against the indemnitee and has undertaken the defense, any voluntary action by the indemnitee which prevents full defense (including appeal) will discharge the indemnitor. American Surety Co. v. Ballman, 104 Fed. 634 (E. D. Mo.); Eaton v. Lyman, 26 Wis. 61. By the weight of modern authority the payment of a judgment, whether voluntary or under issue of execution, does not destroy the right to appeal from the judgment. Hoogendorn v. Daniel, 202 Fed. 431 (9th Circ.); Nashville, etc. Ry. Co. v. Bean's Ex'r, 128 Ky. 758, 109 S. W. 323; Lott v. Davis, 262 Ill. 148, 104 N. E. 199. Contra, Round v. Land & Power Co., 92 Kan. 894, 142 Pac. 292; Merriam Mortgage Co. v. St. Paul F. & M. Ins. Co., 97 Kan. 190, 155 Pac. 17. The principal case does not discuss this point, and the Canadian law on the subject seems not to be settled. See Schlomann v. Dowker, 20 Can. L. T. Occ. Notes 271; Phillips v. Belleville, 10 Ont. 178. If the minority view is taken, it would seem that the voluntary payment of the judgment by the plaintiff in the principal case would be such an act as to discharge the insurer, regardless of the express condition against settlement of claims. But under the majority view, the payment of the judgment would in no way prejudice the rights of the insurer in his defense; and it seems very doubtful whether the payment should be construed as a breach of the condition against settlement of claims, so as to discharge the insurer. On the construction of such conditions, see Pickett v. Fidelity & Casualty Co., 60 S. C. 477, 480, 38 S. E. 160, 161; Connolly v. Bolster, 187 Mass. 266, 270, 271, 72 N. E. 981, 983.

INTERSTATE COMMERCE - CONTROL BY STATES-FRANCHISE TAX ON FOREIGN CORPORATION NOT IN FACT DOING INTRASTATE BUSINESS. A Maryland corporation obtained a license to do business in Missouri. It has, in fact, done no intrastate business there, although its principal office is in the state and it operates an interstate pipe line across it. It had paid property taxes on its property within the state. The present suit was brought to enjoin the state from collecting an annual franchise tax equal to "onetenth of one per cent of the par value of its capital stock and surplus employed in business in the state." (1919 Mo. REV. STAT., §§ 9836-9848.) From a decree dismissing the bill, the corporation appealed. Held, that the tax is on interstate commerce and is unconstitutional. Decree reversed. Ozark Pipe Line v. Monier, U. S. Sup. Ct., Oct. Term, 1924, No. 181.

A state cannot prevent a corporation from engaging in exclusively interstate commerce within its borders. Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1. See Western Union Tel. Co. v. Kansas, 216 U. S. 1, 34; Pullman Co. v. Kansas, 216 U. S. 56, 68. It may, nevertheless, tax property situated within its boundaries which is used exclusively in carrying on interstate commerce. Old Dominion S. S. Co. v. Virginia, 198 U. S. 299. In the case of a foreign corporation doing both interstate and intrastate business, the state may levy a general property tax, and, in addition, a franchise tax for the privilege of doing intrastate business. Southern Ry. Co. v. Watts, 260 U. S. 519. Cf. Ohio Tax Cases, 232 U. S. 576. If, in lieu of all other taxes, the franchise tax for intrastate business may be based on that proportion of the capital stock of the corporation which its assets inside the state bear to its total assets, or on a proportion of its gross receipts from all sources determined in a similar manner. Pullman Co. v. Pennsylvania, 141 U. S. 18; Adams Express Co. v. Ohio, 165 U. S. 194, S. C., 166 U. S. 185; Cudahy Packing Co. v. Minn., 246 U. S. 450; Pullman Co. v. Richardson, 261 U. S. 330. See 38 HARV. L. REV. 361, 363, 367. A recent decision allowed such a franchise tax in addition to a general property tax, where the franchise tax was, in fact, a very low percentage of the proportion of its capital stock determined as outlined above, and where the

corporation was, in fact, doing intrastate business. Southern Ry. Co. v. Watts, supra. In the principal case, the franchise tax was an equally low percentage, but the court refused to uphold the tax when the corporation was actually doing no intrastate business. This may be justified because the tax would inevitably be paid out of revenues from interstate commerce. But the license to do intrastate business would seem to have some value, although not used. If so, it should be taxable by the state granting it unless and until surrendered by the corporation.

