Central Law Journal.

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Copyright, 1914; by Central Law Journal Co. Entered at the Post-Office, St. Louis, Mo., as second-class matter.

Was he Guilty?

J. S. was a clerk who attended his employer on a race track to record in a book his employer's bets on the races. Was he guilty of "occupying a place on the ground for the purpose of recording bets," under a penal statute making that a punishable offense?

See "Occupant-Agent or employee," in Words and Phrases, for the answer

The courts have defined or construed many thousands of words, legal and nonlegal, but all the subject of some legal contest. These definitions can be applied in your practice

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Specialist on the Uniform Negotiable Instruments Law and Adviser in Cases thereunder See Central Law Journal, Oct. 17, 1913; Michigan Law Review, Dec., 1913; Yale Law Journal, Feb., 1914; Central Law Journal, Feb. 20, 1914: University of Pennsylvania Law Review, April, 1914.

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The Honorable Henry S. Priest, one of the most prominent corporation lawyers in the land, rather startled legal circles with the views he expressed in a recent address to a graduating class of a St. Louis College of Law.

After challenging the right of a state to give corporate life to a purely private business enterprise, he broadly declared that: "This, in my judgment, is the cause, the primary and responsible cause, of that industrial condition at which is fruitlessly levelled the actual and potential anti-trust legislation that fills, and is likely to fill, the state and naional statutes."

He then rather graphically portrays the evil influences of corporate organization in weakening personal and financial responsibility and in deadening personal effort to achieve success and again speaks broadly as follows: "If Congress has the power, under its authority to regulate commerce, to legislate upon the instruments of commerce and the character of those engaged in it, it could, by a single section of enactment, draw the teeth of every threatening combination, by prohibiting any corporation, organized for the purpose of conducting a private business, from engaging in interstate commerce."

This sweeping language appears to us to show, that the gentleman has merely supposed that the instrument, which business conditions use in the perpetration of wrong, constitutes the evil he deplores. The late Mr. Pierpont Morgan needed no corporations to enable him to dominate the world of finance. His

genius consisted in using the means that were convenient to effectuate his will. Had it not have been corporations, it would have been boards of trustees, and had there been no boards of trustees he would have pulled his strings and made Mr. partnerships dance to his will. Priest seems to have mistaken an incidental result as a cause.

In his exhortation on causes of governmental interference in the purely personal business affairs of every day life, he seems to concede that corporations are a necessity for the management of affairs in which the public have an interest, as for example, a gas company or a street railroad. But when he concedes that, he quite nearly allows that in large enterprises of purely private business, some means should be provided by law for aggregated capital to engage therein. If the gentleman would go back some two hundred years ago, to when the "Mississippi Bubble" brought its scandal on England, he would learn, that the formation of that scheme was thought infinitely worse than incorporating companies.

Indeed, that scheme is the origin of wise regulation of corporations in England, a problem that this country is engaged in working out, but one which our complex system of government makes far more intricate than there.

When, however, the gentleman says that preventing corporations "organized for the purpose of conducting private. business from engaging in interstate. commerce," would "draw the teeth of every threatening combination," we beg respectfully to suggest that this seems but to take a surface, or superficial, view of the situation.

In this country express companies have engaged in interstate business without becoming corporations and in Massachusetts for more than a generation trust companies have been created by

the issuance of transferable shares of stock, and, possibly, they are more independent of regulation by the state than are corporations whose powers are limited by their charters. Indeed, it may well be thought that aggregations of this kind depend upon their common law rights in the framing of their trust instruments to suit any kind of business they may wish to conduct.

But when they do frame their instruments, the only advantage, so far as general business is concerned, is that the trustee relation is emphasized—action by trustees being more personal conscience-compelling-than is the case with a board of directors of a corporation. The employee, however, is as he was before in the grip of captains of industry and is moved like a pawn on a chess board to where he is to be placed. He still remains "an unsympathetic onlooker, instead of an earnest actor," while the trustees work for dividends on transferable shares. Those shares are treated in Massachusetts as descendible in estates and transferable like corporate shares.

It is useless to inveigh against corporations and radical to say aggregations of capital under corporate form shall

not

engage in interstate commerce. What is meant by this, anyway? That a corporation shall not ship goods from one state to another, or receive goods shipped to it? What is effected, when corporations dissolve and partnerships take their place? We will say guilt becomes personal. Cannot the state make this so as to a member of a board? This is the keynote to the situation. Large interests must have their managers and there are those who labor for them merely as hewers of wood and drawers of water. Personal ambition and the individual brain will be no more in evidence in one sort of aggregation than in another, and to say no sort of aggregation

having a head and his subordinates shall exist is to lose sight of the great things of earth.

