PAYMENT FOR STOCK IN PROPERTY. - When a "trust" is formed by the combination of independent plants, the stock of the "trust" is usually issued in exchange for the plants. For this reason, a recent article in the American Law Review is worthy of attention. Payment for Shares in Property, by Seymour D. Thompson, 36 Am. L. Rev. 840 (Nov.-Dec., 1902). Mr. Thompson conIcedes that shares may be sold at their par value for property at its true valuation. He goes on to point out that even though the property is over-valued, most courts will uphold the transaction in the absence of fraud, even as against creditors of the corporation. He himself, however, evidently prefers the view that property is payment to the extent only of its true value, not of the contract valuation.

To avoid confusion, it is important to consider first the rights of creditors when shares of a corporation are issued as "full-paid at less than par for cash. A creditor who had no knowledge of the fact at the time his claim arose, may, in equity, in case the corporation becomes insolvent, have the agreement by which the part payment was received in full satisfaction set aside, and may then force any holder not claiming through a bona fide purchase to contribute the unpaid balance on the par value of his stock. Scovill v. Thayer, 105 U. S. 143: Upton v. Tribilcock, 91 U. S. 45. The ground of relief is that issuing shares for less than par is a fraud on creditors, since credit has presumably been given to the corporation on the representation that its subscribed capital is available as a fund to pay its debts. It follows that a creditor who knows of the issue below par or one whose claim arises before such issue, has no remedy, since he cannot have acted upon such a representation. First National Bank v. Gustin, etc., Mining Co., 42 Minn. 327.

When shall shares issued not for cash, but for property, be considered "fullpaid"? If money already received from a sale of stock at par for cash were used in purchasing property from the stockholder, no over-valuation of the property would invalidate the transaction unless it were fraudulent. The rule should be no different when the same result is achieved by issuing the shares directly for the property. The practical consideration that the tendency toward fraud may then be greater than in case of a subscription and a subsequent purchase made bona fide as an independent transaction, is offset by the equally practical consideration that the rule imposing liability when property has been over-valued is unjust to the owner, since it deprives him of the benefit of any good bargain that he may make, and at the same time leaves him without remedy in case the property is under-valued. On principle, then, over-valuation should impose no liability unless it is fraudulent. This rule is supported by the great weight of authority. Brant v. Ehlen, 59 Md. 1; Coffin v. Ransdell, 110 Ind. 417.

If, however, the over-valuation has been fraudulent, subsequent creditors should be allowed to have the bargain by which the property was received in payment set aside in equity, and the holders of the stock should be liable for the difference between its par value and the true value of the property turned in. Some courts seem to consider that the only remedy is a rescission of the whole bargain, the corporation returning the property and receiving back the stock. See Du Pont v. Tilden, 42 Fed. Rep 87. This view, although supported by Mr. Cook in his work on Corporations, in § 42, not only gives the creditor a worthless remedy, since the stock is seldom more valuable than the property, but also seems to overlook the fact that when shares are issued for property there is a double transaction, a subscription for stock and a payment of that subscription in property. As has already been stated, when the agreement by which shares are sold for cash at less than par is set aside, the subscriber still remains liable on his subscription. By the great weight of authority the same result follows when the bargain by which specific property is accepted in payment is set aside for fraud. Coleman v. Howe, 154 Ill. 458; Hastings Malting Co. v. Iron Range Brewing Co., 65 Minn. 28. If, however, the stock is transferred to an innocent purchaser for value, the latter is not liable. Berry v. Rood, 168 Mo. 316.

PRACTICE IN PERSONAL ACTIONS IN THE COURTS OF Massachusetts. By Sidney Perley. Boston: George B. Reed. 1902. pp. xlix, 728.

8vo.

