the right of change under state police power, said: "There seems to be no difference in principle between the case of a contract indeterminate and one that is determinate; nor is there any difference in principle between a contract with a borough, with a corporation or with an individual. Any contract of this character, whether for a definite or indefinite period, must give way when its terms conflict with the rates fixed later by a public service commission."12 Tennessee Supreme Court, in a decision handed down July 3, 1919,13 held that a statute creating a Railroad Commission and authorizing it to fix rates of public utilities does not impair the obligations of contract in a franchise ordinance of a city limiting fares, because "in this state it has been held that the general governmental powers of the state cannot be bargained (Lynn v. Polk, 8 Lea. 121.)" In Missouri it was said to be settled in that jurisdiction that rates fixed by franchise and contract are revisable by state agengies in the exercise of the police power to regulate rates.14

Rates Fixed Under Constitutional Franchise. A decision by Virginia Court of Appeals,15 after first quoting from a U. S. Supreme Court decision,16 that "there can be no question in this court as to the competency of a state legislature, unless prohibited by constitutional provisions, to authorize a municipal corporation to contract with a street railway company as to rates of fare, so as to bind during the specified period any future common council from altering or in any way interfering with such contract," said: "The abrogation of such continuing (police) power is never to be

(12) Leiper v. B. & Pac. R. Co., 262 Pa. 328, 105 Atl. 551, P. U. R. 1919C, 397.

(13) Memphis v. Enloe, Tenn., 214 S. W. 71, P. U. R. 1919F, 508.

(14) Va.-W. P. Co. v. Com., Va., 99 S. E. 723, P. U. R. 1919E, 766.

(15) Detroit v. Citizens' St. Ry. Co., 184 U. S 368, 22 Sup. Ct. 410.

(16) Collier on Public Service Companies, p. 235.

presumed," and it cites a very great number of cases where such abrogation was denied, saying: "None of these cases controvert the well-established rule of law that if the municipality *** has expressly conferred upon it by statute the unlimited power to contract with the grantee of the franchise*** and the municipality does so contract and the grantee accepts it and acts under it, the contract is irrevocable during its life." It is then said that the Virginia Constitution and Virginia Statute undoubtedly confer on municipalities absolute power to prevent public utility corporations from doing business therein without their consent, thus a power to impose conditions which may be arbitrarily imposed and this "is not necessarily to be regarded as a power of contract." This distinction appears to me rather shadowy, especially when to every ordinary apprehension there is a contract and not specially a condition imposed. The question would come up more squarely, if a state were vesting the power that had been confided to a municipality of control over its streets in a state commission as its successor in this respect. Certainly the municipality, which had been a mere arm of the government, could be abolished under a state's police power and its powers vested elsewhere. And if the imposing of conditions is not continual in its nature, then i merely regulatory, and surely regulation taken away from the municipality.

ay be

Theory of Rate Firing. The prime purpose in the fixing of a rate for a public utility is to enable it so to operate as to earn fair compensation and only fair compensation. Both it and the public are possessed of property which is used in its operation and both are entitled to a like measure of reward for such use. It has been held to be confiscatory of the public utility's property to deny it either a fair valuation of what it devotes to public use or that it shall not earn fair compensation for But it must be evident that the only way to determine this question is by

its use.

taking into view present conditons in which valuation is put upon property and expense attending its devotion to public use. These things are in as constant a state of change as are markets. Values are altogether relative, and it cannot be imagined that any fixing of prices for the future is anything more than a sort of guess. But there is still another aspect to all of this. The public is interested in what becomes of its property in a certain sense-being devoted to public use. It must remain efficient for purposes to which it is devoted. This is police power over the matter in question. This is the thing in which is declared there exists every presumption against its being surrendered, and it cannot be bargained away, unless there is a clear intention that it is surrenderable. It seems to me that the state of Ohio was not clearly shown to have surrendered its police power over street railways. There is no express or explicit statement in any statute that it does surrender it.

