Avey and S. W. Ables, involving a settlement of accounts between them, the defendant,

instructions to take charge of certain property, including some growing corn, in which Avey and Ables had an interest, and to gather the corn and crib and sell it and report his acts as receiver to the court; that Burnley qualified as receiver, and at his sale of the property the plaintiff, E. W. Avey, bought the corn, which was in two cribs on the place, for 55 cents per bushel, at the crib; that Burnley represented to Avey there were 1,791 bushels of corn in the two cribs, and that Avey was to pay him $985.05 therefor, which was at the agreed price of 55 cents per bushel; and that Avey paid said sum to Burnley.

minated by the trustees and the proceeds of the fund paid to the Louisville Baptist Orphans' Home. The city of Louisville at- J. R. Burnley, was appointed receiver, with tempted to tax the "Norton Trust Fund" while it was in the hands of the trustees, and before it was paid over to the Baptist Orphans' Home. In asserting the exemption of the fund from taxation, this court said: "While the beneficiary of the trust fund is not given the immediate care and control of it, it is the equitable owner of it, and it could not rightfully be diverted to any uses or purposes other than those designated by the testator. If the condition required it, the beneficiary could by appropriate proceedings rescue the fund from any misappropriation of it. It is the owner of the fund, though temporarily controlled by othWhile Norton and Barr are designated as trustees under the will, still they are the trustees for the beneficial owner. They are accountable to it for the management of the property and the execution of the trust. The practical effect of the provision of the will under consideration is that the fund is given to the orphans' home, but it is to be managed for it for the specified time by the trustees named by the testator. If the income from the property or from its proceeds were to go to another during the five years, then it would be very clear that the property or fund should be taxed during that period. When one is the equitable owner of property and is entitled to the income from it, he has the enjoyment of every benefit that could come to any one who might own the property. To hold that the property should be taxed because it is controlled by other than the trustees of the orphans' home for a specified period is giving effect to the shadow, and not the substance, of things. * * * In the case at bar it is admitted that the entire proceeds of the property sought to be taxed, and the income arising therefrom, will go to the orphans' home under the will. In our opinion, the property is exempt from taxation."

We consider the Norton Case, supra, as concluding the case before us. Judgment affirmed.

The petition further states that there were only 1,223 bushels of corn in the two cribs, and that Avey demanded of Burnley that he repay him $312.40 for the shortage, which amounted to 568 bushels, and that Burnley refused to repay any part of it.

The petition alleges that Avey bought the corn from Burnley as receiver, while Burnley is sued individually. There is no allegation of bad faith upon the part of Burnley; and it does not appear whether he has turned the purchase money he received for the corn into court, or still has it.

Passing the question whether a petition against a receiver should affirmatively show that permission to sue the receiver had been granted by the court appointing him, there can be no doubt that the petition in this case is insufficient, because Avey sues Burnley individually on a contract made with him as receiver.

Judgment affirmed.

A receiver cannot be sued individually upon a contract made by him as a receiver.

[Ed. Note. For other cases, see Receivers, Cent. Dig. §§ 321, 322; Dec. Dig. 168.] Appeal from Circuit Court, Carlisle Coun

ty.

MASON COUNTY et al. v. HAYSWOOD
HOSPITAL OF MAYSVILLE.
(Court of Appeals of Kentucky. Nov. 23, 1915.)
TAXATION 241-EXEMPTIONS-HOSPITAL
CONSTITUTIONAL PROVISIONS-INSTITUTION
OF PURELY PUBLIC CHARITY."

Under Const. § 170, exempting institutions

of purely public charity from taxation, a hospital incorporated by trustees as a charitable corporation, having no capital stock and holding property for the maintenance of a hospital for Action by E. W. Avey against J. R. Burn- the treatment of sick and disabled persons and for medical and surgical treatment and the ley. From a judgment for defendant sustain-maintenance of poor persons not able to provide ing a demurrer to the petition, plaintiff ap-it for themselves, maintained without pecuniary peals. Affirmed.

E. T. Bullock, of Clinton, for appellant. John E. Kane, of Bardwell, for appellee.

MILLER, C. J. The appellant Avey prosecutes this appeal from a judgment of the circuit court which sustained a demurrer to his petition seeking a judgment against Burnley for $312.40.

