doing business within its limits. Louisville & Nashville R. R. v. Kentucky, 161 U. S. 701. On the other hand the state cannot in its regulation of railroad charges interfere in the rates for transportation between points within and without its own territorial limits. Wabash, etc., R. R. v. Illinois, 118 U. S. 557. In the case of Louisville & Nashville R. R. V. Eubank, supra, the state regulation of local charges is held invalid because the manner of such regulation will presumably affect the interstate rates of the carrier. Upon principle it would seem clear that the interference with interstate commerce should be very direct in order to set aside a regulation by the state of its domestic concerns. An enforced reduction of local rates will often compel a carrier to raise interstate rates in order to reap the accustomed profit, but such an effect upon interstate commerce would clearly be too remote to constitute an interference. The regulation that the carrier maintain a certain ratio between his state and interstate rates undoubtedly has a more direct effect upon interstate commerce, and judicial opinion may well differ as to whether the effect is sufficiently direct or not.

One consideration tending to negative the assumption that the interstate rate of the carrier will necessarily be affected by the provision in question appears not to have been noticed by the court. If as alleged the Franklin rate is reasonable and the Nashville rate is forced upon the carrier by water competition, it would seem to be a proper case for an application to the railroad commission for permission to maintain the existing rates or at least for relief from the letter of the requirements of the law. It is not to be assumed that such permission will wrongfully be refused. Moreover in case of an arbitrary refusal and the establishment of a local rate that is practically confiscatory, the carrier may avail himself of the Fourteenth Amendment and appeal to the federal courts. If this suggestion is sound it would seem that the assumed directness of the effect of the long and short haul provision upon the interstate rate is not entirely warranted, and that the protection of the carrier lies in the Fourteenth Amendment rather than in the commerce clause of the federal constitution.

UNAVOIDABLE FAILURE OF SUPPLY AS EXCUSE FOR PUBLIC AGENT'S REFUSAL TO SERVE. Is a corporation, which exercises the right of eminent domain and holds itself out as ready to furnish the public with a certain commodity, justified in refusing to serve new customers on the ground that such additional service would reduce the supply to the prior consumers below their reasonable requirements; or, having a limited supply, is the company bound to divide it equally among all members of the public who may wish to demand a share, regardless of the priority of application? The question in this precise form has not arisen with much frequency, possibly because the public agent in most instances has the ability to increase its supply to meet the demand and under such circumstances is held liable for failure to do so.

In a recent Indiana case a company had been organized for the purpose of furnishing natural gas for fuel to the citizens of Indianapolis. A property owner applied for a connection between her dwelling and the gas main, and the company refused on the ground that through unavoidable causes the supply of gas had failed to such an extent that

there was no more than sufficient for its present consumers. Under these circumstances the court issued a mandamus compelling the company to make the connection. State ex rel. Wood v. Consumers' Gas Trust Co., 61 N. E. Rep. 674. It is argued that the appellee in consideration of the extraordinary powers granted to it by the state, has undertaken to bring to the community a public benefit; that this benefit is for all alike who may wish to avail themselves of it; that "there can be no such thing as priority or superiority of right among those who possess the right in common;" and that a refusal by the appellee would be unjust discrimination against the relatrix.

It would seem that the court by a recognition of the settled rule in an apparently analogous class of cases might logically have reached a different conclusion. If a railroad, owing to an unusual influx of business, is unable to furnish sufficient cars for handling the freight, it may refuse to receive it without incurring liability. LAWSON, RTS., REM. & PRAC., § 1804. In such cases the carrier is not compelled to give the latest shipper a share of the accommodations and thereby proportionately diminish those of earlier shippers, but is allowed to carry in the order of presentation. Here the courts seem to recognize a priority of right which the principal case denies. The railroad is justified in refusing for the time being because its facilities have without its default become inadequate. In the principal case the failure of supply was likewise unforeseeable. In the one the impossibility is temporary, in the other permanent: a difference in degree, but apparently not a difference in kind. If the excuse is good in the former, it would seem to be good in the latter also.

REDUCTION OF DAMAGES ON ACCOUNT OF BENEFITS.—A rather novel point in the measure of damages has been recently presented. The Acanthus injured another ship in a collision. The liability was admitted, and the injured ship was dry docked for repairs. While in dry dock, the owners improved the opportunity to have her bottom cleaned and painted, and her bilge keels fitted, steps which they had contemplated before the collision but had not decided upon. This in no way interfered with the repairing, and did not detain the ship in dry dock any longer than it would otherwise have remained. Upon receipt of the bill for repairs and dry docking the owners of the Acanthus claimed a reduction of the dock charges on account of the facts above stated. The owners of the injured ship sued, and it was held that no reduction should be made. The Acanthus, 112 L. T. 153.

