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proved his claim in bankruptcy was held to be disabled, because he was forbidden to maintain an action in any other court until the question of the bankrupt's discharge was determined. Hall v. Greenbaum, 33 Fed. 22; Rosenthal v. Plumb, 25 Hun (N. Y.) 336. But if his claim, though provable, was not proved, the statute would run against him, for he was not unqualifiedly prohibited from bringing suit elsewhere. Cleveland v. Johnson, 5 Misc. (N. Y.) 484, 26 N. Y. Supp. 734; Davidson v. Fisher, 41 Minn. 363, 43 N. W. 79. The present law in terms provides for staying only such suits as are pending against the bankrupt when the petition is filed, and is mandatory only for the period up to the adjudication of bankruptcy. BANKRUPTCY ACT OF 1898, § 11. The power to restrain suits brought later must, therefore, be found by implication or in the general equitable power of the court to protect its jurisdiction. See In re Basch, 97 Fed. 761; COLLIER, BANKRUPTCY, 9 ed., 262. In so far as the mandatory provision does not control, the granting of injunctions to stay proceedings in other courts is governed by the sound discretion of the court of bankruptcy. In re Globe Cycle Works, 2 Am. B. R. 447; In re Franklin, 106 Fed. 666; In re Mercedes Import Co., 166 Fed. 427. The consequent possibility of successfully prosecuting a suit during the pendency of bankruptcy proceedings against the defendant would seem to justify the principal
PLEDGES — Loss OF LIEN — REDELIVERY TO PLEDGOR AS AGENT. - An automobile company delivered an automobile to the defendant by way of pledge. The defendant immediately returned the car and stored it in the company's garage, for purposes of demonstration and sale. The automobile company then became insolvent, and its trustee in bankruptcy now claims the machine as against the pledgee. Held, that the trustee in bankruptcy takes subject to the pledge. W. S. Biles & Co. v. Elliotte, 215 Fed. 340 (C.C. A., 6th Circ.).
The general rule is that a pledgee's interest must be evidenced by possession. Black v. Bogert, 65 N. Y. 601; Collins v. Buck, 63 Me. 459. But the authorities allow the pledgee to return the property to the pledgor for a temporary or special purpose without loss of the lien between the parties. Cooper v. Ray, 47 Ill. 53; Way v. Davidson, 12 Gray (Mass.) 465. Many cases anomalously hold that under such circumstances the lien is good even against intervening rights. McClung v. Colwell, 107 Tenn. 594, 64 S. W. 890; Northwestern Bank v. Poynter, Son, & MacDonalds, (1895] A. C. 56. Contra, Bodenhammer v. Newsom, 5 Jones (N. C.) 107. Where actual delivery of the property is difficult and inconvenient, there is a modern tendency to hold the pledge valid, if the goods are clearly marked to indicate the pledgee's possession, although they remain on the premises of the pledgor. Philadelphia Warehouse Co. v. Winchester, 156 Fed. 600; Bush v. Export Storage Co., 136 Fed. 918. But this doctrine, which must be based on the notice of the pledgee's equitable rights given by the marks, has no application when the goods bear no evidence of the pledge. American Can Co. v. Erie Preserving Co., 171 Fed. 540; Bank of North America v. Penn Motor Car Co., 235 Pa. 194, 83 Atl. 622. The principal case seems to go farther than any of these authorities justify, and can only be supported as an extension of the doctrine concerning redelivery to the pledgor for a special purpose. Although well settled, this exception is doubtful in theory, and it is very undesirable to extend it so far that it virtually does away with the rule that possession is necessary to a valid pledge.
RESTRAINT OF TRADE SHERMAN ANTI-TRUST LAW REGULATION OF COMBINATION WITHOUT DISSOLUTION: INJUNCTION AGAINST “FIGHTING SHIPS.” Several large transatlantic steamship lines formed a combination to regulate the transportation of steerage passengers. Competition among the members was reduced, but rates were not unduly increased, and the service and accommodations were much improved. In order to destroy competition, the combination ran “fighting ships” at cut rates to divert trade from rival ships, sailing from the same port at the same time. The government, by suit in equity, now seeks the dissolution of the combination under the Sherman Anti-Trust Act. Held, that the combination will not be dissolved, but that the use of the “fighting ships” will be enjoined. United States v. Hamburg-American Line, 52 N. Y. L. J. 189 (Dist. Ct., S. D. N. Y.).