The petition alleges that in a suit pending in the Carlisle circuit court between E. W.

profit, and having funds invested the income of which was used solely in meeting its necessary expenses, was an "institution of purely public charity," whose invested fund was exempt from taxation.

[Ed. Note. For other cases, see Taxation, Cent. Dig. §§ 389-393; Dec. Dig. 241.

For other definitions, see Words and Phrases, First and Second Series, Institution of Public Charity.]

Appeal from Circuit Court, Mason County. Action for injunction by the Hayswood Hospital of Maysville against Mason County

and others. Judgment for plaintiff, and de- vised $1,000 and his residuary estate to the fendants appeal. Affirmed.

W. H. Rees, of Maysville, for appellants. Worthington, Cochran & Browning, of Mays

ville, for appellee.

hospital in trust for the purpose of establishing a "free ward for the treatment of children whose parents or friends are not able to

pay for their treatment, the trustees to be the sole judges of who may receive free

ceived upon substantially the same terms two other bequests aggregating $4,800. The above is all the property owned by the hospital. It is alleged in the petition that the trustees have maintained and operated the hospital pursuant to the trust provisions of the deeds referred to and from which "no private pecuniary profit has ever been, or can ever be derived"; they have made valuable and permanent improvements on the hospital property, and equipped it with medical and surgical appliances, and employed trained nurses and attendants.

NUNN, J. Upon the plea that it is an in-treatment." Since then the trustees have restitution of purely public charity appellee brought this action to restrain the sheriff and assessor of Mason county from listing for taxation, or levying upon, or selling any of its property for taxes. Appellants demurred to the petition. The demurrer being overruled they bring this appeal, having declined to plead further. Only two questions are raised for decision: (1) Is the appellee an institution of purely public charity within the meaning of section 170 of the Kentucky Constitution? (2) If an institution of purely public charity does the exemption from taxation apply to its property which is not directly connected with the hospital and not used for hospital purposes, although the income therefrom is used solely in meeting the necessary expense of the hospital?

The idea of this hospital originated in 1907, with Mrs. Mary V. Wilson, an elderly widow residing in Maysville. She conceived the idea of founding the hospital and conveyed the property now used as a hospital to Dr. Thos. E. Pickett, J. Foster Barbour, Clarence L. Sallee, and A. M. J. Cochran, as trustees, and gave them powers of succession. The trust imposed was: "The establishment and maintenance and operation on said premises of a hospital for the treatment of sick and disabled persons." The trustees were directed to adopt and put in force such rules and regulations as would best carry out the trust. If need be they might incorporate, and if the incorporation issued stock then, "if any returns arise from

said stock they will apply them in providing treatment in said hospital for the worthy poor of Maysville." The conveyance further stipulated that the trustees "are to render their services without compensation."

The trust was accepted, and, in 1908, the trustees formed a corporation under the provisions of sections 879 to 883, inclusive, of the Kentucky Statutes. The trustees were the incorporators "as a charitable corporation having no capital stock, under the corporate name of 'Hayswood Hospital.'"

The funds with which the hospital has been equipped and operated "have been derived in part from private donations and in part from the moneys received from sick and disabled persons who have been treated therein * * the receipt from patients at plaintiff's hospital have never been sufficient to defray the expense thereof and keep up and maintain the hospital, nor is it the purpose of plaintiff ever to make it a paying institution. It has kept the balance of the money so given it, after paying for needed improvements and repairs, invested so as to yield an income to be applied to the making up of the deficiency in the necessary running expenses; in other words, as an endowment fund. This fund amounts to about $11,500. The purpose of plaintiff is as soon as it can be done to make other improvements on said hospital build

ing."

*

We are of opinion that the petition suf

ficiently shows that the hospital is an institution of purely public charity. It is not operated for profit. It is unnecessary to enter into an extended discussion of the questions raised, for both have many times been passed on by this court. The recent cases of City of Dayton v. Speer's Hospital, 165 Ky. 56, 176 S. W. 361; Commonwealth v. Board of Education of Methodist Episcopal Church, 166 Ky. 610, 179 S. W. 596, and many other cases therein cited, conclusively settle the question. Since the opinion of the lower court is in harmony with the law as set forth in these opinions, the judgment is affirmed.

