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porating states apply to the stock of the corporation incorporated in several states.20

In seeking incorporation in more than one state, therefore, a corporation seeks to become a domestic corporation in each state. The privileges and advantages which it gains thereby in each state are neither greater nor less than the corporate privileges of every corporation of that state. And so it is only reasonable to conclude that a tax on those privileges may be based on any measure that is valid as to domestic corporations not organized elsewhere. This conclusion was reached in the principal case and in the only authority previous to it on the same point. 21 There is a single dictum to the contrary.22

RECENT CASES

ATTACHMENT SAVINGS ACCOUNT - SUBSEQUENT DIVIDENDS. — Pending the termination of his suit against members of a trade union, the plaintiff attached their savings accounts in the defendant bank. Later the depositors assigned the dividends subsequently accruing upon the deposits. Both the assignees and the plaintiff, who has secured judgment against the depositors, claim the dividends. Held, that the attachment lien covered the dividends. Savings Bank of Danbury v. Loewe, U. S. Sup. Ct., Oct. Term, 1916, No. 713. -- An attachment only reaches effects of the debtor in the hands of the garnishee at the time of service upon the latter. Thus, wages or salary not earned or due at the time of the service of the process cannot be reached. Coburn v. Hartford, 38 Conn. 290; Taber v. Nye, 12 Pick. (Mass.) 105. See 12 Harv. L. Rev. 141. But whatever binds the principal should bind that which is incident to the principal. Accordingly, an attaching creditor may recover the interest upon a corporate existence of appellants, considered as a corporation of this State, must spring from the legislation of this State. As argued by

the appellee, the only possible status of a company acting under charters from two States is that it is an association incorporated in and by each of the States, and when acting as a corporation in either of the States it acts under the authority of the charter of the State in which it is then acting .. Easton Bridge v. Metz, 32 N. J. L. 199. See Keokuk & H. Bridge Co. o. People, 161 Ill. 132, 43 N. E. 691.

20 Moody v. Shaw, 173 Mass. 375, 53 N. E. 891; Attorney General v. New York, N. H. & H. R. Co., 198 Mass. 413, 84 N. E. 737; Cooley's Estate, 186 N. Y. 220, 78 N. E. 939. See Richardson v. Vermont & Mass. R. Co., 44 Vt. 613, 623.

21 Lumberville Bridge Co. v. Assessors, 55 N. J. L. 529, 26 Atl. 711. The tax law said: “All ... corporations incorporated under the laws of this State . . . shall pay a yearly license fee or tax of one tenth of one percent on the amount of capital stock of such corporations.” At page 537, Garrison, J., said: “The franchise that is taxed as property is the privilege enjoyed by a corporation of exercising certain powers derived from the State, whereas the franchise with which we have to do is the right to exist in corporate form without reference to the powers that under such form the company may exercise. . . . The power, as in the case of the right to own and operate a railroad, is taxed as property having a true value. On the other hand, the naked right of existing as a corporation is taxed . not at its true value, ... but at a sum arbiLrarily imposed by the legislature as an annual fee, the amount of which is to be computed by reference to the capital of the company as a criterion.”

22 In State Treasurer v. Auditor General, 46 Mich. 224, 9 N. W. 258, the court held that a corporation incorporated in several states did not come within the terms of a certain tax, because to bring it within the terms would be to tax its property outside the jurisdiction. But this dictum is weakened by the fact that the court does not clearly hold that it was dealing with a franchise tax.

debt, bearing interest, unless the garnishee was prevented from paying the debt by the garnishment. Adams v. Cordis, 8 Pick. (Mass.) 260; Woodruff v. Bacon, 35 Conn. 97. It has been held that dividends declared upon attached corporate stock follow the attachment lien. Jacobus v. Monongahela Nat. Bank, 35 Fed. 395; Norton v. Norton, 43 Ohio St. 509, 525. See Moore v. Gennett, 2 Tenn. Ch. 375, 379. Yet such dividends are declared only at the discretion of the directors of the corporation. See Gibbons v. Mahon, 136 U. S. 549, 558. In the principal case, the bank was under a statutory duty to pay over a certain portion of the net income to the depositors. Conn. GEN. Stat., 88 3440, 3441. As the debtor had a vested right to the dividends, which were as certain as interest, the creditor, who succeeds to his rights, is entitled to the dividends as well as the deposits.

BILLS AND NOTES — DEFENSES — FAILURE OF CONSIDERATION — LIABILITY OF ACCEPTOR OF BILL OF EXCHANGE. The defendant purchased a consignment of salmon, terms “f.o.b.,” payment to be made on receipt of the goods or bill of lading. The consignor drew a draft on the defendant for the purchase price and sold the draft, with the bill of lading attached, to the plaintiff bank, which forwarded the draft to its New York correspondent for collection. Defendant accepted the draft. On the day of its maturity, defendant tendered payment, but the draft and bill of lading could not be found. Later in the day defendant was notified that the documents had been found and they were tendered to him the next day. Held, that defendant is liable on his acceptance. First National Bank of Seattle v. Gidden, 162 N. Y. Supp. 317 (App. Div.).

