Imágenes de páginas
PDF
EPUB

given in the State courts. Inasmuch as the Constitution confines itself to an affirmative declaration of jurisdiction in the Federal courts over admiralty matters, it is obvious that it makes no distinction between legal and equitable remedies so far as the concurrent jurisdiction of the State courts is concerned. Hence the State courts are deemed competent to exercise their customary jurisdiction whether the relief sought is properly granted by a common law court or a court of chancery. Knapp, Stout Co. v. McCaffrey, 177 U. S. 638; Swain v. Knapp, 32 Minn. 429, 21 N. W. 414. It is true that the decree of a sale in co-tenancy is a right acquired comparatively recently by equity. 1 FREEMAN, CO-TENANCY AND PARTITION, $ 537. But its jurisdiction over proceedings for partition in such cases has long been established. FREEMAN, supra, $ 423. So it would seem as if the right of sale were simply a new incident to a general jurisdiction long held, and thus not in conflict with admiralty's jurisdiction. It is well settled, on the other hand, that the district courts have exclusive jurisdiction to entertain an action in rem. Steamer Petrel v. Dumont, 28 Ohio St. 602; BENEDICT, ADMIRALTY, $ 313. In the principal case, however, it is not the action, but the enforcement which is in rem. Accordingly it is clear that the State court has jurisdiction to grant the relief sought; and so it has been decided in several well-considered cases. Andrews v. Betts, 8 Hun (N. Y.) 322; Swain v. Knapp, supra; Reynolds v. Nielson, 116 Wis. 483, 93 N. W. 455. See Leon v. Galceron, 11 Wall. (U. S.) 185, 191. This is all the more desirable since the Admiralty courts have steadfastly refused to decree a sale at the instance of a minority owner. Tunno v. Betsina, Fed. Cas. 14236; Lewis v. Kinney, Fed. Cas. 8325; The Ocean Belle, Fed. Cas. 10402. Indeed it has been urged that the Admiralty courts have no jurisdiction to decree a sale under these circumstances; but there seems no substantial ground for such a doctrine. See Coyne v. Caples, 8 Fed. 638, 639-40; HUGHES, ADMIRALTY, § 189. But see STORY, PARTNERSHIP, 8 439.

ATTORNEY AND CLIENT — DISCHARGE WITHOUT CAUSE ACTION ON CONTRACT FOR BREACH.

- An attorney was employed to procure certain awards, his fee to be a percentage of the recovery. After having made material progress, he was discharged without cause. The client employed another attorney, who procured the awards. The original attorney now sues on the contract. Held, that he cannot recover on the contract. Martin v. Camp, 41 N. Y. L. J. 241 (Ct. of App.)

The measure of damages for a breach of such a contract was discussed in an earlier issue of the REVIEW, in dealing with the decision of the Appellate Division upon this case. See 28 Harv. L. REV. 101. The lower court had allowed the attorney to recover on the contract. The principal case reverses this decision and holds that the attorney may not recover on the contract, but is limited to a recovery upon a quantum meruit. An attorney is bound by the contract both as to his services and the compensation for them. Houghton v. Clarke, 80 Cal. 417, 22 Pac. 288. See Tenney v. Berger, 93 N. Y. 524, 529. It is a fundamental principle of contracts that both parties must be bound by the agreement. To this rule there is the notable exception of the voidable promise of an infant. Holt v. Clarencieux, 2 Strange 937. The principal case would make these contracts also voidable at the option of the client. It is doubtful whether policy demands the extension of such an anomaly. The attorney has no peculiar advantage in the formation of the agreement, for the client, unlike the infant, is presumably competent to contract; the fiduciary relation arises afterward. On the other hand, such a right would enable the client unjustifiably to deprive the attorney entirely of the benefits of the contract, though the services were substantially complete. A client may dissolve his relationship with the attorney at any time and without cause. In re Dunn, 205 N. Y. 398, 98 N. E. 944; Lynch v. Lynch, 99 Ill. App. 454; Delaney v. Husband, 64 N. J. L. 275,

