Page images
PDF
EPUB

PERSONS HUSBAND AND WIFE - HUSBAND AS AGENT IN WIFE'S BUSINESS RIGHTS OF HIS CREDITORS. A wife's success in business was due to the skill of her husband, who conducted the business as her agent. Held, that real estate purchased by him in her name with the profits of the business is subject to the husband's debts. Blackburn v. Thompson, 66 S. W. Rep. 5 (Ky.).

Even assuming that the business here was purchased and carried on with the wife's capital, which is by no means clear from the facts reported, the decision is supported by several well-considered cases, and the modern tendency seems in that direction. Boggess v. Richards's Admr., 39 W. Va. 567; Wilson v. Loomis, 55 Ill. 352. The weight of authority and the general opinion of text-writers is still contra, however. Mayers v. Kaiser, 85 Wis. 382; 2 BISHOP, MARRIED WOMEN, §454; but cf. BUMP, FRAUD. CONVEY., 4th ed., §§ 224, 225. On principle it is difficult to say that a husband may not give away his labor to his wife as well as to another person, especially as he is the natural person to manage her property. But transactions like the present are generally mere screens to enable the husband in fact to conduct his own business more safely, or are carried out with the tacit understanding that he may use the profits to a reasonable extent for his own compensation. Therefore a hard and fast rule enabling his creditors to get at such part of the property as would represent a reasonable compensation for the husband would be equitable. See 8 HARV. L. REV. 430. If the claims of the creditors in the principal case fall within these limits, the case is to be supported. PROCEDURE NEW TRIAL-JUROR UNABLE TO UNDERSTAND ENGLISH. — It was discovered after verdict that a juror, who had not been challenged, was unable to understand the English language. Held, that this is not sufficient ground for granting a new trial. San Antonio, etc., Ry. Co. v. Gray, 66 S. W. Rep. 229 (Tex., Civ. App.). It is very generally agreed that ignorance of the English language is a ground of challenge. State v. Madigan, 57 Minn. 425. One court, however, has held the contrary. In re Allison, 13 Col. 525. The proper time for challenging is before the jury is sworn; and if a party at that time knows or negligently fails to discover that any member of the panel is not qualified, and does not challenge, he is taken as waiving his right for all purposes. Brunskill v. Giles, 2 Moo. & Sc. 41; St. Louis, etc., Ry. Co. v. Casner, 72 Ill. 384. It would seem that this rule is based upon proper considerations of policy, to prevent fraud and unfair dealing by the parties. But when the cause of disqualification is not known until after the verdict, and the objecting party is chargeable with no negligence in failing to discover it, the reason for the rule is absent, and by the weight of authority the court may, in its discretion, grant a new trial. Woodward v. Dean, 113 Mass. 297. In some jurisdictions the new trial is allowed as a matter of right. Shane v. Clarke, 3 Har. & McH. (Md.) 101; Quinn v. Halbert, 52 Vt. 353. It would seem that when, as in the principal case, the unquali fied member of the panel is practically a non-juror, a new trial ought unquestionably to be granted, for the verdict has in effect been found by less than twelve jurors.

PROPERTY - Covenant AGAINST INCUMBRANCES LOCAL ASSESSMENTS. — - The defendant conveyed land to the plaintiff with a covenant against incumbrances. Prior to the sale a public improvement had been completed, and accepted by the city, and an assessment had been levied. After the sale the defendant paid the amount assessed upon the land sold. Later the assessment was adjudged illegal. Under its charter the city had no power to make a reassessment. An amendment was procured, remedying this defect, and a new assessment levied. This was paid by the plaintiff, who now sues on the covenant. Held, that he is entitled to recover. Green v. Tidball, 67 Pac. Rep. 84 (Wash.).

