mortgagee, even on condition broken; the mortgage merely creating a lien upon the land, requiring that property be sold on foreclosure to pass title.-Robinson Mercantile Co. v. Davis, Wy., 187 Pac. 931.

67.

Muncipal Corporations—Estoppel.-An alderman does not waive his right, nor is he estopped to claim the salary due him, by receiving a smaller amount, he doing so without any settlement or compromise, but under protest and' claiming, at the time, right to the full amount.-State ex rel. Whalen v. Player, Mo., 218 S. W. 859.

68. Negligence Contributory Negligence. Contributory negligence is no defense to a cause of action based solely on the humanitarian rule. -Sethman v. Union Depot Bridge & Terminal R. Co., Mo., 218 S. W. 879.

69. Primary Negligence.-Contributory negligence is simply negligence, and is, like primary negligence, relative and not absolute, and, being relative, it is dependent on the peculiar circumstances of each particular case. Siejak v. United Railways & Electric Co. of Baltimore, Md., 109 Atl. 107.

70. Partnership De Facto Corporation. Parties acting as stockholders attempting to organize a corporation, but failing therein because a corporation could not be organized for its declared purpose, or because all of its business was to be conducted in a foreign state, are generally held to be partners.-Hill v. Turnverein Germania of Oklahoma City, Okla., 187 Pac. 920.

71. Patents-Anticipation.-It is not sufficient to constitute anticipation that the device relied on might, by modification, be made to accomplish the function of the patented article: but it must be designed by the maker and adapted for the performance of such function. -H. D. Smith & Co. v. Peck, Stow & Wilcox Co., U. S. C. C. A., 262 Fed. 415.

72. Invention.-Whether the invention of a patent is large or small, primary or trivial, when a claim is clear and distinct, the patentee cannot go beyond the words thereof for the purpose of establishing infringement, and the range of equivalents is measured by what is both described and claimed.-Homer Brooke Glass Co. v. Hartford-Fairmont Co., U. S. C. C. A. 262 Fed. 427.

73. Physicians and Surgeons-Principal and Agent.--The relation of master and servant, or principal and agent, does not exist between two physicians, where one has been sent to treat the patient of the other with the consent of the patient; the rule of respondeat superior not being applicable in such case.-Gross v. Robinson, Mo., 218 S. W. 924.

74. Principal and Agent Declarations by Agent.-The declarations of an agent are not competent evidence of the existence of the agency, in the absence of independent proof of circumstances from which the agency may be inferred.-American Fidelity Co. of Montpelier, Vt., v. State, Md., 109 Atl. 99.

75. Quieting Title-Ejectment.-If defendant I should take possession under an invalid patent, plaintiffs would have a complete remedy by ejectment and to recover possession.-Childers v. York, Kv., 218 S. W. 1027.

76. Railroads-Proximate Cause.-Where the engineer failed to sound whistle after discovering the peril of a driver, and where such negligence was the proximate cause of the injury, railroad was liable, notwithstanding the driver's contributory negligence.-Trochta v. Missouri, K. & T. Ry. Co. of Texas, Tex., 218 S. W. 1038.

77.--Warning.-If plaintiff, when injured by defendant's train, instead of attempting to pass through an opening therein at the highway, across which it was standing, was attempting to crawl under it at another place, there was duty of signaling the starting thereof; the company's servants not having seen him.-Israel v. Wabash R. Co., Mo., 218 S. W. 916.

no

78. Sales-Measure of Damages.-The measure of damages for breach of a contract of sale

of goods is the difference between the contract price and the market price at the time and place of breach.-Mayo v. J. L. Price Brokerage Co., Mo., 218 S. W. 932.

79. Specific Performance Equity Equity should not decline to grant relief for either inadequacy of consideration, or unfairness in the contract, unless the facts justify the conclusion that enforcement of the contract will operate as a fraud upon the rights of the defendants.— Engle v. Engle, Mich., 176 N. W. 547.

80.-Judicial Discretion. Whether specific performance will be decreed in a particular case is a matter of sound discretion, and depends upon the facts and circumstances of the particular case.-Henneke v. Cooke, Md., 109 Atl. 113.