LANDLORD AND TENANT-LIABILITY OF TENANT HOLDING OVER, FOR USE AND OCCUPATION - MEASURE OF DAMAGES. - The defendant refused to deliver up premises on the termination of his lease. The plaintiff's proceedings were so delayed that he did not regain possession until twenty-three months later. He then brought an action for use and occupation during that period. Though the defendant had no notice of any intention on the part of the plaintiff to build on the premises, the plaintiff sought as his damages one thousand dollars a year rental, alleging that the defendant's holding over had prevented him from erecting a building which would have yielded that amount. The lower court gave judgment for the plaintiff at the rate of thirty-five dollars a month, the uncontested rental value of the premises while they were in the defendant's possession. The plaintiff appealed. Held, that in the absence of notice of the landlord's intention to improve the premises, a lessee who holds over after his term is liable for only the fair rental value of the premises in their then condition. Appeal dismissed. Cohen v. Godkin, [1924] 4 D.L.R. 350 (Ont.).

In both England and the United States an action for use and occupation can now be maintained against a tenant who holds over. Comm. of Pitkin County v. Brown, 2 Colo. App. 473, 31 Pac. 525; Ibbs v. Richardson, 9 A. & E. 849. The liability accrues from day to day, and the damages recoverable are the reasonable value of the occupation. Lautmann v. Miller, 158 Ind. 382, 63 N. E. 761; Ibbs v. Richardson, supra. The value to the tenant is not the measure of damages. Williams v. Ladew, 171 Pa. St. 369, 33 Atl. 329. Cf. Horton v. Cooley, 135 Mass. 589. The rental previously paid by the tenant is evidence of what the occupation is worth, but is not conclusive. City of Detroit v. Gleason, 116 Mich. 564, 74 N.W. 880; Elgar v. Watson, 1 Car. & M. 494. In general, when the value of real or personal property is the measure of damages, it is tested by the most valuable use to which the property could practicably be put. Whitwam v. Westminster Brymbo Co., [1896] 2 Ch. 538; The Mediana, [1900] A.C. 113. This principle is applicable to a wrongful holding over. Horton v. Cooley, supra; Bramley v. Chesterton, 2 C. B. (N. S.) 591. The court, however, refused to apply this doctrine where the tenant had no notice of the landlord's intention to improve the premises. See Bramley v. Chesterton, supra, at 605. In view of the ease with which notice could be given, such a departure from the rule of The Mediana may be justified. But the present decision can best be supported on the ground that the plaintiff's damages were conjectural, and that there was no sufficient evidence that the improvements would actually have been made but for the holding over.

LETTERS OF CREDIT-RIGHTS AND LIABILITIES OF ISSUING BANK WHEN GOODS SHIPPED ARE DEFECTIVE. - The defendant bank issued an irrevocable letter of credit authorizing a seller to draw drafts against shipments of "Alicante Bouchez " grapes," invoice and negotiable bill of lading to accompany drafts." The seller presented a draft with a bill of lading which described the shipment simply as grapes, and an invoice which described the grapes fully as complying with the sales contract. The buyer notified the

bank that the grapes were inferior and did not comply with the contract, and requested it not to pay the draft. The bank nevertheless paid. The buyer brought action against the bank, contending that the latter was not entitled to pay the draft. From a judgment for the plaintiff, the defendant appealed. Held, that the documents, together, contained a sufficient description of the goods to satisfy the condition of the letter of credit; and that therefore the defendant bank was justified in paying the drafts notwithstanding notice of the defective quality of the goods. Judgment reversed and complaint dismissed. Laudisi v. American Exch. Nat. Bank, 239 N. Y. 234, 146 N. E. 347.

A seller brought action against the defendant bank for its refusal to accept drafts drawn under a letter of credit issued by the bank to cover a shipment of newsprint paper of a specified tensile strength. The letter of credit provided that the drafts should be accompanied by shipping documents. The bank pleaded that the paper sent was not of the required tensile strength. The plaintiff appealed from an order denying his motion for summary judgment on the pleadings. Held, that the bank was bound to accept the drafts on presentation of proper documents, irrespective of defects in the goods. Order reversed. Maurice O'Meara Co. v. National Park Bank, 239 N. Y. 386, 146 N. E. 636.