Notwithstanding the seeming fairness of the defendant's claim, there seems to be no ground of quasi-contract, on which to allow a reduction in the nature of a counter claim for the benefit of dry docking. There has been no unjust enrichment of the plaintiff at the expense of the defendant, since the defendant has not been compelled to pay any more than he would if the plaintiff had received no benefit. Ruabon S. S. Co. v. London Assurance, [1900] A. C. 6; KEENER, QUASI-CONT., 361.

There is more force in the argument that the advantage taken of the situation by the plaintiff should go in mitigation of damages. Cf. Marine Ins. Co. v. China, etc., S. S. Co., 11 App. Cas. 573. Where a benefit accrues to the plaintiff as a proximate result of a tort, the damages are mitigated. Luther v. Winnisimmet Co., 9 Cush. (Mass.) 171. If the own

ers of the injured ship had definitely decided to dry dock her for their purposes, or if it were necessary so to do, then by the dry docking at the defendant's expense they have really been saved an expenditure which they otherwise would have incurred. The question then is whether such dry docking is the proximate result of the collision. If it is, then there should be a reduction, the damages being the expense of restoring the ship to its former condition. See 2 SEDG., DAM., 8th ed., § 592. No allowance is made for new materials put in place of old materials in the course of such repairs, nor for an increase in the value of the ship by reason of the repairs. The Baltimore, 8 Wall. (U. S.) 377, 385; The Pactolus, Swab. 173. Nor is there any reduction by reason of the fact that some of the repairs made would shortly have been necessary to enable the ship to pass her classification survey. The Bernina, 55 L. T. R. 781. In view of the reluctance of the courts to allow a reduction for benefits, as illustrated by the results reached in the decisions cited above, it may be doubted whether the dry docking would be considered a proximate result of the collision and the reduction allowed. But whichever view may be preferable, the result in the principal case is sound. It does not appear that the dry docking was necessary or had been definitely determined upon by the owners of the injured ship, and as it cannot be said that they were saved an expense which they would otherwise have incurred, no definite benefit can be pointed out.

INSURABLE INTEREST. Courts and text-writers have for many years said that the insured must possess an "insurable interest" in the subject-matter of an insurance policy but this term has rarely been precisely defined. See Lucena v. Craufurd, 2 Bos. & Pul. N. R. 269. It has frequently been held that the interest need be neither an equitable nor a legal right or liability. Cf. Sun Ins. Office v. Merz, 64 N. J. Law 301; Boston Ins. Co. v. Globe Fire Ins. Co., 174 Mass. 229. A recent text-book states that "such an interest that pecuniary loss will result to the assured from the destruction of the property " is sufficient. MAY, Ins., 4th ed., $ 72, note. The vagueness of the term may proceed from confused ideas as to the purpose of the requirement. Although exact statements of this purpose are hardly to be found in the books, it seems to have been usually conceived either as the prevention of wagering policies or as the limitation of the amount recoverable to the damages suffered. It is believed, however, that neither the character of the insurance policy as a wager, nor the measure of damages depends upon the relation between the insured and the subject-matter of the policy.

At present, either by decision or by statute, wagers are illegal in probably all common law jurisdictions. Hence those insurance policies which are mere wagers are void. See Loomis v. Eagle, etc., Co., 6 Gray (Mass.) 396; Trenton, etc., Co. v. Johnson, 24 N. J. Law 576. Although in wagering contracts, as in insurance contracts, performance by one party is conditioned on contingencies more or less beyond the control of either party, yet the wagerer hopes to gain from his contract, the insured only to make himself whole. The difference lies solely in the intentions of the parties. Furthermore, partly, perhaps, as an approximation of the real intentions of the parties, partly as a judicial invention, the rule has become firmly established that the insurance contract is one of indem

nity only. From this rule it follows that the insured can in no case recover more than the actual damages that would have been sustained, had the contract not existed. It is to be noted that the prohibition against wagers invalidates the contract ab initio, while the rule that the insurance contract is one of indemnity assumes a valid contract and relates merely to the damages to be recovered. It may be that the statement, that an insurable interest is necessary to a valid policy, is but an abridged and inexact expression of the two rules stated. Possibly, however, the requirement creates a further limitation upon insurance

contracts.

Insurance provides a means whereby losses of various kinds, otherwise borne primarily by individuals, are distributed among the community at large. If the chance that loss may come to an individual on the happening of a certain event be very remote, then, even although insurance against the possible loss be not a wager, and although there could be no recovery upon the contract by the insured unless loss occurred to him, yet public policy may demand that no such insurance contract be made. To require that the insured stand in a certain relation to the subject-matter of the contract is in effect limiting, in the direction just stated, the kinds of losses that may be insured against. It may well be thought that public policy does not require a limitation of this sort.

