sion of the non-existent property, which possession is conceived to be subject to present transfer. The right of the assignee of a non-existent chose in action has sometimes been confused with that of the purchaser of such future property. His right, however, rests on an entirely different basis. The earlier common law even refused to give effect to assignments of existing contractual rights. Eventually the rights of such assignor and assignee were worked out on the principle of an irrevocable agency in the latter to collect and retain to his own use the obligation owed to the assignor. This doctrine has marked theoretical and practical advantages, but it is to be observed that it makes possible the effectual "assignment" of a right not yet in being, without imposing even the limitations of the fiction of potential possession. However, the courts, apparently impressed by the fact that public policy is opposed to permitting one to mortgage himself too far into the future, have declined to give effect to assignments of future wages unless to be earned in an employment existing at the time of assignment. This subject has been brought into some prominence by a recent conflict of authority. When an assignment of wages to be earned under an existing employment is given as security for a loan, and the assignor thereafter receives his discharge in bankruptcy, the question arises whether or not the assignee may collect wages earned by the assignor after the discharge. It has been held that the assignee had, at the time of bankruptcy, a valid lien on the future wages, which is preserved by the Bankruptcy Act.5 The three other cases dealing with the problem hold that such an assignee can have no lien until the wages have been earned, and therefore that at the time of discharge there is no valid lien to be preserved. The Supreme Court of Massachusetts has recently held that such an assignment operated to transfer potential possession of the wages to be earned after bankruptcy, and that the assignee therefore had, at the time of the discharge, a valid lien. Citizens' Loan Ass'n v. Boston, etc., R. R. Co., 82 N. E. 696.

4

6

All of these cases seem to overlook the nature of the so-called "assignment" of choses in action. A power of attorney to collect wages which may chance to be earned in the future, cannot with propriety be spoken of as a lien, even though given as security for a present obligation. On the other hand, there appears to be no provision in the Bankruptcy Act which can operate to disturb this agency of the assignee. Indeed, it is recognized that such powers of attorney to collect choses in action which were in existence before the bankruptcy, survive the discharge. It seems to follow that such a power of attorney must equally be effectual to permit the assignee to collect the bankrupt's after-acquired choses in action. The weight of the objection to this rule founds itself on "the spirit of the bankruptcy laws." Undoubtedly the dominant purpose of such enactments is to appropriate the whole of the debtor's present property to the payment of his debts and to permit him to retain his future earnings as against former creditors.

1 Grantham v. Hawley, Hob. 132; Hull v. Hull, 48 Conn. 250.

2 See Prof. Ames in 3 HARV. L. REV. 337 et seq.

3 Herbert v. Bronson, 125 Mass. 475. See Kane v. Clough, 36 Mich. 436; Garland v. Harrington, 51 N. H. 409.

Mallin v. Wenham, 209 Ill. 252, 258.

Bankruptcy Act, § 67 d, 30 Stat. at L. 564.

In re West, 128 Fed. 205; In re Home Discount Co., 147 Fed. 538, 547; Leitch v. Northern Pacific Ry. Co., 95 Minn. 35.

Stedman v. Gassett, 18 Vt. 346; Hayes v. Pike, 17 N. H. 564. Cf. In re Oliver, 132 Fed. 588.

8 See 2 Bl. Comm. 471, 472.

Since the present Act fails to provide for the extinction of such powers to collect after-acquired rights of action, that object seems not to have been entirely secured.

JUDICIAL RESTRICTIONS ON THE LEGISLATIVE POWER OF TAXATION. It is well settled by the courts, both state and federal, that taxation must be for public purposes. In some cases this conclusion is based on express or implied constitutional provisions.2 But in a number of leading cases it is not so based.3 It is there drawn from question-begging theories of the nature of legislation, from supposed implied reservations of private rights in the so-called social compact made at the establishment of government, and even from the common dictionary definition of taxation. These sources are clearly questionable. It seems, however, that the doctrine of these cases was established, not on account of its constitutional or logical necessity, but because it was very desirable and because the courts, being regarded as guardians of private rights even when not secured by constitutional provisions, were ready to declare unconstitutional statutes infringing such latent rights. In the assumption of such power the courts seem to have encroached on the functions of the legislature by defining without constitutional requirement the purposes for which it seems wise or politic to tax.

