NOTES OF IMPORTANT DECISIONS.

APPEAL AND ERROR-PENALTY OF REVERSAL ON APPELLEE FOR FAILURE ΤΟ FILE BRIEF.-We have read of courts complaining of too many and too long-winded briefs, and we had rather reached the conclusion that the fewer and briefer the briefs the brevity, numerically and physically, was the more appreciated. We also have occasionally seen and read of cases where both parties wanted a new trial and courts being of the view that the public had contributed as much in expense and trouble and in demand upon other people's time as the parties were entitled to, no concurrence of desire on the part of suitors had anything to do with the question. But a rule and its application in Oklahoma Supreme Court, made for its convenience in dispatch of business, appears to point the way for this mutual dissatisfaction being appeased.

This ruie provides for filing of briefs by counsel and "in case of failure to comply with the requirements of this rule, the court may continue or dismiss the case, or reverse affirm the judgment." See Butler v. McSpadden, 107 Pac. 170.

or

In this case counsel for appellee failed to file a brief, and the court said, Williams, J., dissenting: "We have read the brief filed by counsel for plaintiff in error and from a consideration thereof it seems to us that the point made that the judgment lacks evidence sufficient to sustain it is well taken. In the absence of a brief on the part of counsel for defendant in error, we are not given that assistance which we should have in determining the theory upon which the court rendered its judgment, and the pressure upon the time of the court is such that it cannot, in justice to other litigants, brief cases for parties who elect to neglect it."

We do not know whether the court did anything further in this case than look at the brief filed by plaintiff in error, but we see that it denied that the case should be reversed without a remand, and it was reversed and remanded. Appellee's failure may even have helped him.

We do know that the court cited authority that the appellate court would "assume without looking at the record, that the point urged by appellant that the evidence is insufficient to justify the findings attacked is well taken." This is said to be the California rule, as see Richter v. Imgston, 101 Cal. 582.

The Kansas Court of Appeals has gone almost to a like length, but not quite. It said it

would not carefully search the record to see if there was evidence to sustain a judgment, where appellee filed no brief. And there may be a few other cases that squint that way.

But the rule seems to us wrong. An appellate court may very properly make a rule for the filing of briefs and penalize appellants to the extent of not examining into cases for violation thereof. But an appellee is before an appellate court with a judgment presumptively correct, and he is entitled to stand on it until by an examination of what it rests on it appears to be incorrect. Until the burden of attack thereon has been met and shifted his vested right in that judgment should be recog nized.

Every jurisdiction recognizes validity of a judgment in trial court, because no supersedeas can arrest its enforcement until security for its payment shall have been given.

If this is true, ought not an appellee's standing in an appellate court to be regarded as that of a privilege, the non-exercise of which takes away from him no right that ought not to be taken away.

All courts say briefs are desired for 'assistance" to the court, but we greatly doubt whether any are filed for such an altruistic reason, and the courts know they are not. The appellee files a brief because he fears the court may be misled, but if his fear is not keen enough to make him put up cold cash he ought to be allowed to elect.

We do not know if Oklahoma practice allows appellee's brief to be taxed as costs. We do not believe this is often allowed.

PUBLIC HEALTH-REGULATIONS AS TO LICENSES TO UNDERTAKERS AS BEING IN CONFLICT WITH FOURTEENTH AMENDMENT. A New York statute requiring that no person could be licensed as an undertaker unless he shall also have been licensed as an embalmer and shall have been an assistant to a licensed undertaker "continuously" for at least three years, was lately condemned as violative of the Fourteenth Amendment of the Federal Constitution, the decision being an unanimous one by New York Court of Appeals. People v. Ringe, 90 N. E. 451.

The statute was attempted to be defended under the state's police power, exercised in respect of the public health.

The court freely concedes that it is within the state's police power to regulate the care of dead human bodies, and their disposition by burial or otherwise, as all of this is closely related to the health and general welfare of particular communities. This statute, however, appeared to the court as being so arbi

trary and unreasonable in its requirements, that the court was convinced it "was conceived and promulgated in the interests of those then engaged in the undertaking business, and that the relation which the business bears to the general health, morals and welfare of the state had much less influence upon its origination than the prospective monopoly that could be exercised with the aid of provisions."

