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AGENCY – UNDISCLOSED PRINCIPAL's RighTS AND LIABILITIES WITH RESPECT TO THIRD PERSONS — UNDISCLOSED PRINCIPAL SURETY ON AGENT'S NOTE. — The defendant through her agent sought to borrow money from the plaintiff. The latter lent the money, but only after securing the signature of the defendant as surety on the note given as collateral by the agent. The plaintiff acted in ignorance of the fact that the loan was secured for the defendant. The note was not protested at maturity, and the plaintiff sought to recover against the defendant as undisclosed principal. Held, that the plaintiff cannot recover. Two judges dissented. Brown v. Lanpher, 35 N. Y. L. J. 1651 (N. Y., Sup. Ct., App. Div., July, 1906).
Though the defendant was not liable on the note, it seems that he should have been held in assumpsit, which was the nature of the count in this case. Pentz V. Stanton, 10 Wend. (N. Y.) 271. The court based its decision to the contrary on the ground that the defendant " was not an undisclosed principal,” but “ open, declared, and active participant in the transaction.” This seems to be a misconception of the true principle underlying the rule as to the liability of an undisclosed principal, which, it is conceived, is that the third party has in all cases a right to choose whether or not he shall hold the principal liable. This choice is ordinarily made at the time of entering into the contract, but as it is clear that there cannot be any election as to holding the principal when he is undisclosed, the rule results that in such case the third party may make his election at any time subsequent to the discovery of the principal. Thomson v. Davenport, 9 B. & C. 78. “Th fact that in this case the principal took part in the transaction as surety should have no effect to destroy his liability as having been an undisclosed principal, for since the fact of the agency was unknown to the third party, he could have made no choice not to hold the principal. See Railton v. Hodgson, 4 Taunt. 576 n. (a).
BANKRUPTCY - EXEMPTIONS Life-INSURANCE Policy. The National Bankruptcy Act allows a bankrupt who holds an insurance policy which has “a cash surrender value” to pay such value to the trustee in bankruptcy and hold the policy henceforth free from creditors. NAT. BANKR. Act, $ 70 a (5). A bankrupt héld three tontine policies which did not expressly give the holder a right to a cash surrender value, but it was the invariable custom of the insurance company to allow such an option on policies of that kind. Held, reversing the Circuit Court, that the bankrupt might retain the policy. In re Mertens, 142 Fed. Rep. 445 (C. C. A., Second Circ.).
For a discussion of the principles see 19 Harv. L. Rev. 377, suggesting this rule and criticising cases contra.
BANKRUPTCY — PROPERTY PASSING TO TRUSTEE — TRUSTEE IN BANKRUPTCY NOT EQUIVALENT TO JUDGMENT CREDITOR. · The appellant sold machinery to a corporation of which the respondent was trustee in bankruptcy on a conditional sale contract without filing the contract as required by a statute of Ohio to make it good against creditors. The machinery was installed in the corporation's factory. Helà, that, adopting the Ohio court's interpretation that an unfiled contract of conditional sale is void as to only those creditors who have fastened upon the property by some specific lien, this conditional sale is valid as against the trustee. York Manufacturing Co. v. Cassell, 201 U. S. 344.
This decision, the first on this exact point since the passage of the Bankruptcy Act of 1898, is based chiefly on the grounds that the trustee in bankruptcy stands merely in the bankrupt's shoes. Apparently no notice was taken of $ 67a, providing that “Claims which for want of record or for other reasons would not have been valid liens as against the claims of the creditors of the bankrupt shall not be liens against his estate.” U.S. COMP. STAT. 1901, p. 3449. The decision of the lower court, hereby reversed, and another Circuit Court of Appeals case present what is perhaps a better view. York Manufacturing Co. v. Cassell, 135 Fed.
