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or stock, two arbitrary rules of distribution have been adopted: the Massachusetts rule, giving all cash dividends to the life tenant and all stock dividends to the remainderman, and the Kentucky rule, giving all dividends, whether cash or stock, to the life tenant. Minot v. Paine, 99 Mass. 101; Hite v. Hite, 93 Ky. 257, 20 S. W. 778. Pennsylvania, however, has instituted a third rule attempting an equitable apportionment: the life tenant is accorded that portion of the dividend, regardless of whether cash or stock, that is derived from earnings accrued since the trust was imposed, and the balance is given to the remainderman. Earp's Appeal, 28 Pa. St. 368. Under this rule the practical difficulties in ascertaining the time at which the income actually accrued, and in accounting for enhancement in the corporation assets from other sources than accrued earnings, greatly impede satisfactory apportionment. And when the dividend is of stock, there are further objections to taking it away from the remainderman. For the intention of the settlor seems to be to give the remainderman the present ownership of the stock subject only to the right of the life tenant to its earnings. Hence, to diminish the remainderman's proportionate share in the corporation, and to give to the life tenant, by means of the new stock, an interest in the old assets of the corporation, is technically to defeat this intention. See 26 HARV. L. REV. 77. Furthermore, unless the right is taken into consideration in apportionment, this rule deprives the remainderman in substance of the right of a stock owner to subscribe to any new issue of stock. Carter v. Crehore, 12 Hawaii, 309. In spite of these drawbacks, in the principal case Vermont has adopted the Pennsylvania rule, and New York and Delaware have recently done likewise, though thereby reversing their former arbitrary rules. Compare Re Osborne, 209 N. Y. 450, 103 N. E. 723, with McLouth v. Hunt, 154 N. Y. 179, 48 N. E. 548; and Bryan v. Aiken, 86 Atl. 674 (Del.), with Bryan v. Aiken, 82 Atl. 817 (Del.). On the other hand, Ohio has recently approved the Massachusetts rule. Wilberding v. Miller, 90 Oh. St. 28, 106 N. E. 665.

EQUITY

SPECIFIC PERFORMANCE

CONTRACT TO BUILD AND OPERATE A DEPOT. — The defendant railroad, in consideration of a grant of a right of way and depot grounds, covenanted with the plaintiffs to erect, maintain, and operate a depot thereon for the general accommodation of the public. The defendant built the depot but operated it for only a short period. The plaintiffs pray for a decree of specific performance. Decreed, that defendant operate the depot according to the terms of the covenant so long as such operation remains consistent with its duties to the public. Harper v. Virginian Ry. Co., 86 S. E. 919 (W. Va.).

It has frequently been asserted that a court of equity has no jurisdiction to compel performance of a contract involving continuing acts. See 16 HARV. L. REV. 293. But the trend of modern cases, at least in railroad contracts, indicates a complete reversal of that position. Murray v. Northwestern Ry. Co., 64 S. C. 520, 42 S. E. 617; Schmidt v. Louisville, etc. Ry. Co., 19 Ky. L. Rep. 666, 41 S. W. 1015. See BISPHAM, PRINCIPLES OF EQUITY, 6 ed., § 377. The jurisdiction, however, being concurrent, is entirely lacking if the contract is void at law on grounds of public policy. In general this is the case when a railroad by covenant restricts its freedom of action. Williamson v. Chicago, etc. Ry. Co., 53 Ia. 126; St. Joseph, etc. Ry. Co. v. Ryan, 11 Kan. 602. But contracts to operate a depot at a specified place have usually been held good. Louisville, New Albany, etc. Ry. Co. v. Sumner, 106 Ind. 55, 5 N. E. 404. See 21 AM. & ENG. R. R. CASES, n. s. 835. These decisions may be rested on the construction given to such contracts by many courts, that the contract, in spite of its terms, calls for performance only so long as it is in accord with public policy. Texas & Pacific Ry. Co. v. Marshall, 136 U. S. 393; Atlanta, etc. Ry. Co. v. Camp, 130 Ga. 1, 60 S. E. 177; Jones v. Newport News, etc. Co., 65 Fed.

