6 allow the government an appeal where it can have no effect on the fate of the defendant. It is unnecessary to consider whether or not such a provision would be unconstitutional; it is enough that bench and bar unite in condemning such proceedings, as productive of ex parte arguments and consequently poor decisions. For this reason the House bill before mentioned seems ill-advised in providing that the government may appeal after a verdict of acquittal, but that the verdict shall not be set aside. Moreover, the enactment must not involve "double jeopardy" within the constitutional prohibition, as construed by the United States Supreme Court. Under the rulings of this court jeopardy begins at the moment when the jury is empanelled and sworn, at least "if the preliminary things of record are ready for the trial." If there is a valid indictment and a jury sworn, and also, it is held, if there is a defective indictment with a verdict of acquittal on the merits, the accused has been in jeopardy. Conversely, no jeopardy is produced by preliminary proceedings such as a motion to quash or demurrer to the indictment; and if after conviction the prisoner moves for arrest of judgment because of insufficiency of the indictment, his former jeopardy, if any, should be considered waived.10 Under these doctrines of jeopardy, the Senate bill already cited seems particularly happy in granting the government an appeal in all those cases, and those only, where it may be allowed with legal and constitutional propriety. The seriousness of the evils existing at present, and the possibility of an entirely unobjectionable enactment of much remedial efficacy, seem to bespeak for the President the hearty support of the legal profession in his efforts to secure the timely passage of the recommended legislation. 8 At POSTPONEMENT OF FUTURE GIFT "AS LONG AS LEGALLY POSSIBLE." common law no future interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the time of the creation of the interest.1 Courts have consistently refused to restrict the choice of lives to beneficiaries under the gift, or to limit the number which may be taken to measure its postponement.2 Twenty-eight lives have been held not too many, and the reason is given as Twisden put it: "All the candles are lighted at once." 4 The lives taken must not, however, be so numerous or so obscure as to preclude ascertainment by reasonable evidence at what time the survivor ceases to exist." Thus a gift twenty-one years after the death 4 See Senator Spooner's remarks, Congressional Record, 1st Session 59th Congress, 9033. Cf. Wambaugh, Study of Cases, 2 ed., § 5. 130. See U. S. Const., Fifth Amend. 6 See Kepner v. United States, 195 U. S. 100, 128. See also 18 HARV. L. REV. 216. 7 Cf. I Bish., Crim. L., 7 ed., § 1020. 8 United States v. Ball, 163 U. S. 662. See also Kepner v. United States, supra, 9 See Kepner v. United States, supra, 130. 10 United States v. Ball, supra, 672. Cf. Joy v. The State, 14 Ind. 139. 1 Gray, Rule Perp., 2 ed., § 201. 2 Thellusson v. Woodford, 4 Ves. 227. 8 Cadell v. Palmer, 1 Cl. & F. 372. Cf. Humberston v. Humberston, 1 P. Wms. 332, where Lord Cowper decreed that an executory trust of a perpetuity be settled upon some fifty life-tenants and then over in tail. 4 Love v. Windham, I Sid. 451. 5 Gray, Rule Perp., 2 ed., § 217. of all persons in the world now alive, though within the rule against remoteness, violates this independent rule against uncertainty. 7 An express provision in a will that the postponement be "as long as the law allows" raises a perplexing question. A testator may effectively say that his gift is to comply with the rule against perpetuities, but a declaration that it is not to violate the rule against uncertainty cannot render it certain. Definite lives are essential to the period of postponement, and if the will so designate lives therein mentioned, however slightly, they will be taken. This was the unchallenged procedure in an English case where counsel agreed that the testator designated one or the other of two sets of lives mentioned, and asked the court to decide which. The Supreme Court of Hawaii has recently declared that a trust to pay annuities to forty-two annuitants and their heirs "for as long a period as is legally possible," and then to divide the corpus equally among the then annuitants, clearly discloses an intent that the lives of the annuitants measure