view of forming a copartnership to erect a distillery, etc., on said tract, and to distill whisky thereon; and since said last-mentioned date said distillery and other buildings have been erected on said tract by Thos. J. Megibben and James K. Megibben, and the consideration aforesaid is only for the undivided third part of said tract of land, and not for said improvements thereon." The five acres so referred to is the tract upon which the Excelsior distillery stands. The partnership business was actively continued down to October, 1880, when the partners purchased a tract of about 10 acres, known as the "Sharpe Distillery Tract," together "with the mill and distillery buildings, improvements, machinery, fixtures, and appurtenances of whatever nature or description thereunto belonging or appertaining." This land had on it a flour mill and distillery. In the conduct of the business of the Sharpe distillery the partners had equal shares. The firm continued the manufacture of whisky and the making of flour on both properties until the death of T. J. Megibben, in January, 1890. At that time the Excelsior distillery was in active operation. The firm had a large quantity of grain on hand, and were under contract to feed about 300 cattle, the fulfillment of which, if the distillery did not operate, would result in a loss of from $50 to $75 a day. The Sharpe distillery had just been refitted and improved, and its operation was about to begin. There was a mortgage of $2,700 on the Excelsior distillery and $7,000 on the Sharpe property. Under section 3262 of the Revised Statutes of the United States, before a bond of a distiller is approved, (which is a condition precedent to the operation of his distillery,) he is required to file with the collector of internal revenue the written consent of the owner of the fee, duly acknowledged, that the premises may be used for the purpose of distilling spirits. Upon the death of the elder Megibben, the collector of internal revenue, in accordance with section 3262, Rev. St., required the consent of the owners of the fee, and thereupon, to obviate the difficulty, James K. Megibben, as surviving partner, organized and incorporated under the laws of Kentucky two distilling companies,-one, the Megibben Excelsior Company, for the operation of what we have described as the Excelsior distillery, and the other, the Sharpe Distillery Company, for the operation of the Sharpe distillery, each with a capital stock of $75,000, divided into 750 shares of $100 each; and on January 30, 1890, he conveyed, as surviving partner of the firm of T. J. and J. K. Megibben, the two tracts to these companies respectively, in consideration of the entire capital stock of each. The collector of internal revenue still declined to approve the distiller's bond necessary to the operation of the distillery under the federal law, on the ground that the title to T. J. Megibben's interest was in his widow and heirs, and that the surviving partner had not authority to convey that interest to the companies. Thereupon, in February, 1890, the widow and adult heirs of T. J. Megibben conveyed their interests in the two distillery tracts to the two companies respectively. About the same time proceedings were also instituted in the Harrison county chancery court by Elizabeth Megibben, wife of T. J. Megibben, as guardian of her three minor children, and also in her own name and right, against the two distillery companies, J. K. Megibben, and the adult children and heirs of T. J. Megibben, five in number. There were two petitions filed, one in the case of each distillery. The petition with reference to the Sharpe distillery averred the death of T. J. Megibben, set out the heirs, adult and minor, which he left; the appointment of Elizabeth Megibben as guardian of the minor heirs; her execution of the bond required by law; the partnership of T. J. and J. K. Megibben in the manufacture and sale of whisky; the purchase by them of the Sharpe tract, and the ownership by each of them of a one-half interest; and alleged that the property was all paid for with partnership funds, was used and occupied by them as partners in the distilling of Bourbon whiskies and the operation of a flour mill, and that the property was not useful for any other purpose, and could not be used for any other purpose, than that for which it was purchased by the firm. The petition further recited the sale by James K. Megibben, as surviving partner under a claim of right to make it, of the Sharpe distillery tract to the Sharpe Distillery Company; and averred that he had transferred and assigned one half of the stock to the heirs and widow of T. J. Megibben, and the other half thereof to himself. The petition continued: "Plaintiff further states that the sale of said real estate with the distillery and other improvements thereon by the said James K. Megibben for the consideration above stated is an advantageous disposition of the property, and is beneficial to the interests of all parties concerned therein, and more especially to the wards of the plaintiff. In fact, the interest of her wards require that the said sale should be made, and that the sale as made by the surviving partner should be condoned and approved by the chancellor; and that the interests of said infants require that this court should order the commissioner of this court to make conveyances of the interests of the said infants in and to the said property to the defendant the G. R. Sharpe Co., and confirm said sale." The petition further stated that the adult heirs of T. J. Megibben and his widow had already executed a deed of conveyance for whatever interest each of them had in the property to the said company, and "that the incorporators of said company are James K. Megibben, J. M. Kimbrough, and J. W. Megibben, and that these, together with the other children and heirs of T. J. Megibben and his widow, are the owners of the same quantities of stock of the said company that they owned in the partnership property before the sale thereof by the surviving partner." The petition concludes with a statement of the difficulty which arose in the operation of the distillery under the federal law, already described. The petition in the Excelsior distillery case contained allegations similar to those in the Sharpe case. To the petitions answers were filed by James K. Megibben, by the adult heirs, and by the defendant