736. Though it may be contended that this interpretation creates a new contract for the parties, yet courts have acted similarly in the somewhat analogous cases of equitable servitudes. See 29 HARV. L. REV. 106. Again, the decisions may also be supported on the ground that, though the contracts are such as might become opposed to public interest, the contingency thereof is too slight to make them void at law. But even if the law considers such contracts valid, certainly equity will refuse to grant specific performance after they have become opposed to the public interest. Conger v. New York, West Shore, etc. Ry. Co., 120 N. Y. 29. The conditional decree in the principal case was framed to anticipate such a situation.

HUSBAND AND WIFE-RIGHTS AND LIABILITIES OF WIFE - CONTRACTS BY WIFE TO CONVEY HER REALTY. A statute permitted a wife to contract and deal so as to affect her real and personal property in the same manner and with the same effect as if she were unmarried, but made any conveyance of her realty, without the written consent of her husband, and her privy examination as to her willingness to convey, invalid. 1911 N. C. PUBLIC LAWS, ch. 109. The plaintiff contracted with the defendant husband and wife for a conveyance of the wife's realty, but no privy examination was taken. On the wife's refusal to convey, the plaintiff sues to recover damages for breach of the contract. Held, that he may recover. Warren v. Dail, 87 S. E. 126 (N. C.).

Effect must be given, if possible, to every word, clause, and sentence of a statute. See Petri v. Commercial, etc. Bank, 142 U. S. 644, 650. See 2 SUTHERLAND, STATUTORY CONSTRUCTION, 2 ed., § 380. Therefore the statute must be so construed as to distinguish between the right to contract and the right to convey. Specific performance of the contract will not be decreed, as this would involve the transformation of the contract into a conveyance, which is contrary to the distinction made by the statute. Cf. Martin v. Mitchell, 2 J. & W. 413, 425. But a suit for damages does not involve this difficulty. It is clear that, where a husband is unable to procure a release of dower, he is, nevertheless, liable for the breach of his contract to convey. Drake v. Baker, 34 N. J. L. 358. By similar reasoning, the wife should be liable on her contract to convey. Nor is such liability contrary to the spirit of the statute, for the purpose of the act is not to protect the wife from unfortunate contracts, but to prevent the loss of her realty. And such liability adds no extra burden to her land since it is subject to levies to satisfy judgments for breaches of her other contracts. See Royal v. Southerland, 168 N. C. 405, 406, 84 S. E. 708, 709. Under a similar statute such contracts have been held binding. Brown v. Dressler, 125 Mo. 589, 29 S. W. 13; Davis v. Watson, 89 Mo. App.

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INSURANCE MARINE INSURANCE VALUED POLICY EXTENT OF INSURER'S RIGHT OF SUBROGATION. The plaintiffs insured the defendant's ship, the Helvetia, for the full value, which in the policy was stated to be £45,000. The Helvetia collided with the Empress of Britain and was totally lost. The insurers paid for a total loss in accordance with value stated in the policy. Subsequently in an admiralty action both ships were held to blame, the Helvetia for 12 of the damage and the Empress of Britain for 12, and the owners of the latter paid the defendants £26,900-12 of £65,000-which the court found to be the value of the lost vessel. The insurers now demand this sum from the defendants. Held, that the insurers are entitled to the full amount recovered from the tortfeasors. Thames and Mersey Marine Ins. Co. v. British and Chilean Steamship Co., 32 T. L. Rep. 89, [1916] 1 K. B. 30.

