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sity for the supervision of Ham, and it is not alleged or shown that any delay or damage resulted for want of his supervision.

Some other pretext was needed for putting Ham out of the enterprise and taking Kuykendall in. This was found in the alleged fact that Ham had agreed with Wickwire to assist him in negotiating the county bonds, or enough of them to raise $5,000, and had left the neighborhood and failed to perform that part of his contract, and that Wick wire, for want of $5,000 in cash, was unable and refused to proceed with the construction of the building. Thereupon it became necessary for Kuykendall, who insisted that he was liable as surety for Frick for the building of the court-house, to take Ham's place, and negotiate the bonds so that the work might proceed to completion within the time limited by the Frick contract. But the written contract with Wickwire, which embodied the result of his treaty with Ham & Pearce, contained no provision by which the latter bound themselves to negotiate the bonds for Wickwire. He agreed to receive the bonds themselves as his compensation. Whatever Ham may have said to Wick wire about negotiating the bonds was a mere voluntary and conditional offer, and formed no part of the consideration for the contract, and the absence of Ham and his failure to help sell the bonds did not release Wickwire from his obligation to perform his contract; nor could the neglect of Ham to perform his individual promise, made not to Pearce but to Wickwire, furnish a ground upon which Pearce could legally dissolve his partnership with Ham without Ham's consent. But the testimony in the record is abundant to show that the bonds sold readily at their market price, which was not less than 90 cents on the dollar. They were the bonds of a solvent county, and bore 10 per cent. interest, payable annually, and no sort of defense to them had ever, so far as appears, been raised. There was, therefore, no reason why they should not readily sell for 90 cents on the dollar, which was the price Wick wire was willing to take for thein. Anybody could have sold them. But the hollowness of his excuse for ; turning Ham out of his enterprise and taking Kuykendall in, is found in the fact that when Wickwire came to Pearce and told him he could not go on with the contract for want of $5,000 in money, Pearce bad in his possession between $8,000 and $9,000 in Johnson county bonds, with more than one year's interest at 10 per cent. due thereon, and over $400 in a special order, turned over to him by Kuykendall as the agent of Frick, and being part of the first installment on the contract for building the court-house. These bonds and the special order were without question the property of the partnership of Ham & Pearce. All that it was necessary for Pearce to do was to sell the bonds and furnish Wickwire with the money he said he wanted, or hand him the bonds. Wick wire testifies that if the bonds had been handed him he thinks he would have begun the work. But Pearce, according to his own testimony, never offered Wickwire the bonds, or even informed him that he had them in his possession, and he does not aver or swear that he made any effort to sell the bonds; and, although he avers in his answer that he tried to raise the $5,000 for Wickwire, he does not testify to the fact in his deposi. tion. It therefore plainly appears from the evidence that when Wickwire told Pearce that he could not begin the work for want of $5,000 in money, the latter had assets of the firm of Ham & Pearce in his hands to the amount of nearly $10,000, which could have been readily disposed of at 90 cents on the dollar; and it does not appear that Pearce made any effort to sell the bonds, or in any other way raise the sum needed.

There is nothing in the testimony to show that Pearce did anything more towards carrying on the business enterprise of the firm of Ham & Pearce than was done by Ham. He did not superintend the work, or manage the finances of the firm. His only part in the business of building the courthouse appears to have been to keep partial and fragmentary accounts for *Kuykendall. It is true that, by some arrangement with Wickwire, he aos

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cepted the orders of Kuykendall, given for labor and materials, and paid them in merchandise to the amount of about $20,000; but this was his own private business as a merchant, carried on for his individual profit.

In his answer, Kuykendall bases his defense on the ground that all he did in the matter was in the interest of Frick, and as his agent, and to protect himself for his liability as surety on Frick's bond. But, when he testifies in the case, it appears that he was acting for himself only, and proposed to keep his share of the profits made in the erection of the court-house. He knew that when Wickwire was asserting that he could not begin the work for want of $5,000 in cash, Pearce had Johnson county bonds belonging to the firm of Ham & Pearce, which could have been readily turned into cash at 90 cents on the dollar, sufficient to raise between $8,000 and $9,000, for he himself had delivered these bonds to Pearce for the firm. He knew, therefore, that the excuse of Pearce, that he could not raise money for Wickwire, was a subterfuge. Both he and Pearce knew that Ham had not abandoned the enterprise, for, in the spring of 1870, Pearce visited Ham in Indiana, and proposed to him that they should allow Kuykendall an interest of one-third in their venture, and that Ham declined to accede to the proposition.