Rep. 52; In re Pekin Plow Co., 112 Fed. Rep. 308: see In re Thorp, 130 Fed. Rep. 371. The institution of proceedings in bankruptcy amounts to an effectual sequestration for the benefit of creditors of all the property of the bankrupt which might have been seized by the creditors. Therefore, when such proceedings have been instituted, there would seem to be the effectual seizure required by the interpretation of the Ohio statute. For further discussion of the general question, see 16 Harv. L. Rev. 370. BANKRUPTCY PROVABLE CLAIMS ANTICIPATORY BREACH OF CON
- The petitioner, who had made a contract to deliver supplies over five years following, claimed that the other party's adjudication in bankruptcy by involuntary proceedings constituted a breach of the contract, and wished to be allowed to prove his damages against the estate. The trustees in bankruptcy had elected not to carry out the contract. Held, that adjudication in bankruptcy is not equivalent to a refusal of the bankrupt to perform or to permanent disability to perform, and that therefore no debt exists provable against the estate. In re Imperial Brewing Co., 143 Fed. Rep. 579 (Dist. Ct., W. D. Mo.).
By the Bankruptcy Act of 1898 the provability of a claim depends upon its status at the time the petition is filed. U. S. COMP. STAT. 1901, p. 3447. When insolvency occurs, the assignee or trustee in bankruptcy has a right to fulfill any of the contracts of the bankrupt. Cf. Brassel v. Troxel, 68 Ill. App. 131. But in this case the trustee had not elected to fulfill the contract. By the ordinary doctrine of anticipatory breach, if the vendee refuses to perform, or disables himself from performing the contract, a breach is thereby committed, and he is immediately liable for damages on the whole contract. Roehm v. Horst, 178 U. S. 1. When the creditor elects to treat bankruptcy as a breach, as he has done in the present case by offering to prove his claim, and the trustee does not exercise his election to go on, the adjudication should be equivalent to repudiation or self-disablement, and the debt, thereupon a present liability, should be provable against the bankrupt estate. In re Pettingill, 137 Fed. Rep. 143. The court seems unwisely to limit the logical extension of the theory of anticipatory breach.
CARRIERS LIMITATION OF LIABILITY — LIABILITY TO ADMINISTRATOR of ONE WHO HAS WAIVED HIS RIGHTS AGAINST CARRIER. - In consideration of reduced charges, the deceased agreed that the railroad should not be liable for any damage to him or his goods due to its negligence. The New York Code allows the administrator an action for death when the deceased could have recovered for the injury had it not proved fatal. Held, that, under this statute, the administrator may recover from the carrier for the death caused by its negligence. Hodge v. Rutland Rd. Co., 112 N. Y. App. Div. 142.
By this decision New York adopts the prevailing rule. See 13 Harv. L. Rev. 309; 17 ibid. 491.
CARRIERS NEGLIGENT DELAY — Act of GOD. A connecting carrier, in spite of continued explicit warnings from the U. S. Weather Bureau, negligently detained goods at a station until they were overtaken by a flood. Held, that the original carrier is liable. Wabash R. Co. v. Sharpe, 107 N. W. Rep. 758 (Neb.).
There is some conflict of authority as to whether or not unnecessary delay on the part of a carrier, without other negligence, consequent upon which is the destruction of goods in transit by act of God, renders the carrier liable. The better view would seem to be that mere nonfeasance is in such cases too remote a condition to be regarded as part of the legal cause of the damage. Morrison v. Davis, 20 Pa. St. 171, approved in Denny v. N. Y.C.R. Co., 13 Gray (Mass.) 481; contra, Read v. Spaulding, 30 N. Y. 630. But the decision in the principal case is clearly correct, since the negligent delay was here not a mere antecedent condition of the loss, but a present co-operating cause, continuing up to the time of the disaster. Moreover, a flood against which, by reason of previous warning, provision could have been made in ample time would not seem to fall within any proper definition of an aci of God. See further, 10 Harv. L. Rev.
