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employes enlist in business largely as a soldier is enlisted in military service, except that employer or employe may quit when he pleases. But he may not conspire to prevent arbitration, if compulsory arbitration is provided for.

This presents a different question from that raised by the late enactment of Congress for an eight-hour law. The validity of that law is referable to the commerce clause of the Constitution, as also would be compulsory arbitration by act of Congress.

As harmful to state welfare, we will suppose that there is a

NOTES OF IMPORTANT DECISIONS.

FEDERAL EMPLOYERS' LIABILITY ACT -APPLYING LOCAL LAW TO APPEALS.— In Louisville & N. R. Co. v. Stewart, 36 Sup. Ct. 586, state law fixing penalty in appeals is upheld, where recovery under federal law was had and also state rule for adding interest to the judgment recovered below.

The court said: "The first of the other objections is that the Court of Appeals (Kentucky) was not authorized to add 10 per cent damages or the amount of the judgment as it did. But the railroad company obtained a supersedeas and the law of the state makes 10 per cent the cost of it to all persons if the

strike designed judgment is affirmed. There was no obliga

to paralyze the supplying of milk to the public. Standards are prescribed as to milk in the interest of public health. Does not anyone see that a strike may be a serious interference with such regulation? Why, in the supplying of necessities to the people, should not the public have the right to protect itself from the consequences of agreements interfering with proper regulation, though the agreements do not contemplate interference?

Our law has been careful to protect the right of labor and of business to organize for its advantage, but it has failed to mark the limits of the purpose of organization. To conspire on the part of business to bring labor to terms, or to conspire on the part of labor to bring business to terms, when the result aimed at is through coercion by banding in concert, has no tendency. rightly to exalt the free right of contract. It is rather the surrender of such freedom and when this becomes a menace to the public, it should be placed in the category of unlawful conspiracy.

To organize a labor union for the benefit of its members should not be looked upon as encouraging or legitimizing agreements which in their nature are conspiracies, and this seems especially true so far as what is called a sympathetic strike is concerned. This means coercion pure and simple, and that its ultimate purpose may be mendable is but to say that the end justifies the means for its attainment.

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tion upon the state to provide for a suspension of the judgment and nothing to prevent it making it costly in cases where ultimately the judgment is upheld. So, the state may allow interest upon a judgment from the time it is rendered, if it provides appellate proceedings and the judgment is affirmed, as, but for such proceedings, interest would run as of course until the judgment was paid."

While the vesting of jurisdiction in the state courts of causes of action under this federal law, does not change in any way the rule of liability in different states, yet it would seem that if the things upheld as proper in one state cannot be allowed in another, there may be different recoveries in some appellate courts than in others. Also it is clearly intimated that in one state even the right of appeal might be taken away though in another it be allowed. We imagine, however, that it still might be open for one to get to a higher tribunal to review a decision on some construction of the federal law as or not giving or denying a right thereunder. But for mere error in applying the law to the evidence, would it not be true, that U. S. Supreme Court in writ of error to the state court would be limited just as if the cause of action was under state law?

INSURANCE

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POLICY IN FAVOR OF WIFE SUBSEQUENTLY DIVORCED.-In N. W. Mut. L. Ins. Co. v. Whitesell, 188 S. W. 22, decided by Texas Court of Civil Appeals, it was held that where a wife was named as beneficiary in a life policy, her interest therein ceased on her being divorced.

This ruling follows Hatch v. Hatch, 35 Tex. Civ. App. 373, 80 S. W. 411, which applied the principle in a former Texas Supreme Court case, which held it to be "against public policy

to allow any one who has no insurable interest to be the owner of a policy of insurance upon the life of a human being."

But if a policy is lawfully issued, does change of circumstances invalidate it entirely?

In Marquet v. Aetna Life Ins. Co., 159 S. W. 733, decided by Tennessee Supreme Court, it was ruled that a wife's interest in a life policy on the life of the husband was not extinguished by the subsequent divorce of husband and wife.

In 16 Am. & E. Encyc. Law, p. 846, it is said the principle which is applicable to insurance of property that there must be an insurable interest at all times in the property, "does not apply to life insurance for the reason that it is not a contract of indemnity. The only reason for requiring an insurable interest is to eliminate from the contract the character of a wager; and if a fair and proper insurable interest, of whatever kind, exists at the time of taking out the policy, and it is taken out in good faith, the object and purpose of the rule which condemns wager policies is sufficiently attained, and the insurer must pay the full amount of insurance according to the contract, without reference to the subsequent diminution or cessation of insurable interest."