companies, admitting the allegations of the petitions, and joining in the prayers thereof. The answers of the companies averred that each had complied with its contract, and had issued to the complainants and other defendants all the stock to which they were entitled. A joint entry in the two cases was made by the chancery court, granting the prayer, and ordering the necessary master's deeds. The administrators of the estate of T. J. Megibben were appointed and qualified in February, 1890. They were not made parties to the proceeding in the chancery court. Evidence in this case and before the chancery court shows that it was of great importance in maintaining the value of a distillery that the operation be continuous, in order that the brands of whisky should be kept on the market. The distilleries were operated by the two companies from March until July, 1890. In July, 1890, at the time when the purchasers refused to take the title, the mortgage of $2,700 on the Excelsior property had been paid off. The vendors were ready, on the payment of the purchase price, to pay off the $7,000 mortgage on the Sharpe distillery tract. There were indorsements of the Sharpe Distillery Company unpaid, amounting to about $9,000, all of which were secured by more than that amount in value of whisky stored in the distillery warehouses. There were claims against the estate of T. J. Megibben, but there was other property of the deceased, amply sufficient to pay them. In October, 1890, the shares of stock in the two companies were tendered by James W. Megibben and Elizabeth Megibben, administrators of the estate of T. J. Megibben, to Perin, Hayes, and Hubbell under the contract, and were refused, whereupon the complainants filed their bill for specific performance herein. The defendants below answered, averring-First, that the contract was made by Perin on behalf of himself, Hayes, Hubbell, and James K. Megibben; that Megibben was a necessary party defendant, and, as he was a resident of Kentucky, the court had no jurisdiction; and, second, that both corporations were in debt, and that the title to their property was imperfect and incumbered, in violation of the contract stipulations; and, finally, that the defendants had declined to proceed with the purchase on this account, and had notified the plaintiffs, who acquiesced in the abandonment of the contract. By replication issue was made on these defenses. The case proceeded to a hearing, and the decree for specific performance was entered from which this appeal was taken. Errors were assigned to the holding of the court on the grounds-First, that specific performance would not lie; second, that the plaintiff James K. Megibben was a necessary party defendant, and that the court had not jurisdic tion of the suit; third, that the title of said companies in said real estate was not good and sufficient; and, fourth, that the plaintiffs were not the owners of all of the capital stock of the Excelsior Company and the R. G. Sharpe Company. Lawrence Maxwell, Jr., for appellants. H. D. Peck, for appellees. Before JACKSON and TAFT, Circuit Judges. TAFT, Circuit Judge, (after stating the facts.) The first error assigned to the finding and decree of the circuit court is based on the claim that the contract cannot be specifically enforced, because it is for the purchase and sale of personal property. The point has not been pressed, either in the brief or on the argument, and hardly needs consideration. The agreement was in form a contract to buy all the shares of stock in the incorporated companies. The language of the contract shows that the real agreement was to buy certain real estate, together with the personal property connected with its use for milling and distilling purposes. Without discussing the question whether the sale of shares of stock can be specifically enforced in equity, it is sufficient to say that the sale here was in fact a sale of real estate, and the circumstance that personalty was included in the sale would not affect the power of a court of equity to afford relief by requiring specific performance. See Leach v. Fobes, 11 Gray, 510. The second error assigned, that the court did not have jurisdiction, for the reason that James K. Megibben, a resident of Kentucky, was a necessary party defendant, is not of weight. Megibben is a party plaintiff. He is one of the vendors; and even if he were, under the facts of the case, also one of the vendees, he is willing to comply with his part of the contract. The language of the court below upon this point meets our concurrence: "James K. Megibben is not a party defendant, nor can he in any way be regarded as such. It is true that he is one of the associates of the defendant Perin, but he is ready and willing to perform the contract. The decree is sought against Perin and his associates who are unwilling, and it would not be against him, but against them, to compel them to join in receiving and paying for the capital stock which represents the real property involved. He is therefore properly a complainant, and as much interested in securing a decree against the defendants as are his co-complainants." The assignment of error upon which the decision of the case must turn is based on the holding by the court below that the title of the distillery companies to the real estate was good and sufficient. It is an express stipulation of the agreement that the money was to be paid upon the delivery of the deed, and after examination and approval of the title. This required, of course, that the title should be good. The distilling companies have all the title of James K. Megibben and wife and the widow and adult heirs of T. J. Megibben. The only question in the case relates to the undivided interest in each tract, the legal title to which, by the death of T. J. Megibben, was cast upon his three minor heirs. The argument upon appellees' behalf is that the land so bought by T. J. and J. K. Megibben was purchased with partnership funds, and was used for partnership purposes, under an implied agreement that it should be personal property out and out; that by the law of Kentucky, on the death of T. J. Megib ben, the full equitable title to this property vested in J. K. Megibben, the surviving partner, in trust to discharge the debts and obligations of the partnership, and to adjust the equities between the partners, and with power to sell the equitable title for