If the insured sues the tortfeasor after he has been indemnified, and recovers, he must hold whatever amount the insurer is entitled to in trust for him. Gales v. Hailman, 11 Pa. St. 515; Randal v. Cockran, 1 Ves. Sen. 97. How

ever, the theory upon which the recovery of the insurer is to be rested and consequently, the extent to which it should go, are disputed. An earlier English case stated that the insurer was entitled to everything recovered from the tortfeasor, on the ground that the insurer acquired the right against the tortfeasor through an abandonment. See North of England Ins. Co. v. Armstrong, 5 Q. B. 244, 248; Burnand v. Rodocanachi, 7 App. Cas. 333, 342. But it is to-day conceded on all sides that the right against a tortfeasor is not an incident of property, and therefore does not pass by a subsequent abandonment of the property. The Livingstone, 130 Fed. 746; The St. Johns, 101 Fed. 469, 472. See Simpson v. Thomson, 3 App. Cas. 279, 292. See 18 HARV. L. REV. 384. A better view would seem to be that the right rests on subrogation invoked to prevent the assured from recovering more than a full indemnity. See Preston v. Castellane, 11 Q. B. D. 380, 386; Liverpool, etc. Co. v. Phoenix Ins. Co., 129 U. S. 397, 462. Under this view the insurance company becomes entitled to anything coming into the hands of the insured which reduces the loss indemnified. Still, the insurer clearly should not recover more than he has paid. The Livingstone, supra. See The St. Johns, supra, 475; 2 ARNOULD, MARINE INSURANCE, 9 ed., § 1229. See contra, Railway Co. v. Jurey, III U. S. 584, 594; North, etc. Ins. Co. v. Armstrong, supra, 249. And the reason underlying the subrogation would require that the insurer's right should not begin until the insured had made up his full loss. Contra, The St. Johns, supra; cf. The Livingstone, supra, 749. It is submitted that a "valued" policy of the type in the principal case should effect no change in this result: in such a policy the whole vessel is insured, the clause stating the agreed value being inserted only in order to save the expense and doubt that may attend a later investigation of value in case of loss. In this respect it resembles an agreement for liquidated damages, and is to be sharply distinguished from insurance of a certain amount taken on a vessel. An inquiry as to the actual value of the vessel for the purpose of reducing the recovery or of averaging the loss is, of course, not permitted. Insurance Co. v. Hodgson, 6 Cranch (U. S.) 206, 221; Providence, etc. Co. v. Phoenix Ins. Co., 89 N. Y. 559; Irving v. Manning, I H. of L. Cases, 287. Contra, Clark v. United, etc. Co., 7 Mass. 365. But the valuation is not binding for every purpose in which the value is brought into question. See Burnand v. Rodocanachi, supra, 335, 342; Irving v. Manning, supra, 305. Since in subrogation we must first see the insured made whole, and since actual value has been made the basis of recovery from the tortfeasor, that value and not the agreed value should be the basis of distributing the fund recovered. For this neither violates the contract nor protects the insured in any wrong. In the principal case, therefore, the plaintiff should have recovered only £6,900. The result reached, however, may be correct under § 79 (1) of the English Marine Ins. Act of 1906.

INSURANCE - MERGER OF PRELIMINARY AGREEMENT IN POLICY - PAROL EVIDENCE RULE. - The plaintiff's agent entered into a contract of insurance with the defendant company on terms not in accord with his principal's instructions. Before a policy was issued the property was destroyed. Subsequently the agent, not having been informed of the loss, though it was known to the plaintiff, induced the defendant to issue a policy on new terms that accorded with the latter's instructions. This policy was dated to take effect from the time of the original agreement. The defendant company sought to restrict recovery to the terms of the initial agreement, but the trial court disallowed evidence of this transaction on the ground that the policy contained the contract between the parties. Held, that the exclusion was proper. El Dia Ins. Co. v. Sinclair, C. C. A., 2d Circ. (not yet reported).

