9

allowances on damage claims, are some of the ingenious subterfuges enumerated in the report by which shippers have sought to defraud carriers, or carriers to favor individual shippers. The enumeration shows that what has been described as "the most prolific source of evil known in transportation," 10 is unfortunately not yet a thing of the past. Rivaling in importance the duty not to discriminate, is the obligation imposed on carriers to make reasonable provision for the safety and welfare of patrons and employees. In recent years, this general common-law duty has become more and more crystallized by legislation into a specific duty, under pain of prosecution, to maintain certain fixed standards of equipment and management. The Commission endeavors to enforce these standards, by searching for violations of the various regulating statutes and referring the collected data to prosecuting officials; by investigating train accidents and reporting causes and suggesting cures; 12 and by informally pointing out to railroad officials. defects in equipment where prosecution is deemed inadvisable. Since 1911, also, a nation-wide system of boiler inspection has been conducted by the Commission, with gratifying results.13

11

14

Financial and accounting reforms, and reforms in the technique of railway administration, make up a third group of the Commission's activities. They range from the giving of informal assistance, through an expert employed by the Commission, in the intricate task of unifying freight classification, and the revision of prescribed accounting systems under the Hepburn Act, to the more spectacular investigations of the financial affairs and practices of railroad systems from New England to the Pacific.15 There should be mentioned also the formidable task of supervising the installation of the system of classifications, rates, and regulations for express companies prescribed in 1913. Even more arduous is the duty placed upon the Commission by Sec. 20 of the Panama Canal Act, prohibiting railroad ownership or control of competing water lines, except where, in the Commission's judgment, the public interest warrants exemptions.16 The Commission is investigating, under this Act, fifty-eight applications, embracing seventy-nine water

The Commission points out the significant fact that from 1900 to 1913, roughly the period in which rebating has been most vigorously prosecuted, payments for loss and damage have jumped from $7,055,622 to $30,885,454, and expresses the belief that many claims are paid "not because the carriers feel that the claims are valid, but because claimants threaten to divert traffic unless claims are paid."

10 RIPLEY, RAILWAYS: RATES AND REGULATION, p. 188.

11 SAFETY APPLIANCE ACT (1893), 27 U. S. STAT. AT L., 531; amended 1896, 29 U. S. STAT. AT L., 85; ASH PANS ACT (1908), 35 U. S. STAT. AT L., 476; HOURS OF SERVICE ACT (1907), 34 U. S. STAT. AT L., 1415-1417.

12 Sixty-three such accidents were investigated during the period covered by the report.

13 Required by the BOILER INSPECTION LAW (1911), 36 U. S. STAT. AT L., 913. During the three years' operation of the statute, accidents due to boiler defect have been reduced 35 per cent, with a reduction of 75 per cent in the number of deaths resulting, and of 39 per cent in the number of injured.

14 34 U. S. STAT. AT L., 593 (1906).

15 Thirty-five such investigations have been concluded during the past year, or are still pending. Of these, nine were in response to resolutions of the House or Senate, and the remainder were initiated by the Commission.

16 37 U. S. STAT. AT L., 566 (1912).

line interests, each involving knotty problems of corporate and financial interrelation.

What is perhaps the largest single task imposed on the Interstate Commerce Commission in the twenty-eight years of its existence deserves final mention: the physical valuation of the whole system of interstate carriers.17 The report shows this monumental undertaking already well under way. To establish the present cost of reproduction of the railways, the country has been divided into five districts, and eight engineering field parties in each district are making inventories of the railroad property.18 To establish the original cost, to date, of each piece of railroad property, as called for in the Act, a staff of accountants is at work on the books of the railroads in each district.19 Finally land experts and attorneys are appraising railroad lands and rights of way, determining both present value and actual cost, if any, to the railroad. The result should be a Domesday Book of the American transportation system hard to overestimate in its economic, legal, and legislative consequences.