After establishing the public purposes of taxation, whether properly by force of a constitutional provision or improperly by encroaching on the powers of the legislature, courts further usurp legislative prerogatives by refusing to declare taxing acts public, the purposes of which do not fall within a restricted and artificial definition. This usurpation affects all legislative taxing acts for purposes lying between the restricted definition and the reasonable and liberal definition which the legislature should be allowed to follow. To justify the courts in declaring a tax void, the absence of all possible public interest should be so clear that no reasonable man could consider it promotive of the public welfare. If such taxation is unjust or excessive, the only security for correction is the legislative body. Ultimately the responsibility will rest where it ought, on the electors. This seems good politics and, moreover, respects our tripartite form of government.

A class of cases involving these principles are the decisions as to the constitutionality of state acts taxing insurance companies for the benefit of disabled firemen. When applying only to foreign insurance companies, such statutes have been sustained as police regulations. But other cases have more correctly held that, as the revenue purpose is more important than the regulative, the imposition is a tax. As a tax, it has been held invalid as offending not only against specific constitutional provisions, but against the

1 Cole v. La Grange, 113 U. S. 1.

2 Lowell v. Boston, 111 Mass. 454, 461; Trustees v. Boone, 93 N. Y. 313.

3 Loan Ass'n v. Topeka, 20 Wall. (U. S.) 655; Calder v. Bull, 3 Dall. (U. S.) 386, 387:

See 12 HARV. L. REV. 499; Phila. Ass'n v. Wood, 39 Pa. St. 73.

: City of Minneapolis z. Janney, 86 Minn. III ; Broadhead v. Milwaukee, 19 Wis. 624. 6 See Bank v. Billings, 4 Pet. (U. S. 54,563

7 Trustees v. Boone, supra; Fire Dept. v. Helfenstein, 16 Wis. 136.

8 See Phoenix Assurance Co. v. Fire Dept., 117 Ala. 631; San Francisco v. Ins. Co., 74 Cal. 113; State v. Merch. Ins. Co., 12 La. Ann. 802; Firemen's Benev. Ass'n v. Lounsbury, 21 Ill. 511; Henderson v. London, etc., Co., 135 Ind. 23: State v. Wheeler, 33 Neb. 563.

10

latent rights and reservations above mentioned. On the other hand, it has been held valid, as well under the most liberal conception of the legislative power of taxation as under the requirement of public purposes." A recent South Carolina case regards such a tax as not for public purposes and consequently invalid. Aetna Fire Insurance Co. v. Jones, 59 S. E. 148. Had the court followed the Alabama case,1 11 which it misconceived and which seems the most satisfactory case on this subject, the statute would have been considered within the powers of the legislature. For it is clear that there is the possibility that such a tax promotes the public welfare. It is not, therefore, a question of right for the courts, but a question of policy for the legislature.

INEFFECTUAL CHANGE OF THE BENEFICIARIES OF MUTUAL BENEFIT CERTIFICATES. — Upon the death of a member of a mutual benefit association who has made an ineffectual change of beneficiaries, the problem is presented whether the proceeds should be paid to the original beneficiary or to the persons designated by the society's rules or by statute to receive them if no beneficiary is named. The attempted change may be ineffectual because the second beneficiary is incapable of taking by the rules of the society or by statute, or because of failure to comply with the prescribed formalities. It should be noted that compliance with the formalities is not always necessary for an effectual change; for before the member's death the society can waive such compliance and complete the change, and the original beneficiary cannot object, since, unlike the beneficiary of an ordinary insurance policy, his rights vest only on the member's death.' If, however, the change is ineffectual for any reason, the important question then is, whether or not the act done operated as a revocation of the original designation. If the change attempted was in the nature of an assignment or one which, if ineffectual, leaves the original obligation payable on its face to the first beneficiary, the general rule is that he may recover. There may, however, be grounds for equitable interference. If the cause of the invalidity of the change is attributable to the first beneficiary, he will not be allowed to profit by his own wrong, and the proceeds will be paid as though the change had been accomplished. The same result may be reached if the insured did all in his power to make the change but was prevented by death or because the conditions were impossible of performance. Unless some such exceptional case exists, the fact that the original designation has never been properly revoked will protect the first beneficiary.

