the present instance. On the other hand, goods are not relieved from the burdens that rest on all property similarly situated merely because they are intended for subsequent exportation. But it does not follow from this that the proceeds of such goods (after the exportation thereof) may be taxed as income. The cases dealing with taxes on gross incomes of corporations engaged in interstate commerce present a close analogy to the present situation. The various states may certainly tax the property of such corporations, along with other property within their territory,5 but since Congress regulates interstate commerce under the Constitution, it becomes necessary to determine whether these gross income taxes are state taxes on the commerce itself, and hence unconstitutional. In these cases the courts, looking at the substance rather than at the form, have held them unconstitutional. Wherever possible, however, they are sustained as license taxes for the privilege of doing business in corporate form, and, in so construing, the courts desert the rule of substance and go almost entirely on the form of the particular statute whether or not it declares the imposition of a license or excise tax.8 Under this construction the Federal Corporate Income Tax of 1909 was declared constitutional as an excise.10 Such a rule of construction is unscientific and unsound, but even under this theory the tax in the present case cannot be upheld as an excise; it must stand or fall as an income tax. It was passed after an amendment 12 to the Constitution, rendered necessary by the decision in the Pollack Case,13 and intended to permit the



• Coe v. Errol, 116 U. S. 517; Cornell v. Coyne, 192 U. S. 418, 427.

6 Pullman's Car Co. v. Pennsylvania, 141 U. S. 18; Western Union, etc. Co. 9. Massachusetts, 125 U. S. 530, 552.

6 Philadelphia, etc. Steamship Co. o. Pennsylvania, 122 U. S. 326; Galveston, etc. R. Co. o. Texas, 210 U. S. 217. These cases overrule an earlier case upholding such a tax. See State Tax on Railway Gross Receipts, 15 Wall. (U. S.) 284. “It would seem to be rather metaphysics than plain logic for the state officials to say to the company: 'We will not tax you for the transportation you perform, but we will tax you for what you get for performing it.' Such a position can hardly be said to be based on a sound method of reasoning. Philadelphia, etc. Steamship Co. v. Pennsylvania, supra, at p. 336, per Mr. Justice Bradley. The application of this to the principal case seems clear.

* Maine v. Grand Trunk R. Co., 142 U. S. 217; New York o. Roberts, 171 U. S. 658.

8 See 24 Harv. L. REV. 563. “While the mere declaration contained in a statute that it shall be regarded as a tax of a particular character does not make it such if it is apparent that it cannot be so designated consistently with the meaning and effect of the act, nevertheless the declaration of the lawmaking power is entitled to much weight, and in this statute the intention is expressly declared to impose a special excise tax with respect to the carrying on or doing business by such corporation. Flint v. Stone Tracy Co., 220 U. S. 107, 145, per Mr. Justice Day.

9 36 Stat. AT L. 112. 10 Flint v. Stone Tracy Co., supra. 11 “The distinction between a tax 'equal to'one per cent of gross receipts, and a tax of one per cent of the same, seems to us nothing, except where the former phrase is the index of an actual attempt to reach the property, and to let the interstate traffic and the receipts from it alone. ... This is merely an effort to reach the gross receipts, not even disguised by the name of an occupation tax, and in no way helped by the words 'equal to.'” Galveston, etc. R. Co. v. Texas, supra, at p. 227, per Mr. Justice Holmes. See GRAY, LIMITATIONS OF TAXING POWER, 38.

12 “The Congress shall have power to iay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.” U. S. CoNsT., AMENDMENT 16.

13 Pollack v. Farmers Loan, etc. Co., 158 U. S. 601. This case decided that income

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taxation of incomes as such.14 And, as an income tax, it is indistinguishable from the Gross Income Cases — in substance, by taxing the

proceeds of exports it is taxing the exports themselves. The effect of such a tax is either to shift the burden to the consumer, to reduce the volume of exports through a rise in price, or to leave the burden on the exporter - all dependent on the elasticity of the demand for the particular commodity, and the extent to which outside competition is possible.15 In any case, this indirect effect is reached through the medium of a tax on exports.

Assuming, then, that the tax in Peck & Co. v. Lowe is an export tax, still perhaps the Sixteenth Amendment by its broad language abrogates the constitutional prohibition against such a tax, in so far as it is laid on the income derived from exports. If it has such an effect, the case is obviously correct, but as yet no judicial opinion has been handed down on either side; 16 the court in the principal case assumes that it does not have this effect, but expressly refuses to decide the question, reaching its decision by holding that the tax is not an export tax a result with which we disagree. Since the amendment does not in terms repeal the constitutional prohibition, the repeal, if any, must be by implication. Repeals by implication are not favored, unless the earlier provision is so inconsistent with the later that the two cannot stand together.17 But there seems to be a clear repeal by the Sixteenth Amendment; if incomes, "from whatever source derived,” may be taxed, a prohibition against taxing exports (assuming that such a tax would be an export tax) is utterly inconsistent with

the amendatory provision, and is consequently repealed thereby. The principal case may be sustained upon this ground.

taxes on realty and personalty were direct taxes, and unconstitutional unless apportioned.