45 Atl 265. This would seem to give him ample protection. It follows that the attorney should be allowed to recover for breach of the contract. The weight of authority is to this effect, and opposed to the principal case. Bartlett v. Odd-Fellows' Sav. Bk., 79 Cal. 218, 21 Pac. 743; Scheinesohn v. Lemonek, 84 Ohio St. 424,95 N. E. 913; Moyer v. Cantieny, 41 Minn. 242, 42 N. W. 1000. The scope of this decision, however, is expressly limited to an attorney employed for a single litigation.

BANKRUPTCY DISCHARGE - DEBTS NOT AFFECTED: RIGHT OF REIMBURSEMENT OF ONE INDUCED BY FALSE REPRESENTATIONS TO BECOME SURETY. One Dunfee by false representations induced a surety company to become surety on his bond. Upon Dunfee's default the company was compelled to pay on the bond. Later Dunfee was discharged in bankruptcy. Section 17, cl. 2, of the National Bankruptcy Act (U. S. COMP. STAT., § 9601) provides that a discharge in bankruptcy shall not release a debtor from "liabilities for obtaining property by false pretenses or false representations.” The company sues for reimbursement. Held, that it may recover. In the matter of Dunfee, 56 N. Y. L. J. 287.

The Bankruptcy Act originally provided that a judgment for any fraud should not be released by a discharge in bankruptcy. Under such a broad provision it is clear that obtaining a loan under false pretenses creates a liability which is not discharged in bankruptcy. Forsyth v. Vehmeyer, 177 U. S. 177. This part of the Act was amended to its present form in 1903. The effect of the amendment is to require the obtaining of actual property by fraud, in order to bar the operation of discharge. Rudstorm v. Sheridan, 122 Minn. 262, 142 N. W. 313. Obtaining a promissory note by fraud has been held to constitute the statutory crime of obtaining property by false pretenses, even though no payment has been made on the note. See People v. Reed, 70 Cal. 529, 11 Pac. 676. The obligation incurred is considered to satisfy the statutory requisite of "property.” It has also been intimated that fraudulently inducing another to become a surety may constitute the crime. See State v. Thatcher, 35 N. J. L. 445. No reason is apparent why the same facts would not satisfy the requirement of the bankruptcy statute. Where, as in the principal case, payment is made on the obligation, there would seem to be no doubt that property" is obtained. For the intended and proximate result of the fraud is the payment of money. The Act also requires that property be obtained.” But the crime of fraudulently obtaining property is held to be committed by fraudulently inducing delivery of a chattel to a third person. Musgrave v. State, 133 Ind. 297, 32 N. E. 885. There is no reason why this should not govern the principal case. The tendency of the courts, however, has been to give as wide effect as possible to discharges in bankruptcy. See Hennequin v. Clews, III U. S. 676; Gleason v. Thaw, 236 U. S. 558. In view of such policy, it is possible that other courts may reach a different result.

CONSTITUTIONAL LAW CONSTRUCTION, OPERATION AND ENFORCEMENT OF CONSTITUTIONS MEANING OF LEGISLATURE IN THE FEDERAL CONSTITUTION. The general assembly of Ohio passed an act rearranging the congressional election districts. Under the referendum provision of the state constitution the law was submitted to popular vote and disapproved. Art. 1, $ 4, of the Constitution of the United States provides that "the times, places and manner of holding elections for Senators and Representatives shall be prescribed in each state by the legislature thereof.” A mandamus was brought to order the state election officers to disregard the referendum as void. Held, that the referendum may constitutionally be made part of the state legislative power for the purpose of creating congressional districts. State of Ohio ex rel. Davis v. Hildebrant, 36 Sup. Ct. Rep. 708.