We do need, that laws shall not pry too narrowly into contractual arrangements, but to say corporations are the inspiration of this prying and, therefore, should be abolished, when they are merely the instruments that are abused, is to invite some other Morgan to use the Protean shapes that are at hand. Strike at the root by making all violations those of personal guilt and let business take any form it may.

It may be that the case is not entirely concluded, as the opinion says, in last sentence. that: "The result is that the judgments, based as they are mainly upon offenses that could not be taken into consideration, must be reversed." There seems here no remand for proceedings not inconsistent with the opinion. We notice, however, that in specifying the charges they run in date from December, 1907, to November, 1909, when the charges were presented by the committee in June, 1911, the court holding that the three year statute applied.

To read what is charged, it looks like in spite of all court orders, there were a series of acts of alleged contempt, seemingly gath ering force and intensity during all of this time. In the latter part of the period they are connected back by reference so as to make precedent things culminate in the suggestion that it was the duty of citizens to refuse obedience to the court and take whatever consequences may ensue.

Justices Van Devanter and Pitney dissent from the ruling, but file no opinion-at least none appears in the report of the case by our contemporary, Chicago Legal News.

The Supreme Court dismissed the prior contempt proceeding on May 15, 1911, "without prejudice to the power of the Supreme Court of the District to punish contempt, if any against it." The District Court immediately appointed a committee and the following month it preferred charges. But it would seem that the Federal Supreme Court, after the suggestion of no prejudice, might have given some intimation, that while it was considering the case the statute of limitations was running, and the lower court should consider whether there was enough left in charges, or within the three years to be considered. Lower courts and members of the bar called on to assist them in maintaining their dignity should not have been put to a world of trouble in making, so to speak, a fluke.

CERTIORARI-SUPERINTENDING JURISDICTION OF SUPREME COURT.-The Supreme Court of Missouri has lately arrived at a conclusion, which virtually nullifies attempt by its constitution to divide the labors of its Appellate Courts, notwithstanding that they have different grounds for jurisdiction, all of which would carry causes to the highest

court were that the only appellate court in the state. This ruling overturns a settled course of decision unbroken from the time of the constitution of intermediate courts of appeal, and its reversal seems to serve no useful purpose.

The latest manifestation of that change of view shows two judges holding out against it and a third judge dissenting from it as late as last December now yielding because he can see no good to "come of continual dissents." State, ex rel., United Rys. Co. v. Reynolds, 165 S. W. 729.

It is provided for the sake of bringing about uniformity in state decisions that, when a judge in its Courts of Appeals shall deem a ruling contrary to any previous decision of any one of said Courts of Appeals or of the Supreme Court, the cause must be transferred to the Supreme Court and there reheard. It is also provided that "the last previous ruling of the Supreme Court on any question of law or equity shall in all cases be controlling authority in said courts of appeals."

As we understand this provision there need be no transfer to the Supreme Court for a divergence of view between Courts of Appeals or between a Court of Appeals and the Supreme Court unless a Court of Appeals is deemed to hold contrary to a "last previous ruling of the Supreme Court." Oscillations of the

Supreme Court or prior ruling by a Court of Appeal will not be noticed.

Another section of the constitution gives to the Supreme Court superintending control over Courts of Appeals by mandamus, prohibition and certiorari. Out of this general grant of power it is held allowable by recent ruling, for the court to be appealed to by certiorari to review a ruling by a Court of Appeals as being opposed to the last previous ruling of the Supreme Court. This change of ruling is said by Woodson, J., in State ex rel. Iba v. Ellison, 165 S. W. 369, to be against "rulings by this court in some fifty odd cases extending over a period of almost a third of a century" and to open the door to the destruction of the efficiency of the Courts of Appeals by subjecting their opinions to review by this court and the efficiency of the Supreme Court by lifting a floodgate and pouring into the court every case decided by Courts of Appeals. The whole question is whether or not a general grant of superintending control gives the right to such review, it being specifically pointed out how a case may be reviewed. To our mind the intent of the constitution was to give to a judgment of a Court of Appeals finality, as a competent court to decide a question before it. Otherwise its jurisdiction to decide is a delusion and its interposition as a means of expediting work and relieving the highest court of some of the burden on it rests in acquiescence by suitors.

It is conceivable that all means to secure uniformity in decisions are to be commended, but when a constitution maps out a way that should be considered exclusive. The last analysis of this decision is to have no subordinate Appellate Courts, but instead to create numerous divisions of the Supreme Court. Furthermore as the right to review by certiorari is based on the decision being opposed to last previous ruling by Supreme Court, this is special and though so opposed might not necessarily be deemed opposed to the law.