Where an unpaid assessment has been set aside the city's lien has been held not to be removed thereby. Coburn v. Litchfield, 132 Mass. 449. Similarly, where improvements have been made, but no assessment levied, so that no technical lien has attached, courts have held the land subject to an incumbrance. Carr v. Dovely, 119 Mass. 294; see also Blossom v. Van Court, 34 Mo. 390; but cf. Harper v. Dowdney, 113 N. Y. 644, contra. This view is based upon the right of the city ultimately to secure payment out of the land by taking proper proceedings to make a valid assessment; and co sidered strictly, it would seem inapplicable to the principal case where the city had, before amending its charter, no authority to make a reassessment. Considered more broadly, however, the just right of the city to contribution from this land would seem a substantial incumbrance, where, as here, the right is unenforceable because of a technical defect easily curable by legislation. Moreover technical difficulties may be avoided by allowing the reassessment to relate back to the date of the

first assessment.

This view has been adopted in cases similar to the principal case. White v. Stretch, 22 N. J. Eq. 76; Cadmus v. Fagan, 47 N. J. Law 549; see also Peters v. Myers, 22 Wis. 602: but cf. Langsdale v. Nicklaus, 38 Ind. 289, contra.

[ocr errors]

-

PROPERTY GRATUITOUS PAROL PROMISE IMPROVEMENTS SPECIFIC ENFORCEMENT. The plaintiff, relying on the gratuitous parol promise of his father to give him certain land, moved thereto from a distance and made valuable improve. ments. The defendant had purchased from the father with notice of the promise to the plaintiff. Held, that equity will decree a conveyance by the defendant. Scott v. Lewis, 66 Pac. Rep. 299 (Or.). See NOTES, p. 659.

PROPERTY - POWERS-APPOINTMENT TO TRUSTEE-LAPSE. - Under a settlement, X had a general testamentary power to appoint a certain fund. By will she directed the trustees of the settlement to hold part of the fund for certain appointees and the residue for A. She then gave several legacies and bequeathed and appointed all the residue of her property to A. A died in the lifetime of X. Held, that X's next of kin are entitled to the residue of the settled property and it does not go as in default of appointment. In re Martin, 36 L. J. 670 (Eng., C. A.).

Where an executor is made trustee of property under a general testamentary power, and the beneficiary predeceases the testator, a trust will be raised for the testator's next of kin. In re Van Hagen, 16 Ch. D. 18. The reasoning of the courts would seem to place the case of a trustee who is not an executor on the same footing. See In re Scott, [1891] 1 Ch. 298; In re Van Hagen, supra. Whether this be correct or not, the present case is distinguishable. In the case of a direct appointment and the death of the appointee before the testator, it is as if there had been no appointment at all, and the property will go as in default of appointment. In re Davies' Trusts, L. R. 13 Eq. 163. The same conclusion seems proper in the principal case, where the trustees of the original settlement continued to hold the property and nothing was really appointed except the equitable interest. In re Thurston, 32 Ch. D. 508. Even in such a case, however, the testator may avert this result by showing a clear intent to blend the fund with the rest of the estate. In re Pinède's Settlement, 12 Ch. D. 667. But the language of the will in question hardly shows such intent.

PROPERTY RULE AGAINST PERPETUITIES - SEPARATION OF LIMITATIONS. Personal property was bequeathed to trustees in trust for A for life, and after her death, for such of her children as should attain the age of twenty-five years, but "in default of such issue" then over. A died without having had a child. Held, that the gift over is too remote. Hancock v. Watson, [1902] A. C. 14.

It seems to be settled that where a testator states two contingencies upon the happening of either of which an executory devise is to take effect, although one may be too rer ote, if the other is not too remote, the gift over is good in case the latter contingency happens. Longhead v. Phelps, 2 W. Bl. 703; Jackson v. Phillips, 14 Allen (Mass.) 539, 572. In the principal case, however, the two contingencies, namely, the death of A leaving no children, and the death of all her children before reaching twenty-five, are included in a single phrase; and in such cases, where the testator has not separated the contingencies, the court cannot do it, although one includes the other. Proctor v. Bishop of Bath and Wells, 2 H. Bl. 358; GRAY, PERP., §§ 331-353; cf. Sears v. Russell, 8 Gray (Mass.) 86, 98. Nevertheless, if the limitation may upon an event included in that stated by the testator, take effect as a legal contingent remainder, the court may separate the contingencies, and hold the remainder good, if the event upon which it depends in fact happens. Evers v. Challis, 7 H. L. Cas. 530. The doctrine of Evers v. Challis being confined to legal remainders, the court rightly refused to apply it to the principal case, both because the interests are equitable, and because the subject matter is personalty, contingent interests in which are always executory. GRAY, PERP., § 339. A contrary interpretation of Evers v. Challis was adopted in one case, but later discredited. See Watson v. Young, 28 Ch. D. 436; In re Bence, [1891] 3 Ch. 242.