81. Tenancy in Common-Notice to One.-Ordinarily tenants in common merely from the relationship are not authorized to make agreements or receive notices substantially affecting the estate or interest of each other in the common property.-Hudson v. Cozar, N. C., 192 S. E. 278.

82. Trade Marks and Trade Names Unfair Competition.-"Unfair competition" consists in the use of methods, brands, or advertising matter intended to cause, or in fact causing, confusion in the trade, or to induce or mislead the trade into the belief that the goods of the person or firm marketed under such similiar device are the goods of the person or firm which has established a trade and acquired a good will in business in connection with the rightful use of such trade token.-M. C. Peters Milling Co. v. International Sugar Feed No. 2 Co., U. S. C. C. A. 262 Fed 336

83. Trusts-Resulting Trust. -A resulting trust arises where one party furnishes money to buy property which is transferred or veyed to another.-Vaello v. Rodriguez, Tex.. 218 S. W. 1082.

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84. Vendor and Purchaser-Cancellation. It is not enough for plaintiff, suing to cancel her contract of sale on the ground of her mental incapacity. to show that at times she displayed childishness and lack of mental vigor, but she must show that at the time of contract she was mentally incapable of acting intelligently in matters of that importance.-Mellroy v. Rivercomb, Ark., 218 S. W. 841.

85. Waters and Water Courses-Joint Tortfeasors. Two or more persons who, acting separately and independently, have wrongfully cast in a stream coal, cinders, and other materials and polluted it, with resulting damage to property of a riparian owner, are not jointly liable therefor, nor is any one of them liable for such damages in their entirety.-Farley V. Crystal Coal & Coke Co., W. Va., 102 S. E. 265.

86. Prior Appropriation.-It is established in Montana that the prior appropriator of water is entitled to the use of all water in the stream to satisfy his appropriation, whether such waters come from seepage or from water naturally flowing.-Marks v. Hilger, U. S. C. C. A., 262 Fed. 302.

87.--Surface Water.-Surface water coming through a drain tile and emptying into a stream ceased to be surface water as soon as it flowed into the channel of the stream.-Reaugh v. Atchison, T. & S. F. Ry. Co., Mo., 218 S. W. 947.

88.- Waste.-The iaw does not permit the upper landowner to waste underground waters, if they run in a well-defined stream, and, where such waters supply a spring, the court can enjoin waste, both before such waters reach the spring and after they reach it.-Be Bok v. Doak, Iowa, 176 N. W. 631.

89. Wills-Codicil-On a son's contest of a codicil to his father's will on the ground of undue influence and mental incapacity, testimony as to the father's physical condition for two years prior to the execution of the codicil should not have been excluded.-Hutchins v. Hutchins, Md., 109 Atl. 121.

90. Hallucinations.-Hallucinations of testator concerning assault must have no basis in reason.-Robbins v. Fugit, Ind., 126 N. E. 321.

Central Law Journal.

ST. LOUIS, MO., MAY 14, 1920.

THE "GAP" BETWEEN THE LAW AND BUSINESS USAGES.

Mr. Maine declared in the last century (Ancient Law, p. 24, 8th ed.), that "social necessities and social opinion are always more or less in advance of law. We may come indefinitely near to the closing of the gap between them, but it has a perpetual tendency to reopen. Law is stable; the societies of which we are speaking are progressive." But it is the next sentence of this self-evident truth, writen in 1867, to which it is desired to direct attention. It is done with the intention of supplying the reason why the courts should be ever alert in closing this "gap." Said Mr. Maine, "The greater or less happiness of a people depends on the degree of promptitude with which the gulf is narrowed."

Now the judicial answer for failure to do so is that appeal should be made to the Legislative department of government. That is a valid excuse when the count is confronted by the barrier of a statute or the common law. It is proposed to argue that in all other instances it is the duty of the courts to close the "gulf" between business necessities or conveniences and the law, (1) in the interest of a progressive commerce as well as (2) to prevent cumbersome legislation. For a satisfying example one has but to observe the gradual and highly practical development of American interstate commerce under the wisdom of John Marshall. It is but one of the finest illustrations of Sir Henry Maine's philosophy of the law keeping step with the onward march of business. And it is well to be mindful that no code of statutes, even could they have been agreed upon by a political Congress, could have served the purpose in that contentious era or at any

other time. With the power of prescience Marshall provided law for the future; with a knowledge of commerce he supplied the need of the present.

