« ForrigeFortsett »
Oh. St. 316, 52 N. E. 834. See 3 Cook, CORPORATIONS, 7 ed., $ 663. It is submitted that justice can be done in the principal case without doing violence to so fundamental a conception of the law of corporations. It would have been more logical to have attached the shares owned by the defendant debtor, and in that way to have secured control of the corporation and its assets, including the particular debt in question. Such a procedure would have had the added advantage of being fair to any possible creditors of the corporation, whose interests are entirely disregarded by the mode of procedure actually sanctioned. If the incorporator is thereby enabled to prefer the creditors of his corporation, as against his personal creditors, it is simply the logical working out of an incorporation law which enables the individual to secure the advantages of corporate organization.
CORPORATIONS — STOCKHOLDERS — INDIVIDUAL LIABILITY TO CORPORATION AND CREDITORS — EFFECT OF FAILURE TO PAY STATUTORY PERCENTUM OF SUBSCRIPTION. - The defendant subscribed for one hundred shares of the stock of a corporation without complying with the statutory provision that
10% upon the amount subscribed” should be paid to the directors. N. Y. Consol. Laws, ch. 59, $ 53. The defendant thereafter acted as a director of the corporation and received dividends for a period of years. The corporation became bankrupt; and the trustee seeks to recover the amount unpaid on defendant's stock. Held, that the trustee may recover. Jeffery v. Selwyn, 115 N. E. 275 (N. Y.).
The statute involved is a common one and has been often interpreted, but no trace of uniformity is discernible in the decisions. See i Cook, CORPORATIONS, 7 ed., SS 172-175. The easy holding is that a failure to pay the required ten percentum renders the subscription void. Van Schaick v. Mackin, 129 App. Div. 335, 113 N. Y. Supp. 408. The result, however, is very unsatisfactory when the corporation is in the hands of a representative of the creditors. The opposite extreme is reached by the cases holding that the corporation may enforce the subscription even when the rights of creditors are in no way involved. Pittsburg, etc. R. Co. v. Applegate, 21 W. Va. 172. The objection to such interpretation is that little effect is thereby given to the statute. A middle ground may be supported. The purpose of the statute was obviously to benefit creditors by assuring them of tangible assets and bona fide stockholders. MORAWETZ, CORPORATIONS, 2 ed., § 72. The desired pressure on the stockholder to pay and the corporation to require payment can be reached in the absence of creditor's claims by refusing to allow a recovery by either party against the other when the ten percentum has not been paid. There is no hardship because the parties are in pari delictu. This result has been reached in New York. N. Y., etc. R. Co. v. Van Horn, 57 N. Y. 473. When the corporation is in the hands of a representative of the creditors, however, to allow, as the principal case does allow, recovery by the representative furthers rather than defeats the legislative purpose.
CORPORATIONS STOCKHOLDERS RIGHTS INCIDENT TO MEMBERSHIP RIGHT TO HAVE A FAIR ELECTION OF OFFICERS. · The minority shareholders in a corporation succeeded in electing their candidate by voting through proxies. It had been an unbroken custom to cast votes personally. Held, that a new election must be ordered. In re Real Estate Owners, etc. Ass'n, 56 N. Y. L. J. 2004 (N. Y. Sup. Ct., Spec. Term).
There is no inherent right in a member of a corporation to cast his vote by proxy. Commonwealth v. Bringhurst, 103 Pa. 134. See Phillips v. Wickhan, i Paige (N. Y.) 590, 598; 1 MORAWETZ, CORPORATIONS, 2 ed., $ 486. However, this privilege may be conferred by the articles of incorporation or even the bylaws. People v. Crossly, 69 Ill. 195; Market St. Ry. Co. v. Hellman, 109 Cal.
571, 42 Pac. 225. See 2 Cook, CORPORATIONS, 7 ed., $ 610. And in New York this right is granted by statute. N. Y. CONSOL. LAWS, 1991. Hence, if the court has power to invalidate the election in the principal case, it is not because of anything improper in the mere casting of the votes by proxy. But, if for any reason the shareholders have not had a fair opportunity to vote in a regularly conducted meeting, the election may be set aside. In Re Argus Printing Co., I N. D. 434, 48 N. W. 347; In Re Townsend, 24 Misc. 80, 53 N. Y. Supp. 289. Similarly, where, as in the principal case, there is a fraud and surprise on the majority shareholders, another election may be ordered. People v. Albany, etc. R. Co., 55 Barb. (N. Y.) 344. In the absence of statute, quo warranto is the proper proceeding to try title to a corporate office; and in the ordinary case equity will not interfere. See People v. Albany, etc. R., supra; Mozley v. Alston, 16 L. J. Eq. (N. s.) 217. But, if the election is fraudulently conducted, equity will sometimes take jurisdiction to prevent irreparable injury. Johnston v. Jones, 23 N. J. Eq. 216. But see Hartt v. Harvey, 32 Barb. (N. Y.) 55. However, the remedy in this type of cases is largely statutory. See 2 Cook, CORPORATIONS, 7 ed., § 619. The New York statute is fairly typical. It provides that the Supreme Court shall exercise general supervision over corporate elections and afford any relief the occasion demands. N. Y. Consol. LAWS, 1994.