The court applies the rule of reason emphasized in the Standard Oil and Tobacco cases. See Standard Oil Co. v. United States, 221 U.S. 1; United States V. American Tobacco Co., 221 U. S. 106. See 25 Harv. L. REV. 71. Under this test the "fighting ships" were found to be an unreasonable means of destroying competition and were enjoined. See 29 POL. Sc. QUART. 282, 288. But the combination itself was declared in other respects reasonable, in view of all the circumstances and the benefits conferred on the public, and dissolution was accordingly refused. Cf. United States v. St. Louis Terminal, 224 U. S. 383. How far this application of the test of reasonableness will be sustained is not clear at present. See 28 Harv. L. Rev. 87. In reaching its conclusion the court in the principal case received valuable aid from the report, based on similar evidence, of the Standing Committee on Merchant Marine and Fisheries. 63d CONGRESS, 2d SESSION, H. Doc. 805. Ordinarily such extensive data are not available to the courts when the reasonableness of a given restraint of trade is in question, and the result is therefore apt to depend upon the individual economic theories of the court. These difficulties, however, may perhaps be overcome by placing the matter in the hands of a single special tribunal, and the recent legislation establishing the Federal Trade Commission is designed to accomplish this result. 63d CONGRESS, PUBLIC Act, No. 203, approved September 26, 1914.
RESTRICTIONS AND RESTRICTIVE AGREEMENTS AS TO THE USE OF PROPERTY SALE OF LOTS ACCORDING TO A PLAT. The defendant divided her land for sale into building lots according to a plat, and conveyed a lot to the plaintiff's predecessor in title, by a deed referring to the plat, which showed the abutting lot to be a large undivided corner lot, owned by the defendant. The defendant is now offering for sale a portion of this corner lot contrary to the general plat, and the plaintiff brings a bill in equity to prevent the sale. Held, that the relief sought will be granted. Schickhaus v. Sanford, 91 Atl. 878 (N. J., Chanc.).
A restriction upon the use of land will be enforced by equity against purchasers with notice in favor of land intended to be benefited by the restriction. Tulk v. Moxhay, 2 Ph. 774; Kirkpatrick v. Peshine, 24 N. J. Eq. 206. This doctrine is not confined to any legal analogy, but is purely equitable and is based upon the principle that equity will carry out the intent of the parties. Whitney v. Union Ry. Co., II Gray (Mass.) 359, 364; see 24 Harv. L. Rev. 574. The form of the agreement will therefore be immaterial, for equity looks behind the form, and enforces the intent to bind the one piece of land for the benefit of the other. Tulk v. Moxhay, supra. This intent appears clearly where, as in the principal case, there is a conveyance with reference to a plat which shows the restrictions, and equity properly regards the land sold under such a general scheme as bound by the restrictions. Tallmadge v. East River Bank, 26 N. Y. 105. Furthermore, the dominant owners will be able to enforce the servitude against the land bound, irrespective of the order of purchase. Elliston v. Reacher, (1908] 2 Ch. 374, 665; Barrow v. Richard, 8 Paige (N. Y.) 351. All difficulties as to notice are obviated, of course, when the restrictions are sought to be enforced against land still retained under the scheme by the original grantor.
RESTRICTIONS AND RESTRICTIVE AGREEMENTS AS TO THE USE OF PROPERTY
WHERE THE COVENANTEE HAS NO CORPOREAL INTEREST IN ADJOINING LAND. — The predecessor in title of the defendant covenanted with the London County Council that, in consideration of the latter's sanctioning the laying out of a street across his property, he would not build at the end of the proposed street, where the Council intended to continue the street at a later time. The Council sought to enforce this covenant against the defendant, the present owner, who took the land with notice. Held, that the covenant cannot be enforced. London County Council v. Allen, (1914) 3 K. B. 642.
See page 201 of this issue of the REVIEW for a discussion of the nature and proper limits of the doctrine of equitable servitudes.
SALES — IMPLIED WARRANTY — EXCLUSION BY EXPRESS WARRANTY. The defendant, a canner, contracted to sell to the plaintiff, a jobber of bakers' supplies, a quantity of canned apples guaranteed for six months against "swells,” caused by gas from the souring of the fruit. After delivery, the apples developed a strong flavor of gasoline and rubber, so that the plaintiff's customers refused to purchase them. He now sues the defendant on an implied warranty of fitness and merchantability. Held, that the plaintiff may recover. Wolverine Spice Co. v. Fallas, 148 N. W. 701 (Mich.).