FAILURE TO REGISTER STOCK TRANSFERS. In transferring stock of a corporation the proper change on the register is often omitted; and from this, legal complications may ensue in determining the owner upon whom various forms of stockholders' liability shall fall. The question may arise when the corporation or its receiver is assessing the stockholders. Although the owner of the shares has made a bona fide transfer of them, if no change is made on the corporation's books provided for the purpose, he still retains the legal title, though the equitable title goes to the purchaser. If no notice of the sale has been given to the proper corporate officer, it has been held both that the legal owner of record is liable, much as any other trustee of the stock would be,2 and that the beneficial owner can be held as well, although there can of course be no double recovery. If the former has to pay, he has the right to reimbursement or exoneration from the latter; allowing a direct right against the beneficial owner is therefore a legal short-cut in place of equitable execution by the corporation upon this right of the registered owner. If, however, the corporation has been properly notified of the transfer, the failure to transfer on the books is the corporation's own fault; and it would seem clear that when no creditor's rights are affected the book owner should not be liable for assessments, as the corporation is

17 Required by Sec. 19 (a) of the Act to RegulatE COMMERCE, as amended 1913, 37 U. S. STAT. AT L., 701.

18 The Commission expects soon to more than double the number of field parties in each district.

19 The Commission suggests tentatively that this detail of the valuation program may involve “an expenditure out of all proportion to the value of the results.”

1 See Black v. Zacharie, 3 How. (U. S.) 483, 513.

2 Visalia & T. R. Co. v. Hyde, 110 Cal. 632, 43 Pac. 10; Brown v. Allebach, 166 Fed. 488.

485.

3 Ohio Valley Nat. Bank v. Hulitt, 204 U. S. 162; Brown v. Artman, 166 Fed.

Kellog v. Stockwell, 75 Ill. 68.

5 See 22 HARV. L. REV. 608.

precluded from setting up the registered title which, but for its carelessness, would have been transferred."

8

By statute very generally creditors can hold stockholders individually liable in certain cases. When the suit is by creditors and not by the corporation, it can be seen that different considerations enter. Here a fortiori the book owner who has not notified the corporation of the transfer should be liable, for the creditor may have relied upon his name on the book." But when the failure to change is the fault of the corporation, the question is more difficult. A recent case holds that here the registered owner should not be liable to the creditor, as he has done all that a reasonable man would do to affect the transfer. Bank of Midland v. Harris, 170 S. W. 67 (Ark.). There is a conflict on the analogous question of whether a deed should be considered as duly recorded when through negligence at the recorder's office some requisite act has not been done. The cases that hold the recording invalid argue that the hardship involved in making a man see to it at peril that the recording is properly done is outweighed by the great public policy of letting purchasers of land rely absolutely on the record. Although there is a strong body of authority on the other side,1o this would seem the better view. There is a similar policy in the case of corporations. Its franchise is a gift from the state, and to prevent abuse of that gift the state makes various requirements of which the keeping of a register book is one. It is a right of the state that it or its citizens may be able to find out at any time from the register who have succeeded to this franchise. It might well be argued that definite ascertainment of this apostolic succession was of so great public importance that no consideration of fairness in individual cases should outweigh it, and that the register should be conclusive, except where the corporation having actual notice of the transfer is itself precluded from taking advantage of its own neglect to make the change. After all it is not a very grave hardship to force the book-owner to oversee the registration at his peril, while if he is forced to pay he always has the chance of his remedy over against the beneficial owner. It can be seen, however, that the public policy in this case is not as strong as in the case of recording a deed, for creditors of a corporation, as a matter of fact, do not rely on the register as do purchasers of land. Hence it is not very surprising that instead of a strict simple rule considerations of fairness to individuals have been considered and have led to authority in accord with the principal case. 12

11

Whitney v. Butler, 118 U. S. 655. In such a case the legal short-cut for equitable execution would not explain the corporation's holding the beneficial owner for assessments. But no doubt, as notice had been given to make the transfer, he would not be allowed to say that he did not have the legal title.