GAY et al. v. BRENT. (Court of Appeals of Kentucky. Nov. 23, 1915.) 1. CONSTITUTIONAL LAW 240 - MONOPOLIES 10-EQUAL PROTECTION OF LAW POOLS AND COMBINES.

In 1911 the corporation accepted from Mrs. Fannie A. Hays a conveyance of a tract of land situated five miles from Maysville, containing about 150 acres. The trust expressed in the deed was to provide at the hospital "medical and surgical treatment, and for necessary maintenance while undergoing treatment, to poor persons in need of same, and not able in whole or part to provide the Ky. St. §§ 3915-3921, providing that it same for themselves." This conveyance also shall be unlawful for any association or person to become a member of, or in any way interested stipulated that the trustees shall serve with-in, any pool, trust, combine, agreement, or conout compensation. In 1912, McIlvaney de- federation for the purpose of regulating, con

trolling, or fixing the price of any merchandise, [ Shelby, Northcutt & Shelby, of Lexington, manufactured article, or property, fixing a pen- Talbott & Whitley, of Paris, E. S. Jouett, of alty for violation thereof, and making void Louisville, and B. R. Jouett and J. M. Stevenagreements contrary thereto, is not unconstitutional as being discriminatory. son, both of Winchester, for appellants. Pendleton, Bush & Bush, of Winchester, and Harmon Stitt and Reuben Hutchcraft, both of Paris, for appellee.

[Ed. Note.-For other cases, see Constitutional Law, Cent. Dig. §§ 688, 692, 693, 697-699; Dec. Dig. 240; Monopolies, Cent. Dig. § 9; Dec. Dig. 10.]

2. CONSTITUTIONAL LAW 30-CONSTRUCTION-SELF-EXECUTING PROVISIONS.

Const. § 198, providing that it shall be the duty of the General Assembly from time to time to enact such laws as may be necessary to prevent all trusts, pools, combinations, or other organizations "from combining to depreciate below its real value any article or to enhance the value of any article above its real value," does not contravene any provision of the federal Constitution, since it is not self-executing.

CARROLL, J.

Briefly, the facts of this case are these: Previous to 1906 David S. Gay, J. S. Wilson, E. F. Spears & Son, and N. Ford Brent were dealers in Kentucky blue grass seed, each of them doing business in competition with and independent of the others. About 90 per cent. of the blue grass seed of the world is produced in Kentucky, and in the years previous to 1906 clean blue grass seed had been selling at from 80 cents to $1.35 a bushel, the usual price being $1.25

Spears & Son conceived the purpose of securing control of the blue grass seed market, and in execution of this plan they entered into a private, written contract, which is set out in full in the opinion written in this case when it was here before and that may be found in 149 Ky. 615, 149 S. W. 915, 41 L. R. A. (N. S.) 1034.

[Ed. Note.-For other cases, see Constitutional Law, Cent. Dig. § 32; Dec. Dig. 30.] 3. CONSTITUTIONAL LAW 296- MONOPOLIES 10-DUE PROCESS-VALIDITY. Ky. St. § 3941a, providing in substance a bushel. In June, 1906, Gay, Wilson, and that it shall be lawful for any number of persons to combine, unite, or pool crops of wheat, tobacco, and other farm products raised by them for the purpose of classifying, holding, and disposing of the same in order to obtain a higher price than they could by selling separately, is void, since it is in conflict with the fourteenth amendment of the federal Constitution; it not being possible when such section is construed in connection with Const. § 198, forbidding combinations to enhance or depreciate values of merchandise, and Ky. St. §§ 3915-3921 forbidding combinations in regulation of trade, to determine with reasonable certainty when the price of an article has been enhanced above or depreciated below its real value.

[Ed. Note.-For other cases, see Constitutional Law, Cent. Dig. §§ 825-838, 840-846; Dec. Dig. 296; Monopolies, Cent. Dig. § 9; Dec.

Dig.

10.]