The obligations under a letter of credit agreement do not depend upon performance of the sales contract except in so far as the letter of credit is, in terms, conditioned on that contract. American Steel Co. v. Irving Nat. Bank, 266 Fed. 41 (2nd Circ.); Frey & Son v. Sherburne Co., 193 App. Div. 849, 184 N. Y. Supp. 661. See Wm. E. McCurdy, "Commercial Letters of Credit," 35 HARV. L. REV. 715, 724 et seq. Frequently the letter of credit describes the goods to be shipped, and requires shipping documents to be sent to the bank with the draft. In such cases the bank is held to assume no responsibility to the buyer with respect to the genuineness of the documents or the quality or quantity of the goods. Tocco v. Rinaudo, 143 N. E. 905 (Mass.); Brown v. Rosenstein Co., 120 Misc. 787, 200 N. Y. Supp. 491. But cf. Bank of Montreal v. Recknagel, 109 N. Y. 482, 17 N. E. 217. See Wm. E. McCurdy, supra, 35 HARV. L. REV. 715, 733-735This result is commercially desirable, and is in harmony with the view that the bank is a mere lender of money or credit, not to be identified with the seller. But since the bank often is entitled to a security interest in the goods it does not necessarily follow that the bank may not, if it chooses, refuse payment because of defects in the goods. If the goods are so far defective that the bill of lading may be said to be entirely false it is unlikely that the bank would be liable for refusing to accept the draft. Cf. Old Colony Trust Co. v. Lawyers' Title & Trust Co., 297 Fed. 152 (2nd Circ.). And it would seem that the same reason should operate to relieve the bank from performance where the defects are comparatively slight. The construction adopted by the New York court, however, that the bank may not look behind the documents presented to it, does not work any serious hardship on the bank, since if the parties intend the contrary result the letter of credit may expressly so provide.

LIBEL AND SLANDER LIABILITY FOR WORDS INTENDED TO APPLY TO ANOTHER BUT REASONABLY APPLICABLE TO THE PLAINTIFF. - An attorney named Harry P. L. Kennedy was arrested in Detroit, charged with forgery, and returned to the District of Columbia. A memorandum of the arrest was made at police headquarters giving the name and initials, the occupation, and a general description of the suspect. The defendant's reporter saw this memorandum, and on the strength of the facts which were given there wrote an account of the arrest, which was published in the defendant's

paper. The article omitted the initials of the accused man, describing him simply as Harry Kennedy, an attorney about forty years old. Unknown to the defendant, the plaintiff was an attorney named Harry Kennedy who had practiced for some time in the District of Columbia, and who was also about forty years old. The plaintiff brought suit, alleging that the persons who read the article believed that it designated him. The jury found that the article would be taken to refer to the plaintiff and judgment was given for the plaintiff in the lower court. The defendant appealed. Held, that the actual intent of the publisher of a defamatory article is immaterial, and if from the reasonable construction of the words used the plaintiff is designated he may recover. Judgment affirmed. Washington Post Company v. Kennedy (App. D. C.), reported in 53 Wash. Law Rep., Feb. 13,

1925.

For a discussion of the principles involved, see NOTES, supra, p. 1100.

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POLICE POWER NATURE AND EXTENT CONSTITUTIONALITY OF STATUTE MAKING ILLEGAL THE POSSESSION OF LIQUOR Lawfully OBTAINED. — The plaintiff filed a petition in the Superior Court of Georgia, seeking to enjoin the defendant, a sheriff, from destroying intoxicating liquors in the plaintiff's possession which the plaintiff had legally acquired. These liquors were seized under the authority of a statute which declared the possession of liquor to be unlawful and provided for forfeiture, even though such liquor was legally obtained before the statute was enacted. (11 PARKS' GA. ANN. CODE, § 448.) The Supreme Court of Georgia affirmed a judgment sustaining a demurrer to the petition. The plaintiff sued out a writ of error to the Supreme Court of the United States. Held, that the legislature could, consistently with due process, forbid the possession of liquor, though lawfully acquired. Judgment affirmed. Samuels v. McCurdy, U. S. Sup. Ct., Oct. Term, 1924, No. 225.

The decision answers the question expressly left open in a recent case. See Barbour v. Georgia, 249 U. S. 454, 460. The prevention of intemperance has long been recognized as a purpose within the scope of the police power. Kidd v. Pearson, 128 U. S. 1. As an incident of this power to suppress what is regarded as a public evil, the state may adopt such measures, having reasonable relation to that evil, as it may deem necessary to make its action effective. Purity Extract Co. v. Lynch, 226 U. S. 192. In view of the notorious difficulties encountered in the enforcement of a liquor law, it is submitted that the present decision is eminently sound, because the statute has a direct tendency to aid in the attainment of the primary end of prohibition legislation. See 31 HARV. L. REV. 658. In earlier cases courts have upheld somewhat similar legislation by relying upon the much abused doctrine of nuisance. Mugler v. Kansas, 123 U. S. 623. The law of nuisance may be regarded as the common law of the police power. See FREUND, STANDARDS OF AMERICAN LEGISLATION, 66. Such legislative action is more easily justified on the theory that individual property rights are subject to regulation and even to destruction by the state, in the exercise of its function of protecting the interests of society. Silz v. Hesterberg, 211 U. S. 31. See 27 HARV. L. REV. 571. The point is nearly always raised in cases of this sort, that the property has been taken for a public purpose and compensation must be paid for it. See RANDOLPH, EMINENT DOMAIN, § 23. But compensation is not required when the deprivation is justified under the police power. Gardner v. Michigan, 199 U. S. 325. See COOLEY, CONSTITUTIONAL LIMITATIONS, 7 ed., 849.

