RESTRICTIVE AGREEMENTS AS TO USE OF PROPERTY - Agreement as TO SALE OF CHATTELS- Effect on Sub-Vendee. The plaintiffs, publishers, printed in their books a notice that the books were to be sold only at a certain price, at retail, and by their authorized agents, and that purchasers should not re-sell within a certain time. On breach of any of these stipulations, the title was to revest in the publishers. The defendant, with knowledge of this notice, violated its conditions. Held, that there may be a preliminary injunction to restrain him. Authors and Newspapers' Ass'n v. O'Gorman Co., 147 Fed. Rep. 616 (Circ. Ct., Dist. R. I.).

For a discussion of the principles involved, see 17 HARV. L. REV. 415. Cf. Bobbs-Merrill Co. v. Straus, 147 Fed. Rep. 15 (C. C. A., Second Circ.); Scribner v. Straus, 147 Fed. Rep. 28 (C. C. A., Second Circ.).

STATUTE OF FRAUDS - PART PERFORMANCE REPUDIATION OF CONTRACT BEFORE ACTION UPON IT. — The defendant orally agreed to give the plaintiff a ten-year lease of certain premises. Later a disagreement arose, the defendant claiming it was to be for only five years. Though the plaintiff was informed that he could not have a lease for more than five years, he entered, made improvements, and demanded the execution of a ten-year lease. Held, that the contract cannot be enforced. Czermak v. Wetzel, 100 N. Y. Supp. 167 (App. Div.).

This New York decision illustrates the true principle on which specific performance of oral contracts within the Statute of Frauds is given when there is part performance by the plaintiff. The true basis of equity's interference is not that it is giving specific performance of the oral contracts, but the feeling that the promisee has an equity when, relying on the agreement, he has changed his position so that he cannot be adequately reimbursed nor put in as favorable a position as before. See 15 HARV. L. Rev. 659. When the promisor repudiates the contract and the promisee, with notice, nevertheless sets out to act upon it, the theory on which equity proceeds in these cases does not apply. Parke v. Leewright, 20 Mo. 85; see Wood v. Thornley, 58 Ill. 464, The promisor is innocent of any fraud; the promisee cannot say that he has acted on the faith of the promise. The promisor may lawfully stand on the statute, and refuse to perform the agreement. See Dunphy v. Ryan, 116 U. S. 491, 498. Having done so, he may allow the tenant to enter on other terms, without providing him with an equity.

471.

TAXATION - PARTICULAR FORMS OF TAXATION-STATE INHERITANCE TAX ON STOCK OF SIMULTANEOUSLY INCORPORATED TWO-STATE CORPORATIONS. A New York statute imposed an inheritance tax of 5 per cent upon all "property within the state" belonging to a non-resident decedent. A Connecticut decedent left in Connecticut shares in the Boston & Albany Railroad, a corporation simultaneously and in good faith incorporated both in New York and in Massachusetts. The main offices of the company and fivesixths of its trackage were in Massachusetts. New York officials assessed the shares at their full market value. Held, that they should be assessed at a value representing the proportion of the corporation's property within the state. Matter of Cooley, 186 N. Y. 220. See NOTES, p. 313.

ΤΑΧΑΤΙΟΝ PURPOSES FOR WHICH TAXES MAY BE LEVIED - Relief of BLIND. A statute provided that all blind adults who had been residents of the state for five years and had no means of support should be entitled to not more than twenty-five dollars per capita quarterly from the county treasury. Held, that the statute is unconstitutional, as it requires the expenditure for a private purpose of public funds raised by taxation. Auditor of Lucas County v. State ex rel. Boyles, 78 N. E. Rep. 955 (Oh.).

It is settled law that taxation can only be for public purposes. Loan Ass'n v. Topeka, 20 Wall. (U. S.) 655. But the line between what is a public and what is a private purpose has not been definitely determined. There are, though, some indicia of a public purpose that are established. Thus, if the general well-being of society and the present and prospective happiness and

prosperity of the people be subserved or advanced, the purpose is public. See People v. Salem, 20 Mich. 452. The benefit to the public, however, must be direct and not merely incidental or consequential. Weismer v. Village of Douglas, 64 N. Y. 91. The relief of the poor and the care of those who are unable to take care of themselves are among the unquestioned objects for which taxes may be laid. State ex rel. Goodwin v. Nelson County, 1 N. D. 88; see Booth v. Town of Woodbury, 32 Conn. 118, 128. Tested by these princi ples, it is hard to see why the general purposes in the present case were not of a public character. Under the operation of the statute, however, as it provided for no inquiry subsequent to the one awarding the aid, a beneficiary would still be entitled to receive his bounty after becoming self-supporting. Such a result would render the tax clearly unconstitutional.

