Page images

d of

affidavit that he has a meritorious cause of action, and is unable to procure such security, is not unconstitutional, as giving special advantages to one class of persons at the expense of others.

[merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

CONSTITUTIONAL LAW: RIGHT OF PRIVACY OF A CORPORATION INVALIDITY OF A STATUTE COMPELLING CORPORATIONS TO FURNISH THEIR DISCHARGED EMPLOYÉS WITH A WRITTEN STATEMENT OF THE CAUSES OF THEIR DISCHARGE. In the case of Wallace v. Georgia &c. R. Co., the Supreme Court of Georgia have lately held that a statute requiring railroad, express, and telegraph corporations to furnish their discharged employés with a written statement of the reason of their discharge, under a penalty of five thousand dollars, is unconstitutional. The court did not deliver an opinion, but the following is an official syllabus, which, in Georgia, is more authoritative than the opinion: “

"The public, whether as many or one, whether as a multitude or a sovereignty, has no interest to be protected or promoted by a correspondence between discharged agents or employés and their late employers, designed, not for public, but for private information as to the reasons for discharges, and as to the import and authorship of all complaints or communications which produced or suggested' them. A statute which undertakes to make it the duty of incorporated railroad, express and telegraph companies to engage in correspondence of this sort with their discharged agents and employés, and which subjects them in each case to a heavy forfeiture, under the name of damages, for failing or refusing to do so is violative of the general private right of silence enjoyed in this State by all persons, natural or artificial, from time immemorial, and is utterly void and of no effect. Liberty of speech and of writing is secured by the constitution, and incident thereto is the correlative liberty of silence, not less important or less sacred, Statements or communications, oral or written, wanted for private information, cannot be coerced by mere legislative mandate at the will of one of the parties and against the will of the other. Compulsory private discovery, even from corporations, enforced, not by suit or action, but by statutory terror, is not allowable where rights are under the guardianship of due process of law."

ing it

[merged small][merged small][ocr errors][merged small][merged small][ocr errors][merged small]

RIGHT OF THE OWNER OF AN OFFICE BUILDING TO EXCLUDE BOOKAGENTS THEREFROM.Judge McKinley, of one of the Superior Courts of California, bas recently rendered a decision upon a novel question.

[ocr errors]

1 22 S. E. Rep. 579.

He holds that the owner of a public office building, rented to tenants, who use the rooms for offices of lawyers, real estate agents, etc., has a right to exclude book canvassers from the building, and that such a person has no right of action for damages by reason of such exclusion, it appearing that the owner offers to allow him to go to any office in the building upon the express request of the occupant. The decision seems to be a sound one. The effort of the landlord is simply to protect his tenants from a well-known species of nuisance. The question of the propriety of his action seems to be a question solely between himself and his tenant. It can scarcely be implied, in his contracts of letting with his various tenants, that he dedicates the building to public use in the same sense in which the public highway is dedicated to such use,- in the sense which allows it to be used by tramps, peddlers, book-agents, and every other kind of people that annoy the occupants of offices and take their time from their work. It would be difficult to state upon what proposition of law the landlord assumes any duty toward a book-agent, by the mere fact of building a large building and renting it out to different occupants, to be used as offices for their own purposes.

CARRIERS OF PASSENGERS: Not LIABLE FOR FAILURE OF CONDUCTOR TO AWAKEN A SLEEPING PASSENGER.— In Missouri &c. R. Co. v. Kendrick, the Texas Court of Civil Appeals hold that where a railway conductor promises to awaken a passenger at the station where he is to get off, but fails to do so, whereby he is carried beyond his station and put to damage and inconvenience, there is no liability on the part of the railroad company. There are other cases so holding, and the Texas court reviews them at length; but we do not believe they are sound or just.