The court argued only the constitutional objection that the inclusion of the referendum in the state legislative power for the purpose of creating congres

sional districts is destructive of a republican form of government. U. S. Const., Art. 4, 94. This is a political question not for judicial determination. Pacific States Tel. & Tel. Co. v. Oregon, 223 U. S. 118. See 24 Harv. L. REV. 141. Cf. Kiernan v. City of Portland, 57 Ore. 454, 112 Pac. 402; State v. Board of Commissioners, 93 Kan. 405, 144 Pac. 241. But the question whether the word “legislature" in Art. 1, § 4, of the Constitution means the periodical representative assembly of the state, or the whole constitutional law-making machinery, including, as in this case, the people acting by initiative or referendum, was not discussed. The latter construction has been approved by a decision of the Supreme Court of South Dakota. State ex rel. Schrader v. Polley, 26 S. Dak. 5, 127 N.W.848. See 24 Harv. L. REV. 220. In 1911 Congress impliedly recognized the more inclusive definition by providing that states might redistrict themselves "in the manner provided by the laws thereof." 37 STAT. AT LARGE, 13, ch. 5, COMP. STAT. 1913, § 15. The decision in the principal case assures the constitutionality of this act, and, although it does not in terms discuss the point, necessarily sanctions the definition of the South Dakota case.

CONTRACTS — DEFENSES: IMPOSSIBILITY — FAILURE OF CONSIDERATION DIMINUTION OF PRICE. - In 1911 a gas company entered into a contract with an urban council whereby the gas company was to install a gas plant, furnish street lamps, and maintain them for five years. The council agreed to pay therefor a fixed annual sum per lamp, payment to be made in four equal quarterly installments. On January 1, 1915, the Defence of the Realm Act prohibited lighting street lamps "until further order.” Consequently no gas was consumed between January 1, 1915, and November 1, 1915, when the gas company sued for the first three quarterly installments of 1915. Held, the gas company can recover. Leiston Gas Co. v. Leiston-cum-Sizewell Urban District Council, (1916] 2 K. B. 428.

Where performance is rendered impossible by domestic law, the promisor is not liable. Bailey v. De Crespigny, L. R. 4 Q. B. 180; Horlock v. Beal, (1916] 1 A. C. 486; Cordes v. Miller, 39 Mich. 581. This defense rests upon the policy of the law in refusing to force a party to do that which it has expressly forbidden. See 18 Harv. L. REV. 384. The principal case goes further, in that it allows the defaulting party to profit by his non-performance. The court, considering the erection of the plant and lighting system, the full performance for a long period, and the indefinite duration of the order, decided that there had not been a substantial failure of consideration. Thus the plaintiff's breach neither created liability, nor did it furnish a defense for defendant's refusal to perform. It would seem equitable in such a case to diminish the contract price, to which the plaintiff is thus entitled, to the extent that he has profited by his non-performance. In the principal case, under this rule, the plaintiff would recover the installments reduced by the expenses which he has saved by his non-performance. He would then recover fully for the services performed and his profit for the whole. This remedy in the nature of a recoupment for unearned enrichment is recognized in France, Germany, and other jurisdictions following the civil law. See WILLISTON, SALES, § 606. Surely the law, having created the loss, should apportion it equitably.

CORPORATIONS CAPITAL, STOCK, AND DIVIDENDS — NATURE OF OVERISSUED STOCK. - The defendant corporation issued stock certificates in excess of its charter limit to a purchaser for value without notice. The purchaser assigned to a third person for value “all claims and demands of every description and kind” against the defendant. Later he assigned the certificates without consideration to the plaintiff. The defendant refused to issue new certificates to the plaintiff. The plaintiff sues. Held, that he may not recover. Smith v. Worcester, etc. Ry. Co., 113 N. E. 462 (Mass.).