7 Richmond v. Irons, 121 U. S. 27; Johnson v. Somerville Dyeing & Bleaching Co., 15 Gray (Mass.) 216.

8 For a more complete statement of the case, see RECENT CASES, p. 427.

9 Jennings v. Wood, 20 Ohio 261; Barnard v. Campau, 29 Mich. 162; Miller v. Bradford, 12 Ia. 14.

10 Merrick v. Wallace, 19 Ill. 486. See Gillespie v. Rogers, 146 Mass. 610, 612. 11 Richmond v. Irons, supra, is not contra to the principal case. It held the registered owner liable when notice had been given to an officer of the corporation who chanced also to be the vendee of the stock, but on the ground that this was not proper notification. In the principal case the vendee of the stock was also an officer, but appears to have been the only proper person to notify.

12 Earle v. Carson, 188 U. S. 42.

-

RECENT CASES

APPEAL AND ERROR DETERMINATION AND DISPOSITION OF CAUSE - DIVISION OF COurt. · On appeal from a conviction of murder in the second degree, two judges favored affirmance, and the other three held that the conviction should be set aside. Of these three, two held the refusal of one instruction erroneous, while the third joined with one of these two in holding a certain instruction bad, and was alone in thinking the refusal of another instruction error. Only two of the three, however, voted to remand the case for a new trial, for the other voted for a reduction of the degree of the offense to manslaughter. Hence on no one assignment of error was a majority of the court for reversal. Held, that the judgment be set aside and that the cause be remanded for new trial unless the state elect to stand on a conviction for manslaughter. Price v. State, 170 S. W. 235 (Ark.).

Where an appeal arises on a single assignment of error and a majority of the court is for reversal but for different reasons, it is properly held that there should be a reversal. Browning v. State, 33 Miss. 47, 87; Oakley v. Aspinwall, I Duer (N. Y.) 1. Even where the appeal is on several assignments of error and a majority upholds each assignment, but the minority on the separate assignments unite on the vote for reversal and become a majority, it has been held that there should be a reversal. Smith v. United States, 5 Pet. (U. S.) 292. See 22 HARV. L. REV. 533. This result seems to be required by logic, so long as the judges vote on the general question of reversal rather than separately on each specific assignment of error. It is obvious, however, as a matter of practice, that a new trial is futile when a majority of the appellate court has sustained the trial court on every point. On this ground, some courts have held, even apart from statute, that there should be no reversal. In re McNaughton's Will, 138 Wis. 179, 118 N. W. 997, 1001. See Legal Tender Cases, 52 Pa. 9, 101. Statutes requiring a separate vote on each assignment of error lead to this same result in other states. See Md., Pub. GEN. Laws, Art. 5, $84, 9; cf. Matthews v. American Central Ins. Co., 154 N. Y. 449, 48 N. E. 751. In the principal case, therefore, unless the compromise reached was demanded by local practice, it would seem that an affirmance might have been justifiable.

BILLS AND NOTES - STATUTES — NEGOTIABLE INSTRUMENTS LAW: EFFECT ON STATUTE MAKING USURIOUS NOTES VOID. A statute declared void all notes given for usurious consideration. Sections 55 and 57 of the uniform Negotiable Instruments Law, subsequently adopted, provide that the title of a person who negotiates an instrument is defective when obtained for an illegal consideration, but that a holder in due course holds the instrument free from such defects. The plaintiff was an innocent holder for value of a note given for usurious consideration. Held, that the plaintiff can recover. Emanuel v. Misicki, 149 N. Y. Supp. 905 (Sup. Ct.).