14 The present income tax taxes all persons, and so cannot be considered as an excise tax; it is not applied solely to corporations and the like, as was the tax of 1909. The provision as to corporations is a part of the whole and cannot be separated therefrom, and that whole is clearly a tax on income. In addition, the tax of 1909 specifically declared the imposition of an excise; the present tax is expressly laid on incomes without more qualification as to its purpose.

15 See BASTABLE, PUBLIC FINANCE, 3 ed., 571.

16 There is great diversity of opinion as to whether the amendment renders the income from state bonds, formerly exempt from federal taxation, open to the income tax. The answer depends upon whether the amendment be construed to open to taxation income from all sources, income from exports among them. See (in accord with such construction): STATE PAPERS OF Gov. HUGHES, 1910, quoted in FOSTER, INCOME Tax, 2 ed., par. 27; Opinion of Ex. Sen. Edmunds, 45 CONG. RECORD, 1957. See (contra such construction) Letter of Sen. Root, N. Y. WORLD, 1 March, 1910, quoted in FOSTER, INCOME Tax, 2 ed., par. 27.

17 U. S. v. Greathouse, 166 U. S. 601, 605. See 1 SUTHERLAND, STATUTORY ConSTRUCTION, 2 ed., par. 247; SEDGWICK, STATUTORY AND CONSTITUTIONAL Law, 97.


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ADVERSE POSSESSION - CONTINUITY ADVERSE POSSESSION IN CONTEMPT OF COURT. In an action of trespass to try title plaintiff recovered judgment, and defendant was perpetually enjoined from trespassing on the land in question. Defendant continued to occupy the land for the period required by the Statute of Limitations. Plaintiff again brings an action of trespass to try title. Held, that title was acquired by adverse possession. Ludtke v. Smith, 186 S. W. 266 (Texas).

The case is more unique than difficult. It is well settled that the recovery of a judgment in ejectment, defendant remaining in possession, will not interrupt the running of the statute. Smith v. Trabue, i McLean 87, Fed. Cas. No. 13116; Jackson v. Haviland, 13 Johns. (N. Y.) 229; Smith v. Hornback, 14 Ky. 232; Mabury v. Dollarhide, 98 Mo. 198, 11 S. W.611. In one case where a decree ordering a conveyance had by statute itself the operation of a conveyance, an opposite result was reached. Gower v. Quinlan, 40 Mich. 572. But clearly an injunction, directed simply at the defendant personally, can have no effect on his relation to the land, which is the only thing the Statute of Limitations is concerned with.

APPEAL AND ERROR — NOMINAL DAMAGES - -REFUSAL TO REVERSE. — The plaintiff sued for a libel actionable per se according to a statutory definition, alleging no special damage. The trial court sustained the defendant's demurrer to the declaration. The libel was of such a nature that no punitive damages were involved. Held, that, although the trial court erred in sustaining the demurrer, judgment be affirmed since only nominal damages are involved. Jones v. Register & Leader Co., 158 N. W. 571 (Iowa).

It is a well-established rule that the upper court will not reverse an erroneous judgment in order to allow nominal damages. Harwood v. Lee, 85 Iowa 622, 52 N. W. 521; Kelly v. Fahrney, 97 Fed. 176; East Moline Co. v. Weir Plow Co., 95 Fed. 250. But the dependence of costs upon a reversal makes an affirmance unjust. Moreover, there is a general exception to the stated rule if substantial rights are involved. Lewis v. Flint, etc. Ry. Co., 153 Mich. 638, 23 N. W. 469. See Heater v. Pearce, 59 Neb. 583, 587, 81 N. W.615,616. It has been so held, for example, in actions for trespass to determine title. Wing v. Seske, 109 N. W. 717 (Iowa); Harriss v. Sneeden, 104 N. C. 369, 10 S. E. 477. A similar decision was rendered in an action which, by establishing rights concerning a continuing nuisance, created an adjudication binding for any later case which might arise. Harvey v. Mason City, etc. R. Co., 129 Iowa 465, 105 N. W. 958. In the principal case a substantial right might well be found in the interest of the plaintiff to have his reputation cleared by some sort of a decision in his favor. Nor would it be necessary to reverse judgment and remand the cause in order to protect the plaintiff. There is plenty of authority allowing the appellate court to render a final judgment itself. Roberts v. Corbin & Co., 28 Iowa 355; Yeoman v. Lasley, 40 Ohio St. 339. See Bernhardt v. Brown, 118 N. C. 700, 24 S. E. 715. And such procedure is not prevented by the Iowa code. See 1897 Iowa CODE, 8 4139.