Ordinarily a warranty of merchantability and fitness for the intended purpose would be implied on a sale of unspecified goods such as that in the principal case. Hood v. Bloch Bros., 29 W. Va. 244, 11 S. E. 910. It is sometimes said, however, that this implication is necessarily excluded by an express warranty in the contract. See Turl's Sons v. Williams, etc. Co., 136 App. Div. 710, 712; 121 N. Y. Supp. 478, 480. In certain cases, of course, an express warranty clearly shows an intention to exclude any implied agreements, as when the seller expressly warrants only certain qualities, or when he agrees simply that the product shall conform to specifications furnished by the buyer. Dowagiac Mfg. Co. v. Mahon, 13 N. D. 257, 101 N. W. 903; Gill & Co. v. National Gaslight Co., 172 Mich. 295, 137 N. W. 690. The same intention is apparent when the express warranty is as broad as that sought to be implied, but is unavailable, because the buyer has not performed a condition precedent. Wasatch Canning Co. v. Morgan Canning Co., 32 Utah 229, 89 Pac. 1089. But it seems clear that a simple warranty of quality, not in any respect inconsistent with the implication, does not exclude an implied warranty of fitness and merchantability, for warranties are usually expressed in the contract to protect the buyer, not to limit the liability of the seller. Cook v. Darling, 160 Mich. 475, 125 N. W. 411; Boulware v. Victor Auto Mfg. Co., 152 Mo. App. 524, 134 S. W. 7. See UNIFORM SALES Act, $ 15 (6).
SPECIFIC PERFORMANCE — DEFENSES CLEAN HANDS: APPLICATION OF THE MAXIM TO BASEBALL CONTRACTS. — The defendant, a baseball player of exceptional ability, was induced by the plaintiffs to sign a contract to play for them, although they knew that he was obliged by the reserve clause of his contract with the Philadelphia Club to offer his services for the season to that club. The Philadelphia Club had the right to terminate this contract on ten days' notice to the defendant. The plaintiffs seek an injunction to restrain the defendant from playing for the Philadelphia Club. Held, that the injunction will be refused. Weegham v. Killifer, 215 Fed. 168 (Dist. Ct., W. D., Mich.); affirmed, 215 Fed. 289 (C. C. A., 6th Circ.).
The defendant here was bound by a contract similar to the one in the previous case to play baseball for the plaintiff during the season. The contract was the one prescribed by the National Commission under the National Agreement, which controls forty leagues and substantially all professional baseball players in the country. The defendant broke this contract and signed another with the Buffalo Federal League Club. The plaintiff seeks an injunction to restrain the defendant from playing for any other club during the period of their contract. Held, that the plaintiff is not entitled to the relief sought. American League Baseball Club of Chicago v. Chase, 149 N. Y. Supp. 6 (Sup. Ct.).
Both cases illustrate the application of the maxim that he who comes into equity must come with clean hands. In the first case, if the prior contract were enforceable, inducement of a breach would be clearly a legal wrong. Lumley v. Gye, 2 E. & B. 216, 22 L. J. Q. B. 463; Wanderers Hockey Club v. Johnson, 25 West. L. R. 434 (Brit. Col.). The courts have held, however, that the reserve clause is merely an agreement to make a contract if the parties can agree, and is not enforceable at law or in equity. Metropolitan Exhibition Co. v. Ward, 24 Abb. N. C. 393, 9 N. Y. Supp. 779. But the plaintiff's conduct in inducing a breach of the obligation is still inequitable enough to warrant a denial of injunctive relief. Cf. Keane v. Boycott, 2 H. Bl. 511. The second case refuses relief on the double ground of the lack of mutuality of remedy arising from the club's option to terminate and the inequitableness of the plaintiff's conduct in striving to obtain a monopoly of the baseball business. On the point of mutuality, the court follows the weight of authority, although what appears to be a better view would enjoin a breach. Philadelphia Ball Co. v. Lajoie, 202 Pa. 210, 51 Atl. 973. See Ames, Mutuality in Specific Performance, 3 COL. L. Rev. 1, 11. The denial of equitable relief because of the plaintiff's part in a monopolistic combination rests upon the substantially absolute control exercised by the association of baseball clubs operating under the National Agreement over the transfer and exchange of professional players. As the court says, such a combination is clearly not monopoly within the Sherman Anti-Trust Law, for it does not involve control of interstate commerce. See Metropolitan Opera Co. v. Hammerstein, 147 N. Y. Supp. 532, 535 (Sup. Ct.). The conclusion that it is nevertheless an illegal monopoly at common law is more doubtful, for there was no evidence of unlawful or oppressive measures or that the combination was more than a reasonably necessary means of regulating professional baseball. See EDDY, COMBINATIONS, 88 305, 559. But if the arrangement is to be regarded as monopolistic because of its undue interference with the individual's freedom of contract, it is clear that equity will not aid it. O'Brien v. Musical Mutual Protective Union, 64 N. J. Eq. 525, 54 Atl. 150.
TAXATION WHERE PROPERTY MAY BE TAXED TAXATION OF FOREIGN CORPORATIONS ON CREDITS IN HANDS OF LOCAL AGENT. — A Tennessee corporation had an office in Alabama. By statute, Alabama levied a tax on the solvent credits payable in Alabama arising from the corporation's local business there. Held, that the tax is valid. State v. Tennessee Coal, Iron, & R. Co., 66 So. 178 (Ala.).