Recognizing the special opportunity, created by the appearance of the Revised Laws of Massachusetts, for a new publication on the practice in the courts of this commonwealth, Mr. Perley has sought to supply the legal profession with a work which should in all respects be up to date. The mere fact that whenever a statute is quoted or mentioned the reference is to the late revision, would in itself be sufficient to give the book a value which no work of former years possesses; but in addition to this advantage there is the further one that the author has been able at various points to make his work more nearly complete for present purposes than earlier publications, by reason of the late decisions. That he has not more fully availed himself of these recent cases is however to be deplored. For instance, under the heading of "Interrogatories" he tells us that the president or some other officer of a corporation may be examined as if he were a party, and he gives the citation of the statute which so provides. But he cites no case, and does not amplify the subject. Yet the case of Gunn v. N. Y., N. H. & H. R. R., 171 Mass. 417, which is cited in the Revised Laws, decides that when an officer of a corporation is interrogated as to matters concerning the corporation of which he has no personal knowledge, he may be required to ascertain the facts and answer the questions. Certainly this is a considerable amplification of the bare words of the statute, and a decision of enough importance to deserve a place in a treatise on practice. Such an omission seems a distinct neglect of opportunity and is a very real defect in a new book. Apart from such omissions, however, the work must prove decidedly useful. As is usual in books of this character, necessary or conventional forms for writs, pleadings, and other papers which might be needed in the prosecution of an action are inserted at the appropriate places, and the rules of the courts are given at length.

The arrangement of the material comprised within the work is logical and convenient; it indicates the order of the proceedings and their mutual relations, and brings out clearly their bearing on the final result. The author deals first with the courts, their jurisdictions, their rules, and their officers, and then discusses, separately and carefully, the various possible steps that may be taken in an action, from its very beginning to its completion. Altogether the volume contains, in compact form, a large amount of practical information for use in the every-day business of a lawyer. R. A. J.

IRRIGATION INSTITUTIONS. A Discussion of the Economic and Legal Questions Created by the Growth of Irrigated Agriculture in the West. By Elwood Mead. New York: The MacMillan Company. 1903. pp. xi, 392.

12mo.

This is the latest addition to the Citizens' Library of Economics, Politics and Sociology, edited by Professor Richard T. Ely, an excellent series of popular treatises upon some of the important questions of the day. The present work deals with the problems and difficulties of systematic irrigation, which is such a vital matter in the arid regions of our country, and discusses the subject from the historical, economic and legal points of view. The legal aspect of the question is particularly emphasized; for the peculiar conditions prevailing where irrigation is necessary have greatly affected the law of water rights. In several of the western states the common law doctrine of riparian rights has been entirely abrogated and the doctrine of priority of appropriation substituted. In others these two conflicting doctrines persist to a certain extent side by side. In either case many legal tangles occur. Matters are still further complicated, where rivers flow through more than one state, by most important questions of interstate rights. The author's clear statement of the legal situation and of the steps taken by the different states towards the solution of some of the difficulties incident to it, makes the book, though not distinctively of a legal

character, of considerable interest and importance to the student of this branch of the law. Then too the history of irrigation, and the administrative and economic problems involved in its development are thoroughly treated, with especial reference to conditions existing in each of the states concerned. Many reforms are suggested by the author as being necessary for the full perfection of the system. The book is certainly a comprehensive survey of the institutions and problems of irrigation, and will prove an excellent source of information for any who are interested in the subject.

W. H. H.

BRITISH RULE AND JURISDICTION BEYOND THE SEAS. By the late Sir Henry Jenkyns. Preface by Sir Courtenay Ilbert. Oxford: Clarendon Press. 1902. pp. xxiii, 300. 8vo.

To the general reader the preface may prove the most interesting part of this book. Sir Courtenay Ilbert and others here give their impressions of Sir Henry Jenkyns, and of his work in the office of Parliamentary Counsel to the Treasury, which he held for many years. One hardly knows of another book where the duties of the Parliamentary Counsel, and his place in the English legislation of to-day, are suggested better than here. To Americans this preface is peculiarly instructive.

The main part of the book deals with the jurisdiction actually exercised by the United Kingdom beyond the territorial limits of Great Britain and Ireland; the means by which such jurisdiction is exercised; and, to some extent, the constitutional theories on which the jurisdiction is based. Taking up the various kinds of British dependencies, and discussing consular jurisdiction and the extraterritorial jurisdiction of British courts, the author states concisely, and very carefully, the limits of the jurisdiction in fact now existing. The references to English statutes are exceedingly numerous. The work has apparently been prepared with great thoroughness, and cannot fail to be of value to the student of government.