4. STATUTES 143-AMENDMENT-UNCONSTITUTIONAL AMENDMENTS.

After this agreement was entered into, and pursuant to its terms, and to accomplish the intended object, the parties to the agreement at once commenced to buy all of the blue grass seed available, their purchases including the seed owned by farmers as well as dealers. Among the purchases of seed so

made was a large quantity bought from Brent

at $1.30 per bushel. When the time arrived for the delivery of this seed by Brent he Since the validity of a constitutional enact- refused to perform the contract, and therement cannot be impaired by an unconstitutional upon Gay, Wilson, and Spears & Son, who amendment, the amendment of Ky. St. $8.3915 3921, prohibiting the regulation or fixing of prices of commodities of any kind, by the unconstitutional act of 1906 (Acts 1906, c. 117; Ky. St. § 3941a), legalizing pools of farm products does not affect the validity of the act amended. [Ed. Note. For other cases, see Statutes, Cent. Dig. § 211; Dec. Dig. 143.]

5. CONTRACTS 116-VALIDITY-CONTRACTS

IN RESTRAINT OF TRADE.

are doing business under the name of the Kentucky Blue Grass Seed Company, brought suit against Brent to recover damages for a breach of the contract, alleging in the petition that between the time the contract was entered into and the time specified for the delivery of the seed, it had advanced 38 cents per bushel, and had he performed his contract they would have realized a profit of this sum.

Since the common-law doctrine of restraint of trade is in force in this state, unaffected by Const. § 198, providing that it shall be unlawful In the answer to this petition, which is set to form combinations to depreciate below or en-out at length in the former opinion, Brent hance above real value, the value of any article, or Ky. St. § 3941a, legalizing pools of farm charged that the purpose of the agreement products, an executory contract for the purchase between Gay, Wilson, and Spears & Son, of of blue grass seed, pursuant to a private agree- which agreement he was ignorant when he ment to form a pool to restrain trade in such contracted to deliver the seed, was to control commodity, was unenforceable when it appeared that the parties seeking the enforcement of the blue grass seed market and create a the contract did so to secure a monopoly in the monopoly in unreasonable and unlawful recommodity by controlling the market and sup-straint of trade, and to thereby increase the pressing competition. [Ed. Note. For other cases, see Contracts, ther averred that in entering into this agreecost of blue grass seed to the public. He furCent. Dig. §§ 542-552; Dec. Dig. 116.] ment Gay, Wilson, and Spears & Son intendAppeal from Circuit Court, Clark County. ed to and did form and create a trust, comAction by David S. Gay and others bine and pool in violation of the statute law against N. Ford Brent. From a judgment of the state for the purpose of enhancing the dismissing the petition, plaintiffs appeal. Af- price of blue grass seed above its real value, firmed. and that immediately after one object of the

scheme; and when such a contract is made, name it may be called, and although it may be whatever form it may assume, or by whatever reached under the law of monopolies, trusts, and conspiracies, it will be declared void as being in unreasonable restraint of trade."

pool had been accomplished in practically se- | restrained, the promoters would not go into the curing control of the blue grass market, they did arbitrarily raise the price of blue grass seed above its real value. To this answer a general demurrer was sustained, and from the judgment of the lower court holding that his answer did not present a defense, Brent prosecuted an appeal to this court.

In the course of the opinion of this court holding that the answer presented a good defense on which Brent was entitled to go to trial, it was said:

"Nor do we find it necessary in disposing of the case to consider at all the anti-trust statutes of the state. Leaving out of view entirely the applicability of the anti-trust statutes, we think the controlling and decisive question in the case is: Did the averments of the answer, which must be treated as true, state the defense of an unlawful and unreasonable restraint of trade upon which Brent was entitled to introduce evidence and have a decision on the merits? *** It will also be noticed that the answer in substance charged that the partnership or agreement entered into between Gay and his associates had for its purpose the creation of a trust and monopoly to control the blue grass seed market of the country, and to fix and regulate the price at which the seed should be sold; and that in pursuance of this purpose and to carry it into effect the purchase of the carload of seed from Brent was one of many purchases undertaken in execution of the plan to control and monopolize the market and fix and regulate the price of the seed."