The court rests its decision upon the general proposition that an acceptor is liable absolutely on his acceptance, regardless of the surrender to him of the attached bill of lading. Now it is undoubtedly well settled that failure of a pledgee to surrender collateral upon tender of payment of the debt does not discharge the debt. Cass v. Higenbotam, 100 N. Y. 248, 3 N. E. 189. See JONES, PLEDGES, 3 ed., $ 543 ff. Where the collateral has been converted by the pledgee, the pledgor has merely a counterclaim for the value of the security or a defense pro tanto to the action on the debt. Cass v. Higenbotam, supra; Harrell v. Citizens Banking Co., Ini Ga. 848, 36 S. E. 460. See JOYCE, DEFENSES TO COMMERCIAL PAPER, § 613. But in a situation like that in the principal case it would seem that the bill of lading is more than mere collateral. Under the contract between the buyer and seller, it is the 'agreed exchange for the payment of the draft. It is clear that total failure of consideration is a good defense as between the original parties to a promissory note. Perkins v. Brown, 115 Mich. 41, 72 N. W. 1095; Wyckoff v. Runyon, 33 N. J. L. 107; Divine v. Divine, 58 Barb. (N. Y.) 264. Similarly, the drawerpayee of a bill of exchange cannot recover from the acceptor where the consideration for the acceptance has totally failed. French v. Gordon, 10 Kan. 370; Hazeltine v. Dunbar, 62 Wis. 162, 22 N. W. 165. See JOYCE, DEFENSES TO COMMERCIAL PAPER, § 202. And if an indorsee of the payee takes a bill or note with notice of the failure of consideration between the payee and the obligor, he cannot recover on the instrument. Russ Lumber & Mill Co. v. Muscu piable Land & Water Co., 120 Cal. 521, 52 Pac. 995; Carey v. Nissle, 145 Mich. 383, 108 N. W. 733. The indorsee should be in no better position where, having assumed control of the document which he knows to be the consideration for the payment of the draft, he himself causes the failure of consideration. The indorsee must then be taken to assume the seller's duties as well as his rights. Cf. Walker v. Squires, Hill & D. (N. Y.) 23; Guaranty Trust Co. v. Grotian, 114 Fed. 433. It might be urged that in any event the transfer to the buyer of the beneficial ownership of the goods is a sufficient performance of the contract to preclude a defense of entire failure of consideration. See Linnell v. Leon, 206 Mass. 71, 73, 91 N. E. 895. But in fact what the buyer contracted for was a delivery to him of the goods or the bill of

course.

lading, a (prerequisite to the ready sale of the goods. On the particular facts of the principal case, however, the conclusion of the court must be supported, for there was not such a material delay as to excuse performance on the part of the defendant. Cf. Smith v. Vertue, 9 C. B. (N. S.) 214; \Linnell v. Leon, supra.

BILLS AND NOTES — PURCHASER FOR VALUE WITHOUT NOTICE — RIGHTS OF PAYEE OF A STOLEN CERTIFIED CHECK WHO HAS GIVEN VALUE FOR IT. — A. drew a check on the defendant bank, payable to the plaintiff. The defendant certified the check. B. stole it and negotiated it to the plaintiff by posing as a messenger from A. The plaintiff sues for the amount of the check. Held, that he cannot recover. Empire Trust Co. v. Manhattan Co., 162 N. Y. Supp. 629 (App. Div.).

At common law a payee could be a holder in due course. Watson v. Russell, 3 B. & S. 34; Fairbanks v. Snow, 145 Mass. 153, 13 N. E. 596. Contra, Charlton Plow Co. v. Davidson, 16 Neb. 374. But under the Negotiable Instruments Law such a result is not so easily reached. For the definition of a holder in due course apparently requires negotiation. See BRANNAN, NEG. INST. Law, $ 52. And “negotiation” of a bill " payable to order” is accomplished by “the indorsement of the holder completed by delivery.” See BRANNAN, supra, $ 30. As the maker does not pass the bill to the payee by indorsement, in capacity of a holder, this would seem to preclude the payee from becoming a holder in due

But the general definition of negotiation is a transference “from one person to another in such manner as to constitute the transferee the holder thereof.” See BRANNAN, supra, $ 52. And a payee may be a holder. See BRANNAN, supra, & 190. Evidently considering the troublesome phraseology before mentioned as not being an intended modification of the general definition, many courts have held that a payee may be a holder in due course. Boston Steel & Iron Co. v. Steuer, 183 Mass. 140, 66 N. E. 646; Brown v. Rowan, 91 N. Y. Misc. 220, 154 N. Y. Supp. 1098. See Lloyd's Bank v. Cooke, (1907] 1 K. B. 794, 808. The court, however, in the principal case distinguishes these cases on the ground that in them the improper negotiation was by an agent, and not by a thief. This, it was argued, prevented the payee from being an “immediate” party and thus allowed him to be a holder in due course. It would seem, however, that such analysis is founded on feeling rather than construction. For granted the inference in the clause requiring "indorsement of the holder," then in neither case can the payee be a holder in due course; while if the general definition is to cover, it must apply equally well in either case.