JURISDICTION OF CONSULAR COURTS: DOES NOT EXTEND TO ALLOWING A COUNTER-CLAIM. The decision of the Judicial Committee of the English Privy Council, in the case of The Imperial Japanese Government v. Peninsular and Oriental Steam Nav. Co.,? is to the effect that, by virtue of the treaties existing between Great Britain and Japan, a British subject has a right to require that proceedings taken against him by a Japanese shall be decided in the Consular Court; but the Consular Court has no jurisdiction to entertain a counter-claim against a Japanese, though arising out of the same circumstances as those which give rise to the action. The Japanese Government is in the

1 32 S. W. Rep. 42.

2 72 L. T. Rep. 881.

[ocr errors]

same position with respect to proceedings in the Consular Court as a Japanese subject. No Order in Council can operate to confer upon the British Courts in Japan a wider jurisdiction than that acquired by treaty.

[merged small][merged small][ocr errors][ocr errors][merged small]

CONFLICT OF LAWS: LIFE INSURANCE INSURANCE MONEY DISTRIBUTED ACCORDING TO THE LAW OF PLACE OF PERFORMANCE, - In the case of Crosland v. Wrigley,! decided in the English Chancery Division, before Mr. Justice Kekewick, it appeared that policies of insurance on his life were effected by an Englishman domiciled in England, with an American insurance company through their English office, for the benefit of his wife and children. It was held, that the policies, in accordance with the intention of the parties, must be construed, so far as related to the distribution of the insurance moneys, in accordance with the lex loci solutionis, the law of the place of domicile of the assured.

[ocr errors][merged small][merged small][ocr errors]

LANDLORD AND TENANT: TRESPASS BY LANDLORD IN FORCIBLY EJECTING TENANT WHO HOLDS ER. - In Entlman v. Hagood, the Supreme Court of Georgia decide the proposition maintained in the following official syllabus : " Whatever may have been, at common law, the right of a landlord, with respect to removing, without resort to legal proceedings, a tenant holding beyond his term, in view of the statutes of this State providing for the summary ejection of tenants under legal process, and the public policy thereby manifested, a landlord who, without such process, forcibly and violently ejects a tenant and his personal goods from the rented premises, is liable to the latter in an action of trespass, although the tenant was holding over beyond his term, was in arrears for rent and had received legal notice to quit.”

sto and

CONSTITUTIONAL LAW: VALIDITY OF A STATUTE ESTABLISHING COMPULSORY VACCINATIONS IN THE PUBLIC SCHOOLS.-- In Bissell v. Davison,3 the Supreme Court of Errors of Connecticut, hold that a statute authorizing school committees to make vaccination a condition of attending schools though there may not be a case of small-pox in the town, and no apparent danger of an epidemic of that disease, is constitutional and valid. As the police power, under all theories, extends to the protection of the public health, there would seem to be no doubt whatever of the propriety of this decision.

[ocr errors]

173 L. T. Rep. 60.

2 22 S. E. Rep. 545.

3 32 Atl. Rep. 349.

CONSTITUTIONAL LAW: DELEGATION OF LEGISLATIVE POWER — INVALIDITY OF a STATUTE AUTHORIZING THE INSURANCE COMMISSIONER TO PREPARE A STANDARD INSURANCE POLICY FOR EXCLUSIVE USE. Two decisions have been recently rendered, one in Pennsylvania and one in Minnesota, to the effect that it is not competent to the legislature of a State to enact a statute devolving upon the State Insurance Commissioner the duty of preparing a standard or uniform policy of insurance, which shall be used by all insurance companies doing business in the State,1 — the reason being that it is tantamount to a declaration of legislative power. It is to be observed that the legislature of Missouri, at its last sion, passed a statute of this kind.2


RIGHT OF A CORPORATION TO PREFER ITS OWN DIRECTORS AS CREDITORS. — This question recently received a thorough overhauling in the Supreme Court of Utah Territory, in the case of Noble Mercantile Company v. Mount Pleasant Equitable Co-op. The court denies the power of directors so to deal with the assets of the corporation in contemplation of its suspension, in the following unassailable reasoning, in its opinion written by Judge Bartch:

It appears to be well settled by authority that the directors of an insolvent corporation, which has been financially embarrassed, and no longer intends to continue its business, cannot, by reason of their superior knowledge of the corporate affairs, secure any peculiar advantage to themselves to the injury of other creditors. They are chosen by the stockholders and are intrusted with the exclusive control of the property and management of the corporate business. This creates a fiduciary relation between them and the stockholders, and the corporate property becomes impressed with a trust, which must be administered for the exclusive benefit of the stockholders while the corporation is solvent, and for the benefit of the creditors when it becomes insolvent, and ceases to longer pursue the objects of its creation. This trust relation forbids that the directors should administer the corporate affairs for their own special benefit. Nor does it allow them to prefer one stockholder over another, or themselves as stockholders, in the distribution of dividends or of corporate property. This is so from the very nature of things, for otherwise no corporation could exist. If the directors could manage the business of the corpora

1 O'Neil v. Insurance Company 2 Laws Mo. 1885, p. 194. (Pa.), 30 Atl. Rep. 943; Anderson v. 3 Not reported at the time of this Manchester Fire Assur. Company writing, but doubtless reported in the (Minn.), 63 N. W. Rep. 241; 8. c. on Pacific Reporter before this reaches the a former hearing, 60 N. W. Rep. eyes of our readers.

[merged small][ocr errors][ocr errors][ocr errors]

tion in the interest of one or more stockholders whom they might select, to the disadvantage of the remainder, the majority would be enabled to prey upon the rights of the minority because it would be within the power of the majority to select oficers to suit their own selfish ends in fraud of the interests of the minority. This would not only be contrary to all our ideas of trust relation, but it would destroy the corporation itself, because contrary to the law of its corporate existence which says that all stockholders must share pari passu. So, the fiduciary relation existing between the directors and the creditors, when the corporation has become insolvent and ceased to carry on its corporate business, forbids that the directors shall by reason of their superior knowledge concerning the affairs of the corporation, gain any special advantage by preferring themselves over other creditors equally meritorious; and this is in full accord with the principle that he who has the management and possession of property for the benefit of others, may not dispose of such property for the benefit of others, may not dispose of such property for his own special benefit to the injury of any of the beneficiaries.'

The contention of respondents, in regard to the question under consideration, is not only at variance with the trust relation, existing between the directors and creditors of an insolvent corporation, but also with the salutary rules which courts of equity apply to such relations in other cases of trust, for it is well understood that, in ordinary cases of trust, the trustee can derive no special advantage, to the injury of his cestui que trust by reason of his possession and control of the property. Nor is such contention in harmony with the known duties of directors of the corporate funds which are to be managed for the interests of the stockholders, and, if the debts be incurred, they stand pledged exclusively for the creditors until the debts are paid. In contemplation of law, the corporate property, in case of insolvency, constitutes a trust fund, first, for the payment of its creditors, and second, for distribution among its stockholders, equally and ratably. If, therefore, & corporation dissolve, and, without first liquidating its liabilities, make distribution of its property among its stockholders, a court of equity will convert all holders of such property, except bona fide purchasers for value, into trustees for the creditors, and compel such trustees to account, to the extent of the property so in their hands. In equity, the creditors' claims constitute a lien upon the fund.

[merged small][ocr errors][merged small][ocr errors]

The learned judge reviews a considerable mass of judicial authority upon the question, and states the well-known qualifications of the rule, such as that which concedes to a corporation, although in embarrassed circumstances, the power to mortgage its property in good faith to one of its own directors, to secure present advances to help it out of its difficulties. The question was ably argued against the validity of a preferential assignment in favor of directors, by Messrs. Frank B. Stephens and Benner X. Smith, of the Salt Lake bar; Messrs. Bennett, Marshall and Bradley being opposed to them.

[ocr errors][merged small][merged small]
« PreviousContinue »