the period of postponement. Fitchie v. Brown, November 1, 1906. The court thereby first imputes to the testator knowledge that the rule against perpetuities depends upon lives, and then finds that he meant these lives in fact. Such intention seems very doubtful. Mention of persons for purposes of munificence is at best shadowy evidence that they are incidentally designated as measuring-rods. And though solicitous that his gift not fail, the testator would scarcely have opposed an interpretation which would protect his beneficiaries against their own improvidence even longer than these forty-two lives and twenty-one years. The lives of the inmates of the Kona orphanage (one of the annuitants) would doubtless have suited him better. It may well be, therefore, that under guise of construction courts are unwittingly laying down a rule of law that where a future gift is to take effect at the remotest time the law will allow without further direction as to that time, coupled with a gift meanwhile of income, the co irt will remedy the uncertainty by looking to the will for lives with which to measure the period of postponement. Such a rule, if adopted, would reach a desirable result without even beneficent violence to the words of the will. It would be convenient, for the beneficiaries would remain so near to their annual payments that their decease would be speedily known. It would have analogy for its attitude toward uncertainty. A direction that a legatee be supported according to his condition in life is valid. A gift to two persons in such shares as a third shall appoint, will on failure of appointment be equaliy divided. A gift of income for as long a period as another shall appoint, and then of the corpus absolutely, would hardly be let fail for want of appointment. 10 On the other hand, courts are indisposed to favor those who seek by general language to guard themselves against forbidden policies. Though a contract in reasonable restraint of trade is enforcible, a man cannot bind himself to refrain from a business "so long as the law allows." Such an agreement invites litigation and burdens courts.11 Nor will a settlement of chattels to go with settled land “as far as law and equity permit be construed as executory in order more perfectly to carry out the settlor's intent. 12 9 In re Moore, [1901] 1 Ch. 936. 9 Salusbury v. Denton, 3 Kay & J. 529. 7 Pownall v. Graham, 33 Beav. 242. Cf. 1 Jarman, Wills, 5 ed., *357 et seq. See Gray, Rule Perp., 2 ed., §§ 365 et seq. THE EFFECT OF FRAUD UPON INCORPORATION.1. The effect of fraud practised in connection with alleged incorporation is usually raised by an attempt to impeach the corporation collaterally. The invulnerability of de facto corporations to collateral attack is generally conceded. May this doctrine, then, be invoked by an organization in answer to a charge that its attempted incorporation was vitiated by fraud? Evidently no occasion arises for the consideration of this question unless there is failure to incorporate de jure. First, then, we must inquire whether the state itself may deny the effectiveness of proceedings attended by fraud. It is essential to distinguish between two types of fraud. (1) A statute requires the filing of a certificate in which shall be a statement that a certain proportion of stock is actually paid up. The incorporators file such a certificate with knowledge of its falsity. (2) A statute authorizes incorporation for purpose A. The incorporators organize in due form, but with the secret intent of using the corporation for the unauthorized purpose B. Suppose the fraud take the first form. If the corporation were chartered by 2 a special legislative act, it might well be that the sovereign's fiat would create the corporation despite fraud inducing the creation. And although incorporation is now usually provided for under general enabling statutes, even in such cases if the statute expressly declare that some document, for instance the certificate of the Secretary of State, shall "have the force and effect of a special charter, and shall be conclusive evidence of incorporation," an entire failure to perform conditions prescribed by the statute would seem to be immaterial, and, a fortiori, fraud would be unimportant.3 There is, moreover, a decided tendency to give similar effect to much weaker statutes. It seems a fair construction, however, of a clause calling for certain