Since the agent was acting within the scope of his authority his failure to follow the plaintiff's instructions in the original transaction did not prevent a

contract arising between his principal and the defendant company. North River Bank v. Aymar, 3 Hill (N. Y.) 262. But his subsequent attempt to create a different contract and to incorporate it in the policy should have been held futile, since an original contract of insurance cannot be formed when the insured knows the property has been destroyed. Wales v. Bowery Fire Ins. Co., 37 Minn. 106, 33 N. W. 322. Nor does it matter that when the policy was executed the plaintiff did not know it was a new contract, or that his agent did not know of the loss of the property, for the objection is not bad faith but lack of consideration. Thus the policy was absolutely void and could not become the written understanding of the parties by merging the oral contract. Nebraska, etc. Ins. Co. v. Seivers, 27 Neb. 541, 43 N. W. 351. Cf. Pratt v. Dwelling House, etc. Ins. Co., 130 N. Y. 206, 217, 29 N. E. 117. Hence the defendant company did not seek to traverse the parol evidence rule by showing that the parties intended to make an agreement different from that summed up in the policy; its aim was simply to prove that the latter was not a contract because of the nonexistence of conditions required for the formation of a contract. Pym v. Campbell, 6 E. & B. 370. See 4 WIGMORE, EVIDENCE, § 2400. The resulting conclusion is that the court erred in disallowing evidence of the prior agreement to prove that the policy was an original agreement and void. Salisbury v. Hekla Fire Ins. Co., 32 Minn. 458, 21 N. W. 552. Contra, Ins. Co. v. Lyman, 15 Wall. (U. S.) 664. Mistaking the parol evidence rule for a rule of evidence, when in fact it is a principle of substantive law, is the source of the error. See THAYER, PRELIMINARY TREATISE ON EVIDENCE, 397.

LANDLORD AND TENANT-CONDITIONS AND COVENANTS IN LEASES IMPLIED COVENANT BY LANDLORD NOT TO INTERFERE WITH TENANT'S USE of the PremiSES. — In a lease was a covenant of quiet enjoyment by the landlord and a covenant by the tenant to conduct a restaurant on the premises. The landlord let adjoining premises to be used for noisy auction rooms. The tenant sues the landlord. Held, that he may recover. Malzy v. Eicholz, 32 T. L. R. 152 (K. B. Div.).

In an ordinary contract it is a condition to the promisee's right to enforce the promise that he does nothing to interfere with its performance. Peck v. United States, 102 U. S. 64; European, etc. Co. v. Royal, etc. Co., 30 L. J. C. P. 247. Some cases hold that a promise by each party not to interfere with the performance of the other is necessarily implied from the express contract of the parties. Patterson v. Meyerhofer, 204 N. Y. 96, 97 N. E. 472; Levy and Hipple Motor Co. v. City Motor Cab Co., 174 Ill. App. 20. See 17 HARV. L. Rev. 46. It is true that in these latter cases the injury which the plaintiff complained of was the deprivation of the profits which he would have made, had he been able by performing his promise to put himself in a position to demand the performance of the defendant's express promise. But it cannot affect the implication of the promise, that the damages from its breach have no connection with the express contract. Some courts regard an interference by a landlord with the tenant's expected use of the premises as a breach of the landlord's covenant of quiet enjoyment. Tebb v. Cave, [1900] 1 Ch. 642; McDowell v. Hyman, 117 Cal. 67, 48 Pac. 984. Contra, Tucker v. Du Puy, 210 Pa. St. 461, 60 Atl. 4. And in England such an interference is also actionable as being a derogation from the grant of the landlord. Grosvenor Hotel Co. v. Hamilton, [1894] 2 Q. B. 836. But it is submitted that the principal case is best supported by implying, on the above principles of contracts, a covenant that the landlord will not interfere with the tenant's performance of his agreement to use the property in a certain way.

