tions ought not to justify a difference in rates before the commission or the court.

Chattanooga is 151 miles nearer than Nashville to New York by the Southern and most direct routes. It has at least three through competing Southern lines from New York under different managements. These lines reach Nashville over one road from Chattanooga. Chattanooga is connected with Cincinnati, where the stream of traffic of the east and west trunk lines is reached, by a railroad 335 miles in length. Nashville reaches the same city by a railroad 295 miles in length. So far as the record show's, the conditions of railroad transportation between Cincinnati and Nashville are not substantially different from those between Cincinnati and Chattanooga. Both the Louisville & Nashville and the Cincinnati Southern are Southern roads. The Louisville & Nashville does not encounter as much unrestricted competition at Nashville as the Cincinnati Southern at Chattanooga, for the only other line entering Nashville is the Nashville & Chattanooga Company, of which the Louisville & Nashville Company owns more than one-half the stock. But it is said that the Louisville & Nashville Company is vitally interested in building up Nashville by enabling her merchants to compete with those of cities on the Ohio river. Why should the interest of this company be any greater in Nashville than that of the Cincinnati Southern Railroad in Chattanooga? The difference in the Chattanooga and Nashville rates is to be found in something other than the physical conditions existing at the two cities; for, regarding them alone, there is no reasonable ground for any substantial disparity. The evidence shows that the rates to Chattanooga from Cincinnati and from the Eastern Seaboard have always been fixed and agreed upon by an association of the Southern railway and steamship companies. The Louisville & Nashville Company has not been a member of it, but the Nashville, Chattanooga & St. Louis Company, of which the Louisville & Nashville Company owns a majority of the stock, has always been a member; and so has the Georgia Central Railroad & Banking Company, whose road from Atlanta to Savannah the Louisville & Nashville Company jointly. operates. The association has grouped Chattanooga with a large number of towns to the south of it for the same rates, and all the members of the association make their rates to Chattanooga accordingly. The Cincinnati, New Orleans & Texas Pacific Railway has been a member of this association, and it is the agreement between it and the other lines at Chattanooga which has prevented the lowering of its New York rate. Without such an agreement, it is not possible to see why normal competition would not give Chattanooga substantially the same rates as Nashville. The result of the agreement is to deny to Chattanooga the natural advantage which direct connection with Cincinnati secures to Nashville, and ought to secure to Chattanooga. The agreement is more than a mere tacit understanding resulting from a praiseworthy desire to avoid rate wars and the carriage of goods at less than cost; for the rates to Nashville are admitted to pay a profit over the cost of transportation, and they are from 25 per cent. to 50 per cent. less than the

Chattanooga rate for a considerably longer haul, with no apparent difference in conditions. We do not perceive that the fact that the competition at Nashville existed before the defendants began to carry merchandise by the Southern route has any material bearing on the issue. It only shows that the cost of transportation on the Southern lines was more slowly reduced than on the Northern lines, but it does not affect the existing situation. It is not important to inquire into the motive actuating the Cincinnati, New Orleans, & Texas Pacific Railway Company in its acquiescence in the Chattanooga rate agreement, though its greater or less dependence on the great Southern railway systems for its north-bound business readily suggests itself as a reason for its willingness to hold up its rates, and to refuse to Chattanooga what normal competition would give her. Nor can it be said that the Louisville & Nashville Company, whose fostering care of Nashville is insisted upon in the evidence and briefs for defendants, and is offered as a motive for its low rates to Nashville, is not a party to the plan by which Chattanooga is prevented from enjoying the natural traffic advantages which her railroads and her situation ought to give her; for through its ownership of a majority of the stock of the Nashville, Chattanooga & St. Louis Railway Company, operating a road from Nashville through Chattanooga to Atlanta, its joint operation of the railroad of the Georgia Central Railroad & Banking Company from Atlanta to Savannah in connection with the Ocean Steamship Company, of which the Georgia Central Company owns all the stock, it is very largely interested in traffic from the Eastern Seaboard to Chattanooga, and through Chattanooga to Nashville, and necessarily exercises an influence in shaping the action of the Southern Traffic Association in fixing rates. By its consent to the discrimination against Chattanooga, it only furthers its purpose to favor Nashville; for it enables Nashville merchants to undersell those of Chattanooga to the north and west of that city. We know that it is stipulated in the record that the officers of the Nashville, Chattanooga & St. Louis Railway Company would testify that it competes with the Louisville & Nashville Railroad Company, and that they are under different managements; but such evidence must be weighed in the light of the history of railroads in this country, and the motives that ordinarily govern in railroad management. One railroad company acquires the controlling interest in another company to control its general policy; and, while it may permit independence in the personnel and the details of management, it needs more than a stipulated statement of this general nature to induce a belief that the company which elects the directors of the other will permit that other to take a course materially detrimental to the interests of the owning company.