The principal case is additional authority to the effect that the Negotiable Instruments Law repeals by implication previous statutes making void instruments obtained in illegal transactions. Wirt v. Stubblefield, 17 App. D. C. 283; Klar v. Kostiuk, 65 N. Y. Misc. 199, 119 N. Y. Supp. 683. But there is much authority, including a late Iowa case, to the contrary, and this attitude seems much preferable, for the reason that a clear provision for repeal should be necessary to abrogate the previous statute. Penny Savings Bank v. Fitzgerald, 149 N. W. 497 (Ia.); Alexander v. Hazelrigg, 123 Ky. 677, 97 S. W. 353; Crusins v. Siegman, 81 N. Y. Misc. 367, 142 N. Y. Supp. 348; Martin v. Hess, 71 Leg. Intell. 148 (Phila. Munic. Ct.). Furthermore, it is difficult to see how

the provisions of the Negotiable Instruments Law have any application, for when a statute makes the instrument void from its inception, the case is properly not one of defective title, but one where no negotiable instrument ever came into legal existence. See 27 HARV. L. REV. 679.

CONFLICT OF LAWS — JURISDICTION FOR DIVORCE - JUDICIAL SEPARATION IN ENGLAND. An Englishwoman was married to a Spaniard in England. After several years of foreign residence she returned, and at a time when her husband was also in England she filed a petition for judicial separation based on adultery. The husband defended on the ground that his domicile was in Spain. Held, that the English court has power to grant the relief. Riera v. Riera, 138 L. T. J. 37 (Prob. Div.).

A rather sharp divergence between America and England has come about on the problem whether divorce can be granted the wife by any jurisdiction except that of the husband's domicile. By the prevailing American rule the wife may acquire a separate domicile for the purpose of securing divorce if the conduct of the husband has been such as to justify her action. Ditson v. Ditson, 4 R. I. 87. See 15 HARV. L. REV. 66, 28 id. 196. But the English courts have adhered to the principle that an actual change in the marriage status can be effected only at the domicile of the husband. See 26 HARV. L. REV. 447. Even in England, however, a deserted wife is allowed to sue at the last previous matrimonial domicile, so as to prevent the husband from asserting his changed domicile for the purpose of profiting by his own wrong. Deck v. Deck, 2 Sw. & Tr. 90. And it was further established in a celebrated case that an English court may grant to the wife a judicial separation to protect her from the cruelty of her husband, even though his domicile is foreign. Armytage v. Armytage, [1898] Prob. 178. This was regarded not as a decree that would in any way affect the marriage status, but rather as a manifestation of the inherent right of the sovereign to bestow personal protection on those within its territory. The principal case seems clearly right in extending this relief to adultery, for it should be open to give needed protection against all abuses of the personal relation between the parties.

CONSTITUTIONAL LAW - PRIVILEGES, IMMUNITIES, AND CLASS LEGISLATION - PERSONAL DISCRIMINATION: JIM CROW STATUTES. The Oklahoma Separate Coach Law permitted railroads to haul sleeping cars, dining cars, and chair cars for white passengers without providing like accommodations for negroes. In a suit for an injunction to restrain the defendant railroads from furnishing such cars for white passengers only, it was shown that there was no sufficient demand to warrant the railroads in supplying separate Pullmans for negroes. Held, that the bill be dismissed as too vague for equitable relief. But the majority of the court intimated that in a proper action the statute would be held unconstitutional. McCabe v. Atchison, Topeka & Santa Fe Ry. Co., 235 U. S. 151.

For a discussion of this new phase of the Jim Crow question which the Supreme Court here considered, see NOTES, p. 417.

CONSTITUTIONAL LAW

MILITARY COMMISSION.

TRIAL BY JURY-TRIAL OF CIVIL OFFENDER BY The governor of Montana declared martial law in a district where rioting was prevalent. The relator was arrested on the charge of resisting an officer and tried and sentenced by a military commission. He sued out a writ of habeas corpus. Held, that the relator be remanded to await trial before a legally constituted civil tribunal. Ex parte McDonald, In re Gillis, 143 Pac. 947 (Mont.).

For a discussion of the principles involved, see NOTES, p. 415.