these purposes; that, after the satisfaction of such debts, obligations, and equities, or at once upon T. J. Megibben's death, if it should be found no such debts or equities existed, the equitable title passed to the personal representatives of T. J. Megibben for distribution as personal property; that nothing but the naked legal title to the undivided interest of the deceased partner descended to the heirs, and that this a court of equity, in a proper proceeding, might compel them to convey as either the surviving partner or the personal representative, in his lawful right to transfer the whole beneficial interest, should direct; that the personal representatives and the surviving partner have united in conveying the equitable title to the distilling companies; that the adult heirs have also conveyed their title; and that by the Harrison chancery court proceedings the legal title of the minor heirs has been divested and transferred to the two companies, thus making in the latter a perfect title to the entire property. If the court of appeals of Kentucky have clearly laid down in their decisions a principle affecting the devolution of the equitable title to partnership real estate upon the death of one partner, it is a rule of property which the federal courts will respect and follow, instead of exercising their independent judgment, as they do with reference to questions involving the general common law of the state. gess v. Seligman, 107 U. S. 20, 2 Sup. Ct. Rep. 10. Bur The law as to the disposition, distribution, or descent of the interest of a deceased partner in partnership real estate has been considered by the court of appeals of Kentucky in the cases of Galbraith v. Gedge, (1855,) 16 B. Mon. 631; in Cornwall v. Cornwall, (1869,) 6 Bush, 369; in Bank v. Hall, (1871,) 8 Bush, 672; in Lowe v. Lowe, (1878,) 13 Bush, 688; in Holmes v. Self, (1881,) 79 Ky. 297; in Caskey v. Caskey, (1884,) 5 Ky. Law Rep. 775; and in Flanagan v. Shuck, (1885,) 82 Ky. 619. In Cornwall v. Cornwall, Lowe v. Lowe, Holmes v. Self, and in Caskey v. Caskey, the question was between the heirs and distributees of the deceased partner, as to whether in equity the partnership real estate, after the payment of the debts of the partnership, should descend to the heirs or should pass to the distributees. From these cases it is clear that for 30 years the rule of property governing the descent and distribution of partnership real estate on the decease of a partner has been as follows: First. The legal title to partnership real estate held in the names of the partners descends to the widow and heirs of each, exactly as it would were the partners tenants in common. Second. Where real estate is purchased with partnership funds for partnership purposes, it is partnership property, to which the surviving partner has an equitable title, and which he may sell to pay partnership debts or settle partnership equities, compelling, by aid of a court of equity, the heirs of the deceased partner to perfect the sale by deeding such title. Third. In the absence of any agreement between the partners, express or implied, to the contrary, both the legal title and the bene ficial interest in the surplus of such partnership real estate, after the debts and the equities of the partnership are satisfied, descend to the heir at law. Fourth. When, however, there is an express agreement between the partners, or one which can be clearly implied from the circumstances, to consider and treat such real estate as part of the personal property stock of the partnership, then, though the legal title to te deceased partner's interest descends to the heir under the statutes of descent, the equitable title, and the full beneficial interest, after the payment of the partnership debts and adjustment of the equities between the partners, vest in the personal representatives of the deceased partner for distribution as personal property, and to this end a court of equity may force a conveyance of the legal title from the heirs to the vendee of the personal representatives. In December, 1891, the court of appeals of Kentucky decided the case of Carter v. Flexner, 17 S. W. Rep. 851. In that case the surviving partner of a firm which had been engaged in buying and selling real estate made a contract to sell certain of the real estate bought by the firm with partnership funds in the course of partnership business. There were debts of the firm to be paid by the proceeds of sale. The contracting purchaser refused to comply with the contract, on the ground that the surviving partner was not invested with the legal title to the real estate. The court held that the surviving partner could not convey a good title except to his one-half interest, and that the heirs of the deceased partner should be required to convey their legal title to the purchaser, if an advantageous sale, or one of fair value, had been made in good faith by the survivor. There was nothing in the conclusion reached which required a departure from the principles already laid down in the cases to which we have referred. The learned judge who delivered the opinion, however, used language emphatically indicating a desire to break away from the rule stated in the fourth paragraph above, under which partnership real estate, by agreement, express or implied, between the partners, may be converted into personalty "out and out." The report of the case in the Southwestern Reporter contains a memorandum from the files of the court of appeals that the case is not to be officially reported. Just what the considerations are which lead that court to order cases not to be reported we do not know, but it would seem clear that, if it were intended by this decision to reverse and obliterate the doctrine of the conversion of real estate into personalty "out and out," which has been in force in the state for more than 35 years as a rule of property, the court would have ordered the case to be officially reported. In the case of Turman v. White's Heirs, 14 B. Mon. 450, 461, Chief Justice Marshall refers to a decision of the court of appeals as of doubtful authority because withheld from publication. But, whatever the inference to be drawn from the failure to officially report a case in the court of appeals, we do not feel at liberty to disregard the line of authorities referred to, and to depart from the rule so clearly laid down in cases where the exact |