We are pressed with the argument that to reduce the rates to Chattanooga will upset the whole Southern schedule of rates, and create the greatest confusion; that for a decade Chattanooga has been grouped with towns to the south and west of her, shown in the diagram; and that her rates have been the key to the Southern situation. The length of time which an abuse has continued does not

justify it. It was because time had not corrected abuses of discrimination that the interstate commerce act was passed. The group in which Chattanooga is placed, shown by the diagram above, puts her on an equality in respect to Eastern rates with towns and cities of much less size and business, and much further removed from the region of trunk-line rates, and with much fewer natural competitive advantages. If taking Chattanooga out of this group and putting it with Nashville requires a readjustment of rates in the South, this is no ground for refusing to do justice to Chattanooga. The truth is that Chattanooga is too advantageously situated with respect to her railway connections to the north and east to be made the first city of importance to bear the heavier burden of Southern rates, when Nashville, her natural competitor, is given Northern rates. The line of division between Northern and Southern rates ought not to be drawn so as to put her to the south of it, if Nashville is to be put to the north of it. And we feel convinced from a close examination of the evidence that, but for the restriction of normal competition by the Southern Traffic Association, her situation would win for her certainly the same rates as Nashville. It may be that the difficulty of readjusting rates on a new basis is what has delayed justice to Chattanooga. It may well be so formidable as to furnish a motive for maintaining an old abuse.

It has been suggested that traffic managers are much better able, by reason of their knowledge and experience, to fix rates, and to decide what discriminations are justified by the circumstances, than courts. This cannot be conceded, so far as it relates to the interstate commerce commission, which, by reason of the experience of its members in this kind of controversy, and their great opportunity for full information, is, in a sense, an expert tribunal; but it is true of the federal court. Nevertheless, courts are continually called upon to review the work of experts in all branches of business and science, and the intention of congress that they should revise the work of railway traffic experts, whether railway managers or commerce commissioners, is too clear to admit of dispute.

We conclude that the defendants are violating the fourth section of the interstate commerce act, in charging a higher rate from New York and other Eastern cities to Chattanooga than to Nashville. The order that enjoined them from doing so is therefore right. The decree of the circuit court affirming the order of the commission is affirmed, with costs.

MANHATTAN LIFE INS. CO. v. HENNESSY.

(Circuit Court of Appeals, Fifth Circuit. January 9, 1900.)

No. 821.

1. LIFE INSURANCE-ASSIGNMENT OF POLICY-INSURABLE INTEREST.

It is sufficient, to entitle an assignee of a life insurance policy to recover thereon, that he had an insurable interest in the life of the insured at the time the assignment was made, although it may have ceased prior to the latter's death.

2. ASSIGNMENTS FOR BENEFIT OF CREDITORS-CONDITION FOR RELEASE IN FULL -EFFECT OF ACCEPTING DIVIDEND.

In the absence of statutory provision, the participation by a creditor in the benefits of a general assignment by his debtor, conditioned that those accepting its benefits shall release their claims in full, does not operate as a discharge of the unpaid part of the debt, there being no consideration therefor.

8. LIFE INSURANCE-ASSIGNMENT OF POLICY-INSURABLE INTEREST.

A creditor, to whom his debtor has assigned policies of insurance on his life as collateral, does not cease to have an insurable interest in such life by reason of his accepting the benefits of a general assignment made by the debtor conditioned that all creditors participating shall accept the dividends paid in full satisfaction of their debts, where his claim is not in fact paid in full, as, even if the transaction operates as a legal discharge of the debt, the moral and equitable obligation to pay the remainder still rests upon the debtor, and is sufficient to give the creditor an insurable interest in his life.

4. SAME-ACTION ON POLICY-DEFENSE OF PAYMENT TO ASSIGNEE.

A debtor obtained policies of insurance on his life, which he assigned to his creditor as collateral security, with the assent of the insurance company, and the creditor thereafter paid all premiums on such policies. The debtor subsequently made a general assignment conditioned that all creditors accepting its benefit should release their claims in full. The creditor proved its claim under such assignment, and received dividends, but the amount of its debt remaining unpaid largely exceeded the amount of the policies. The debtor made no effort to reclaim the policies, but notified the company to cancel the same. The creditor, however, continued to pay, and the company accepted, the premiums thereon for more than 20 years, and until the death of the insured, when the creditor proved its claim thereunder, which was paid by the company. Held, that such payment was authorized, and constituted a defense to an action against the company on the policies on behalf of the estate of the insured, any claim of the estate to the amount collected in excess of the premiums paid being one which could only be asserted in an action against the assignee.

In Error to the Circuit Court of the United States for the Eastern District of Texas.

This is a suit by Ellen Hennessy, of the state of Texas, against the Manhattan Life Insurance Company, incorporated under the laws of the state of New York, for $9,000, being the amount of two insurance policies on the life of Patrick H. Hennessy, deceased. The Manhattan Life Insurance Company issued one of the policies on April 1, 1872, for $5,000, and the other on January 23, 1874, for $4,000. Each policy was payable to the "said assured, his execu tors, administrators, or assigns, within ninety days after due notice and satisfactory evidence of the death of the said Patrick H. Hennessy." Patrick H. Hennessy and M. P. Hennessy were partners in business, in Texas, under the firm name of P. H. Hennessy & Pro. This firm owed the J. L. Mott Iron Works, a corporation chartered under the laws of the state of New York, about $42,000, for which debt each member of the firm was individually liable. Patrick H. Hennessy assigned one of these policies as follows:

"The State of Texas, County of Galveston.