Kuykendall testifies that he sold $16,000 of the county bonds for 80 cents on the dollar, but he does not mention the name of any purchaser at that price, and no witness testifies that he ever bought a bond for less than 90 cents, except one, who says he bought two bonds, not of Kuykendall, but of one McDemot, who at first asked 85 or 90 cents on the dollar for this bond, but afterwards took 75 cents, because, as he said, "he was bound to have some money.' But even if Kuykendall did sell a part of the bonds at 80 cents on the dollar, he cannot impose upon Ham a loss incident to his own unwarrantable interference in Ham's affairs.

In their answers both Pearce and Kuykendall aver that after the alleged cancellation of the contract between Ham & Pearce and Wickwire, Pearce had no further concern with the enterprise or interest therein; and Kuykendall avers that, as agent of Frick, he sublet the contract to Wickwire. But in his deposition Kuykendall testifies that he divided equally with Pearce the profits made on the contract, which statement is not contradicted by Pearce in his testimony. Ham had an interest in the assets and prospective profits of the firm of Ham & Pearce. It does not appear that he failed to perform any duty which, as a member of the firm of Ham & Pearce, he had undertaken to perform; or that, with good faith on the part of Pearce, the partnership enterprise could not have been successfully carried out. And however the ques. tion may be decided whether one partner may, by his own mere will, dissolve a partnership formed for a definite purpose or period, it is clear that upon such a dissolution one partner cannot appropriate to himself all the partnership assets, or turn over the share of his partner to another with whom he proposes to form a new partnership.

The case, as presented by the evidence, is this: Pearce undertook, without any just cause, to exclude Ham, his partner, from an interest in a valuable contract, in which they were equally concerned, and to take in Kuykendall in his stead, and Kuykendall, knowing that Pearce could not rightfully exclude Ham, conspired with Pearce to accomplish that purpose, and undertook to appropriate to himself the profits of the contract which of right belonged to Ham. It is clear that these actings and doings of Kuykendall and Pearce had no effect on the rights of Ham; that he is entitled to one-half of the profits of the contract. This conclusion finds ample support, if support be needed, in the case of Ambler v. Whipple, 20 Wall. 546. The profits are easily ascertained. They would have consisted of $10,000 in the bonds of Johnson county, bearing 10 per cent. interest, and at the time of the bringing of this suit there was at least three years' interest due on the bonds, making in principal and interest $13,000. Estimating the bonds to be worth

only 90 cents on the dollar, the amount due Ham exceeded the decree rendered in his favor by the circuit court, even after allowing Knykendall a reasonable compensation for any services rendered by him. * The entire profits were appropriated by Pearce and Kuykendall, and they must account to Ham for his share.

Decree affirmed.

*576

(113 U. S. 674)
CHICAGO LIFE INS. Co. 0. NEEDLES, Auditor, etc.

(March 2, 1885.) 1. CONSTITUTIONAL LAW-IMPAIRING THE OBLIGATIONS OF A CONTRACT-CHARTERED IN.

SURANCE COMPANY-Laws REGULATING THEIR BUSINESS.

A state, having once granted a charter to an insurance company, does not, by subsequent legislation, intended to regulate insurance companies according to the requirements of good morals and public policy, impair the obligations of a contract, within the meaning of the constitution of the United States, even though the

effect of such legislation be to compel the company to suspend business. 2. SAME-COXTRACTS-EFFECT or LEGISLATIVE ACT_COMPANY AND STATE-COMPANY AND

POLICY-HOLDER.