TRUSTS CREATION AND VALIDITY PROVISION FOR INTEREST AND FINAL DISPOSITION. The plaintiff's testator gave to the defendant a sum of money on the understanding that the latter should pay interest thereon to the testator during his life, and upon his death dispose of the sum according to instructions in a letter to be left by the testator. Upon the death of the testator, though the letter of instructions was duly found, his personal representatives claimed the fund. Held, that whether the agreement created a trust or not, the personal representatives cannot recover from the defendant. One justice dissented on the ground that the agreement resulted in a mere loan. Morris v. Wucher, 100 N. Y. Supp. 878 (App. Div.).

In spite of the court's hesitation as to the grounds for its decision, the result is undoubtedly correct. The fact that interest was to be paid on the amount is sufficient, according to the better view, to negative the existence of a trust. Pittsburgh Nat'l Bk. v. McMurray, 98 Pa. St. 538. The conclusion of the dissenting justice, however, that on that account the transaction can result in nothing but a debt recoverable by the testator or his representatives, does not follow. The defendant took title under a contract, first to pay interest, and second to make certain final disposition of the money received, and he cannot be compelled to do other than fulfil his contract. Cf. Scrugg v. Alexander, 72 Mo. 134. This conclusion is not open to the objection that it permits testamentary disposition of property without the formalities required by the Wills Act, for the testator parted with control at the time of the original transfer. A similar decision was reached in an English case on the erroneous ground that a valid trust was created. Moore v. Darton, 4 De G. & Sm. 517.

TRUSTS POWERS AND OBLIGATIONS OF TRUSTEE-EQUITABLE SETOFF AGAINST INSOLVENT CEstui que TruST. — The estate of a cestui que trust brought suit for an account against the trustee's estate. The latter claimed the right to set off against the trust obligation certain claims held by the trustee personally against the cestui. The cestui's estate was insolvent. Held, that, owing to the insolvency, the set-off will be allowed in equity. Smith v. Perry, 95 S. W. Rep. 337 (Mo., Sup. Ct.).

At law only mutual debts may be set off against each other. Tagg v. Bowman, 99 Pa. St. 376; see Mo. REV. STAT. 1899, §§ 4487-4499. It is also established that ordinarily a trustee when called on to account for trust property cannot set off personal claims against the cestui. First Nat'l Bank v. Barnum Wire Works, 58 Mich. 124, 315. But equity allowed set-off in general before statutes allowed it at law. Ex parte Stephens, 11 Ves. Jr. 26. And equity may, therefore, go further than the statutes and enforce by way of set-off crossdemands, whether arising out of the same or disconnected transactions, and whether liquidated or unliquidated. A ground of such equitable set-off is the insolvency of the party against whom it is claimed. St. Paul Trust Co. v. Leck, 57 Minn. 87. The extent to which the cases have gone has been to stay the collection of a liquidated claim until an unliquidated cross-claim should be determined and set off. North Chicago Rolling Mill Co. v. St. Louis Steel Co., 152 U. S. 596. The present case goes further in allowing the set-off of a legal against an equitable claim. On its facts this case does not seem open to the objection of working an injustice to other creditors of the

cestui. It may therefore be supported as an extension of the general doctrine of equitable set-off.

TRUSTS POWERS AND OBLIGATIONS OF TRUSTEES - PROFITS ARISING FROM COMBINATION OF TRUST AND PERSONAL INTERESTS OF TRUSTEE. — The defendant was trustee of the plaintiff group of gas companies with entire control. He also owned a controlling interest in the competing group of companies. A coke manufacturing company needed a market for its by-product gas. By contemporaneous transactions the defendant entered into long-term contracts with it on behalf of the plaintiff companies and sold out his personal holdings in the other companies at an abnormal profit. Held, that the plaintiff companies are entitled to an equitable share of the personal profits. Bay State Gas Co. v. Rogers, 147 Fed. Rep. 557 (Circ. Ct., Dist. Mass.).

That a trustee cannot make use of trust-funds for private profit is fundamental. If he trade or speculate with them, he must account to the cestui for gains. Norris's Appeal, 71 Pa. St. 106. Only by removal of all temptation of selfinterest can trustees' loyalty and prudence to defenseless cestuis be assured. I PERRY, TRUSTS, 5 ed., §§ 427 et seq. Nor can the trustee reap incidental benefit from his office, though the cestui himself could never have obtained it. White v. Sherman, 168 Ill. 589. If he himself act as solicitor or broker for his cestui, he gets nothing for his services, though he might have paid others for them. Broughton v. Broughton, 5 De G. M. & G. 160. He cannot buy up at a discount claims against the estate or incumbrances upon it and pocket the difference. Rankin v. Barcroft & Co., 114 Ill. 441. Only Kentucky seems favorably disposed toward any kind of incidental profit. Bush v. Webster, 72 S. W. Rep. 364. The fiduciary capacity does not, however, disqualify a trustee from making profit in a common or joint enterprise with his cestui. Levi v. Evans, 57 Fed. Rep. 677. But equal zeal must be used in furthering each interest. Scott v. Ray, 18 Pick. (Mass.) 360. In the principal case single ownership of the combined interests involved a strategic position, intrinsically valuable, which could be realized on by sale of either holding. The profit should therefore be apportioned.