There are cited to this proposition a number of cases, one being Conn. Mut. L. Ins. Co. v. Schaeffer, 94 U. S. 457, holding to the right of a divorced wife who paid the premiums after divorce to recover. It was not said this was a prerequisite to her recovery and it might be contended that if the premiums were paid by another this was in her behalf. There was a contract in this case valid at inception and certainly the company would have no right to nullify it or refuse to accept premiums to keep it up. Certainly, also, there might have been a certain interest which had ripened against the company. Could that be taken from the wife by the insured? We think not. The language we quote from the Texas Supreme Court is broad and does not differentiate as it should.

NAVIGABLE RIVERS OYSTER BED SUBJECT TO DANGER OF POLLUTION.-The theory of right of State in navigable waters in trust for the public is illustrated in a case where the owner of an oyster bed below lowwater mark of a tidal navigable arm of the sea sued a city for pollution of the water by emptying sewage therein. City of Hampton v. Watson, 89 S. E. 81, decided by Virginia Court of Appeals.

In this case it was held that from early English decision the public right in tidal navigable salt waters could not be disposed of to the detriment of the public and the lease to a private individual of an oyster bed therein was taken subject to this right. It, furthermore, was ruled that "the sea is the natural outlet for all the impurities flowing from the land and the public health demands that our large and rapidly growing seacoast cities should not be obstructed in their use of this outlet, except in the public interest."

It was further said that the plaintiff in this case was especially subject to the jus publicum at stake because he "leased this land with full knowledge of the then existing sewage emptying into Hampton Creek and subject to the public right to increase the same as necessity required on account of the growth in population of the city of Hampton."

The principle invoked was sound enough not to need any reinforcement in the facts above recited, and all that need here be said is that the American view of what are navigable streams as distinguished from the English view, viz. tidal streams and streams navigable in fact, whether tidal or not, ought to carry as full recognition of the jus publicum as was recognized under English law. Many cases are cited by the Virginia court in support of its conclusion.

EFFECT OF SUCCESSIVE SALES OF ALL PARTNERS' INTERESTS UPON RIGHTS OF CREDITORS OF THE FIRM.

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Assuming that A., B. and C. constitute a firm, and contract debts; assuming that, thereafter, each severally sells, or suffers to be sold, his individual interests in the firm; what, thereafter, are the rights of the firm creditors against the property and assets of the former firm? Such is the question proposed for discussion. many adjudicated cases seem to have dealt with it, but those that do disclose a direct conflict of authority. In view of the fact that the question might arise at any time, and also in view of the further fact that the question involves some of the most fundamental principles in the law of part

nership, some consideration of it may not be without profit.

It is conceived that the lack of harmony in the decisions will ultimately be found to be due to a divergence of opinion with reference to two of the elements involved: -first, in respect to the recognition, or non-recognition, of a partnership as a quasi entity; and second, in respect to whether a waiver or loss of a partner's equity or lien must be shown affirmatively, or is to be presumed, when a sale of an individual partner's interest has been disclosed.

It must be borne in mind that throughout this discussion, we do not have in view, primarily, those classes of cases wherein firm property or assets have been sold or disposed of by the firm as such, or wherein are disclosed laches, or the intervention of superior rights, liens or equities. The presence of any of these factors in the case puts it beyond the scope of what is here proposed to treat. It must be conceded that many of the cases which at first glance might seem to involve our question, as a matter of fact, do not. Upon closer analysis in such instances, it will be found that one or more of the factors above referred to are present.

For example, since ex parte Ruffin,' decided in 1801, which is regarded as the leading case in all our courts, it has been universally conceded, even if it was earlier doubted, that a partnership may, as a firm act, sell and dispose of its property and assets, and give a title thereto which will be free and clear of any and all claims of general creditors. The only limitation upon this power is that it shall be exercised bona fide and not in fraud of the creditors. Hence, in such case, in the absence of bad faith on the part of the partners, the creditors are without recourse against the subject-matter of the sale. And as ex parte Ruffin expressly holds, this is equally true where the sale is of the interest of one of two partners to the other, and is actually

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executed. The same principle has been held to apply in the case of a sale by one of four partners to the other three, all agree- · ing, and then by one of those three to the other two. But none of these afford any ground or reason for asserting that successive and independent sales of the several interests of all of the different partners are equivalent to a joint act, though we shall later see that the form of the agreement has an important bearing upon the question of whether or not the partner's lien or equity has been waived or lost.