An issue of stock in excess of the charter limit is void. New York, etc. R. Co.

v. Schuyler, 34 N. Y. 30; Scovill v. Thayer, 105 U. S. 143. An illustration of this is the fact that equity will not compel the corporation to recognize as a shareholder a person acquiring certificates of such stock. i Cook, CORPORATIONS, 6 ed., § 284. But the bona fide purchaser of such certificates may recover damages at law. A stock certificate is a representation by the corporation that the person to whom it is issued is the owner of shares. In re Bahia, etc. R. Co., 3 Q. B. 584. If knowledge of the falsity of the misrepresentation can be brought home to the corporation, all the requisites of an action of deceit are present. See First Avenue Land Co. v. Parker, III Wis. I, 9, 86 N. W. 604, 607. Recovery may also be based on estoppel. For a corporation wrongfully refusing to recognize as owner the transferee of a valid certificate may be held liable in an action on the case. See Protection Life Ins. Co. v. Osgood, 93 Ill. 69. Some courts also permit the transferee to recover in assumpsit. Hill v. Pine River Bank, 45 N. H. 300. A recovery in trover has also been allowed. Ralston v. Bank of California, 112 Cal. 208, 44 Pac. 476. A purchaser for value of a void certificate, in an action for refusal to issue a new certificate, should have the same three remedies. For against a bona fide purchaser of a certificate of void stock the corporation is estopped to set up invalidity. In re Bahia, etc. R. Co., supra. See Allen v. South Boston R. Co., 150 Mass. 200, 204, 22 N. E. 917, 918. But the plaintiff in the principal case was not a purchaser for value. He therefore acquired only the rights of his assignor. As under any of the theories of recovery set forth the bona fide purchaser of overissued stock holds only a "claim or demand," the assignor had already assigned his rights and had nothing to give to the plaintiff.

DANGEROUS PREMISES · LIABILITY OF CONTRACTOR IN POSSESSION TO EMPLOYEE OF OWNER. — The defendant, a contractor, was in possession of certain premises while erecting a building for the owner. The contract provided that defendant should afford the use of scaffolding to other tradesmen employed by the owner. The plaintiff, a tradesman, fell on the scaffolding and was injured. Held, that the plaintiff is entitled to the rights of an invitee. Elliott v. C. P. Roberts & Co., 32 Times L. R. 478.

As a greater duty of care as to the condition of the premises is owed by the landlord to an invitee than to a licensee, the determination of the status of an entrant upon the land becomes a matter of distinct importance. See 28 Harv. L. REV. 329. Now it has been held that the servant of a landowner is merely a licensee in a structure in course of erection on the land by an independent contractor. Blackstone v. Chelmsford Foundry Co., 170 Mass. 321, 49 N. E. 635. For according to the general rule, the acquisition of the status of invitee is dependent on the fact that the entry on the land was at the express or implied invitation of the occupier and to his business interest. See Indemaur v. Dames, L. R. 1 C. P. 274, 288. In the principal case, however, the use of the premises by the servants of the landlord was one of the considerations of the contract. Now it is true that the plaintiff can have no direct right under a contract to which he is not a party. Marvin Safe Co. v. Ward, 46 N. J. L. 19; Roddy v. Missouri Pacific R. Co., 104 Mo. 234, 15 S. W. 1112.

But the contract in establishing the business interest of the contractor in the use of the premises by the plaintiff does determine the plaintiff's status. For such interest need not necessarily be direct. Watkins v. Great Western Ry. Co., 46 L. J. C. P. 817. Low v. Grand Trunk Ry. Co., 72 Me. 313. The same result has been reached where the premises were jointly occupied by a contractor and the plaintiff's employer. Gile v. Bishop Co., 184 Mass. 413, 68 N. E. 837. Instead of basing the right of recovery on these technical relationships, it might have been better to adopt a single broad rule of reasonable care, such as that once stated in a well-known English opinion. See Heaven v. Pender, Q. B. D. 503, 509. But the courts have not followed this suggestion. There is a

II

tendency, however, in some American decisions to extend the limits of the invitee relationship. Atlanta Cotton Seed Oil Co. v. Coffey, 80 Ga. 145, 4 S. E. 759; Illinois Central R. Co. v. Hopkins, 200 Ill. 122, 65 N. E. 656.