J. B. S.

A TREATISE on the Law OF PRIVATE CORPORATIONS. By Henry Osborn Taylor. Fifth edition. New York: The Banks Law Publishing Co. 1902. pp. xiii, 969. 8vo.

The changes in the present edition of this standard work are not very numerous nor very sweeping, the principal one being the addition of some eight hundred recent adjudications by way of citation, together with such modifica tions of the text as seemed necessary to make it conform to the present state of the law. There has been added also a brief discussion of the so-called "Securities Companies," necessarily, perhaps, somewhat inadequate because of the absence of decisions on the important question of their legality. But the most striking feature of Mr. Taylor's work, in this as in former editions, is his frank rejection of the doctrine that corporations are distinct entities-legal persona, -a doctrine supposedly established among the fundamental conceptions of the law. 66 Corporation in Mr. Taylor's terminology has a double signification: on the one hand it may mean "the sum of legal relations subsisting in respect to the corporate enterprise "; on the other it is used to designate "the body of individuals in whom and their appointees are vested the corporate powers.' The second meaning obviously accords with the popular notion; the former is Mr. Taylor's substitute for the "legal entity" theory. His conception avoids certain theoretical difficulties raised by the "entity" theory, as, for example, the question whether corporations may properly sue on stock subscriptions made before incorporation, and questions arising out of "double incorporation "; on the other hand it seems not to square so well with the diverse citizenship rule of the United States courts, and it involves difficulties in the matter of title to corporate property. Inasmuch, however, as the exponents of the two oppos

ing theories are in substantial agreement as to what the law is, the question has perhaps little more than academic significance. Indeed, it may be doubted whether, in the last analysis, Mr. Taylor's formula is not simply one way of defining a legal persona, as distinguished from a natural person, and thus essentially in accord with the commonly accepted view. There can be no doubt, however, that his view furnishes the basis for a very clear and simple classification of the entire subject. Starting with an analysis of the idea of a corporation in Roman law and in the common law, he next deals with the legal effect of acts done prior to, and looking towards, incorporation; he then considers the legal relations, growing out of incorporation, between the various parties -state, corporation, officers, stockholders and creditors - between whom legal relations may subsist in respect to the corporate enterprise"; and finally he considers the relations existing among the members of each class.

In some portions of the work there is manifest a tendency, all too common nowadays, to overwork the doctrine of estoppel. For instance, in dealing with the subject of de facto corporations Mr. Taylor makes the rules of law concerning them turn purely on estoppel, with the result that some cases are included that involve merely matters of estoppel, and do not depend on the alleged corporation's being even de facto; at the same time other cases are included that admittedly do not contain the elements of estoppel. It would seem better to concede that these rules require no more abstruse explanation than the public policy of reserving to the state alone the right to complain of the failure to comply strictly with the requirements it has prescribed. In a similar way the doctrine of estoppel is applied to questions relating to de facto officers. It is again brought forward in dealing with the subject of ultra vires, but here, it would seem, to better purpose. The entire subject of ultra vires is clearly presented. There is much to be said in favor of Mr. Taylor's view, which makes the enforceability of ultra vires contracts depend primarily upon estoppel, as opposed to the two most widely accepted views, that of the New York courts, as laid down in a line of cases beginning with Bissell v. R. R., 22 N. Y. 258, making the right of enforcement turn on performance, and the federal rule, for which the case of Central Transportation Co. v. Pullman Palace Car Co., 139 U. S. 24, is usually cited, that an ultra vires contract can give rise to no rights on the contract. A strong argument for Mr. Taylor's view is that it rests the whole doctrine of ultra vires upon principles that apply equally in cases of tort and contract.