Nothing, therefore would seem so sacred as to be immune from attack by the commercial spirit. Death, instead of arresting, is attempted to be made an adjutant in its behalf.

The opinion quotes very extensively from Wyeth v. Board of Health, 200 Mass. 474, 86 N. E. 925, 128 Am. St. Rep. 439, from which is quoted approvingly the following: "No argument has been addressed to us to show that the general embalming of dead bodies is necessary for the preservation of the public health, and we know of no facts that indicate such necessity. Except in those cases where embalming is desired for a special reason, we know of nothing connected with the duties of an undertaker that calls for the work of a licensed embalmer. In cases generally it is not an essential part of the duties of an undertaker and it has no relation to the public health."

It was further said the "continuous service" requirement was arbitrary, if intended to exclude all other, as the only requirement the state can make is length of service, whether continuous or interrupted, which would presume qualification in one applying for a license as an undertaker.

The bold attempt by this kind of legislation to turn a power for the benefit of the community into foisting upon it a monopoly seems to us most rightfully and forcefully rebuked. The court well said: "The business of undertaking has been carried on for generations, particularly in the rural districts, by persons not holding embalmers' licenses, and who have no special knowledge of the work of embalmers." If detriment to health from the lack of embalmment has not been proven, it would seem useless to hope it ever will be.

ELECTRICITY-THE SUBJECT OF LARCENY.-Judge Charles S. Lobingier, judge of the Court of First Instance for the Judicial District of Manila, lately decided that electricity was the subject of larceny or its Spanish equivalent "hurto." U. S. v. Jose de Leon, Feb. 3d, 1910 (not reported.)

The article under the penal code, under which prosecution was brought, read, as translated in the opinion, as follows: "The following are guilty of larceny (hurto): Those who, with intent of gain and without violence or

intimidation, against the person or force against things, shall take another's personal property without the owner's consent."

The judge came to the conclusion that it was, because by decisions by the Spanish Supreme Tribunal, rendered in 1887 and 1897, construing a similar section in Spanish law, it was held that the appropriation of illuminating gas belonging to another was "hurto," or larceny.

The chief contention made was that electricity was an energy and not a corporal substance, but the judge thought that, as its effects, like those of gas, could be seen and felt, and the act of appropriation in each case consisted in the production of the effects, which appropriation involved or resulted from the consumption, of enforced things, the rule as to gas should obtain. Authority was cited to show that the common law agreed with the Spanish as to gas.

Here a door would seem open for a very interesting inquiry, and assuming that Spanish jurisprudence rests on the principles of the civil law, it would seem the learned judge should have sought his rule there, instead of resorting to the common law at all. The old common law refinements about asportation, etc., may have their counterparts in the civil law, but it has seemed to us that the law of larceny has always presumed that taking or asportation was in the single act of the thief and depended on no contingency of the happening of a subsequent act put in motion by another.

Let us illustrate as to an undoubtedly corporal substance. Suppose water is to be turned into an irrigating ditch at a certain time, and in advance thereof one not entitled to use the same arranges for its diversion. Certainly there is no larceny until diversion results, and then it comes through the intervening act of another. Taking then is aided, or, as we might say, asportation is accomplished, by a lawful act. So might it be if the wrongdoer connects his pipe or wire with another's as. the expected source of supply of gas or electricity, when this shall be afterwards turned

on.

If gas or electricity is not diverted eo instanti the connection there would seem to be a mere trespass, and yet whether it is immediately diverted or not depends upon the flow being continued. If one were conveying apples by some sort of endless chain and there was a manual caption as they were passing along, this would be larceny, but if there was a mechanism installed in advance to catch them as they may be made to pass, here would be another question. The mechanism would not distinguish between good apples and bad apples, and all

our notions about intent and alibi must to some extent be reformed if this is larceny.

CORPORATIONS-SUBSCRIPTIONS UPON CONDITIONS NOT COMPLIED WITH.-We discussed, in a comparative way, in 70 Cent. L. J. 219, two decisions respectively by the Federal Supreme Court and the Massachusetts Supreme Judicial Court on the question of the fiduciary relation of promoters to a corporation. We thought the former of these two decisions found a reason for exception to a principle which had no salutary basis in principle.