DEEDS CONSTRUCTION - LIFE ESTATE RAISED BY IMPLICATION. — A settlor by deed assigned the residue of a long term for years to trustees, to the use of A. and B., husband and wife, "for and during the term of their lives as tenants in common”; and “after the decease of the survivor" to the use of their children. A. died leaving children. Held, that B. was entitled during the remainder of her life to the whole of the net income from the property. In re Stanley's Settlement, 51 L. J. 206 (Ch. D.).

The court here raised a life-estate in the survivor by implication to fill the unintentional gap in the limitations. Such cross-limitations to the survivor have often been implied in the case of wills. Ashley v. Ashley, 6 Sim. 358; Draycott v. Wood, 8 L. T. (N. s.) 304. See In re Hudson, 20 Ch. D. 406, 415. But as to deeds, the authorities have declared that no estate or trust can arise by implication. See NORTON, DEEDS, 377; FEARNE, CONTINGENT REMAINDERS, 9 ed., 49. As regards legal estates, the cases bear them out. Cole v. Levingston, í Vent. 224; Doe v. Dorvell, 5 T. R. 518. See 1 JARMAN, Wills, 6 ed., 660. In equity, however, there have been some decisions in which estates have been implied as in the principal case. Tunstall v. Trappes, 3 Sim. 286; Allin v. Crawshay, 9 Hare 382; In re Akeroyd's Settlement, (1893] 3 Ch. 363. But see Mara v. Browne, (1895) 2 Ch. 69, 81. It is difficult to see what justification there can be in these distinctions between wills and deeds, and between law and equity. If in a deed the intent of a settlor is clear beyond a reasonable doubt, a life interest in the survivor should certainly be implied. For, after all, the ultimate aim of the judicial construction of deeds, as of wills, is to carry out the intention of the parties. Temple's Adm'r. v. Wright, 94 Va. 338, 26 S. E. 844. See Ballard v. Louisville & N. R. Co., 9 Ky. L. R. 523, 524, 5 S. W. 484, 485; Walton v. Drumtra, 152 Mo. 489, 497, 54 S. W. 233, 235; DEVLIN, DEEDS, 3 ed., 844 a.

EMINENT DOMAIN COMPENSATION COMPENSATION FOR LOSS OF PROFITS CAUSED BY GRADING STREET. — A garage company held a lease of certain premises from year to year. Street grading done by the city cut off access to the garage for four months, causing a loss of profits to the company during that time. No evidence tended to show the leasehold less valuable after the grading than before. Act XVI, § 8, of the Constitution of Pennsylvania provides that just compensation be made for property "taken, injured or destroyed” by municipal corporations in the construction of highways. The company seeks to recover damages from the city. Held, that it may not recover. Iron City Automobile Co. v. City of Pittsburg, 98 Atl. 679 (Pa.).

Injury caused an abutting owner by the regrading of a city's streets is not a "taking" under the ordinary constitutional provision against taking private property for public use without just compensation. Therefore, if the grading is done under authority of law and with due care, in the absence of statute the owner is entitled to no compensation. Callender v. Marsh, 1 Pick. (Mass.) 417, 430; Radcliff's Execators v. Mayor, etc. of Brooklyn, N. Y. 195, 203. See LEWIS, EMINENT DOMAIN, 3 ed., § 133. But under constitutional provisions, such as in the principal case, municipalities must make compensation for injuries caused abutting property. City of Bloomington v. Poliock, 141 Ill. 346, 31 N. E. 146; Sheehy v. Kansas City Cable Ry. Co., 94 Mo. 574, 7 S. W. 579. See City of Atlanta v. Green, 67 Ga. 386; LEWIS, EMINENT DOMAIN, 3 ed., $8 346, 348. The cases, however, are in hopeless conflict as to what elements determine the amount of the owner's damage. SEDGWICK, DAMAGES, 9 ed., $ 1170. In general, where a leasehold is damaged, the measure of damages is the difference between the fair market value of the leasehold interest before

« AnteriorContinuar »