the defendant had made a written contract with the plaintiff for the purchase of 150 barrels of sugar to be delivered during the month of August, 1920, or as soon there after as is possible, and that, on September 9, 1920, Hosmer minuted on the face of that contract the following delivery orders: No. 8540-30bbls.; No. 8541-30bbls.; No. 8542 -30 bbls.; No. 8545-30 bbls.; No. 8544

30 bbls.-and on that date, September 9, 1920, sent to the defendant five delivery orders, on each of which was stated the number of the order and the number of barrels of sugar covered by the order, the same as was recorded on the face of the contract, and on the face of each delivery order was printed in bold type the words "August Contract." These are the sugars which the defendant

claims to apply to the contract here sued upon, calling for delivery in September, or as soon thereafter as possible. It also appeared that the shipping receipt made out when the sugar was shipped and the invoice sent the defendant covering the shipment, each bore the numbers of the delivery orders. (1) Now, these delivery orders which were sent to the defendant on September 9, 1920, for 150 barrels of sugar, and which the defendant is seeking to have applied to the contract sued upon calling for delivery in September, or as soon thereafter as is possible, show that, when they were made out, sent, and received by the defendant, the plaintiff intended the sugars therein specified, and which were later shipped, should be applied in fulfillment of the contract calling for delivery in August. That intention and application must stand, unless there was some substantial evidence in the case from which the jury would have been warranted in finding that the plaintiff changed its purpose to have those sugars so applied, and agreed with the defendant that they might be applied to the contract calling for delivery in September. [2] After diligent study we are unable to find any evidence from which it reasonably could be concluded that the plaintiff changed its expressed intention that the sugars, shipped under the delivery orders of September 9, 1920, should be applied on the contract calling for delivery in August, and agreed that they should be applied on the September contract here in suit. The defendant cannot well claim that the delivery orders dated September 9, 1920, did not inform it and that it did not know that the sugars therein specified were to be shipped under the contract calling for August delivery. The defendant had no such difficulty when it received the delivery orders dated October 8, 1920, which stated they were orders for shipments under the September contract. The delivery orders dated September 9th and October 8th were of exactly the same nature and character, except that the first ones called for deliveries in August and the second ones in September. On receipt of those dated October 8th saying, "Sept. Contract," the defendant at once replied by letter saying: "We have no September contracts existing with you. We received in September the entire amount of sugar for which we had contracted with you for delivery in September." [3] It seems clear to us that the issue raised by the pleadings as to the contract declared on in count 1 was never passed upon by the jury. It appeared that between the 30th of May and the 7th of June (as the defendant's

BRYAN, Circuit Judge. This is an appeal from an order denying a preliminary injunction which was sought to prevent the Otis Elevator Company from taking the passenger and freight elevators and elevator equipment out of a seventeen-story hotel owned by the Tampa Commercial Hotel Company, subject to a mortgage to secure a million dollar bond issue. The order was entered in a suit to foreclose the mortgage, in which appellant as trustee for the bondholders alleged that the elevator company claimed a lien upon the hotel property, and had notified the hotel company that it would remove the elevators and equipment from the building unless the balance due on the purchase price thereof was paid within three days, and had brought a suit in replevin to recover possession. It was alleged that any lien the elevator company might have was inferior to the lien of the mortgage. There was incorporated in the mortgage an afteracquired property clause that applies to fixtures, including elevators; but that clause covers only such fixtures as were owned by the mortgagor. At the hearing for preliminary injunction, the elevator company introduced its contract with the hotel company. That contract provides that title to the elevators and equipment connected therewith should be retained by the elevator company until full payment of the purchase price of $60,000; but it requires the elevator company to install the equipment as well as the elevators. That equipment included overhead beams, guard rails, and weights, and electric devices for operating the elevators. There was an unpaid balance of approximately $14,000 on the purchase price, and the elevator company therefore insists that it still holds title to the elevators and equipment, and in retaking possession is only enforcing its rights as owner of personal property, although its counsel stated in the argument that it still was willing to accept the unpaid balance of the purchase price in settlement of its claim.

[1,2] It being established that the elevators and equipment had been installed and were in place in the hotel, a prima facie presumption arose that they had become a part of the freehold and that the unconditional title thereto was in the owner of the hotel property. Under these circumstances it will not be presumed that the sale was conditional, or that title to fixtures had been retained by the parties who had furnished them. That a materialman's lien existed would be the more reasonable inference suggested by the situation. The burden therefore rested on