If, however, there has been a sufficient revocation of the original designation, the rights of the first beneficiary are completely destroyed. A contrary result, it is true, has been reached in several cases which hold that although the original certificate was surrendered and a new one issued, as the second

9 Phila. Ass'n v. Wood, supra ; San Francisco v. Ins. Co., supra ; State v. Wheeler, supra.

10 Firemen's Benev. Ass'n v. Lounsbury, supra; Phoenix Assurance Co. v. Fire Dept., supra.

11 Phoenix Assurance Co. v. Fire Dept., supra.

1 Titsworth v. Titsworth, 40 Kan. 571. Cf. McLaughlin v. McLaughlin, 104 Cal. 171.

2 Elsey v. Odd Fellows', etc., Ass'n, 142 Mass. 224.

3 Grand Lodge v. Child, 70 Mich. 163. See 16 HARV. L. REV. 67.

was invalid, the beneficiary named in the first should recover. This result, however, seems unsound. Since a certificate may be surrendered or revoked without a new beneficiary being named, it would seem that when the revocation is once complete all the beneficiaries' rights are forever extinguished, and the issue of any later certificate, whether invalid or not, is immaterial. A recent case reaches this result, holding that when the new certificate is invalid the proceeds should be distributed as though no designation had ever been made. Grand Lodge, etc., v. Mackey, 104 S. W. 907 (Tex., Civ. App.). The only possible theory on which a contrary result can be justified is on analogy to the law of dependent relative revocation of wills, where, in certain cases, when an attempt is made to substitute an invalid gift for a valid one, the court will set aside the revocation and allow the old gift to stand. But the better view in such cases is that if the revocation is not really conditional, but absolute, although made because of the desire to change the legatee, the old gift will not be revived unless that result is clearly the intent of the testator." If equity would interfere only in cases where such proof is made, little objection could be made to an extension of the doctrine to the revocation of mutual benefit certificates. For the indiscriminate interference which has confused the law of both subjects there can be no

excuse.

CONFLICTING RECEIVERSHIPS. — Recently New Jersey creditors of a New York corporation secured the appointment of receivers for its property by the federal circuit court. Shortly thereafter, the attorney-general of New York instituted proceedings in the state courts to dissolve the corporation, pursuant to statute, because it had been insolvent for a year; and moved for the appointment of receivers for its property, as permitted by statute in such proceedings. The court, following Mr. Alderson's work on Receivers, granted the motion, but, though it believed its receivers entitled to possession, instructed them in deference to a spirit of comity not to molest the federal receivers, and to request the federal court to relinquish control. People v. N. Y. City Ry., 107 N. Y. Supp. 247. The moderate form of this decree reaches a proper result,' but it is believed that the attitude of the court was wrong both in its reasoning and on authority. The inviolability of property in the hands of a receiver appointed by a court of competent jurisdiction is well settled. In the present case the court admitted that there were facts sufficient to give either state or federal court jurisdiction, and that when two courts have concurrent jurisdiction of a controversy, the assumption of jurisdiction by one court excludes the other. It went on, however, to quote a dictum of Mr. Justice Bradley: "But where the objects of the suits are different, this rule does not apply, although the thing about or in reference to which the litigation is had is the same in both cases." It then pointed out that the suit in the federal court was to continue the exist

2

4 Grace v. N. W., etc., Ass'n, 87 Wis. 562; Smith v. B. & M., etc., Ass'n, 168 Mass. 213.

Cullin v. Knights of Maccabees, 77 Hun (N. Y.) 6.