EMINENT DOMAIN - WHEN PROPERTY IS TAKEN - DAMAGE TO LAND ON STREAMS TRIBUTARY TO STREAMS IMPROVED. - The government erected a lock and dam in the Cumberland River, which caused the plaintiff's land, which is situated on an unnavigable tributary of the Cumberland River, to be frequently overflowed. Held, that the plaintiff is entitled to compensation. United States v. Cress, U. S. Sup. Ct., Oct. Term, 1916, No. 84.
In another case, the facts were similar to those in United States v. Cress, except that instead of flooding the plaintiff's land, the water was backed up upon a mill dam, so that there was not enough fall to turn the mill wheel. Held, that the plaintiff is entitled to compensation. United States v. Kelly, U. S. Sup. Ct., Oct. Term, 1916, No. 718.
The federal government has power to control navigable streams so far as may be necessary in regulating commerce among the states and with foreign nations. CONSTITUTION, Art. 1, § 8. See Scott v. Lattig, 227 U. S. 229, 243; Gibson v. United States, 166 U. S. 269, 272. But this power is limited by the Fifth Amendment which prohibits the taking of private property for public use without just compensation. See Monongahela Navigation Co. v. United States, 148 U. S. 312, 336. For a taking there must be an appropriation of an interest in the land itself as contrasted with mere consequential damage such as an interference with access to a stream. Gibson v. United States, supra; Scranton v. Wheeler, 179 U. S. 141. See 14 Harv. L. REV. 451. If the land is permanently flooded, it is a taking of the fee simple. Pumpelly v. Green Bay Co., 13 Wall. (U. S.) 166; United States v. Lynah, 188 U. S. 445. See LEWIS, EMINENT DOMAIN, 3 ed., $ 80. If the flooding is only occasional, a lesser interest analogous to an easement is taken. McKenzie v. Mississippi, etc. Boom Co., 29 Minn. 288. It is also a taking when the improvements interfere with the use of a mill. Gibson v. Fischer, 68 Iowa, 29, 25 N. W. 914; Barclay R. & Coal Co. v. Ingham, 36 Pa. St. 194. It would seem that the rights of riparian owners along unnavigable tributaries are as great as the rights of owners of land along the stream improved.
EVIDENCE — DOCUMENTS - CARBON COPIES AS DUPLICATE ORIGINALS. — Plaintiff offered in evidence a carbon copy of a typewritten letter which he had sent to the defendant. No notice to produce the original had been given. Held, that the carbon copy is admissible. Edmunds v. Atchison, etc. Ry. Co., 162 Pac. 1038 (Cal.).
It is well settled that a letter-press reproduction of a writing is not a duplicate original and cannot be offered in evidence without accounting for the original.
Bentley, 44 N. Y. 166. See 1 ELLIOTT, EVIDENCE, § 208. But reproductions made by a printing-press have been held to be duplicate originals; and each of such documents has been regarded as primary evidence of the contents of any other. Rex v. Watson, 2 Stark. 116, 129. Where the question has arisen, courts have generally taken the view that a carbon copy of an ordinary communication is a duplicate original and may be introduced without explaining the non-production of the other original. Hubbard v. Russell, 24 Barb. (N. Y.) 404; International Harvester Co. v. Elfstrom, 101 Minn. 263, 112 N. W. 252; Cole v. Elwood Power Co., 216 Pa. St. 283, 65 Atl. 678. Contra, State v. Teasdale, 120 Mo. App. 692, 97 S. W.995. It is submitted that whether documents are duplicate originals or not should depend, not on the mechanism by which they are produced, but on the effect intended to be given to the different documents by the parties. See Cleveland, etc. R. Co. v. Perkins, 17 Mich. 296. Although a carbon copy is made simultaneously with the typewritten letter, there is but one original, that which is mailed and is intended as the written communication between the parties. See Andrews v. Wirral Rural Council, (1916) 1 K. B. 863, 872. And it would seem that this is true even though the document sent has no particular legal significance in itself. See contra, 19 HARV. L. Rev. 123.
INTERSTATE COMMERCE — CONTROL BY CONGRESS - APPLICATION AUTOMATIC COUPLER ON SINGLE ELECTRIC CAR. Section two of the Safety Appliance Act forbids any interstate common carrier to “permit to be ... used on its line any car not equipped with couplers . . which can be uncoupled without the necessity of men going between the ends of the cars." An interurban interstate electric railway operated single cars without automatic couplers of the kind required. The United States sues for the penalties provided. Held, that it may not recover the penalties. International Ry. Co. v. United States, 238 Fed. 317.