QUASI-CONTRACTS FORGERY BY AGENT-LIABILITY OF PRINCIPAL. One X was agent for the defendant to indorse and draw checks. In the defendant's absence X forged his principal's name to stock securities of the latter, and sold them to the plaintiff, who paid in checks to the order of the defendant, with whom he supposed himself to be dealing. The agent indorsed the checks into the bank, and subsequently drew out and embezzled the amount, and most of his principal's money. The princi

pal, on discovering his losses, obtained new stock from the corporation. The plaintiff, having returned to the corporation the certificates in his hands, brought assumpsit for money had and received. Held, that the plaintiff is not entitled to recover. Fay v. Slaughter, 62 N. E. Rep. 592 (Ill., Sup. Ct.).

Lord Mansfield laid down the rule that in such an action the defendant is liable only for the money he has actually received, and may use as a defence anything which shows that the plaintiff is not equitably entitled to recover. See Moses v. Macferlan, 2 Burr. 1005, 1010. Clearly, apart from technicalities, the defendant in the principal case was not ultimately enriched, for though the money was deposited to his credit, he never had any opportunity to use it. Cf. KEENER, QUAsi-Conts., 333, 334If the defendant has not been enriched he cannot be held, since the mere fact that he had wronged the plaintiff, if shown, would not support a quasi-contractual action. National Trust Co. v. Gleason, 77 N. Y. 400. It has, it is true, been held that where there are two wrongdoers each is liable for the total amount of the unjust enrichment of either or both. City National Bank v. National Park Bank, 32 Hun (N. Y.) 105. Under the reasoning of this case it seems that, if the defendant could on principles of agency be held liable for the tort, he might be charged for the enrichment of the agent. Such a decision, however, appears to be opposed to the equitable theory on which actions of this sort are based, and is inconsistent with National Trust Co. v. Gleason, supra. See KEENER, QUASI-ContS., 200-202. The decision in the principal case, therefore, is to be supported.

STARE DECISIS OVERRULED DECISION CONSTRUCTION OF WILL. — The Supreme Court of Pennsylvania held that certain expressions in an instrument created a trust. Subsequently, another case arising as to the same document, this decision was overruled. Held, that a will executed and taking effect between the dates of these two decisions, should be construed according to the first. Lisle's Estate, 58 Leg. Intel. 490 (Pa., Orphans' Ct.). See NOTES, p. 667.

TORTS NEGLIGENCE OF SELLER OF CHATTEL

LIABILITY TO THIRD PER

SONS. The plaintiff, a servant of a manufacturing jeweller, was injured by the breaking of a drop press, negligently constructed by the defendant and sold by him to the jeweller. Held, that no action will lie. McCaffrey v. Mossberg, etc., Co., 50 Atl. Rep. 651 (R. I.). See NOTES, p. 666.

TORTS

[ocr errors]

SALE OF DANGEROUS ARTICLE - FAILURE TO WARN VENDEE. Upon the plaintiff's order the defendant sent him a quantity of phosphorus properly packed and labelled, but without any specific warning as to its dangerous qualities. The letter ordering the phosphorus showed that the plaintiff was an illiterate person, and it did not indicate for what purpose the phosphorus was intended. By reason of the plaintiff's ignorance of the nature of the substance, an explosion occurred, and the plaintiff was severely injured. Held, that in an action for negligence a demurrer was properly sustained. Gibson v. Torbert, 88 N. W. Rep. 443 (Ia.).