The case of Sigler v. R. W. Winstead & Co., 125 S. W. 272, decided by Kentucky Court of Appeals, proceeds on the theory that if a promoter solicits a subscription it is his business not merely to answer honestly and fairly all questions that may be asked him about the corporation or proposed corporation, but he is not allowed by silence to lead a proposed subscribed to believe that previous subscriptions are not what they appear to be, when the promoters know the contrary was true.

The facts in this case showed that a subscription to a business enterprise provided for its becoming effective when bona fide subscriptions to a certain amount were obtained.

This was only accomplished by counting subscriptions to which were annexed secret agreements for reduction in price, payment in goods, services, etc. The subscribers proposing to pay cash were held entitled to cancel their subscriptions, notwithstanding that promoters offered to make up the difference in the other subscriptions.

The court said: "Each one as he subscribed, not only had the right to rely upon the integrity of the paper as presented to him, but he was justified in the belief that the subsequent subscriptions would be taken so as to meet the requirements of the contract, to-wit: at 100 cents on the dollar, and be payable in cash."

It is a ruling like this, which serves to make more precarious the boosting of fake enterprises and the more salutary business conditions. A promoter who evolves an idea, which his persistency in nerve and persuasiveness may develop, comes to regard himself as a sort of Columbus in discovery. Probably statutes may evolve some plan to secure good faith in representations of these promoters, and tentatively we suggest that no promoter's shares shall be issued to him until all others are taken, except to the extent he pays actual cash therefor, and that these and those to be issued to him upon property or services be impounded to answer any injury suffered by

another, for misrepresentation in obtaining subscriptions. A promoter ought not to have a vote in organization or be allowed to qualify as a director, except upon a cash subscription, and even then he should not be allowed on the board, if the main asset of a proposed corporation is property proposed to be transferred to the corporation, until some fixed period shall have elapsed thereafter.

A REVIEW OF AUTHORITIES UPON THE CONSTITUTIONALITY OF THE FEDERAL CORPORATION TAX STATUTE.

This statute has been discussed by law magazines, newspapers and in speeches, with respect to its constitutionality and the claimants for and against constitutionality have endeavored to sustain their conclusions by decisions of the federal supreme court. There is no very great multiplication of authority in diversity of view, but the cases referred to are fairly numerous and it is our purpose to present all or nearly all of these, grouped or classified and compared, to indicate as far as possible what of adjudication there is, which may be of importance upon this vexed question.

I.

What is the Thing Taxed?-This preliminary inquiry ought to help in the classification we purpose making. And right

here we find ourselves in a state of doubt. The first section of the act most assuredly does not apply to any foreign corporation not engaged in business in this country and it is equally certain, that the tax as to it is not upon any income other than of business "transacted and capital invested" in this country. Therefore it may be confidently said, that a foreign corporation merely having investments in this country, but doing no business here, does not come within the statute. Therefore further, it may be said, with certainty, I think, that the tax as to a foreign corporation is upon the privilege of doing business.

But how stands the matter as to domestic corporations? Do they have to be "engaged in business" in this country to be

come subject to the tax, or, if they merely have investments and do no business are they subject to the tax? The words "engaged in business," etc., might be claimed to qualify only foreign corporations, but such limitation is more difficult to be claimed for the words "with respect to the carrying on of business," etc., following after "shall be subject to pay annually a special excise tax" which words, beyond any peradventure of doubt, apply both to domestic and to foreign corporations. Up to this point in the section it looks like the doing of business is a condition absolute to becoming subject to the tax. But the domestic corporation is taxed differently from the foreign. The former is taxed upon income received "from all sources," and that this includes what does not arise from the transaction of business, the exception stated being in regard to dividends from corporations also subject to the tax. Does this difference show that there is a tax upon domestic companies, as if they were natural persons, and, therefore, different kinds of tax provided, one on domestic corporations, whether they do business or not, and another on the privilege exercised by a foreign corporation to do business? That the tax on domestic corporations may embrace their investments outside of the United States, while that on foreign corporations touches only their investments in this country, seems not decisive of this inquiry, for, whether the tax be merely on a privilege to do business in one or both cases, it is different, and in favor of the foreign corporation. There is at least a difference in estimating the income to be taxed, and the rationale of its allowance exists under one aspect of this matter the same as under the other, because it is certain it is a tax upon privilege, merely, so far as foreign corporations are concerned.