It is equally unquestioned that an individual partner can sell and dispose of his share or individual interest in the firm without consulting his co-partners. Under such circumstances, what the vendee takes is only the interest which his vendor had. And it is immaterial in this regard, though significant, as will appear, in connection with the consideration of the question of waiver or loss of the partner's equity, whether the sale of the interest is voluntary or involuntary, or whether the succession occurs in some other manner. In Taylor v. Fields, decided in 1799, Lord Chief Baron McDonald says: "In law there are three relations: first, if a person chooses for valuable consideration to sell his interest in the partnership trade, for it comes to that; or if his next of kin or executors take it upon his death; or if a creditor takes it in execution, or the assignees under a commission of bankruptcy. The mode makes no difference; but in all those cases the application takes place of the rule, that the party coming in the right of the partner comes into nothing more than an interest in the partnership, which cannot be tangible, cannot be made available, or delivered, but under an account be

(3) Ex parte Wheeler, Buck 25, Fitzgerald v. Christt, 20 N. J. Ea. 90.

(4) Baker's Appeal, 21 Pa. 76, 59 Am. Dec. 752.

(5) Lindley, Partnership, 364; Jones v. Way, 78 Kan. 535, 97 Pac. 437.

(6) 4 Ves. 396.

tween the partnership and the partner; and it is an item in the account that enough must be left for the partnership debts." And this has always been the law. The vendee is in no better position than his vendor.8

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What is it then, which the vendorpartner has, and his vendee, or successor, takes? In West v. Skip, supra, decided in Chancery in 1749, Lord Hardwick says: * nothing is to be considered his (a partner's) share but his proportion of the residue on balance of the account." And this rule is fully recognized." Included in this right to a "proportion of the residue on balance of account," by necessary implication, is the right of each partner to insist upon the application of firm property and assets to the discharge of firm obligations, so that the account may be taken, and the residue determined. And this is called the "partner's equity," or "partner's lien."10 It arises in equity, and rests upon the presumed intention of the partners as between themselves." Its purpose is to indemnify the partners against liability upon the joint obligations of the firm.12

Growing out of this "equity" or lien of the partners has arisen a corresponding "equity" or "lien" of firm creditors, based upon the fact that the partner's right operated in favor of the creditors.13 It is, however, strictly derivative, and can only in a loose sense be called a lien.14 Being derivative, it is, of course, lost to the cred

(7) Bank v. Vandolah, 188 Ill. App. 123. (8) Fox v. Hanbury. Cowper 445; West V. Skip, 1 Ves. 239.

(9) Menagh v. Whitwell, 52 N. Y. 146; Case v. Beauregard, 99 U. S. 119; Costello v. Costello, 209 N. Y. 252, 103 N. E. 148; Grocery Co. V. Owens, 161 S. W. 911.

(10) Ex parte Ruffin, supra; ex parte Williams, supra. And the other authorities cited

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itors immediately it is lost, or waived, by the partners.15

From the above authorities, and others. which will be cited, it amply appears that the real basis of the "equity" or "lien" is the conception, originally that of equity, that a partnership is in some sense and to some extent a thing apart from the individuals composing it, in other words, a quasi entity. It owns property and owes obligations. The several partners are personally liable for such obligations, and to indemnify them against such liability, they have the right, the equity, in effect to this extent a lien, to require that the partnership property go to pay partnership debts. The modern trend, both in legislation and decision, is very strongly toward the recognition of this quasi entity, as witness the Federal Bankruptcy Act, the Practice and Revenue Acts of the several states, together with the rapidly accumulating number of decisions by the courts of last resort.16

Reference has been made to a loss or waiver of the partner's equity and a consequent loss of the creditor's derivative equity. This may, of course, occur. But the question still remains as to what proof of it must appear in a particular case. Does it follow, as a matter of law, from the fact that a sale or disposition of the partner's interest. is shown, or must further facts appear from which an inference must be drawn that the partner intended to surrender his equity as well as his interest? In other words, are the interest and the equity separable? From an examination of the nature of the case, it would seem that they are. By disposition of his interests in the firm, a partner is not generally relieved

(15) Citations, supra.