Where the dangerous qualities of an article are not matter of common knowledge, there is a general duty upon those who send or deliver such article to others to give warning of the danger incurred by handling it. Parrot v. Wells, Fargo & Co., 15 Wall. (U. S. Sup. Ct.) 524; Farrant v. Barnes, 11 C. B. N. s. 553. But where, as in the principal case, the substance is one whose dangerous character is generally known, a vendor would seem entitled ordinarily to assume such knowledge on the buyer's part. In such cases, though not under a general duty to warn, he may still be responsible where, as in the case of a child, he knows or has reason to know that through the buyer's ignorance or inexperience harm is likely to result. Binford v. Johnston, 82 Ind. 426. Selling to an adult known to be ignorant of the danger would come within the same rule. Wellington v. Downer, etc., Co., 104 Mass. 64. So in the principal case it should have been left to the jury to say whether from the plaintiff's letter the defendant should reasonably have suspected that the plaintiff was ignorant of the nature of phosphorus. If so the defendant should be liable.

TRUSTS-CREATING A TRUST BY DYING Intestate. - A woman told her father that before taking an intended foreign trip she purposed making a will in her mother's favor. The father promised that her wishes as to the property would be followed. Within ten days she died suddenly intestate. Held, that these facts do not warrant a conclusion that a trust for the mother attached to the father's inherited share in the daughter's personalty. Whitehouse v. Bolster, 50 Atl. Rep. 240 (Me.).

According to some authorities, a trust for a third person may arise from a transfer absolute on its face, only if such transfer was induced by fraud prejudicial to an intended beneficiary; according to others, only if the transfer resulted from a reliance on the transferee's assent to hold for such beneficiary. Moran v. Moran, 104 Ia. 216; Tee v. Ferris, 2 K. & J. 357. Courts applying these tests are frequently forced to imply an original fraudulent purpose from the transferee's act of promising; or assent from notice to him of the transferor's terms. Dowd v. Tucker, 41 Conn. 197; Moss v. Cooper, 1 J. & H. 352. Moreover, in the distinction which they involve between trust expressions in an instrument of transfer and outside expressions, these tests oppose old authority. See SHEP., TOUCH., 518. It is conceived that in all cases where property is transferred to one person with the intention that a beneficial interest therein shall go to another, the creation of a trust obligation by such transfer depends not on anything done by the transferee, but rather on the acts of the transferor; accordingly the true explanation of the cases above would seem to lie in the broad principle that a transferee is bound by terms stated as part of the act of transfer or previously communicated to him in contemplation of that act. Cf. Davis v. Coburn, 128 Mass. 377. All these rules apply as well to transfers made by voluntarily allowing property to descend as to transfers by actual conveyance. Sellack v. Harris, 5 Vin. Abr. 521; Williams v. Fitch, 18 N. Y. 546. In the principal case, on any view, the essentials of a trust were lacking. The intestate affixed none to the transfer of her property for she intended no such transfer. In fact, the contingency of a trust was not in her mind at all. Nor can a constructive trust be raised out of the receipt of the property by the father gratuitously, contrary to the former owner's intention. The same principle applies, by which, in cases of mistake by a testator, a legal title intended for one person passes absolutely to another. See Newburgh v. Newburgh, 5 Madd. 364.

TRUSTS - ESTOPPEL AGAINST TRUSTEES PAYMENT FROM TRUST FUND. - X agreed to render legal services without charge to the defendants, as trustees of a bankrupt's estate. Afterward, he assigned to the plaintiffs whatever claim he had against the defendants for legal services, and the trustees in writing promised the plaintiffs that they would pay them whatever sum the court should allow X, and stated that the fee ought to be a large one. A considerable allowance was made to the trustees for counsel fees; but no fee was allowed to X, though he made application. A balance of $1850 remaining in the hands of the trustees, the plaintiffs put in a claim for it. Held, that the plaintiffs are entitled to the money. Sione v. Hart, 66 S. W. Rep. 191 (Ky.).