RENT CHARGES ESTATE TAIL - EFFECT OF DISENTAILING ASSURANCE. A tenant in fee simple of lands granted a rent charge issuable out of the

lands to trustees in fee to the use of successive tenants in tail with ultimate remainder to the use of the settlor and his heirs. One of the tenants in tail, while in the enjoyment of the rent charge, executed a valid disentailing assurance. Held, that the tenant acquired an equitable fee simple in the rent charge. In re Frank's Estate, [1915] 1 Ir. 387 (Ct. of Appeal).

Two tenants in tail of equitable rent charges, which had been granted to them de novo without remainders over, executed a disentailing deed. Held, that the deed created merely a base fee in each rent charge determinable on the failure of the issue in tail. Pinkerton v. Pratt, [1915] 1 Ir. 406 (Ct. of Appeal).

A rent charge may be entailed like any other tenement. Smith v. Farnaby, Carter 52; Drew v. Barry, I. R. 8 Eq. 260, 283. See CHALLIS, REAL PROPERTY, 299. And, like any other tenant in tail, a tenant in tail of a rent charge can bar the succeeding estates thereof. Smith v. Farnaby, supra; Anonymous, 12 Mod. 513. Similarly an equitable remainder may be barred just as though the estates were legal. Brydges v. Brydges, 3 Ves. Jr. 120; Boteler v. Allington, 1 Bro. C. C. 72. See Salvin v. Thornton, Ambler 545, 549. It is said that an equitable tenant in tail cannot cut off a legal fee. Brydges v. Brydges, supra. However, such a tenant can bar the equitable remainder though it is vested in the person with the legal fee. Robinson v. Cuming, 1 Atk. 473. This has been explained by saying that the court will not allow a merger since that would prevent the barring of the equitable remainder. See LEWIN, TRUSTS, 12 ed., 12. Since this means simply that the equitable remainder can be barred regardless of merger, the analogy of equitable estates gives but feeble support for the distinction made by the court in the principal cases. However, the fact that an estate of rent charge is created only by the parties, whereas equitable estates are frequently raised by the courts, may indicate that every legal estate does not contain an incipient estate of the former sort though it does of the latter. And the text-writers and some dicta support the principal cases. Chaplin v. Chaplin, 3 P. Wm. 229, 230. See 2 JARMAN, WILLS, 6 ed., 1153; THEOBALD, WILLS, 7 ed., 500; CHALLIS, REAL PROPERTY, 2 ed., 299.

RES JUDICATA PERSONS CONCLUDED PERSONS ASSISTING IN THE DEFENSE. One hundred underwriters insured a yacht by identical policies under which each was severally but not jointly liable for his proportionate share. The yacht was destroyed. In an action by the owner against one of the underwriters the defense was conducted under the direction and at the expense of all. On judgment being given against him, the owner now sues another of the underwriters. Held, that the matter is not res judicata. Fish v. Vanderlip, 156 N. Y. Supp. 38 (Sup. Ct.).

A judgment is conclusive only as between parties or persons in privity with parties. Litchfield v. Goodnow's Administrator, 123 U. S. 549; Yorks v. Steele, 50 Barb. (N. Y.) 397. See 2 BLACK, JUDGMENTS, 2 ed., §§ 534, 600. But a party, in this sense, need not be a party of record. Thus a person not nominally a party may subject himself to be concluded by openly and actively assuming the conduct of the defense of an action in which he is interested. Castle v. Noyes, 14 N. Y. 329; Frank v. Wedderin, 68 Fed. 818; Empire State Nail Co. v. American Solid Leather Button Co., 71 Fed. 588. But the matter will not be made res judicata by such participation when, as in the principal case, the person assisting in the defense does so, not because of some direct interest of his own in the subject matter of the particular action or because of some responsibility to the defendant depending upon the decision, but merely because he has similar though entirely separate rights against the plaintiff. Litchfield v. Goodnow's Administrator, supra, Rumford Chemical Works v. Hygienic Chemical Co., 215 U. S. 156. See Schroeder v. Lahrman, 26 Minn.

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