The purpose of the Act was to keep men from going between cars that were being coupled. Although penal in form, the Act has been held to be chiefly remedial; and, as such, it has been liberally construed so as to accomplish its purpose. See Johnson v. Southern Pacific Ry. Co., 196 U. S. 1, 17. Congress by amendment, and the courts by construction, have combined in requiring couplers wherever and only where danger might be incurred. See Pennell v.
Philadelphia & Reading Ry. Co., 231 U. S. 675, 679; United States v. Chicago, etc. Ry. Co., 149 Fed. 486, 488. Thus, the word "car” in section two includes locomotives. 32 STAT. AT L. 943, § 1; Johnson v. Southern Pacific Ry. Co., 196 U. S. 1. But the courts have held that this does not usually include the front end of the locomotive. Wabash R. Co. v. United States, 172 Fed. 864. See Campbell v. Spokane, etc. R. Co., 188 Fed. 516, 518. However, if the front end is used for shunting, it must be properly equipped. Chicago, etc. Ry. Co. v. United States, 196 Fed. 882. Likewise, “car” includes tenders. 32 STAT. AT L. 943, § 1; Philadelphia & Reading Ry. Co. v. Winkler, 4 Pennewill (Del.) 387, 56 Atl. 112. But the courts have held that the end of the tender coupled to the locomotive is not included. Pennell v. Philadelphia & Reading Ry. Co., 231 U. S. 675. Safety does not require the coupling on cars which are run singly. Therefore, the decision in the principal case seems clearly right.
INTERSTATE COMMERCE — DEMURRAGE - UNIFORM DEMURRAGE CODE PUBLIC AND PRIVATE TRACKS - DUE PROCESS. The defendant, Swift & Co., occupied under a license from the plaintiff, the Hocking Valley Railway Co., a siding appurtenant to the Swift warehouse. The Uniform Demurrage Code provides for imposing a charge on all privately owned cars detained under lading longer than the forty-eight-hour free period, whether on private or car
rier's tracks. Swift & Co. held their own cars under lading on this siding over forty-eight hours, and refused to pay the demurrage charge. This action was brought by the railway company to recover these charges. Held, that the plaintiff recover. Swift & Co. v. Hocking Valley Ry. Co., U. S. Sup. Ct., Oct. Term, 1916, No. 376. For a discussion of the case, see NOTES, P. 756.
LANDLORD AND TENANT - SURRENDER BY OPERATION OF LAW – WHETHER TENANT CAN RECOVER AN EXCESS OVER RENT RESERVED RECEIVED BY LANDLORD. - A clause in a lease provided that, if the premises should become vacant, the lessor was authorized to enter, re-rent the land, and apply the proceeds to the rent due from the lessee. The lessee vacated the premises and stopped paying rent. He offered to surrender to the lessor; but the latter would not accept. The lessor leased the premises for a greater amount than the original rent. The lessee seeks to recover the excess. Held, that he may not recover. Whitcomb v. Brant, N. J. Ct. Err. & App. (not yet reported).
A surrender of an estate puts an end to the tenant's liability on the lease, unless by an express contract the tenant has made himself liable. Richardson v. Gordon, 188 Mass. 279, 74 N. E. 344. See 1 TIFFANY, LANDLORD AND TENANT, 1179. Where the consent of both landlord and tenant cannot be implied there can be no surrender by operation of law. Auer v. Penn, 99 Pa. St 370; Brown v. Cairns, 63 Kan. 584, 66 Pac. 639. But the court in the principal case conceives that the abandonment of the premises and failure to pay rent terminated the privity of estate, and that the lessee, being in default, cannot recover in quasi-contract. But privity of estate is not terminated merely by breach of covenant; in fact, the landlord has no power thereupon to evict a tenant unless a provision giving him such a right is inserted in the lease. Vanatta v. Brewer, 32 N. J. Eq. 268; De Lancey v. Ganong, 9 N. Y. 9. In the
9 principal case the landlord expressly refused to exercise such a right. It must appear, therefore, that the lessee is still owner of the leasehold estate, and that the lessor, having collected the proceeds under an authorization by the lessee, is bound to account to him for them. 2 TIFFANY, LANDLORD AND TENANT, 1341. LEGACIES AND DEVISES — PAYMENT — INTEREST BY WAY OF MAINTE
- A widow bequeathed her leasehold residence to her daughter, contingent, however, upon the daughter's marrying or reaching twenty-one. At the death of the testatrix the daughter was an infant. She had not been receiving support from her mother. The question arises to whom the rents and profits of the residence belong until the daughter attains twenty-one or marries. Held, that the residuary legatees are entitled as against the daughter. In re Eyre, 142 L. T. 280.