An act of legislation, which imposes on insurance companies the necessity of suspending business at any time when their assets are less than the amount of their outstanding policies, and 4 per cent. thereof, does not bear towards companies chartered by the state the character of an act impairing the obligations of contracts between either the state and the company, or the policy-holder and the company, which had to suspend under the legislative condition. In Error to the Supreme Court of the State of Illinois. * By an act of the general assembly of Illinois, approved February 16, 1865,* certain named persons were created a body politic and corporate by the name of the Travelers' Insurance Company, with authority to carry on the business of insuring persons against the accidental loss of life or personal injury sustained while traveling by railways, steamers, and other modes of conveyance. Subsequently, by an act approved February 21, 1867,—the provisions of which were formally accepted by the company,—its name was changed to that of the Chicago Life Insurance Company, and it was invested with power to make insurance upon the lives of individuals, and of persons connected by marital relations, to those applying for insurance, or in whom the applicant had a pecuniary interest as creditor or otherwise; “to secure trusts, grants, annuities, and endowments, and purchase the same, in such manner, and for such premiums and considerations, as the board of directors or executive committee shall direct." That, as well as the original act, was declared to be a public act, to be liberally construed for the purposes therein mentioned.

A general law of the state, approved March 26, 1869, and which took effect July 1, 1869, entitled “An act to organize and regulate the business of life insurance,” provides, (section 10:) “When the actual funds of any life insurance company doing business in this state are not of a net value equal to the net value of its policies, according to the combined experience,' or 'actuaries' rate of mortality, with interest at four per centum per annum, it shall be the duty of the auditor to give notice to such company and its agents to discontinue issuing new policies within this state until such time as its funds have become equal to its liabilities, valuing its policies as aforesaid. Any officer or agent who, after such notice has been given, issues or delivers a new policy from and on behalf of such company before its funds have become equal to its liabilities as aforesaid, shall forfeit, for each offense, a sum not exceeding one thousand dollars.” The same statute requires, among other things, every life insurance company incorporated in Illinois to transmit to the auditor, on or before the first day of March, in each year, a sworn statement of its business, standing, and affairs, in the form prescribed or author. ized by law and adapted to its business; empowers that officer to address

•577

inquiries to any company in relation to its doings or condition, or to any other matter connected with its transactions, to which it was required to make prompt reply; and makes it his duty to make, or cause to be made, an exami. nation of its condition and affairs, whenever he deems it expedient to do so, or whenever he has good reason to suspect the correctness of any annual statement, or that its affairs are in an unsound condition. The provisions relating to life insurance companies, incorporated in other states, and doing business in Illinois, need not be here examined, or their effect determined.

By another general statute, approved February 17, 1874, in force July 1, 1874, it is provided as follows:

“Section 1. If the auditor of state, upon examination of any insurance company incorporated in this state, is of the opinion*that it is insolvent, or that its condition is such as to render its further continuance in business hazardous to the insured therein, or to the public, or that it has failed to comply with the rules, restrictions, or conditions provided by law, or has exceeded or is exceeding its corporate powers, he shall apply by petition to a judge of any circuit court of this state to issue an injunction restraining such company, in whole or in part, from further proceeding with its business, until a full hearing can be had, or otherwise, as he may direct. It shall be discre tionary with such judge either to issue said injunction forth with, or to grant an order for such company, upon such notice as he may prescribe, to show cause why said injunction should not issue, or to cause a hearing to be had on complaint and answer, or otherwise, as in ordinary proceedings in equity, before determining whether an injunction shall be issued. He may, in all such cases, make such orders and decrees, from time to time, as the exigencies and equities of the case may require, and in any case, after a full hearing of all parties interested, may dissolve, modify, or perpetuate such injunction, and make all such orders and decrees as may be needful to suspend, restrain, or prohibit the further continuance of the business of the company.”

“Sec. 5. When the charter of any such insurance company expires, is forfeited, or annulled, or the corporation is restrained from further prosecution of its business, or is dissolved, as hereinbefore provided, the court, on application of the auditor, or of a member, stockholder, or creditor, may, at any time before the expiration of said two years, appoint one or more persons to be receivers, to take charge of the estate and effects of the company, including such securities as may be deposited with the auditor or treasurer of state, and to collect the debts due, and property belonging to it, with power to prosecute and defend suits in the name of the corporation, or in their own names, to appoint agents under them, and do all other acts necessary for the collection, marshaling, and distributing of the assets of the company, and the

closing of its concerns; and, when necessary for the final settlement of its un. on finished business, the powers of such receivers may be continued as long as the court deems necessary therefor."