WILLS-JOINT WILLS REVOCATION. - A and B made a joint will whereby each left his property to the other for life, and at the death of the survivor all the property of both was to go to C. A died. B accepted the decedent's estate, and then made another will revoking the first. Held, that C may recover such property from the defendants, to whom B voluntarily transferred it during his life, as he would have been entitled to under B's first will. Bower v. Daniel, 95 S. W. Rep. 347 (Mo., Sup. Ct.). See NOTES, p. 315.

BOOKS AND PERIODICALS.

I. LEADING LEGAL ARTICLES.

RIGHTS OF THE JAPANESE IN CALIFORNIA SCHOOLS. Much popular discussion has been evoked by a rule adopted on October 11, 1906, by the board of school trustees of San Francisco, which provides that Japanese children shall attend schools set apart for Chinese, Japanese, and Koreans, and excludes them from other schools. In considering whether or not such action violates any rights of the Japanese, it may be well first to look at the question apart from the treaty between the United States and Japan.

It is generally held that local school officials have no power thus to provide for separate schools in the absence of express legislative authority. But in the

1 Ottawa Board of Education v. Tinnon, 26 Kan. 1; Wysinger v. Crookshank, 82 Cal. 588.

present case such authority is probably conferred by § 1662 of the Political Code of California of 1903, which provides that "trustees shall have the power to... establish separate schools for Indian children and for children of Mongolian or Chinese descent." It can hardly be questioned but that "Mongolian is used here in its broadest sense and includes Japanese.1 The question then arises whether the action of the school board, though authorized by the legislature, is violative of any rights of the Japanese under the federal Constitution. The first section of the Fourteenth Amendment secures to all persons, thus including aliens,2 the equal protection of the laws. It is well established, however, that even in the case of a citizen this clause does not prevent the segregation in public schools of different races. The rights of an alien would not be any greater than those of a citizen. But though different races may be segregated, no race may be accorded better treatment than another. So no constitutional rights of the Japanese have been violated in the present case unless the schools for Japanese and for whites offer the latter greater advantages, or unless there is more than a reasonable difference in their accessibility. The former supposition the evidence at hand seems to negative, but it may be that the Japanese school is unreasonably difficult of access.4 Even in such a case it will have to be established though this seems not an insuperable difficulty — that aliens have rights in public property, such as public schools. This last objection would very probably not have to be met in the case of Japanese children born in this country, since they are citizens of the United States. On the other hand, such children have, it is clear, no rights under the treaty.

In making inquiry as to whether any treaty rights of Japanese who were born in Japan have been violated, it may well be noted that there is doubt as to whether the treaty-making power of the United States would justify it in guaranteeing to a foreign sovereign for his subjects a greater right or privilege than citizens of this country possess, the privilege of exemption from racial segregation in schools. For though no case has arisen in which the treatymaking power has been held to be exceeded, there is a general opinion that it has substantial limits. On the whole, however, it seems probable that it would be held to extend to the case in hand.8 In a recent article Mr. Edwin Maxey comes to the further conclusion that the treaty actually does guarantee to all Japanese subjects freedom from segregation, and that San Francisco has violated this treaty right. Exclusion of Japanese Children from San Francisco Schools, 16 Yale L. J. 90 (December, 1906). The material part of the treaty reads as follows: "in whatever relates to rights of residence and travel . . . the citizens or subjects of each Contracting Party shall enjoy in the territories of the other the same privileges, liberties and rights. . . [as] native citizens or subjects, or citizens or subjects of the most favored nation."9 Granting with Mr. Maxey that "rights of residence" include school privileges, it is hard to see how the treaty gives the Japanese any rights that are necessarily violated by the segregation order. This is clear as to the clause that gives them the same rights as have citizens of the United States. And even the citizens of the most favored nation are subject to segregation in our schools. A colored British subject would have to attend the schools for negro children, and a white British child the schools for white children, wherever there is segrega

1 See 2 Encyc. Britannica, 9 ed., 113.

2 Yick Wo v. Hopkins, 118 U. S. 356, 369.

3 Lehew v. Brummell, 103 Mo. 546.

4 See the report of Secretary Metcalf, which accompanied the President's Message to Congress of December 18, 1906.

5 In re Look Tin Sing, 10 Sawy. (U. S. C. C.) 353

Butler, Treaty Making Power, § 454.