CARRIERS PERSONAL INJURIES TO PASSENGERS — UNSAFE APPROACHES TO STATIONS. — The plaintiff received personal injuries through the openly defective condition of a stairway indicated and constantly used as an approach to the defendant's station. This stairway, the majority of the court assumed, was owned and maintained by the city. There were other suitable approaches to the station. Held, that the defendánt is liable. Schlessinger v. Manhattan Ry. Co., 98 N. Y. Supp. 840.
It is the duty of a railroad company to use proper care that safe means of access to and from its stations be provided for the use of passengers. Un. doubtedly, therefore, the company is liable for personal injuries resulting from defective passageways negligently maintained by it on its own premises. Furthermore the same liability has been imposed for defective approaches, apparently open to use by passengers, both when they are on the railroad's premises but maintained by other parties, and when they are on another's premises but maintained by the railroad. Del., etc., R. R. Co. v. Trautwein, 52 N. J. Law 169; Tobin v. Portland, etc., R. R. Co., 59 Me. 183. The present decision with two somewhat similar adjudications tends to show that the carrier would generally be held liable, although the defective approach was owned and maintained by another and on another's premises. See Cotant v. Boone, etc., Ry. Co., 125 Ia. 46 ; Gulf, etc., Ry. Co. v. Glenk, 9 Tex. Civ. App. 599, 606. Here, however, the liability cannot well be for the defective condition of the approach itself, for the railroad company had no legal right to make repairs on another's property. The railroad's wrong really lay in not guarding its own premises so that passengers would not reasonably be led to use the dangerous passages therefrom. Cf. Burgess v. Great Western Ry. Co., 6 C. B. (N. s.) 923.
CHARITIES AND TRUSTS FOR CHARITABLE Uses — WHAT CONSTITUTE CHARITIES. — TRUST FOR PATRIOTIC PURPOSES. - A testatrix by her will left certain funds to be invested by specified trustees, and directed that a part of the income be given annually to the ringers for the time being of the parish church, who should ring a peal of bells on every May 29 in commemoration of the happy restoration of the monarchy to England. Held, that the provision is a valid charitable gift. In re Pardoe-McLaughlin v. Atty.-General, 22 T. L. R. 452 (Eng., Ch. Ď., Apr. 10, 1906).
Under the broad definition given to the term “charitable trusts” by the courts at the present day, the present case is undoubtedly correct. Webb v. Oldfield, (1898] i Ir. Ch. 431. The term covers not only such objects as would be understood by it in its popular sense, but also anything which tends to benefit a number of people by bringing their minds or hearts under the influence of education and religion, lessening public burdens, or by conducing to their social betterment. Garrison v. Little, 75 Ill. App. 402. ' Accordingly, gifts in trust for anti-vivisection societies, temperance societies, vegetarian societies, societies for studying and curing diseases of animals useful to man, and the like, as well as gifts for strictly educational or religious purposes, have been upheld as charitable trusts. In re Foveaux, (1895] 2 Ch. 501; Harrington v. Pier, 105 Wis. 485; Webb v. Oldfield, supra; University of London v. Yarrow, I De G. & J. 72. A patriotic trust, as in the principal case, can be supported either as educational, for it instructs and reminds the people of their history, or as one for social betterment, since it brings the people to a greater realization of their duty to their country and their neighbor. In either aspect, it is a valid charitable trust. Sargent v. Cornish, 54 N. H. 18.
CONFLICT OF LAWS EFFECT OF CONTRACTS DAMAGES RecoverABLE FOR BREACH IN DIFFERENT STATE. — A telegraph message sent in Indiana to the plaintiff in Kentucky was delayed in Indiana, with the result that the plaintiff suffered mentally through the delay in delivery; He sued in Kentucky, and obtained judgment. The defendant appealed. Held, that the defendant's liability is governed by the law of Kentucky. Western Union Telegraph Co. v. Lacer, 93 $. W. Rep. 34 (Ky.).
For a case allowing recovery in the state in which the message was sent, and for a discussion of the principles involved, see 17 Harv. L. Rev. 354.