A corporation has its domicile only in the State in which it is incorporated. Bergner & Engel Brewing Co. v. Dreyfus, 172 Mass. 154, 51 N. E. 531; Chafee v. Fourth National Bank, 71 Me. 514. Accordingly, it must be on some basis other than domicile that a state in which a foreign corporation maintains a branch office is able to tax the corporation for credits arising from the local business. And except for that fictional situs at the obligee's domicile, a chose in action as such can have no situs. See 27 Harv. L. REV. 107,113; 28 ibid. 104. From the business point of view, however, such credits form part of the stock in trade of the local office, and are taxable accordingly as property within the jurisdiction. Metropolitan Life Ins. Co. v. New Orleans, 205 V. S. 545; Hubbard v. Brush, 61 Oh. St. 252, 55 N. E. 829. But the cases properly insist that the branch office be more than a mere collection agent, and will permit a tax only on the credits that are really part of the local office's investment. Reat v. People, 201 Ill. 469, 66 N. E. 242; Myers v. Seaberger, 45 Oh. St. 232, 12 N. E. 796. In the principal case, the court talks of commercial domicile, and of the situs of choses in action, but the true basis of the decision must be that the credits in question represent business capital employed in the state, taxable in much the same manner as any merchant's stock in trade.
TORTS — INTERFERENCE WITH BUSINESS OR OCCUPATION - JUSTIFICATION — INTERPRETATION OF ENGLISH TRADES DISPUTES ACT OF 1906. — A stevedores' association, by agreement with a dockworkers' union, undertook to maintain union conditions and rates of pay, while the dockworkers agreed to protect the stevedores in maintaining a scale of charges to customers, by refusing to work for any stevedore who undercut the accepted rates. The plaintiff, a stevedore, maintained union conditions for his workmen but refused to join the association, and charged less than the association's rates to shipowners. The defendants, three stevedores and three union officials, therefore induced his men to strike, in violation of their contracts. The TRADES DISPUTES Act of 1906, 6 Edw. VII, c. 47, § 3, establishes a defense to this type of action if the acts complained of are done “in contemplation or furtherance of a trade dispute." Section 5 (3) then defines a trade dispute as "any dispute between employers and workmen, or between workmen and workmen," connected broadly with conditions or terms of employment. The jury found that this was a dispute between employers, and that the dockworkers were “brought in to assist ” the stevedores' association. Held, that this was not a “trade dispute" under the act. Long v. Larkin, (1914) 2 Ir. K. B. 285 (C. A.).
If one man joins another in a dispute with a third party, it seems to follow that a dispute arises between him and the third party. But the gist of the decision in the principal case is that if workmen take sides in a quarrel between employers, they are not necessarily engaged in a dispute with employers. The vice of the court's interpretation of the act is that it seeks in the origin and motive of the dispute, not in the fact of its existence, the defense accorded by the statute. Only a year before, the English Court of Appeal reached substantially the opposite conclusion, and held that if a strike is called, the fact that it is inspired by ill will does not overthrow the statutory defense. Dallimore v. Williams, 30 T. L. R. 432. Even if one accepts the interpretation put on the statute in the principal case, it is hard to see how the facts warranted the conclusion that the dockworkers were merely meddling in the stevedores' dispute, since their own wage scale depended on their preserving the integrity of the joint agreement. One is led to suspect that judicial hostility to the policy of the statute had some part in the result. See Conway v. Wade, (1908) 2 K. B. 844, 855; (1909) A. C. 506, 510. The decision has more than local significance, as similar questions may arise under the socalled Clayton Act, passed by Congress, October 16, 1914, which restricts the use of injunctions in certain cases arising out of labor disputes. 63d ConGRESS, PUBLIC Act, No. 212, § 20.
TRADE MARKS AND TRADE NAMES — PROTECTION APART FROM STATUTE AUDIBLE SIMILARITY WITHOUT FRAUDULENT INTENT. - The plaintiff sold a brand of cigars called “B. & M.” The defendants sold a cigar named “P. & M.” and had recently extended their trade into the territory where the plaintiff operated. The plaintiff asks an injunction against the use of this name, claiming that his trade was being injured on account of the misleading similarity in the sound of the names. It did not appear that the defendants intended to injure or divert the plaintiff's business, or that there was any resemblance in the boxes or labels of the cigars. Held, that the injunction will not be granted. B. Payn's Sons Tobacco Co. v. Payette, 149 N. Y. Supp. 183 (Sup. Ct.).
Equity interferes to protect trade marks and trade names against infringe