declarations, that those declarations should at least be bona fide. It is believed, therefore, that, unless coerced by the statute, courts should deny de jure incorporation in cases where statements required by statute have been made with knowledge of their falsity. But suppose the fraud be of the second type, consisting merely in wrongful motive. If the statute have no express requirement in this regard, it seems reasonable to ascribe to the legislature a negative attitude in the matter, a desire that the question of motive shall not be thrust upon the courts, which have frequently indicated their disinclination to involve themselves in it. And such seems to be the law. If the fraudulent motive result in fraudulent conduct, the state has an immediate remedy. And if the rights of third parties against such fraudulent organization be not sufficiently protected by appeal to the state official, relief might be furnished in the form of equitable injunction. We may now consider whether, granting that fraud of the first type suggested has left the organization without de jure existence, it may yet invoke the de facto doctrine. Whether the reason underlying this doctrine be consideration for the de facto organization, or for the court, or some more general ground, it is conceived that it should yield before an attack based, not on 1 For a discussion of the question whether the corporate entity should ever be disregarded after admittedly due incorporation, see NOTES, p. 223. 2 Mass. Rev. L. 1902, c. 110, § 20. 3 Rice v. National Bank, 126 Mass. 300. 4 See Cochran v. Arnold, 58 Pa. St. 399. 5 See Paterson v. Arnold, 45 Pa. St. 410, overruled by Cochran v. Arnold, supra. See also Davidson v. Hobson. 59 Mo. App. 130. • Importing, etc., Co. v. Locke, 50 Ala. 332. But see Brundred z. Rice, 49 Oh. St. some technical, mechanical defect, but on allegations of fraud in those who seek protection behind the corporate shield." It must be admitted, however, that there is a somewhat general tendency in the authorities to disregard the distinction between technical oversights, on the one hand, and fraud, on the other. To this effect is a late Missouri Supreme Court decision. First National Bank v. Rockefeller, 93 S. W. Rep. 761. Such decisions may be accounted for on the supposition that the less frequent cause for collateral attack has been merged by courts in the rule admittedly applicable to the more frequent cause for such attack. TENTATIVE QUALIFICATIONS OF THE DOCTRINE OF A SEPARATE CORPORATE ENTITY. - Although in our courts the apparently sound conception 1 of a corporation as an organic or psychical reality, separate and distinct from the natural persons composing it, does not obtain, yet, on the basis of a legal fiction, it is in general treated as such an entity. This entity can sue and be sued; be grantor and grantee; and have a continued existence and rights and obligations in contract or tort, wholly independent of those of the individual members. The corporation cannot be confronted with a stockholder's admissions, nor can its property be attached for his debts.* 5 Not even a sole stockholder can convey, or sue to recover, corporate property in his own name; nor can the corporation utilize his credits as a set-off. Indeed, in the teeth of public policy, a ship owned by an English corporation composed partly of foreign members has been held entitled to registry " as wholly belonging to Her Majesty's subjects." Yet firmly established and variously applied as is the "fiction" of a corporate entity, a qualifying doctrine has been proposed that under some circumstances it be disregarded. 8 Of the authorities, many decisions, which only apparently involve heedlessness of the "fiction," must be eliminated from consideration. For example, the adjudications that conveyances to corporations composed of the insolvent grantors are fraudulent, rest not upon the basis that there is no real conveyance, but upon the strong evidence that the conveyances are only to the intent and effect of defrauding creditors. There must likewise be distinguished decisions resulting from ultra vires doctrines,10 and from the doctrine that a fraudulently formed corporation has no legal existence.11 Moreover, the opinions in the Northern Securities case indicate no belief 1 8 The Christian & Craft Grocery Co. v. Fruitdale Lumber Co., 121 Ala. 340. See Pattison v. Albany Bldg. & Loan Ass'n, 63 Ga. 373. Cf the German view, Holtzendorff's Rechtslexikon, tit. Juristische Person, 943 3 5 6 7 8 See also 19 HARV. L. REV. 222. See Mor., Priv. Corp., 2 ed., § 232. Fairfield, etc., Co. v. Thorp, 13 Conn. 173. Williamson v. Smoot, 7 Martin (La.) 31. Parker v. Bethel Hotel Co., 96 Tenn. 252. Button v. Hoffman, 61 Wis. 20. Gallagher v. Germania, etc., Co., 53 Minn. 214. The Queen v. Arnaud, 16 L. J. Q. B. (N. s.) 50. See also Foster v. Commissioners of Inland Revenue, [1894] 1 Q. B. 516. * See Booth v. Bunce, 33 N. Y. 139. But cf. First, etc., Bank v. Trebein Co., 59 Oh. St. 316. D See Mill v. Hawker, L. R. 9 Exch. 309. 