CONFLICT OF LAWS — TESTAMENTARY SUCCESSION -EFFECT OF WILLS ACT ON WILL OF ENGLISH WOMAN MARRYING SCOTCHMAN. — The English Wills Act of 1837 provides that “ every will made by a man or woman shall be revoked by his or her marriage. This act does not apply to Scotland. An English woman after having made her will married a domiciled Scotchman. After they had lived in Scotland some time, she died. Held, that the will is not revoked, since by her marriage the testatrix became Scotch, so that the Wills Act did not apply to her. Westerman v. Schwab, 43 Sc. L. Rep. 161.
The exact point raised by this case has apparently never before been adjudicated. The principal argument in favor of revocation seems to have been that the English Wills Act has the effect of reading into every person's will a clause that the will should be revoked before marriage. It has been held, however, that if a Frenchwoman marries a domiciled Englishman, her will, on which the English act would have no effect when made, is revoked by marriage. See In re Martin,  P. 21. This would seem to show that the act operates not because of any tacit condition annexed to the will, but directly at the time of the marriage. Following this interpretation of the act, the court decided the case on the general principle that the civil effect of the marriage should be determined by the law of the matrimonial domicile, which is usually the domicile of the husband. See Mason v. Homer, 105 Mass. 116. It is well settled that the distribution of personal effects as between wife and husband, when of different jurisdictions, falls within this rule. Mason v. Fuller, 36 Conn. 160. The adoption of this principle offers a further means of harmonizing the principal case with the case cited above, where the effect of the marriage was to revoke the instrument. See In re Martin, supra.
CONSPIRACY CRIMINAL LIABILITY CONSPIRACY TO COMMIT CRIME REQUIRING PLURALITY OF ACTORS. An indictment charged that the four defendants — of whom two were members of a Detroit company and two traffic managers of a railroad doing an interstate business, a member of the Detroit company, since deceased, and others to the jurors unknown, had conspired with one another and with two persons who acted as agents both for the Detroit company and for two New York corporations, to procure the railroad to give rebates on sugar shipped by the New York corporations to the Detroit company; and alleged overt acts, culminating in the giving of rebates by the traffic managers to the two agents for the benefit of the Detroit company and the New York corporations. Held, that there is no conspiracy. United States v. Guilford et als., 38 Chi. Leg. N. 411 (Dist. Ct., S. D. N. Y., July, 1906). See Notes, p. 62.
CONSPIRACY CRIMINAL LIABILITY - DAMAGE TO PERSON IN His TRADE OR CALLING. In accordance with an agreement of theatre managers to exclude the complainant, a dramatic critic, from their play-houses, he was refused admission to certain performances and forcibly prevented from entering. Held, that, under the Penal Code of New York, such agreement is not criminal unless the sole motive is to inflict harm. People v. Flynn, 100 N. Y. Supp. 31.
The class of criminal conspiracies where there is contemplated, in the means or the end, no act which would be tortious or criminal if done by an individual, is hard to define. Many such conspiracies derive their criminality from the danger to the individual of the combined exercise of an imperfect right which would be comparatively harmless and therefore negligible by the law when exercised by a single person. Smith v. People, 25 ill. 17; Mifflin v. Com., 5 Watts & S. (Pa.) 461. Even where the agreement is to do a thing perfectly lawful for the individual, the combination may have such power for oppression as to be criminal. State v. Donaldson, 32 N. J. Law 151; Com. v. Carlisle, Bright. (Pa.) 36. Whether such agreements are criminal seems to depend on whether their purpose is justifiable. Combinations which work ruin to individuals in fair competition are clearly lawful, and so are peaceful strikes by workmen to secure an advance in their own wages. Mogul Steamship Co. v. M1cGregor, L. R. 23 Q. B. 598 ; see Master Stevedores' Assn. v. Walsh, 2 Daly (N. Y.) 1. But conspiracies to inflict wanton harm on an individual in his
trade or calling, whatever the means used, are criminal. King v. Eccles, i Leach 274. The principal case can be supported, if at all, on the ground that the parties to the agreement were only taking necessary and reasonable steps to protect their business interests, and were therefore justified.