The language of the defendants practically amounted to a statement that the ordinary contractual relation of attorney and client existed between the defendants and X. The plaintiffs, therefore, might justly have a claim by estoppel against the defendants, the necessary change of position being found in the plaintiffs' omission to take immediate proceedings against X, who previous to this suit became insolvent. If liability is rightly incurred by trustees for the benefit of the estate, though suit is properly brought against the trustees individually, yet they are entitled to be reimbursed out of the trust property. But since, in the principal case, X had agreed to serve without fee, and the trustees acted entirely outside the line of their duty in making the contrary representation on which the plaintiffs' action is based, the trustees are not entitled to reimbursement. See LEWIN, TRUSTS, 9th ed., 725. The court therefore erred in allowing the plaintiffs' claim to be paid out of the trust fund. See In re Johnson, 15 Ch. D. 548. The decision seems to rest on the assumption that if the plaintiffs did not get the money it would go to enrich the trustees. On the contrary, it is submitted that whatever part of the gross sum allowed for counsel fees was not expended for that purpose, would be held on a constructive trust for the creditors of the estate.

BOOKS AND PERIODICALS.

THE SITUS OF DEBTS. The doctrine advanced by Mr. Minor in his CONFLICT OF LAWS, that when a debtor and a creditor are domiciled in different states, the debt is taxable not only at the domicile of the creditor but at that of the debtor as well, has met the approval of a recent writer. The Situs of Debts for Purpose of Taxation, by E. S. Maloney, 7 Va. L. Reg. 606 (Jan., 1902). If such a tax is to be justified at all it must be as a tax on property. It does not profess to be a tax upon the debtor because whatever the debtor pays is to be deducted from the amount due. On the other hand, this cannot be taxation of the creditor, inasmuch as he is not within the jurisdiction of the taxing power. An inquiry thus arises as to what property situated within the state of the debtor's domicile may be thus subjected to taxation. Admittedly the debtor has no property in the debt. MINOR, CONFL. LAWS, § 123. But it is contended that the obligation to pay is property belonging to the creditor and the tax is thus defined as upon property of the creditor in the hands of the debtor.

To say that a debt has a situs either at the domicile of the creditor or at that of the debtor is obviously to state a fiction. A chose in action is in its nature incapable of location at any particular place. Field, J., in State Tax on Foreign Held Bonds, 15 Wall. 300. The fact that a creditor comes into a particular state does not give that state any real power or control over property which it Idid not have before. An illustration of this truth is found in the freedom of choses in action from execution at common law and in the fact that even under modern statutes the proceeding is purely equitable in its nature because jurisdiction over the person of the debtor is necessary to execution upon the debt. Again, if the tangible property from which the chose in action derives its value is situated without the jurisdiction, there is nothing which the state can seize and out of which taxes can be taken. Nor can it prevent any dealing whatsoever with that property by the state within which it is located, even though the chose in action be thereby rendered utterly worthless. The logical view seems to be that the right to tax in these cases arises not out of jurisdiction over property, but by reason of control over the person, and that the tax is not in reality a tax on property, but upon the person measured by property in the debt.

The conception of the obligation of the debtor as property in his own hands belonging to the creditor does not, in this view, aid Mr. Maloney's contention, inasmuch as the obligation exists no more in one place than in another. Moreover, it is not the duty of the debtor to pay, but rather the corresponding right to enforce that duty that may properly be defined as the creditor's property and this right cannot in any sense be said to be property in the hands of the debtor. It is contended, however, by Mr. Maloney that this right to sue is property situated within the state of the debtor's domicile because enforceable there. But the claim against the debtor being personal, he may be sued wherever found. All states hold themselves ready to enforce the obligation, and if this is the property taxed, it is taxable in all jurisdictions alike.

Accepting the well established principle that the power of taxation is limited to persons or things within the sovereignty, it is submitted that the right contended for does not exist. There is nothing at the domicile of the debtor to be taxed. The tax is not levied upon the debtor, the creditor is without the jurisdiction, and no property can be located within it. Whether courts have the power to declare such taxation invalid is another matter, but by the great weight of authority it has been so held as falling within the clause of the federal constitution which forbids impairing the obligation of contracts. COOLEY, TAXATION, 2d ed., 22; State Tax on Foreign Held Bonds, supra; Murray v. Charleston, 96 U. S. 432. The cases cited in support of Mr. Maloney's view will be found upon examination to deal with taxation upon business or earnings

« PreviousContinue »