BILLS AND NOTES — RIGHTS OF A DONEE AFTER MATURITY OF A NOTE VonABLE FOR ILLEGALITY. — The defendant executed and delivered his promissory note, bearing a secular date, on Sunday. The plaintiff who is suing on the note is a donee after maturity without actual notice. Held, that he may recover. Gooch v. Gooch, 160 N. W. 333 (Ia.).

A contract entered into on Sunday is voidable merely and not void under the Sunday law of Iowa. Collins v. Collins, 139 Ia. 703, 117 N. W. 1089. See CODE, $ 5040. The defense of the maker of a note voidable for this or any other reason is usually considered to be personal or equitable. See 2 AMES, CASES ON BILLS AND NOTES, 812. It follows on well-known principles that neither a donee nor a purchaser after maturity should recover. Bank of British North America v. McComb, 21 Manitoba 58; Wing v. Dunn, 24 Me. 128; Cowing v. Altman, 71 N. Y. 435. Courts of Iowa have, however, held that the indorsee for value without notice of a matured note made on Sunday but dated on a secular day may recover. Leightman v. Kadetska, 58 Ia. 676, 12 N. W. 736. See Johns v. Bailey, 45 Ia. 241. The theory of these cases on which the court in the principal case relied is that "it is only against a person in equal fault that a defendant can be allowed to allege his own turpitude." Leightman v. Kadetska, supra. Thus the defense of illegality is not considered to be an equity in favor of the maker. By such a decision the clearly announced and accepted policy of the legislature that secular transactions shall not take place on Sunday is practically defeated. Where the transferee has paid no value there can be no possible counterbalancing policy requiring his protection.

CARRIERS BILLS OF LADING CONSTRUCTION OF “RESTRAINT OF PRINCES" IN A BILL OF LADING. - The captain of a German ship when in mid-ocean obeyed an order from the owners to return to New York on account of the declaration of war between Germany and the Entente Powers. The ship is libeled for non-delivery of a cargo billed to Plymouth and Cherbourg on a bill of lading which contained the usual “restraint of princes” exemption. The court found, as facts, that the captain acted under orders, and not in the use of his discretion as master; that, at the time, war was imminent, but was not actually declared until two days later; and that, if the ship had proceeded at its usual speed and without harbor delays it would have cleared the ports about thirteen hours before the declaration of war. Held, that the libellant may recover. Guaranty Trust Co. v. Kronprinzessin Cecelie, 56 N. Y. L. J. 915 (C. C. A., ist Circ.).

It was apparently conceded in the case that no liability arises in favor of cargo owners, if the decision of a captain in an emergency turns out adversely to their interests. The liability in the principal case was predicated on the fact that the captain was acting on the owner's orders. But it seems probable that the conceded rule, as that of general average, is based on the idea that ship and cargo are a joint maritime enterprise. See HUGHES, ADMIRALTY, § 20. The individual interest is subordinate to that of the many. So it would seem justifiable to extend in law what the wireless has extended in fact, and allow a freedom from liability to follow the owner's discretion when circumstances make him the better judge. In any case, the “restraint of princes” exemption in the bill of lading should prevent recovery. Early cases lay down the rule that the restraint must be actual and operative, not merely expected and contingent. Atkinson v. Ritchie, 10 East 530, 531; Hadkinson v. Robinson, 3 Bos. & P. 388, 392; King v. Delaware Ins. Co., 6 Cranch (U. S.) 71. But the modern law, pursuing a general tendency to construe contracts rationally rather than literally, has modified this rule, and it seems that a well-founded fear of restraint is sufficient. See ABBOTT, SHIPPING, 14 ed., 627; STEPHENS, BILLS OF LADING, 53. Thus, where a blockade has been established, the clause is held to cover this contingency even though there are chances for the ship to get through. Geipel v. Smith, L. R. 7 Q. B. 404, 409; The Styria, 101 Fed. 728,731, aff'd 186 U. S. 1. Cf. contra, Kacianof v. China, etc. Co., (1913] 3 K. B. 407. Furthermore, even though no actual blockade has been established, a grave danger of capture is considered sufficient restraint to bring the case within the saving clause. Nobel's Explosives Co. v. Jenkins & Co., (1896) 2 Q. B. 326, 331. But cf. Matsui & Co. v. Watts, etc. Co., 114 L. T. R. (N. s.) 326. Even danger to shipping from mine fields is considered within the term “restraint of princes. East Asiatic Co. v. S. S. Tronto Co., 31 T. L. R. 543. If a given condition creating reasonable risk of capture is within the clause, it would seem but just that likewise a reasonable risk of a condition which would result in capture should come within the clause.