What are the processes by which the "gap" shall be closed? Mr. Maine (supra, p. 25) would bring law into harmony with society and commerce through the instrumentalities of legal fictions and equity as well as legislation, the three agencies historically used for the purpose. It supports our argument to recall that remedial equity is everywhere older than remedial legislation (supra, p. 26). It is only in political times that men have cast their destiny with the gamble of legislative relief instead of the sound reasoning of the courts. The failure of the courts to "close the gap," when opportunity presented cannot escape suspicion as a serious causative influence in destroying commercial faith in the practical understanding of judges of business needs and usages. There will not be two minds as to the benevolent uses of equity in preventing hardships created by that very law which we pretend to be obliged to respect. If the chancellor may stay the law, may he not with greater right, create new law in response to new conditions?

In order to eliminate it from further consideration, it is timely to remark that a "legal fiction signifies any assumption which conceals, or affects to conceal the fact that a rule of law has undergone alteration, its letter remaining unchanged, its operation being modified." This is in fact a complete stay of the law and falls in neither of the other two classes.

These preliminary remarks are intended to bear evidence that the great Law-Givers of all times have striven to keep the law in harmony with the demands, requirements and customs of society and commerce to the extent of inventing instrumentalities that would facilitate the effort. It has proven to be the highest judicial wisdom. We may now with better under

standing of the intent and more confidence in the result proceed to apply the principle.

American commerce is developing new theories and new conditions that in due course of time become acceptable customs with all the force and dignity of the ancient "customary law." It is concluded that these customs, when not inconsistent with the statutory or common law, could with great assistance to the course of commerce be recognized by the Courts, without the aid of the three agencies mentioned for the process would be the making of lawjudicial law-the best in history. This is what made John Marshall's great reputation. The law merchant would thereby become law by simple adoption. That is a policy dictated by harmony, but it is one of prudence and expediency. It closes the "gap" between the law that exists and as the law is needed. It is the height of wisdom in the courts to permit society to work out its own rules when possible. The great common law of England is but "the solemn decisions of courts which have administered justice in the very same halls for nearly eight hundred years." (Tyler's Stephen on Pleading.) Commerce will eventually perform this act in a crude way through legislation. On general principles, the prevention of unnecessary legislation should be one of the first duties of good citizenship and judicial discretion. We come now to apply the principle to a concrete commerce enterprise.

The automobile business has taken a high place in American commerce. Its tremendous resources have drafted some of the best legal and commercial intellect, learning, genius and energy. Its simplicity of development has reflected that participation. This phenomenal industry has come into the closest contact with every class of people. The inspiration of competition has assured a respect for public sentiment. The practices that have crystal

lized into well defined and acceptable customs, therefore, have the earmarks that command respect. One of these is the mortgage given on the individual car that enables the retail dealer to carry a substantial exhibition stock without capital and permits the sale to the user on attractive terms. A business in a highly luxurious article was thereby put on a cash productive basis. Many large corporations were promptly organized to finance this new industry and much good bankable security was created. The Supreme Court of Appeals of Virginia has so applied the law that this custom must be stopped. (Boice v. Finance, etc., Co., March 18, 1920, 102 S. E. 591.)

"Boice, without making any examination whatever of the records, purchased an automobile of W. F. Gordon, a licensed dealer in automobiles in the city of Richmond, that was displayed on his salesroom floor, paid him the purchase price and took possession of the automobile. Gordon had previously given a mortgage on the automobile to secure the purchase price, which was duly recorded, to secure a loan of money obtained from the Finance and Guaranty Corporation. The loan was not paid, and the Finance and Guaranty Corporation, hereinafter called the guaranty company, brought this action of detinue to recover possession of the automobile, and there was a judgment in its favor in the trial court." That judgment was reversed by the Supreme Court.