In a case lately decided in Colorado the doctrine of insurable interest was involved. Öne in possession of land but not claiming title, insured buildings thereon under a bona fide belief that he owned them. The court allowed recovery on the policy for an amount not stated. American, etc., Co. v. Donlon, 66 Pac. Rep. 249. As the insured did not intend to make a wager the policy was rightly held valid. Cf. Marks v. Hamilton, 7 Ex. 323; but see Sweeny v. Franklin Fire Ins. Co., 20 Pa. St. 337. The measure of damages should have been the actual loss occasioned to the insured by the destruction of the buildings.

ACCRUAL OF CAUSE OF ACTION FOR FAILURE OF SURFACE Support.— The question whether the owner of the surface of land acquires a right of action against the owner of the subjacent strata at the moment the latter removes the support, or only when the actual subsidence of the surface occurs, has not arisen often in America. In England it has come before the courts with some frequency, and it has there been decided by a unanimous opinion of the House of Lords that the Statute of Limitations begins to run not from the time of the excavating, but from that of the cave-in. Backhouse v. Bonomi, 9 H. L. Cas. 503. While few American cases raise the precise point many courts evidently regard the English doctrine as the settled rule. See Smith v. Seattle, 18 Wash. 484. A discussion of this point in a recent Pennsylvania case consequently arouses interest when it appears that the court takes a directly contrary position and holds that the Statute runs from the date of the mining. Noonan v. Pardee, 50 Atl. Rep. 255. While acknowledging the final decision of Backhouse v. Bonomi, supra, the court regards it as being ill adapted to the conditions of coal mining in America. The court argues that since the plaintiff in the principal case knew that mines existed below his land, and since he had a right to investigate, and see that proper support had been left, his right of action arose when the mine

owner removed coal without leaving such support. To the argument that the plaintiff by careful observation might not have been able to discover the defendant's breach of duty, the court answers that that is "one of the incidents attending the purchase of land over coal mines." Later the court refers to the right of the surface owner to sue, as a "right which from the nature of the case could not have had more than a doubtful existence before the actual damage occurred an admission which seems to detract from the weight of the earlier reasoning.

The English rule regards the plaintiff's right as a right to the ordinary undisturbed enjoyment of the surface. The defendant's right on the other hand is to excavate the minerals from the subjacent strata, and so long as he acts without disturbing the plaintiff, he is within his rights. When the subsidence occurs, the plaintiff's enjoyment of the surface is interfered with, and his right of action accrues. In an apparently analogous class of cases where a railroad builds an embankment but negligently fails to put in proper drainage culverts and flood water is at times thrown on the plaintiff's land, the courts seem almost universally to have held that the Statute runs, not from the building of the embankment, but from the time of actual damage to the plaintiff. St. Louis, etc., Co. v. Briggs, 52 Ark. 240. On the whole then it would seem that the position of the principal case is hardly to be supported as against the reasonable and convenient rule of the English courts.

THE PAROL EVIDENCE RULE AS APPLIED TO INSURANCE POLICIES. The United States Supreme Court has handed down a decision that will have a far reaching effect upon the liability of insurance companies. The plaintiff brought action upon an insurance policy issued by an agent of the defendant. The policy contained conditions that it should be void if other insurance existed upon the property covered by its terms, and that no agent should have power to waive any condition of the policy unless such waiver were endorsed in writing upon the policy. The defence was that the property covered by the policy was in fact insured in another company at the time of the issuance of the policy. The plaintiff maintained that the defendant's agent, who had full powers to accept risks and issue policies, knew of the additional insurance when he issued the policy, and should be deemed to have waived the provision. The court, with three judges dissenting, held that the knowledge of the agent would not avoid the stipulation in the policy. Assurance Co. v. Building Association, 22 Sup. Ct. Rep. 133.

Although there is a conflict upon the point the great weight of authority is opposed to this decision. The reasoning of the principal case is that the insurance policy constitutes the contract of the parties, that by its terms the limitations of the agent's authority are brought home to the insured, and that to sustain the plaintiff's contention would be to vary a written contract, in violation of the parol evidence rule. As a matter of fact, however, a binding insurance contract is commonly made before the policy is issued. The agent of the insurer acting within the apparent scope of his authority agrees to assume the risk and issue the policy, and the insured agrees to pay for the policy when issued. The policy is merely the reduction into writing of a contract already existing, and if a loss occurs before the policy is issued the insurer is liable. In