6 Accord, Carson v. Vicksburg Bank, 75 Miss. 167.

7 See Tupper v. Tupper, 1 Kay & J. 665.

1 State v. Port Royal, etc., Ry., 23 S. E. 363, 368; aff. 45 S. C. 413; ibid. 470.

2 In re Tyler, 149 U. S. 164; O'Mahoney v. Belmont, 62 N. Y. 133, 149. See 17 HARV. L. REV. 196.

3 Wilmer v. Atlantic, etc., Ry., 2 Woods (U. S.) 409, 425.

ence of the corporation, while that in the state court was to terminate it. Therefore, the court argued, this case came within the exception and not the rule, and consequently the federal court's jurisdiction of the property was not exclusive. The reading of the entire decision from which the court quoted demonstrates that it completely misunderstood and misused the words it borrowed. There the question before the state court was the validity of a sale, and that before the federal court the rights of bondholders. When the federal court discovered that the state receivership was prior in time, it refused a writ of assistance to its own receiver. After laying down the rule and exception above stated, it pointed out that since the questions before the courts were different, there was no conflict of jurisdiction as to the question, and both suits could go on. Then it proceeded to show that as to the res there was a conflict, and decided that the court first getting jurisdiction over that could keep it. The distinction between conflict of jurisdiction as to the question and as to the res, which here escaped the New York court, has frequently been taken. It is undoubtedly established that the court first acquiring jurisdiction over the res draws to itself the exclusive right to dispose of it for the purposes of the litigation then before it. Even willingness of the receiver to surrender the res is immaterial, since the property in fact is in the hands of the court. The courts say that where either state or federal court appoints a receiver, the result as to the other is as if the res were removed to another territorial sovereignty.7

Another argument of the court in support of its view was that, since the corporation is the creature of the state, the federal court by appointing a receiver cannot prevent the state from dissolving it. As already shown, the state may proceed with its dissolution suit, since that is different from the suit before the federal court. The possession of the property of the corporation may be desirable in such a proceeding, but it is not necessary. The inconvenience thus resulting is merely one of the many attendant upon divided jurisdiction. Furthermore, the court is not supported by the cases cited, except one passing dictum. In fact, unnoticed by the court there is authority opposed to its contention."

8

RIGHTS OF SECURED CREDITORS UPON INSOLVENCY OF THE DEBTOR OR HIS ESTATE. The rights of a secured creditor against an insolvent debtor may be adjusted in one of two ways: either he may be required first to exhaust his security and credit the proceeds on his claim; or he may be allowed to recover a dividend on his full claim and resort to his security for

* De La Vergne, etc., Co. v. Palmetto, etc., Co., 72 Fed. 579; Metropolitan Trust Co. v. Lake, etc., Ry., 100 Fed. 897.

5 Shields v. Coleman, 157 U. S. 168; Mil. & St. P. R. R. v. Mil. & Minn. R. R., 20 Wis. 165. This principle is also applied in analogous cases: property in receiver's hands subject to a maritime lien cannot be disturbed. See Moran v. Sturges, 154 U.S. 256; nor taken by eminent domain, Western, etc., Co. v. Atlantic, etc., Co., 7 Biss. (U.S.) 367. See also Heidritter v. Elizabeth, etc., Co., 112 U. S. 294; State v. Marietta, etc., R. R., 35 Oh. St. 154.

6 The E. L. Cain, 45 Fed. 367.

In re Tyler, supra, 186; The E. L. Cain, supra, 369.

8 Petition of Kittanning Ins. Co., 146 Pa. St. 102, 105.

9 Lake, etc., Co. v. Brown, etc., Co., 44 Fed. 539, aff. sub nom. Leadville Coal Co. v. McCreery, 141 U. S. 475; Mercantile Trust Co. v. Missouri, etc., Ry., 48 Fed. 351. The federal receiver is not even a necessary party to the state's dissolution suit. City Water Co. v. Texas, 88 Tex. 600.