"Know all men by these presents, that whereas, the Manhattan Life Insurance Company, of the city of New York, state of New York, has heretofore, to wit, for value received, issued to me their policy of insurance in writing, bearing date April 1, A. D. 1872, whereby they insured my life in the sum of $5,000: Now I, Patrick H. Hennessy, of the city and county of Galveston, state of Texas, for and in consideration of my indebtedness to the J. L. Mott Iron Works, of the city of New York, state of New York, have sold, assigned, transferred, and set over, and by these presents do sell, assign, transfer, and set over, unto the said J. L. Mott Iron Works, all my right, title, and interest in and to the said policy of insurance, and all sum and sums of money, interest, benefit, 99 F.-5

and advantage whatsoever now due, or hereafter to arise, or to be had or made, by virtue thereof; to have and to hold the same unto the said J. L. Mott Iron Works, executors, administrators, and assigns, forever, as collateral security to the said J. L. Mott Iron Works. Witness my hand and the use of scroll for seal, at the city of Galveston, this April 13, A. D. 1872.

The other one he assigned in these words:

"P. H. Hennessy. [L. S.]"

"The State of Texas, County of Galveston.

"For value received I, the undersigned, having a policy on my life in the Manhattan Life Insurance Company, of New York, said policy being numbered 36,943, dated January 23, A. D. 1874, for the term of life from that date, for the amount of $4,000, annual premium $120.64, do hereby grant and transfer all my right, title, and interest in and to the same unto the J. L. Mott Iron Works of New York, and their assigns and successors. Witness my hand and scroll for seal this April 17, A. D. 1874. P. H. Hennessy. [L. S.]"

Both assignments were duly acknowledged by Patrick H. Hennessy before William R. Johnson, notary public for Galveston county, Tex. Both policies were delivered to the J. L. Mott Iron Works, and remained in its possession. Due notice of each of these assignments of the policies was given by the said Patrick H. Hennessy to the Manhattan Life Insurance Company, which assented to the assignments. The firm of P. H. Hennessy & Bro., on August 23, 1875, executed a general assignment, which states "that it conveys all the property of the firm and its members not exempt by law." In this instrument the debt to the J. L. Mott Iron Works is estimated at over $42,000 principal. This assignment provides that the proceeds shall be distributed pro rata by the assignee to all the creditors who shall accept this assignment and sign a release in full of all claims and demands against the firm of P. H. Hennessy & Bro., and to those only. On November 1, 1875, the J. L. Mott Iron Works proved their claim with the assignee for $48,309, principal and interest, and received a dividend thereon on November 11, 1875, of 7 per cent., $3,381.63, and another and final dividend on March 22, 1876, of 34 per cent., $1,811.58; leaving unpaid $43,115.79. On the policy for $5,000 the J. L. Mott Iron Works paid the annual premiums from April 1, 1876, to April 1, 1896, amounting in the aggregate to $2,388.75. On the policy for $4,000 the J. L. Mott Iron Works paid the annual premiums from January 23, 1876, to January 23, 1897, amounting in the aggregate to $2,156.07. Previous to these payments the premiums on the policies were paid by Patrick H. Hennessy. On January 18, 1879, Patrick H. Hennessy wrote to the Manhattan Life Insurance Company, stating that he was informed that the J. L. Mott Iron Works was keeping up the policies on his life "given them to secure the indebtedness to them of the late firm of P. H. Hennessy & Bro.," and that this firm was dissolved on August 25, 1875. Hennessy, in his letter, adds: "The assignment referred to provided that the creditors accepting it should take the property specified therein, and therefor give a discharge from all indebtedness. The J. L. Mott Iron Works accepted the assignment, received their pro rata under it, and thereby any further claim of theirs became canceled. They took the property for their claim, and their claim was thereby satisfied. This communication is to notify you of the facts as stated, and to demand, as the J. L. Mott Iron Works hold no insurable interest in my life, that the policies on my life in your company in their favor, or if assigned by them to others, be canceled, and rendered null and void." Patrick H. Hennessy made his last will on December 19, 1890. He gave all his property to his wife. He mentioned in the will that he had made provision for his children by a policy in the Etna Life Insurance Company, but the policies involved in this litigation are not mentioned. His wife is made sole executrix. Patrick H. Hennessy died on February 13, 1897. The Manhattan Life Insurance Company was notified by the J. L. Mott Iron Works that it claimed the amount of the two policies as the assignee of Patrick H. Hennessy, and it also had notice that Ellen Hennessy claimed the policies as the executrix and sole legatee of her husband, Patrick H. Hennessy. In the course of the correspondence that ensued, the Manhattan Life Insurance Company, on March 11, 1897, wrote to the attorneys of Mrs. Ellen Hennessy as follows: "We also beg to notify you that the papers