BROKERS WRONGFUL SALE OF STOCK - RIGHT OF CUSTOMER TO SIMILAR STOCK NOT ACQUIRED FOR THE PURPOSE OF RESTITUTION.— A stockbroker purchased on credit for the plaintiff 100 shares, and at different times for other customers 180 shares, of a certain stock. He subsequently disposed of all stock of this kind. Later he acquired 100 shares of the same kind of stock. These shares were neither acquired nor held on behalf of any particular stockholders.

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Upon his bankruptcy the plaintiff petitions for fff of these shares. Held, that the plaintiff may recover. Duel v. Hollins, 36 Sup. Ct. Rep. 615.

By the weight of authority a customer has a property right in stock purchased on credit for him by a stockbroker. Richardson v. Shaw, 209 U. S. 365. See 19 Harv. L. REV. 529. Contra, Covell v. Loud, 135 Mass. 41. But the stock is considered fungible and the broker is only required to keep for the customer sufficient stock of the same kind. Caswell v. Putnam, 120 N. Y. 153, 24 N. E. 287; Richardson v. Shaw, supra. Where one who holds property subject to the rights of another wrongfully disposes of it and later reacquires it, he of course still holds it subject to those rights. Williams v. Williams, 118 Mich. 477, 76 N. W. 1039; Church v. Ruland, 64 Pa. St. 432, 444; Schutt v. Large, 6 Barb. (N. Y.) 373, 380. Now the same is held where the wrongdoer disposes of fungible property — stock, for example — and later acquires similar property. In re Brown, 171 Fed. 254. These decisions are sometimes based on a presumption that the acquisition was for the purpose of restitution. But it is often difficult to justify such presumption. Further, it is hard to see on what principle the law gives legal effect to this intention if it is presumed. A less artificial and more satisfactory explanation would seem to be a constructive trust, imposed by law on the wrongdoer when he is capable of making specific reparation for his wrongful disposal of property. This broader principle would give a right in a case, like the principal case, where circumstances rebut the presumption of an intent to restore.


CARRIERS PERSONAL INJURIES TO PASSENGERS -DUTY TO PROTECT FROM ASSAULT. - The plaintiff, a negro, while waiting in a depot to take passage on a train, was assaulted by the town marshal, who was running all negroes out of town. The station agent, who knew all of the circumstances, made no attempt whatever to interfere. The plaintiff sues the railway. Held, that the defendant is not liable. Fennell v. Atchison, Topeka & Santa Fe R. Co., 158 Pac. 14 (Kan.).

The duty of carriers to protect their passengers from assault cannot be questioned. Seawell v. Carolina Central R. Co., 132 N. C. 856, 45 S. E. 850; Texas, etc. R. Co. v. Jones, 39 S. W. 124 (Tex. Civ. App. 1897). See Southern R. Co. v. Hanby, 183 Ala. 255, 259, 62 So. 871, 873. This applies even to assaults and arrests made by officers of the law if the carrier has notice that the conduct of the officer is wrongful. See 2 HUTCHINSON, CARRIERS, $ 987. But since carriers are not insurers of safe passage, it must appear, in order to establish liability, that the assault was forseeable and could have been prevented. See Pittsburg, etc. R. Co. v. Hinds, 53 Pa. 512, 515. See 25 Harv. L. Rev. 470. The principal case assumed that a lesser duty is owed to the populace waiting in the station for trains than to those on board trains. See 2 HUTCHINSON, CARRIERS, Š 989. But the rule is well settled that persons entering depots for the purpose of taking passage are passengers. Exton v. Central, etc. R. Co., 62 N. J. L. 7, 42 Atl. 487. See 2 Wood, RAILROADS, § 298.



CARRIERS SLEEPING CARS — LIABILITY CARRIER PULLMAN EMPLOYEE'S TORT TO TRESPASSER. The plaintiff's husband, who was trespassing on a Pullman car, was impelled by the threatening conduct of a Pullman conductor to jump off the train, and sustained fatal injuries. The plaintiff sues the railroad. Held, that the railroad is not liable, as the conductor was not its servant. Louisville & Nashville R. Co. v. Marlin, 186 S. W. 595 (Tenn.).