Further, it seems to me that there is little to be gained in favor of the public utility companies that there should exist any surernder of a state's police power over a public utility. But at all events U. S. Supreme Court only holds that for the definite time in the contracts before the court and by a particular class of public utilities, there was a surrender of the state's police power. It did not hold that such power could be parted with for all time. There may be reason for saying that the interests of a particular utility and of the public as well would be promoted by declaring that contracts for a definite time would remain wholly unchangeable, when they are made with a subordinate agency of the government, though it also be the case that those with private parties are subject to change. But it well may be thought that this difference should unmistakenly appear. The state is in effect on both sides of contracts, when a public utility deals with an arm of public government. It has concern in no wrong being

BOYCE, J. A decision of this case depends upon the construction of a land sales agency contract made between the appellant, as party of the first part, and the appellees, as parties of the second part, on the 4th day of December, 1916. By the terms of this contract the said Robert F. Alley, as party of the first part, appointed the parties of the second part, appel. lees, as exclusive agents to solicit purchasers for the sale of lands owner, controlled or listed for sale by party of the first part "in the shallow water district of Northwest Texas, including Hale and adjoining counties," until January 1, 1918. This exclusive agency covered certain territory in Iowa. The parties of the sec ond part agreed to actively solicit purchasers for such land in said territory, and to deliver prospective purchasers to the party of the first part at Hale Center, at their own expense, and without cost to the first party. The appellant, as party of the first part, agreed to pay to the second parties as commission the sum of $5 per acre for each acre of land sold to any person resident in the territory assigned to the party of the second part, and to refer any inquiry from persons resident in such territory to the parties of the second part. The first party also agreed "to take proper care of prospective purchasers furnished by second party or their sub

agents, when delivered to first party at Hale Center, or other point mutually agreed upon, to furnish two seven-passenger automobiles and show them lands for sale and make proper effort to sell them land and to furnish them meals without cost to second party." Said contract also contained the following paragraph, which furnishes the basis of this suit:

"The first party agrees to show any lands owned by second party to prospects furnished by them, and to aid in making sale for no other charge than a commission of one dollar per acre on all lands owned by second party and sold to second party by the first party in said shallow water district, and sold during the term of this contract."

During the existence of this contract the appellees sold about 1,600 acres of land in said shallow water district, owned by them, and purchased of appellant, Alley. While the appellant had shown this land to "prospects furnished by" the appellees, sale thereof was not made to any such persons, and the appellant did not show the lands, or aid in any way in making the sale to the persons who actually bought from the appellees. The appellant, Alley, brought this suit to recover $1 per acre commission on this sale, claiming that under the terms of the contract he was entitled to such commission whether such sale was in any way aided by him or not.

The general rule is that one employing an agent to sell land for a commission on the sales may make sales himself or through other agents, without liability to the agent for commission on such sales; even where the agency is exclusive, the owner may sell himself, and is not liable for commission. So that, in the ordinary contract providing for a commission to the agent on sales of the land made during the term thereof, the sales have reference only to sales resulting from the efforts of the agent. "The parties may, by contract, avoid the effect of this rule, as where the owner undertakes to pay a commission on all sales within a certain time, no matter by whom made." C. J. vol. 9, p 576; Mechem on Agency (2d Ed.) 2445. In the cases referred to by the authorities making the statement just quoted, the contracts contained some express language or provision that clearly indicated that there was an agreement to pay the commission whether the agent participated in the sale or not. The contract in the case of Parkhurst v. Tryon, 134 App. Div. 843, 119 N. Y. Supp. 184, is more nearly like the one we are considering than any other authority we have found. In that case the written contract between the owner and the agent provided that the agent should "advertise and attempt to sell

NOTE-Exclusive Agency Not Preventing Sale by Owner Without Responsibility to Agent.Contracts of this nature are construed upon the theory that there shall be good faith between the owner and his agent. Thus it has been said: "It has been frequently held that the owner of real estate, by employing a real estate agent or broker to effect the sale of property, does not preclude himself from employing other agents for the same purpose, or from effecting a sale himself, provided, that in making the sale himself he acts in good faith; 'good faith' meaning that the owner would not be allowed, after making a contract with a real estate broker, to avail himself of the broker's services, where the broker had procured a purchaser, and to effect the sale himself, thereby depriving the broker of his commission." Moore v. May, 10 Ga. App. 198, 73 S. E. 29. The fact that the contract considered by the court provided that it was irrevocable for three months did not change this rule.