"Sec. 9. The mode of summoning parties into court, the rules of practice, course of procedure, and powers of courts, in cases arising under this act, shall be the same as in ordinary proceedings in equity in this state, except as herein otherwise provided.”

Under the authority conferred by the latter statute the auditor caused an examination to be made by the chief clerk of the insurance department of the state into the condition of this company. That officer reported that it had been doing a losing business for several years, was insolvent within the meaning of the statute, and that immediate steps should be taken to appoint a receiver, to the end that the affairs of the company be wound up as quickly as possible, as being for the best interests of its policy-holders. As the result of that examination, the present proceedings were commenced by the auditor in the circuit court of Cook county under the said act of 1874. The petition filed by him shows that, in his opinion, the condition of the company rendered its

*878

further continuance in business hazardous to the insured. He prayed that the company be enjoined from further prosecuting its business; that a receiver be appointed to take charge of its real estate and effects; and that such other relief be granted as should be meet. An injunction was issued, and a receiver appointed, with authority to take possession of the property of the company; the latter being directed to execute all conveyances necessary to vest in him full title to all its property, assets, and choses in action. The company, by its answer, put the plaintiff on proof of all the material allegations of the petition. At the final hearing, it moved the court, upon written grounds, for a final decree in its behalf; one of which was that the statutes of the state, under which these proceedings were had, were in violation of the constitution of the United States, in that they impaired the obligation of the contract between the state and the company, as well as of the contracts between the company and its policy-holders and creditors. This motion was denied, and a final judgment rendered perpetually enjoining the company from further prosecution of its business. From that judgment a writ of error was prosecuted to the suprenie court of the state, where, among other things, was assigned for error the refusal of the court of original jurisdiction to adjudge that the said statutes of Illinois were in violation of the constitution of the United States. The judgment of the inferior court was, in all things, affirmed by the supreme court of the state, and from that judgment of affirmance the present writ of error is prosecuted.

C. C. Bonney, for plaintiff in error. J. L. High and E. B. Sherman, for defendants in error.

Mr. Justice HARLAN, after stating the facts in the foregoing language, delivered the opinion of the court:

The supreme court of Illinois did not, in terms, pass upon the claim distinctly made there, as in the court of original jurisdiction, that the statutes in question were in derogation of rights and privileges secured to appellant by the constitution of the United States. But the final judgment necessarily involved an adjudication of that claim; for, if the statutes, upon the authority of which alone the auditor of state proceeded, are repugnant to the national constitution, that judgment could not properly have been rendered. This court, therefore, has jurisdiction to inquire whether any right or privilege, protected by the constitution of the United States, has been withheld or de nied by the judgment below. And our jurisdiction is not defeated because it may appear, upon examination of this federal question, that the statutes of Illinois are not repugnant to the provisions of that instrument. Such an examination itself involves the exercise of jurisdiction. The motion to dismiss the writ of error upon the ground that the record does not raise any question of a federal nature must, therefore, be denied.

The case upon the merits, so far as they involve any question of which this court may take cognizance, is within a very narrow compass. The main proposition of the counsel is that the obligation of the contract which the company had with the state, in its original and amended charter, will be impaired, if that company be held subject to the operation of subsequent statutes, reg. ulating the business of life insurance and authorizing the courts, in certain contingencies, to suspend, restrain, or prohibit insurance companies incorporated in Illinois from further continuance in business. This position cannot be sustained, consistently with the power which the state has, and, upon every ground of public policy, must always have, over-corporations of her own creation. Nor is it justified by any reasonable interpretation of the language of the company's charter. The right of the plaintiff in error to exist as a corporation, and its authority, in that capacity, to conduct the particular business for which it was created, were granted, subject to the condition that the privileges and franchises conferred upon it should not be abused, or so employed as to defeat the ends for which it was established, and

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