It is well settled that Pullman employees are not, except under special arrangements, general servants of the railroad. Robinson v. Baltimore & Ohio R. CO., 237 U. S. 84; cf. Oliver v. Northern Pacific R. Co., 196 Fed. 432. Yet railroads are often held liable to passengers for acts of Pullman employees which touch the railroad's duty. Pennsylvania Co. v. Roy, 102 U. S. 451;

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Campbell v. Seaboard Air Line Ry., 83 S. C. 448, 65 S. E. 628. The courts uniformly reason that for this purpose the Pullman employees are temporary servants of the railroad. See Pennsylvania Co. v. Roy, 102 U. S. 451, 457. This is, at best, a fiction. The true reason for the liability rests in the fact that the carrier's duty of proper conveyance is non-delegable. See Dwinelle v. New York, etc. R. Co., 120 N. Y. 117, 123, 24 N. E. 319, 321; Barrow S. S. Co. v. Kane, 88 Fed. 197, 199. A breach of it, therefore, even though committed by the servant of an independent contractor, renders the railroad liable. Some make this duty not only non-delegable, but even absolute in respect of the wilful torts of employees. Jackson v. Old Colony Street R. Co., 206 Mass. 477, 92 N. E. 725. See 6 LABATT, MASTER AND SERVANT, 2 ed., § 2447 ff. But obviously a non-passenger cannot invoke this extraordinary liability, since it rests upon the relationship of carrier to passenger. Blake v. Kansas City Southern Ry. Co., 38 Tex. Civ. App. 337, 85 S. W. 430.

CONFLICT OF LAWS - JURISDICTION FOR DIVORCE — FOREIGN DECREE AGAINST A NON-RESIDENT. - The plaintiff's wife had divorced a former husband in Nevada, the court there taking jurisdiction by the wife's residence and constructive service on the husband. The plaintiff now sues in New York to annul his marriage on the ground that his wife's previous divorce decree was void. Held, that the burden is on the plaintiff to establish that the husband in the former action was a resident of New York when the decree was rendered. Kaufman v. Kaufman, 160 N. Y. Supp. 19 (Sup. Ct.).

New York has long contended that divorce proceedings are in personam. See Lynde v. Lynde, 162 N. Y. 405, 412, 56 N. Ē. 979, 981. It has therefore refused to give effect to a foreign court's decree of divorce against a non-resident of the foreign state not personally served. Winston v. Winston, 165 N. Y. 553, 54 N. Y. Supp. 298. See 15 Harv. L. Rev. 66. The Supreme Court, while considering such divorce binding in the foreign state, has held that New York's disregard of such decree was not a violation of the “full faith and credit” clause. Haddock v. Haddock, 201 U. S. 562. The majority of the states, however, deeming divorce to be an action in rem, hold, if one party be domiciled within the state the other, though non-resident, may be served constructively. Loker v. Gerald, 157 Mass. 42, 31 N. E. 709; In re James Estate, 99 Cal. 374, 33 Pac. 1122; Dunham v. Dunham, 162 Ill. 589, 44 N. E. 841. Some of the New York courts have made an attempt by subtle distinctions to more closely conform to these decisions. North v. North, 47 Misc. 180, 93 N. Y. Supp. 512, affirmed 111 App. Div. 921, criticised, Catlin v. Catlin, 69 Misc. 191, 193, 126 N. Y. Supp. 350, 351. And it must be obvious that even the New York decisions, requiring, as they do, domicile of the libellant to create jurisdiction, cannot consider divorce as in personam in the true sense of the word. See J. H. Beale, Jr., “Constitutional Protection of Decrees of Divorce,” 19 HARV. L. REV. 586, 590. Indeed, the principal case, by giving extraterritorial effect to a decree of divorce rendered against a non-resident defendant served by publication, unless such defendant be a resident of New York, seems to be an acknowledgment of that fact. Certainly any decision which tends to bring the New York law on this subject into conformity with that of the majority of states, must be desirable. But it is difficult to see on what principle the present decisions of the New York courts can possibly be based. But see Percival v. Percival, 106 App. Div. III, 118, 94 N. Y. Supp. 909, 913.

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CONSTITUTIONAL LAW – POWERS OF LEGISLATURE: TAXATION CONSTITUTIONALITY OF AN INCOME TAX ON A CORPORATION ENGAGED IN EXPORT TRADE. - The plaintiff corporation seeks to recover the tax levied by the Federal Government on that part of its income derived from export trade, asserting the levy to be unconstitutional as a tax on exports. Held, that the tax

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