POWERS FRAUDULENT EXECUTION OF Power of SALE BY LIFE TENANT. -A conveyed to the defendant a certain lot, reserving a life estate and a

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power to sell, trade, or dispose" of the property during the life tenancy. A then executed a deed purporting to convey the fee of the lot to C. Shortly after, C reconveyed to A. There was no actual consideration for either of these conveyances. A died, and A's heirs sought to have the conveyance from A to the defendant cancelled, the claim of the defendant removed as a cloud on the heirs' title, and the lot partitioned. The lower court decreed in accordance with the plaintiffs' prayer. The defendant appealed. Held, that the deed to the defendant conveyed a fee subject to the life interest and power of sale, and that the purported exercise of the power, being gratuitous and for the purpose of defeating the defendant's interest, was void. Decree reversed. Easley v. Little, 145 N. E. 625 (Ill.).

The decision is proper. A life estate, clearly given, is not enlarged into a fee by a general power of disposition. Kirkpatrick v. Kirkpatrick, 197 Ill. 144, 64 N. E. 267; Cales v. Dressler, 146 N. E. 162 (Ill.); Steiff v. Seibert, 128 Ia. 746, 105 N. W. 328; Hinkle's Appeal, 116 Pa. St. 490, 9 Atl. 938; Huston v. Craighead, 23 Ohio St. 199. Contra, Davis v. Heppert, 96 Va. 775, 32 S. E. 467; Morgan v. Morgan, 60 W. Va. 327, 55 S. E. 389. Hence, the life tenant could not pass title to the fee by virtue of ownership of it. Nor does the purported exercise of the power convey a fee. The power under the circumstances of the present case is a power to pass title in fee and not merely in the reserved life estate. Robert v. Lewis, 153 U. S. 367 (overruling Giles v. Little, 104 U. S. 291); Woodbridge v. Jones, 183 Mass. 549, 67 N. E. 878; Simpkins v. Bales, 123 Ia. 62, 98 N. W. 580. See I TIFFANY, REAL PROPERTY, 2 ed., $320. See also 15 MICH. L. REV. 326. Contra, Miller's Adm'r v. Porterfield, 86 Va. 876, 11 S. E. 486. See Brant v. Va. etc. Co., 93 U. S. 326, 333-334. But a power to sell is not exercised by a gift or voluntary conveyance. Stocker v. Foster, 178 Mass. 591, 60 N. E. 407; Kirkpatrick v. Kirkpatrick, supra. See I TIFFANY, op. cit., § 329. A conveyance in the nature of a colorable sale, merely for the purpose of smashing the remainderman's estate is, moreover, a fraud on the power; that is, only an apparent compliance with the expressed intent of the donor of the power. Cales v. Dressler, supra; Stocker v. Foster, supra; Huston v. Craighead, supra; Hutchinson v. Cole, 6 R. I. 314; Harty v. Doyle, 49 Hun, 410, 3 N. Y. Supp. 574; Taylor v. Haskell, 178 Pa. St. 106, 35 Atl. 732. See I TIFFANY, op. cit., 8329; LEAKE, PROPERTY IN LAND, 2 ed., 311. The only fact which gives countenance to an objection to the instant case is that if the power had been exercised by a bona fide sale, the donee of the power could have disposed of the proceeds in whatever manner he desired and thus have deprived the remainderman of any interest. Possibly, however, the courts would spell out, and give effect to, an intent of the donor of the power that the remainderman's claim should attach to the unexpended proceeds of the property at the death of the donee of the power. Cf. Keniston v. Mayhew, 169 Mass. 166, 47 N. E. 612; Brockley's Appeal, 4 Atl. 210 (Pa.).

UNFAIR COMPETITION ADDITION TO TRADEMARK BY LICENSEE— USE OF ADDITIONAL FEATURES AFTER LICENSE EXPIRES.-The plaintiff owned the "Chippewa Springs" and sold bottled water and soft drinks in Wisconsin and Illinois. The defendant took over the Chicago distribution business of the plaintiff for five years, receiving with it the right to use the plaintiff's trademark "Chippewa " for that period. Shortly before the expiration of the contract, the defendant began to use a label on which were the word "Chippewa" and the figure of an Indian maiden sitting by a spring. When the contract ended, the defendant went into business for itself, using Lake Michigan water, and the same label. This continued from 1914 to 1924. The plaintiff did not attempt to do any business in Chicago