the elevator company, which denied the existence of a lien, and instead asserted ownership, to prove not only a conditional sale, but also that the equipment had not become a part of the freehold. There was satisfactory proof of a conditional sale, and that the hotel company had failed to pay the balance due. Under the terms of the contract, the elevator company held title to the personal property in question. It did not lose that title by virtue of the after-acquired property clause of the mortgage, because the mortgagor did not own it. But there was no proof that the fixtures in question were not so attached to the hotel building as to lose their character as personalty and become part of the freehold. We are of opinion that, in the absence of such proof, it was error to deny the preliminary injunction, and that the trial court, in the exercise of its sound discretion, should have required evidence as to the effect upon the hotel property of the removal of the fixtures installed by the elevator company. If the fixtures can be removed without substantial damage to the hotel building, then they did not lose their character as personalty, and title thereto remains in the elevator company under its contract. The right of removal would not be defeated by proof that the hotel could not be successfully operated without elevators, or that they had been attached by bolts and screws to the building. Holt v. Henley, 232 U. S. 637, 34 S. Ct. 459, 58 L. Ed. 767; Detroit Steel Co. v. Sistersville Brewing Co., 233 U. S. 712, 34 S. Ct. 753, 58 L. Ed. 1166.

The trustee, in support of his position that the fixtures had become a part of the freehold, cites In re Moultrie Creamery & Produce Co., 2 F. (2d) 129, decided by this court; but in that case the mortgage was upon a plant as such, and the machinery which it was there held became a part of the freehold was substituted for other machinery which was subject to the lien of the mortgage. We do not think that case is inconsistent with the just cited rulings of the Supreme Court; but, if it is, of course, it would not be controlling. The elevator company has received three-fourths of the purchase price, and offers to surrender its claim of title upon payment of the balance due it. Even if it should be found upon final hearing that the facts warrant the removal of the fixtures, in view of that offer an opportunity should be allowed to any bondholder, or the trustee as his representative, promptly to pay off such balance with interest, and to have a lien therefor superior in dignity to the lien of the mortgage. In this way an equitable settlement of the whole matter would be made, and the hardship avoided of losing the benefit of the substantial payments on the contract price. Of course, if it shall appear that the fixtures in question can be removed and payment or tender of the balance due thereon shall not be made promptly, then the elevator company would be entitled to retake possession of its property without paying the amounts it has received in partial payment.

The decree is reversed, and the cause remanded, with directions for further proceedings in conformity to this opinion. Reversed.

79(7)-Privity be

tween plaintiff and defendant is necessary to authorize recovery for breach of contracts and covenants in oil lease.

In action for damages for breaches of contracts and covenants in oil lease, plaintiff must show either privity of contract or privity of estate between itself and defendant.

2. Mines and minerals 74-Privity between plaintiff, who assigned oil lease, and defend

ant, who bought half interest from assignee, held not to exist, authorizing recovery for defendant's breach of contract.

Where plaintiff assigned oil lease in contract not extending to successors and assigns, and assignee with plaintiff's knowledge and consent sold one-half interest to defendant, which assumed its proportion of obligations of assignee to plaintiff for drilling, there was no privity of contract between plaintiff and defendant, authorizing recovery for breach, notwithstanding that defendant controlled plaintiff's assignee by stock ownership.

3. Mines and minerals74-Privity between

plaintiff, agreeing to assign lease to another, and defendant, assignee of such other, held not to exist, authorizing recovery for defend ant's breach of contract.

Where plaintiff made contract wherein it did "agree to sell and assign" certain leased premises to another, which in turn made contract with defendant whereby it did "agree to sell and assign" half interest and promised assignments were never made, there was no privity of estate between plaintiff and defendant, authorizing suit for breach of contract or lease. since agreement to assign is not assignment; doctrine of covenants running with land not availing plaintiff, since it is based on fact that

some estate has been transferred.

4. Mines and minerals 74-"Agreement to assign" oil lease is not "assignment" of "lease."

Agreement to assign oil lease is not "assignment" of lease itself, since no present trans

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

WOOLLEY, Circuit Judge. The PenO-Tex Oil & Leasehold Company instituted this suit against the Pittsburgh Western Oil Company and the Big Four Oil & Gas Company, all corporations. The Big Four Oil & Gas Company filed an affidavit of defense in the nature of a demurrer and, on hearing, the court entered judgment for that company alone. The Pittsburgh Western Oil Company, though served with process, either did not appear or, because of an intimated lack of financial responsibility, was left out of the case. This writ of error, however, is directed to the judgment for the Big Four Oil & Gas Company. We shall, therefore, deal only with questions raised as to its liability.

In the interest of brevity, we shall, in stating the facts of the case, abbreviate names and omit dates and many figures.

Downie, owner, leased 140,000 acres of land in Texas to Kuykendall for oil and gas mining purposes under covenants (extending to their respective heirs and assigns) that the lessee should commence the drilling of a well within a year or, on default, the lease should terminate, unless continued by payment of a certain yearly rental. Kuykendall assigned thirty-three sections of the leased land to Cranston (his heirs, etc.) who, by separate contract with Kuykendall, undertook to drill a test well on the premises.