The Virginia court classifies automobiles with "a stock of goods, wares and merchandise." In defiance of the custom to the contrary it argues: "Is there anything then in the character of automobiles that should put them in a different category from ordinary goods, wares and merchandise? It is true that they are bulky and are easily susceptible of accurate description and continued identification through the medium of the registry laws. They

also involved the expenditure of considerable sums of money. But this is the mere statement of a fact, not a reason for the supposed distinction."

It also ignores the fixed custom of the automobile trade that titles to motor cars have to be examined and are examined as consistently as titles to real estate. Every now and then some thoughtless person omits the precaution, in both cases, but to prevent this purely personal misfortune the obstruction of a fixed course of commerce is hardly justified, apart from the violation of the great principles contended for by Mr. Maine. The Virginia court in justification of its position, argued that "the constructive notice furnished by a recorded mortgage or deed of trust in such cases is not sufficient. The act of knowingly permitting the goods to be so handled and used by the seller in the ordinary and usual conduct of his business is just as destructive of the rights of the creditor as if such permission had been expressly granted in the mortgage or deed of trust."

By all of which it is intended to point out that, in the light of what has been said, a splendid opportunity was lost for closing Sir Henry Maine's "gap" between the fixed law and a progressive commerce; that the result of the decision will be a little more lobbying and a little more legislation; and that it is as preferable to have the courts. make the laws today as in John Marshall's time. THOMAS W. SHELTON.

NOTES OF IMPORTANT DECISIONS.

RIGHT OF MANUFACTURER TO BIND RETAILER TO OBSERVE RESALE PRICES BY CONTRACTS.-The precise distinctions to be observed in applying the rule denying the right of the manufacturer to fix prices on resale of article, as announced in Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 31 Sup. Ct. 376, are made clearer by the recent de cision of the Supreme Court in United States V. Schrader's Son, 40 Sup. Ct. 251.

In the Schrader case it appeared that the defendant manufactured rubber tire valves, pneumatic gauges and other automobile acces sories which it sold to tire manufacturers and jobbers. Before selling any of its goods to a customer the latter was required to execute a contract which granted a license to the pur chaser to resell the articles bought at prices to be fixed by defendant from time to time. If purchaser refused to sign the contract he could not secure the goods he desired. Defendant was indicted on this state of facts as being engaged in a combination made criminal under the Sherman Act. The District Court, relying on the case of United States v. Colgate Co., 250 U. S. 300, 39 Sup Ct. 465, sustained a demurrer to the indictment. On appeal the Supreme Court reversed the case and remanded it for trial.

There has been considerable controversy and confusion over the extent to which a manufacturer may fix prices for resale of an article, and this controversy has become confusion worse confounded since the decision of the Supreme Court in the Colgate Case, which apparently recognized the right on the part of the manufacturer to specify resale prices. In that case it was said:

"The purpose of the Sherman Act is to prohibit monopolies, contracts, and combinations which probably would unduly interfere with the free exercise of their rights by those engaged, or who wish to engage, in trade and commerce-in a word, to preserve the right of freedom to trade. In the absence of any purpose to create or maintain a monopoly, the act does not restrict the long-recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal. And, of course, he may announce in advance the circumstances under which he will refuse to sell."

The District Court in the Schrader case declared that it could not reconcile the Miles case which made illegal contracts, fixing prices on resale, with the Colgate case holding valid a refusal of a manufacturer to further deal with retailers who refused to sell his goods at prices quoted to him for resale purposes. On this point the trial court said:

"I can see no real difference upon the facts between the Dr. Miles Medical Company Case and the Colgate Company Case. The only dif ference is that in the former the arrangement for marketing its product was put in writing, whereas in the latter the wholesale and retail dealers observed the prices fixed by the vendor. This is a distinction without a difference. The tacit acquiescence of the wholesalers

and retailers in the prices thus fixed is the equivalent for all practical purposes of an express agreement. Granting the fundamental proposition stated in the Colgate Case, that the manufacturer has an undoubted right to specify resale prices and refuse to deal with any one who fails to maintain the same, or, as further stated, the act does not restrict the long-recognized right of a trader or manufacturer engaged in an entirely private business freely to exercise his own independent discretion as to the parties with whom he will deal, and that he, of course, may announce in advance the circumstances under which he will refuse to sell, it seems to me that it is a distinction without a difference to say that he may do so by the subterfuges and devices set forth in the opinion and not violate the Sherman Anti-Trust Act; yet if he had done the same thing in the form of a written agreement, adequate only to effectuate the same purpose, he would be guilty of a violation of the law. Manifestly, therefore, the decision in the Dr. Miles Medical Case must rest upon some other ground than the mere fact that there were agreements between the manufacturer and the wholesalers. ***"

It seems, however, that the District Court stumbled over the very distinction the Supreme Court had taken the pains to lay down in the Colgate case. On this point, Justice McReynolds, speaking for the Court in the Schrader case, said:

"The court below misapprehended the meaning and effect of the opinion and judgment in that cause. We had no intention to overrule or modify the doctrine of Dr. Miles Medical Co. v. Park & Sons Co., where the effort was to destroy the dealers' independent discretion through restrictive agreements. Under the interpretation adopted by the trial court and necessarily accepted by us, the indictment failed to charge that Colgate Company made agreements, either express or implied, which undertook to obligate vendees to observe specified resale prices, and it was treated "as alleging only recognition of the manufacturer's undoubted right to specify resale prices and refuse to deal with any one who fails to maintain the same. It seems unnecessary to dwell upon the obvious difference between the situation presented when a manufacturer merely indicates his wishes concerning prices and declines further dealings with all who fail to observe them, and one where he enters into agreements-whether express or implied from a course of dealing or other circumstances-with all customers throughout the different states which undertake to bind them to observe fixed resale prices. In the first, the manufacturer but exercises his independent discretion concerning his customers and there is no contract or combination which imposes any limitation on the purchaser. the second, the parties are combined through agreements designed to take away dealers' control of their own affairs and thereby destroy competition and restrain the free and natural flow of trade amongst the states."

In

SPECIFIC PERFORMANCE WHERE THERE HAS BEEN MATERIAL MISREPRESENTATION. Some interesting questions concerning the enforceability by specific performance of contracts for the purchase of real property were decided by the Court of Appeals of New Jersey in the recent case of Muller v. Weiss, 109 Atl. Rep. 356.

The contract sought to be enforced in this case contained a provision that a conveyance would be made and accepted subject to, inter alia, "all restrictions and covenants of record." When this was read to defendant, and before it was signed he asked the complainant what the restrictions were, and he said that they only forbid the keeping of a saloon on the land. The proof showed that the deed by which complainants acquired title to a material portion of the land was subject to other restrictions, which limited the use C the land to any building other than a dwelling house to cost not less than $4,000, to be of a required height and to be arranged in apartments not less than three stories in height and to be arranged for not more than three families. The vice chancellor found that the defendant was induced to enter into this contract through the fraudulent misrepresentation of the complainant as to the character of the restrictions which incumbered the property, and the Court of Appeals agreed with his findings on this branch of the case.

The plaintiff sought to overcome the objection of a material misrepresentatiin with respect to the restrictions on the property by having the former owner of the subdivision one John G. Gerber, who had inserted the restrictive covenants in the original deeds to each lot in the subdivision, to release by quitclaim deed the restrictive covenants running with the land in the lots which were the subject of this particular contract. In holding that these restrictions could not be removed by the grantor who created them, the Court said:

"There is another reason why this release cannot have the effect which the complainants urge, and that is it appears in the case that Gerber had sold, prior to this contract, to different persons, a number of lots designated on his map, subject to the same restrictions which he attempted to release, and he cannot in such manner release the rights of former purchasers to enforce a restriction made, presumably for their benefit and as a part of the inducement for their purchase. The release of Gerber would not destroy the right of prior buyers to the benefit of a general scheme, nor relieve the defendants from the possibility of lawsuits by such owners to enforce such restrictions."