(16) Jackson Bank v. Durfey, 72 Miss. 971, 18 So. 456; Cole v. Reynolds, 18 N. Y. 74; Kelly v. Scott, 49 N. Y. 595: Gates v. Beecher, 60 N. Y. 518, 19 Am. Rep. 207; Hess v. Lowrey, 122 Ind. 225, 23 N. E. 156, 17 Am. St. Rep. 355; Paige v. Paige, 71 Jowa, 318, 32 N. W. 360, 60 Am. Rep. 799; Francis v. McNeal, 228 T. S. 695, 33 Sup. Ct. 701, 57 L. Ed. 1029; Good v. Jarrard, 93 S. C. 229, 76 S. E. 698.

from his liability for its debts, nothing further appearing.17 The reason for the rule providing for the equity still persisting, it would seem that the rule itself should still apply, until it affirmatively appears that the partner has elected to surrender his right. But let us see how the matter stands on authority. In West v. Skip,18 decided by Lord Hardwick in 1749, there was an agreement by one partner to sell to the other of two upon certain terms, the purchasing partner to give security for payment, and an order was entered in court to that effect. But the security was never given, and the court proceedings terminated adversely to the selling partner. Meanwhile, the purchasing partner was in possession of the firm property, and he had suffered it to be seized by certain of his creditors. In a subsequent bill in equity to assert the vendor-partner's lien, the claim was set up that he had lost it, and should be levelled with the rest of the creditors of the purchasing partner. This, however, was denied by the Chancellor, upon the ground that nothing that had been done had destroyed the lien, that there was no evidence that the selling partner had "waived his property and resorted to personal security." In ex parte Ruffin, previously cited, the express ground of the decision that the lien had been waived was that the vendor at the time of the sale had made an agreement with his co-partner, the vendee, and had taken a bond from him to be held harmless against the firm debts. This was taken as evidence of an intent to waive the lien and provide for something in its stead, and the Chancellor remarks that the bond is good and will be paid. So, in ex parte Williams, also already cited, the evidence showed that at the time of the sale of the interest, the vendee had expressly agreed to pay all the firm debts, and the vendor had accepted such agreement. And this was evidence

(17) McAreavy v. Magirl, 123 Iowa 605. 99 N. W. 193.

(18) 1 Ves. 239.

of an intent to surrender the equity.19 And so in all the cases involving this phase of the general question, except in those representing one of the two conflicting lines which involve the particular question we are considering.

Where the sale is to a stranger, rather than to a co-partner, the necessity of evidence to show a waiver or loss of the equity would seem all the more pressing. Merely by virtue of the sale of the interest, the vendee, a stranger, does not become a partner.20 Nor, in the absence of an express agreement to that effect, does he become liable to pay the firm debts as they existed at the time of his purchase.21 But, as we have already seen, the vendor still remains liable for the debts. And where the sale is one under execution of the interest of an individual partner, the reason for the requirement of affirmative evidence is even more apparent, since the whole proceeding is one adverse to the partner, and no presumption as to intent should arise. therefrom. He is still liable for the firm debts, as before. It is unquestioned that a "purchaser under an execution against one partner has no claim until the partnership debts are paid, except on the separate interest of the individual partner in the residue."22

In the light of the foregoing consideration of principles, let us examine the conflicting authorities upon our question, and first, Menagh v. Whitwell, 23 decided in 1873. This case represents the view that the partners', and consequently the creditors', lien does survive the successive dispositions of the several partners'

(19) So also, Smith v. Edwards, 26 Tenn. 77, 7 Hun.p. 106, 46 Am. Dec. 71; Croone v. Bivens, 39 Tenn. 191, 2 Head 339; Dimon v. Hazard, 32 N. Y. 65.

(20) Jones v. Way, 78 Kan. 535, 97 Pac. 437. (21) Nix v. First National Bank of Pueblo. 23 Colo. 511, 48 Pac. 522.

(22) in re Corbett, 5 Sawyer 206.

(23) 52 N. Y. 146.

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