Where the contract provided that, if the agent found a purchaser, the owner agreeing, that no other agent should be employed, and the price being a certain amount, the facts show that the agent found a buyer for a less price which h submitted to owner, then the latter told the agent that as he had made some repairs, he would have to have a larger sum. Afterwards the owner sold to the party the agent had found for the price originally fixed. The agent, however, had not disclosed to the owner the name. The court considering that the increased price governed the agent, said: "Power to fix the price is incident to the right retained by the owner to sell, and an agent necessarily must take this into account, and, unless he cares to assume the risk of a sale by the owner to a prospective customer on terms different from those specified, he must disclose such purchaser's name in submitting his proposition. Indeed, there is an element of bad faith in withholding this information from the principal, with whom the agent is required to deal with candor and fairness, and it must be understood from the discussion that recovery might have been had, had the sale been at the price specified in the employment of plaintiff as agent." Gilbert v. McCullough, 146 Iowa 333, 125 N. W. 173.

There is a distinction between an exclusive agency and an exclusive right to sell, the former merely preventing the employment of other agents or brokers.

Thus in Dale v. Sherwood, 41 Minn. 535, 43 N. W. 569, 5 L. R. A. 720, 16 Am. St. R. 731, the court said: "It is settled at least in this state, that where an agency to sell real estate on commission is given, the exclusive right to sell not being given, the owner himself has still the right to make a sale independent of the agent, and in such case will not be liable to the agent for commissions unless he sells to a purchaser procured by the agent. This right on the part of the owner is an implied condition of the agency, subject to which the agent accepts it."

Under this rule it has been held that an owner acting in good faith and without any knowledge that a purchaser from him was induced by the agent to purchase, may himself sell to such purchaser, though he has clothed the agent with an exclusive agency. Smith v. Preiss, 117 Minn. 392, 136 N. W. 7, Ann. Cas. 1913D, 820.

There are many cases, both English and American, taking this view.

Thus in Greene v. American Malting Co., Wis., 140 N. W. 1130, it was said the only general effect of the exclusive agency is to prevent the owner from placing the property in the hands of another agent. See also Ferguson v. Willard, 196 Fed. 370, 116 C. C. A. 406; Woolf v. Sullivan, 224 Ill. 509, 79 N. E. 646; Hurxthal v. Dalby, 168 Mo. App. 538, 153 S. W. 1066; Tracy v. Radeke, 141 Ia. 167, 119 N. W. 525, Ann. Cas. 1912B, 663.

But if the contract expressly stipulates for a definite period of time in which the agency is to be exclusive, this implies exclusive right to sell. Blumenthal v. Bridges, 91 Ark. 212, 120 S. W. 974, 24 L. R. A. (N. S.) 279. This, however, is opposed to Moore v. May supra.

After all, however, the element of good faith is stressed in these contracts of agency, and there is a question of construction of the contract creating the agency; e. g., in Green v. Cole, 127 Mo. 587, 30 S. W. 135, it was held that where an owner employs an agent to plot and sell within a fixed time and agent performs services under the contract, owner is liable for damages if he revokes and sells himself. In line with the instant case are Helling v. Darby, 71 Kan. 107, 79 Pac. 1073; Woodall v. Foster, 91 Tenn. 195. 18 S. W. 241. C.

ITEMS OF PROFESSIONAL

INTEREST.

ANNOUNCEMENT OF 1920 MEETING AMERICAN BAR ASSOCIATION.

The next meeting of the American Bar Association will be held at St. Louis, Mo., Aug. 2527, 1920.

It is with deep sorrow that we have learned of the sudden death of Hon. George W. Whitelock, the genial secretary of the Associaton. He passed away January 8, 1920. Only three days before we had received a letter from Mr. Whitelock, in which he promised to give the readers of the Journal a full report of the result of a recent referendum on a matter submitted to a vote of the members of the Association. The referendum referred to was on the following resolution:

"Whereas the Constitution of the United States and the Constitutions of the several states contemplate government by and for all the people and not by or for any particular class, group or interest:

"Now Be It Therefore Resolved, That the liberties of the people and the preservation of their institutions depend upon the control and exercise by the federal, state and municipal governments of whatever force is necessary to maintain at all hazards the supremacy of the law and to suppress disorder and punish crime."

THE LEGAL PERSONALITY OF A FIRM.