CONSTITUTIONAL LAW — DUE PROCESS OF LAW LEGISLATIVE REGULATION OF GAS RATES. - In a suit by a gas company to recover the price of gas furnished the city of New York the city set up the defense that the price was unreasonable, although less than the maximum rate fixed by the legislature. Heid, that the statutory fixing of a maximum rate is equivalent to express legislative authority to charge up to that rate ; and that no constitutional right of the consumer is thereby impaired, even though the legislative rate is unreasonably high. Brooklyn Union Gas Co. v. The City of New York, 35 N. Y. L. J. 553 (N. Y., Sup. Ct.), 2 Dept., May 14, 1906.
It has repeatedly been held that governmental regulation of the charges of public service corporations must not go so far as to force them to operate at no profit, since this would be in substance confiscation of their property without due process of law. Stone v. Farmers' Loan and Trust Co., 116 Ú. S. 307; C.M. and St. P. R. Co. v. Minnesota, 134 U. S. 418. But the principal case is clearly right in holding that legislative authorization of unreasonably high rates does not work a corresponding confiscation of the consumer's property. True, the consumer has the common law right to be charged only a reasonable price for the services or commodities of a corporation affected with a public interest. Aldnutt v. Inglis, 12 East 527. But he has no property, no vested interest, in this or any other rule of the common law. Munn v. Illinois, 94 U. S. 113. If his expectation that in future he will secure such commodities at reasonable rates is destroyed by legislative alteration of the common law, he has suffered no loss of property without due process of law. He may refuse to buy, or he may petition the legislature to change the law. He has no remedy in the courts.
CONSTITUTIONAL LAW — DUE PROCESS OF LAW STATUTORY REMEDIES AGAINST UNINCORPORATED ASSOCIATIONS. A statute allowing suits against unincorporated associations in the associate names, with process served merely upon certain of their officers, provided for judgments against the associations which should be binding upon all the members so that they might be held liable individually upon final process. Held, that the statute is not in violation of the fourteenth amendment to the Constitution of the United States as involving a taking of property without due process of law. Patch Mfg. Co. v. Capeless, 63 Atl. Rep. 938 (Vt.). See Notes, p. 58.
CONSTITUTIONAL LAW - PERSONAL Rights FREEDOM OF CONTRACT. Held, that $ 171 a of the New York Penal Code making it a misdemeanor for an employer to require of an employee, as a condition of employment, that he shall not join a labor union, is unconstitutional. People v. Marcus, 35 N. Y. L. J. 839 (N. Y., Ct. App., May 25, 1906). For a discussion of the principles involved, see 19 Harv. L. Rev. 368.
CONSTRUCTIVE TRUST MISCONDUCT BY NON-FIDUCIARIES BANK RECEIVING TAX RECEIPTS ILLEGALLY DEPOSITED. — A county treasurer without legal authority deposited tax receipts in a private bank for collection, the bank knowing the treasurer's lack of authority. The bank became insolvent. Held, that the county has a preferred claim for the amount collected. Page County v. Rose, 106 N. W. Rep. 744 (Ia.).
The ordinary relation arising on the deposit of money in a bank is that of debtor and creditor. Marine Bank v. Fulton Bank, 2 Wall. (U. S.) 252. It is well settled, however, that if a bank receives a deposit knowing of its insolvency it holds the money as trustee. Wasson v. Hawkins, 59 Fed. Rep. 233. The same rule should hold if a bank receives a deposit knowing that it has no right to do so. Merchants Nat. Bank v. School District, 94 Fed. Rep. 705; Board of Fire & Water Com. v. Wilkinson, 119 Mich. 655. In such cases the depositor can recover his whole deposit on the bank becoming insolvent, since the law presumes that no part of the trust fund is paid out so long as an amount equal to it remains in the bank. Sherwood v. The Central Michi