66

An infrequency of reference to English authorities is to be remarked throughout the work, many important English cases finding no place among the citations. Likewise, some recent American decisions of considerable authority fail to appear, although opposed to statements made in the text. Instances of this are noted in the discussion of questions of constitutional law in the chapter on Corporation and State," and also in the chapter on "Corporation and Shareholders," in the section dealing with the right to reclaim dividends paid out of capital. Again, no mention is made of the so-called "one man company cases, such as the House of Lords case of Salomon v. Salomon & Co., [1897] A. C. 22, or of the line of cases represented by Seaton v. Grant, L. R. 2 Ch. App. 459, concerning the effect of a shareholder's motives upon his right to bring suit against the corporation. Furthermore, none of the decisions of the state courts, like Parsons v. Joseph, 92 Ala. 403, are cited to indicate the diversity in practice between the state and the federal courts concerning the right of a shareholder to sue in respect of wrongs that occurred before he purchased his stock. And finally, the important topic of "voting_trusts" receives but a passing comment. These, however, are but minor criticisms of a work that is on the whole extremely accurate, and for a volume of such moderate proportions surprisingly complete.

25

A TREATISE ON THE LAW OF JUDGMENTS, including the Doctrine of Res Judicata. By Henry Campbell Black. Second edition. St. Paul: West Publishing Company. San Francisco: Bancroft-Whitney Co. 1902. 2 vols. pp. ccii, 1-754; xvii, 755-1592. 8vo.

The first edition of this excellent work, published in 1891, was reviewed in 5 HARV. L. REV. at p. 43. Believing, as is stated in the preface, that the cardinal principles of the law of judgments have remained substantially unchanged, the author has retained in the second edition most of the chapter and section titles of the first. A number of sections, however, have been rewritten, and seven thousand new decisions have been added to the citations. As a result of these additions, the present revision comes out some four hundred and fifty pages larger than the original work.

Although the author aims primarily to state the law as it is rather than as it should be, he does not fail in his analysis of the subject to indicate that certain doctrines, though established, constitute departures from general rules. An example of this is the treatment of the question as to the right to attack collaterally a grant of administration upon the estate of a person not in fact dead. By the weight of authority collateral attack is in such a case allowed. Mutual Benefit Life Ins. Co. v. Tisdale, 91 U. S. 238. This, the author points out, is an "exception to the rule of conclusiveness attaching to the decree of a probate court appointing an administrator." It would seem, however, that the recent case of Hilton v. Guyot merits more attention than a mere statement of the point it decides. Hilton v. Guyot, 159 U. S. 113. That case holds that a foreign judgment will not be regarded as conclusive unless the country where it was obtained accords a similar force to an American judgment. This view, however, disregards the fundamental conception that the enforcement of a foreign judgment depends upon and is required by principles of the common law, which cannot be affected by the action of a foreign government. Nereide, 9 Cranch (U. S. Sup. Ct.) 388, 422; see also DICey, Confl. Laws, 10. Retaliation "is for the consideration of the government, not of its courts." Per Marshall, C. J., in The Nereide, supra.

The

Of the other important American treatises dealing with the general subject of Judgments, none has appeared since Van Fleet on Former Adjudications, which was published in 1895. The publication of a work which gives access to the many cases decided since that date would for this reason alone seem timely.

CASES ON INTERNATIONAL LAW, selected from Decisions of English and American Courts. Based on Snow's Cases and Opinions on International Law. Edited with Syllabus and Annotations. By James Brown Scott, Dean of the College of Law, University of Illinois. Boston: The Boston Book Company. 1902. pp. lxvii, 961. 8vo.

In 1893, Dr. Freeman Snow, then instructor in International Law in Harvard College, published for the use of his class a collection of cases. The distinctive feature of the collection was the valuable analytic syllabus of the subject with numerous references to treatises, which Dr. Snow included in his volume. The book, though ostensibly covering the entire field, did not, however, contain all even of the leading cases in which the courts of the United States and England have applied the principles of international law; nor did the syllabus contain references to the works of some of the distinguished Continental jurists. These limitations have been removed in the edition which has just been put forth by Dean Scott.

The original arrangement has, with a few modifications, been retained. Only one new section, that discussing the effect of a change of sovereignty on local law, has been added. Yet the book is greatly altered. Generally speaking, all th leading cases in the United States and England have been gathered together, and the collection has been brought down to date. In two respects Dean Scott has departed from Dr. Snow's scheme. He has omitted all head