A general legacy, contingent or vested, payable at a future date carries interest, not from the death of the testator but only from the time it is payable. Heath v. Perry, 3 Atk. 101. On the other hand, a specific legacy, if vested,
3 carries interest from the death of the testator, even though the enjoyment of the principal is expressly postponed. See 2 ROPER, LEGACIES, 4 ed., 1250.
. A contingent specific legacy, however, does not bear interest until the happening of the contingency. See 2 WILLIAMS, EXECUTORS, 10 ed., 1170. An exception to this rule as to contingent specific legacies and general legacies arises on bequests from a parent to an infant child, in which cases the courts usually allow the child interest in the interim by way of maintenance. The basis of this exception is commonly said to be a rule of presumed intention of the testator the court “will not presume the father . so unnatural as to leave a child destitute” meanwhile. Incledon v. Northcote, 3 Atk. 430, 438. In accordance with this view of presumed intention no gift of income will be implied where
there is a separate provision for maintenance. Wynch v. Wynch, i Cox Ch. 433. In some cases, however, the exception has the earmarks of a flat rule of policy regardless of expressed intention, a policy in favor of the child being supported. Thus, when the testator directed the interest to be accumulated until the legatee reached twenty-one, one court, nevertheless, implied a gift of income for maintenance. Mole v. Mole, 1 Dick. Rep. 310. But whatever the scope of the exception, the principal case seems clearly not to fall within it; for the fact that the child had not been dependent upon the mother for support precludes the necessity or probable intention of a gift of the intermediate income.
LIMITATION OF ACTIONS ACCRUAL OF ACTION — CONSTRUCTION STOCKHOLDERS' LIABILITY STATUTE. A Minnesota statute provides that on
etition by the receiver of an insolvent corporation the court may levy assessments upon stockholders if the corporate assets are shown to be insufficient to discharge the corporate indebtedness. GEN. STAT. 1913, § 6645 et seq. In 1907 a corporation was declared insolvent and a receiver appointed. In 1915 the receiver petitioned for a hearing and obtained an assessment. Later the same year he sues a stockholder upon the assessment, and is met with a defence of the six year Statute of Limitations. Held, the action is barred by the Statute of Limitations. Shearer v. Christy, 161 N. W. 498 (Minn.).
The general principle seems clear that the Statute of Limitations does not begin to run upon a claim until suit may be brought to enforce it. Staninger v. Tabor, 103 Ill. App. 330; In re Hanlin's Estate, 133 Wis. 140, 113 N. W. 411. Where some condition beyond the control of the plaintiff must first be satisfied, the statute does not run until such condition is fulfilled. Harriman v. Wilkins, 20 Me. 93. See 1 Wood, LIMITATIONS, 4 ed., § 122 a. But where the preliminary act or condition precedent to direct prosecution of the claim is within the plaintiff's control, the statute begins to run as soon as such act may reasonably be accomplished. Shelburne v. Robinson, 8 Ill. 597; Williams v. Bergin, 116 Cal. 56, 47 Pac. 877; Bauserman v. Charlott, 46 Kan. 480, 26 Pac. 1051. Contra, Hildebrand v. Kinney, 172 Ind. 447, 87 N. E. 832. In the principal case the court proceeds upon the basis that the right of action against the stockholder arises as soon as the receiver is appointed. Other courts, however, in construing this Minnesota statute have held that the right of action does not arise until the insufficiency of corporate assets is adjudicated and the assessment is levied by the court. Bernheimer v. Converse, 206 U. S. 516; Hale v. Cushman, 96 Me. 148, 51 Atl. 874. Similar provisions in other states have likewise been interpreted as giving rise to a right of action only when the assessment is levied. Goss v. Carter, 156 Fed. 746; Mister v. Thomas, 122 Md. 445, 89 Atl. 844; Shipman v. Treadwell, 208 N. Y. 404, 102 N. E. 634. And statutes making stockholders of insolvent corporations liable on unpaid subscriptions have received a similar construction. Hawkins v. Glenn, 131 U. S. 319; Gillin v. Sawyer, 93 Me. 151, 44 Atl. 677. It would seem that neither of these views is desirable. On the one hand, the creditors should be protected; on the other, the stockholder should not have liability hanging over him indefinitely until the receiver may choose to get an assessment levied. It is the policy of the law to wind up insolvent estates speedily in the interest both of the creditor and of the stockholder. Under such a statute the receiver may bring proceedings against the stockholders as soon as the corporate assets have been so marshalled that the propriety of an assessment can be demonstrated to the court with fair certainty. Limitations should, therefore, begin to run as soon as this step might reasonably be accomplished.
MANDAMUS — ACTS SUBJECT TO MANDAMUS — TEMPORARY POSSESSION OF PUBLIC OFFICE PENDING RESULT OF CONTEST. - The defendant, governor