7

2 Northwestern L. Rev. I; same article in 1893 Am. Bar Ass'n 243. Cf. U. S. Rev. Stat. § 709. See Geofroy v. Riggs, 133 U. S. 258, 267.

8 Cf. Geofroy v. Riggs, supra.

9 29 U. S. Stat. at L. 848.

tion of negroes and whites. It is merely incidental that Japanese subjects are very generally of the Japanese race; German subjects are generally white, and would have to attend the schools for whites. The whites are segregated as much as the negroes or the Japanese. It must be clear that it is the Japanese as a race, not as subjects of the emperor of Japan, who are segregated, since American citizens of Japanese descent are included as Japanese. To interpret the treaty to stipulate against school segregation of the Japanese as a race, as contrasted with Japanese subjects, would be to adopt a very strained construction which would raise grave questions as to the extent of the treaty-making power. It must be remembered that segregation is not discrimination at all, and cannot fairly be said to be a denial of equal privileges, liberties, and rights, any more than under the Fourteenth Amendment it is a denial of the equal protection of the laws.

AFFIDAVITS IN ATTACHMENT. I. Raymond D. Thurber. A summary of the law and collection of authorities on the probative value of affidavits in proceedings for the attachment of property. 7 Bench & Bar 55.

CONTROL OF CORPORATIONS, THE. Frederick N. Judson. Maintaining that the most advisable method of controlling corporations is not by forfeiture or suspension of the exercise of the corporate functions, but by enforcing a strict responsibility on the part of the officers and members of the corporations for corporate acts. 18 Green Bag 662.

DIVORCE PROBLEM AND RECENT DECISIONS OF THE UNITED STATES SUPREME COURT, THE. D. D. Murphy. After discussing Haddock v. Haddock and

Atherton v. Atherton, contending for more uniform divorce laws. 14 Am. Lawyer 499. See 19 HARV. L. REV. 586.

DO WE NEED A "SALE OF GOODS" ACT IN NEW YORK? E. Lyman Tilden. A comparison of the simplicity of the English statute with the complexity and apparent conflict of New York decisions; concluding that a codification of the law of sales is highly desirable. 68 Alb. L. J. 303.

ENTITY THEORY IN CORPORATION LAW, THE. Anon. Showing how the fiction of corporate entity is in some cases set aside to prevent injustice. 32 Nat. Corp. Rep. 881. See 20 HARV. L. REV. 78; ibid. 223.

EVOLUTION OF THE LAW BY JUDICIAL DECISION.

I. Robert G. Street. Discussing the responsiveness of all judge-made law to public opinion, enumerating the influences of the Roman law upon the common law, and emphasizing the chaotic condition of the latter. 14 Am. Lawyer 490.

EXCLUSION OF JAPANESE CHILDREN FROM THE PUBLIC SCHOOLS OF SAN FRANCISCO. Edwin Maxey. 16 Yale L. J. 90. See supra.

FREEDOM OF THE EXECUTIVE IN EXERCISING GOVERNMENTAL FUNCTIONS FROM CONTROL BY THE JUDICIARY. I. John Campbell. A Colorado view of the governor's right to declare martial law and suspend the writ of habeas corpus. 14 Am. Lawyer 503.

INDEX OF COMPARATIVE LEGISLATION, AN. W. F. Dodd. Reviewing the best existing summaries of comparative legislation and making suggestions for the proposed summary to be published by the United States Government. I Am. Pol. Sci. Rev. 62. LAW OF OFFICERS, THE. Leonard Felix Fuld. Treating the subject under the headings de facto officers and qualifications for office. 14 L. Stud. Helper 266, 329. LIMITATION OF LIABILITY OF VESSEL OWNERS. James D. Dewell, Jr. Pointing out that the owner of a vessel, by moving causes of action against him into the federal district courts, can, in many cases by the aid of federal statutes, lessen his common law liability. 16 Yale I.. J. 84.

MOVEMENT FOR AN INTERSTATE ORDER BILL OF LADING. Anon. Commenting on the need for reformation of the law of bills of lading and explaining the legal effect of proposed amendments to the federal rate bill. 23 Banking L. J. 866. NEGRO SUFFRAGE: THE CONSTITUTIONAL POINT OF VIEW. J. C. Rose. Dis

cussing the methods by which a large part of the negro population of the South is prevented from voting. I Am. Pol. Sci. Rev. 17.

NEWFOUNDLAND FISHERIES' DISPUTE, THE. Alfred B. Morine. Explaining the questions at issue, and raising questions as to the construction of the treaty of 1818 which defines the rights of Americans. 5 Can. L. Rev. 414.