11 See Brundred v. Rice, 49 Oh. St. 640; also NOTES, p. 222. that the result hinged on disregarding the corporate entity; 12 and it is also noticeable that in questions of the jurisdiction of the federal courts over suits to which a corporation is a party, substantially the same result has been reached by conclusive presumptions as would logically follow the conception of a corporate entity.18 The distinction sometimes suggested, that law perceives only the corporate garb, while equity may "draw the veil," not only has little in justice or logic to commend it, but seems so generally ignored by the authorities that it may be disregarded. 15 Yet after all this is said, there undoubtedly remain many judicial statements that the corporate entity will sometimes be disregarded, and five or six decisions expressly to that effect,15 - about half of them cases where the court is striving to give effect to a statute under which the state is pursuing the corporation for alleged illegal acts. 16 17 Although the numerous expressions of opinion may presage the ultimate adoption of the limiting doctrine, as yet the question surely remains sub judice. The most promising statement of the tentative qualifying doctrine seems to be that the "fiction" of a corporate entity will be disregarded "when urged to an intent and purpose not within the reason and policy of the fiction." Thus phrased, the qualification is apparently just and unobjectionable. Yet there seem to be weighty reasons for rejecting it. The merits of general and sharply defined rules of law need no encomiums. The proposed exception, by its specious generality, will tend to introduce additional elements of litigation-breeding uncertainty into the already chaotic corporation law. By what standards can it clearly be determined what is "within the reason and policy of the fiction"? A comparison of the cases where the entity has been observed with those where it has been suggested that it be disregarded, shows but too clearly how ragged would be the line of demarcation. Furthermore, there seems to be no urgent need of the innovation; for the "public inconvenience, wrong, fraud, or crime," 18 to prevent which the "fiction" is to be abjured, can almost always be reached through other legal principles. Take, for instance, the facts of a recent case where the court, fully maintaining the doctrine of a corporate entity, held that a corporation's promise not to engage in a certain business, assented to by its principal stockholders, bound neither them nor a new corporation formed by them. Hall's Safe Co. v. Herring, etc., Co., 146 Fed. Rep. 37 (C. C. A., Sixth Circ.). Here the stockholders might readily have been bound by individual contracts, breaches of which equity would enjoin; and the new corporation might then very possibly be enjoined as a confederate in these illegal acts. If in scattered instances suitable established legal remedies are lacking, the legislature, which has granted corporate powers, should be left to provide against abuse of them. 20 19 12 See Northern Securities Co. v. United States, 193 U. S. 197. 13 See I Smith, Cas. on Priv. Corp., 2 ed., 94–102. 14 See Mor., Priv. Corp., 2 ed., § 227. 15 See Ferguson v. Earl of Kinnoull, 9 Cl. & F. 250; State v. Standard Oil Co., 49 Oh. St. 137; Sportsman, etc., Co. v. American, etc., Co., 30 Wkly. L. Bul. 87 (Cincinnati, Super. Ct.); People v. North, etc., Co., 121 N. Y. 582; United States v. Milwaukee, etc., Co., 142 Fed. Rep. 247. 16 In Ohio, however, the qualifying doctrine under discussion seems established. See Ohio cases, supra. 17 See 7 Am. & Eng. Encyc., 2 ed., 634. 18 See United States v. Milwaukee, etc., Co., supra, 255. 19 Cf. Moore, etc., Co. v. Towers, etc., Co., 87 Ala. 206. 20 Cf. Lewis v. Gollner, 129 N. Y. 227. |