In answer to the argument that the purchase of the seed from Brent involved only a small part of the blue grass seed then on the market, and therefore it should not be treated as an illegal arrangement, or as an unreasonable or unlawful agreement in restraint of trade, the court said, quoting with approval from the opinion in Merchants' Ice & Cold Storage Co. v. Rohrman, 138 Ky. 530, 128 S. W. 599, 30 L. R. A. (N. S.) 973, 137 Am. St. Rep. 390; and applying it to the

facts of the Brent Case:

It was further said in the opinion:

"Nor do we think that in ruling that the scheme of Gay and Company was an agreement in restraint of trade, we have unduly extended trine rests. It is true that by the common-law the scope of the principle upon which the doccontracts treated as being in restraint of trade were limited to contracts having for their purpose the purchase of some trade or business, as a part of which the seller agreed not to engage in the trade or business he had disposed of. But, in dealing with conditions brought about by modern business methods, it has been found necessary for the public good to extend the common-law prohibition against contracts in restraint of trade to states of case involving more than the mere purchasing and selling of a trade or business, so as to give the courts for the good of the public authority to prevent as much as possible combinations and arrangements having for their purpose the creation of a monopoly, the control of prices, and the suppression of competition. Addyston Pipe & Steel Co. v. United States, 175 U. S. 211 [20 Sup. Ct. 96], 44 L. Ed. 136.

"The restraint of trade may be accomplished in more ways than one. Every business scheme that has for its purpose the control of the market and the fixing of prices, necessarily tends to restrain trade and suppress competition in the article sought to be controlled. But when the doctrine was first recognized conditions were such that the public good only required that it be applied to contracts of sale and between the that if this wholesome principle of the common parties to the contract. It is, however, manifest law should be confined to the narrow limits that were sufficient in its origin, it would be wholly inadequate to correct the evils that modern trade conditions have produced. And so, taking for a foundation the principle that illegal and unreasonable restraint of trade is obnoxious to the spirit of the law, the range of this principle will be extended to meet the requirements of to-day and to embrace every condition in which an unlawful attempt is made to restrain trade and control the market and suppress competition by whatever means these ends are sought to be accomplished."

"But the validity of this particular contract cannot be determined by looking at it alone. It must be considered in connection with the others of which it was and is a part, and when so considered in connection with the circumstances unOn the trial of the case, after it was reder which it was entered into and the conditions manded, the law and facts, by agreement, that gave rise to its execution, we find that it were submitted to the trial court, and in a was only one of a number of like contracts secured about the same time by the Merchants' judgment and an opinion holding that Gay, Refrigerating Company in furtherance of the Wilson, and Spears & Son could not mainpurpose to obtain control of the ice market and tain the action, the trial court said, in his effectually destroy substantial competition. In short, we think it is plain that the purpose in findings of law, that: the minds of the parties to this transaction was to purchase the National Ice & Cold Storage Company and Rohrman's interest therein, as a link in the chain that would finally bind all the consumers of ice in Louisville to the wheels of a single concern, thereby creating a condition that would enable the purchaser to control the market and stifle, if not suppress, competition. ** If a contract is made that suppresses competition, and controls the market, and that contract is entered into between those who have theretofore engaged in competition in the market sought to be controlled, it is a contract in restraint of trade. It may be more. It may amount to a trust or conspiracy or a monopoly, but it is nevertheless a contract in restraint of trade. To restrain trade is the essential feature of the contract-the reason why it was made.

"The Kentucky statutes against pools, trusts, and conspiracies do not apply to contracts in restraint of trade. Contracts in restraint of trade are controlled by the common law, and when they are unreasonable, they are declared to be void. A contract entered into between those who have theretofore engaged in competition with reference to any particular product or commodity, which suppresses competition and controls the market with reference to that product or commodity, is in unreasonable restraint of trade; and this suppression is not required to be total in order to bring it within the condemnation of the law. When the enforcement of an executory contract would be a step in the perfection of a scheme to restrain trade in a product or commodity, the law will not aid the perfection of such a scheme by enforcing such an

From that judgment this appeal is prose- stance of this act was that it should be uncuted.