CONFLICT OF LAWS — SHARES OF STOCK — JURISDICTION TO ADJUDICATE OWNERSHIP. – A resident of Tennessee died possessed of stock in a Kentucky corporation the certificates being in his possession. A Tennessee court granted letters of administration to the widow, and finding that the deceased was domiciled in Tennessee, decreed that the widow was entitled to the stock according to Tennessee law. The widow brought suit against the corporation in Kentucky to have the stock transferred to her on the books of the corpora

tion. The mother of the deceased, who was not before the Tennessee court at the time of the decree, intervened, claiming that the domicil of the deceased was in Kentucky, and that by Kentucky law, she, as next of kin, should share with the widow. The widow claimed full faith and credit for the finding of the Tennessee court as to domicil. The Kentucky court refused full faith and credit on the grounds that the Tennessee court had no jurisdiction of the stock. The widow then prosecutes this writ of error. Held, that full faith and credit under the Constitution of the United States need not be extended to the finding of the Tennessee court. Baker v. Baker, Eccles & Co., U. S. Sup. Ct., Oct. Term, 1916,

No. 115.

For a further discussion of this case, see Notes, p. 486.

CONSIDERATION WHAT CONSTITUTES CONSIDERATION - CONTRACT TO SUPPLY INDEFINITE BUSINESS REQUIREMENTS. By the terms of a contract, the defendant, a sugar manufacturer, agreed to sell, and the plaintiff, a wholesale grocer, agreed to buy, all of the plaintiff's “August requirements” of sugar at a fixed price. Upon a breach by the defendant, the plaintiff brings suit. Held, that the contract is void for lack of mutuality. T. W. Jenkins & Co. v. Anaheim Sugar Co., 237 Fed. 278.

An agreement to supply a commodity merely as the buyer may desire is unenforceable for lack of consideration, since the buyer incurs no detriment. American, etc. Co. v. Kirk, 68 Fed. 791; Teipel v. Meyer, 106 Wis. 41, 81 N. W. 982. But if, as in the principal case, he agrees to buy from no one else, this limitation on his freedom of action furnishes sufficient consideration, although he may not be bound actually to buy from the seller. See 14 Harv. L. Rev. 150. This is generally so in a contract to supply in such quantities as the buyer may desire for his business, or conversely, to buy as much of a product as the producer may desire to sell. National Furnace Co. v. Keystone Mfg. Co., 110 Ill. 427; Burgess, etc. Co. v. Broomfield, 180 Mass. 283, 62 N. E. 367. Some courts, however, have erroneously taken the view that the obligation supporting the promise to sell is a corresponding promise to buy. To reach this result it was necessary to presume that the business was to continue, and hence that the buyer would buy, even if the market price fell. But in the principal case this presumption cannot be made, since the commodity supplied is not incidental to an established business, but is the entire subject of the business. Therefore if prices fall, the buyer may escape buying by ceasing to trade in the commodity. On this basis the court holds the contract void for lack of mutuality. Now the requirement of mutuality can properly mean only that a bilateral contract, to be enforceable, must be binding on both parties. This is so, if consideration is furnished by each party. But the theory of the principal case further requires that the obligations must be correlative — that if one party is bound to sell, the other must be bound to buy. This result is indefensible and adds an unwarranted technicality to the law of contracts. See Jordan v. Indianapolis Water Co., 159 Ind. 337, 345–46, 64 N. E. 680, 683. Another recent federal case makes a sound application of the principles here involved. Ramey . Lumber Co. v. Schroeder Lumber Co., 237 Fed. 39.

CONSTITUTIONAL LAW - VALIDITY OF LAWS REGULATING THE SALES OF GOODS IN BULK. The New York “Sales in Bulk Act” provides that the sale or transfer in bulk of any part or the whole of a stock of merchandise otherwise than in the ordinary course of trade shall be void as against the creditors of the seller or transferor unless certain formalities calculated to notify such creditors of the transaction are observed. LAWS, 1914, c. 507; PERSONAL PROPERTY LAW, § 44. The constitutionality of this statute was recently put in issue. Held, that the act is constitutional. Klein v. Maravelas, 56 N. Y. L. J. 1257 (Ct. of App.).

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