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It is difficult to see how with merely a distinction between the basis for computing the tax it may be thought there are two kinds of tax attempted to be imposed. Therefore, I take it, that the tax is upon one thing-the privilege of doing business

As a Tax on this Privilege is the Tax Constitutional? This question should be

subdivided with reference to domestic corporations and foreign corporations, and again by classification of domestic corporations into state, congressional and territorial. If it may be thought the tax is constitutional as to some one or more of these corporations, but not as to all, then the question would arise as to separableness, so as to save or not the legislation.

Let us take the corporations in the order indicated, first considering domestic corporations "organized under the laws of any state?"

If, as is now assumed, this is a tax upon the right of a private corporation organized under state law to do business, is it constitutional?

In The Collector v. Day,' it was decided. that the tax by the federal government of the salary of a judicial officer of a state was unconstitutional because this was taxing "the means and instrumentalities" necessary for a state to carry on its government. In Mercantile Nat. Bank v. New York,2 the obligations of indebtedness of states were similarly non-taxable. So as to municipal bonds. Both of those were deemed taxes upon the power of the state and its instrumentalities to borrow money. In Pacific Ins. Co. v. Soule, it was decided that a tax on business is not a direct tax and therefore constitutional. The business there happened to be by an insurance company, but it came under the designation "all persons," etc., and therefore the question here, seems not there, involved-condition

ing the doing of business by a state corporation which in the Soule case stood like an individual to the government upon its doing business when an individual is not now so conditioned. South Carolina v. United States, has been claimed to derogate somewhat from the principle, that a state instrumentality cannot be taxed be taxed by the fededal government, as there the state dispensaries were taxed on the sale of liquor. But I do not

construe this holding. The logical effect of the holding is that the state cannot by legislation make a corporation or agency municipal in its character so as to defeat federal taxation, if the doing of things by or through that corporation or agency is engaging in private business. But here is furnished an opportunity to state clearly, by illustration, the point which seems to me to be involved. Suppose an internal revenue law were to declare that no revenue tax should be imposed on the sale of liquor, unless it be sold by state dispensaries. Would not that be a law aimed at the exercise by a state of a constitutional power and therefore invalid? Suppose again this tax was attempted to be imposed only upon corporations organized under state laws and foreign corporations, congressional and territorial corporations engaged in business were not taxable, would this not be legislation likewise aimed? But is there not just as patent a discrimination between state corporations and natural persons, and does it not equally aim, by necessary construction, at the constitutional right of the state to create corporations? As the distinction between natural persons and corporations found in this act has not been heretofore attempted we have no precedents on this subject.

lying principle in the succession tax cases decided by the supreme court is easily differentiated from what is here the question. In United States v. Perkins, the question was whether the United States took its bequest free of state charges for transmission, and in Snyder v. Bettman, the correlative proposition was whether Springfield, Ohio, took its bequest free of the federal tax. Both the national government and states were held to have the power to impose such a tax. It was said the tax was valid because it was a tax "not upon property, but upon the right to succeed to property," and there was no conflict "with the proposition that neither the federal nor the state government can tax the property or agencies of the other." In the case of income of a corporation there is a vested. interest inhering in shares of stock, and it would be depriving shareholders of property without due process of law to prevent its being paid. If the government can not take the whole of the income, how can it take any part? If it can take a part, may it not take the whole?

IV.

Income "from All Sources."-It seems difficult to claim that income from al sources is not intended to cover income derived from property which congress has no power to tax either directly or indirectly, or from rents, a tax upon which is forbidden as being direct, because the specific exception is of dividends from companies. subject themselves to this tax. But it has been claimed that, because a bank may be taxed on the amount of its deposits though it has money invested in government securities, and tax may be laid upon the privilege of taking property by will, though it be government bonds. this question is foreclosed. But just as in the latter case the tax is on a privilege, so it was in the former, the state putting this tax on the corporation's right to exist. See also Home