A partnership or firm is not, of course, as yet recognized in English law as having a legal personality of its own distinct from that of the persons who constitute it. Outside the law courts the notion of the firm being an entity distinct from its members-as a corporation is has become part of the average business man's mental equipment. Certainly there is a tendency, even among lawyers, to regard partnerships as separate entities on the footing of corporations, and possibly the business man's view may yet at no very distant date, by legis lation or judicial decision, become the technically correct view. The change would hardly be more revolutionary than that effected by the House of Lords' decision in the Taff Vale Railway case (1901 A. C. 426), that a trade union may be sued in its registered name, though "neither a corporation, nor an individual, nor a partnership between a number of individuals." The Legislature itself has much assisted the promulgation of the notion that a partnership has a distinct personality of its own by inserting in the Partnership Act, 1890, an express declaratory statement of the Scottish law on this point. By section 4 (2) of the Act it is formally enacted: "In Scotland a

firm is a legal person distinct from the partners of whom it is composed."

Cases like the Taff Vale case are, however, extremely rare, and abstract questions relating to the juridical nature of a partnership in English law are not likely to be raised directly in the courts. Such questions more commonly receive their answer indirectly, by the emergence of some principle forming the necessary fcundation of some declaration of an individual right or liability. And cases of this kind are quite as likely to arise for decision in the oversea courts as in those of the United Kingdom. In illustration of this two cases may be cited, one from New Zealand and the other from Ontario, each of which displays the tendency above noticed to regard a partnership as a separate legal entity. The New Zealand case is, indeed, of practical interest on other grounds, relating as it does to the elucidation of a difficult enactment-section 3 of the Mar ried Womens' Property Act, 1882.

The case referred to is Reeves v. Reeves' Official Assignee (1919 N. Z. L. R. 385), before the New Zealand Court of Appeal, and was concerned with the claim of a wife to prove in the bankruptcy of her husband for money lent him for purposes of his business. The husband carried on the business of a dairyman at one place, and was also a partner in a firm which also carried on a dairying business at another place. Both he and the firm became bankrupt. The wife had lent him money for his own business, and she sought to prove for her debt in competition with joint creditors of the firm, but after payment of the separate creditors of the husband. It was contended that under the relevant enactment, which is a transcription of section 3 of the English Married Women's Property Act, 1882, she must be postponed to all the creditors of the firm. By section 3 money of the wife lent to the husband for his business is to be "assets of her husband's estate in case of his bankruptcy, under reservation of the wife's claim to a dividend as a creditor * * after, but not before, all claims of the other creditors of the husband

have been satisfied." Several difficult points have cropped up under this section, and the only one that need be now noticed is the meaning of "others creditors of the husband." Does this expression include creditors of the firm of the husband and other persons taken together? There seems to be no reported case on this point. There is, however, the case of Re Tuff (1887 19 Q. B. D. 88), where it was held by Mr. Justice Cave that the section does not apply to a married woman lending money

to a firm in which her husband is a partner. "The circumstances of the two cases are entirely different," and it was held that section 3 applied only where the husband is the sole trader. The New Zealand Court held that "creditors of the husband" did not include creditors of the husband's firm, the firm and the partner being quite distinct one from the other. The wife was therefore not postponed to creditors of the firm.

The Ontario case-Henderson v. Strong (1919, 45 Ont. L. R. 215)-draws an even sharper distinction between partner and firm, though the case is less practical in its interest than the New Zealand one. A company in Ontario was constituted under the Companies Act of Canada-Rev. Stat. of Canada, 1906, c. 79. By section 29 (2) of this statute it is enacted "The company shall in no case make any loan to any shareholder of the company." One of the shareholders was a member of a partnership in Scotland, and a loan was made by the company to this Scottish firm. It was contended that the loan was illegal and void, as being made to a shareholder, but the Ontario Court would not accept this view, and held that there had been no loan to any shareholder, the firm and the partner being distinct entities, and the Scottish firm not being a shareholder in the company. Apart from the possibility of the status of the Scottish firm in Ontario being governed by Scottish law-which is, perhaps, doubtful the view. was definitely expressed that even in English law the firm and the partner were so distinct that the loan to the firm could not be regarded as in any sense a loan to the partner. The following observations of the Chief Justice of Ontario purport to be made entirely from the point of view of English, and not Scottish, jurisprudence: "Nor am I at all able to agree in the notion that the law does not recognize * * the separate existence of co-partnership firms; that they are in no sense legal entities. They may sue and be sued. * in most of their attributes they are much the same as incorporated companies of unlimited liability; and I can imagine no good reason for lawyers shocking business men and business methods with fine-drawn notions regarding the want of legal existence of concerns the actual existence of which is ever before the eyes of everyone." This will certainly "shock" the orthodox lawyer. Possibly some people will think it merely a little in advance of juridical public opinion. -English Exchange.

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