Cranston assigned his leased thirty-three sections and also the drilling contract between himself and Kuykendall to the PenO-Tex, the plaintiff in this suit, which assumed Cranston's contractual well-drilling obligations. Pen-O-Tex then entered into a contract with Fairchild (extending to their heirs, successors, etc.) whereby he engaged to drill the well. With the year expired and no well drilled, Pen-O-Tex entered into a contract with the Pittsburgh Western, one of the defendants, whereby it agreed to sell and assign eighteen of its leased thirty-three sections to the latter company with an undertaking by that company to assume all the obligations of the Pen-O-Tex in the drilling contracts. This contract between Pen-OTex and Pittsburgh Western did not extend to their successors and assigns. On the same day, the Pittsburgh Western, with the knowledge and consent of the Pen-O-Tex, entered into a contract with the Big Four, the other defendant, whereby it agreed to sell and assign to the latter company an undivided one-half interest in the same eighteen sections "now owned" by it, and sold and transferred to the Big Four an undivided one-half interest in personal property located on the leased premises consisting of a drilling outfit, under terms whereby the latter company assumed its proportion of the obligations of the Pittsburgh Western to the Pen-O-Tex for the drilling of a well and onehalf the expense thereof. The Big Four controlled the Pittsburgh Western by stock ownership.

No well was completed and no rental paid in accordance with the terms of the original lease and, as a result, the leasehold interests of the plaintiff, and of the defendants, if they had any, were lost. The Pen-O-Tex then brought this suit against the Pittsburgh Western and the Big Four on the contracts of the Big Four with the Pittsburgh Western and the Pittsburgh Western with the Pen-O-Tex to recover-what?

er

The plaintiff's pleading answers this question by a formal demand that it "recov$500,000," but it does not clearly state the legal character of the claim. Seemingly the action is in assumpsit, recovery is based on breaches of contracts and breaches of covenants in a lease, and in both cases the demand sounds in damages. We shall discuss the questions in that light. [1] To maintain the present action there must be either privity of contract or privity of estate between Pen-O-Tex, the plaintiff, and the Big Four, the defendant in the judgment. Mallalieu's Estate, 42 Pa. Super. Ct. 103.

[2] The Big Four and Pen-O-Tex were not parties to any contract put in evidence. The only contract in which the Big Four was a party was the one it made with the Pittsburgh Western. Although by that contract it assumed performance of a part of the Pittsburgh Western's obligation to the Pen

O-Tex, and, conceivably, became liable to the former company, that undertaking does not make the Big Four a party to the Pen-OTex-Pittsburgh Western contract so that it may be sued by the Pen-O-Tex. Goodyear Shoe Machine Co. v. Dancel (C. C. A.) 119 F. 692.

The Pen-O-Tex was a stranger to the only agreement in the record made by the Big Four, and hence there is no privity of contract between the two corporations and, accordingly, no right of action on that ground arising in the plaintiff, unless, indeed, the Pittsburgh Western and the Big Four may, because of the latter's ownership of the stock of the former, be regarded a corporate entity under the law of Pennsylvania Canal Co. et al. v. Brown et al. and Brown et al. v. Pennsylvania Canal Co. et al. (C. C. A.) 235 F. 669; Brown et al. v. Pennsylvania R. Co. and Pennsylvania R. Co. v. Brown et al. (C. C. A.) 250 F. 513 and kindred cases. The facts as pleaded do not establish that status.

[3] The plaintiff, however, maintains more earnestly that, as to a part of the premises, the lease, beginning with Downie to Kuykendall, ran through mesne assignees to the Big Four; that the original covenant to drill a well ran with the land to the last assignee; that there is privity of estate between the Big Four, the last assignee, and the plaintiff, an intermediate assignee then still retaining an interest in the land with the original lessor; and that, in consequence, it may maintain this action under the accepted theory, when applicable, that every successive assignee of a lease, however remote in the devolution of the leasehold title, is liable to a preceding holder on an obligation of the lease breached during their joint interest and consequent privity of estate. Washington Natural Gas Co. v. Johnson, 123 Pa. 576, 16 A. 799, 10 Am. St. Rep. 553; Knupp v. Bright, 186 Pa. 181, 40 A. 414; Hale v. Gypsy Oil Co., 113 Kan. 176, 213 P. 824: Stone v. Marshall, 188 Pa. 602, 41 A. 748, 1119.

But the doctrine of covenants running with the land is based on an essential legal fact that some estate to which the covenant may attach as its vehicle or conveyance has been transferred. 11 Cyc. 1081; Flanikin v. Neal, 67 Tex. 629, 4 S. W. 212. To apply this law to the instant case it must appear that the leased land or some interest in it was assigned by Pen-O-Tex to the Big Four. We have found no evidence of such an assignment. There was the well-drilling contract between Pen-O-Tex and Pittsburgh