Law Commons^™

Extent Of The Legislature's Reserve Power To Change Common Law Attributes Of Corporations, Edward R. Hayes

Vanderbilt Law Review

Does a stockholder have a right, at common law, to dissent and have his stock repurchased when his corporation purchases the assets of another business? If he does, is this a common law attribute of corporations? What other common law attributes may there be? To what extent has a legislature power to alter or modify these attributes, or to authorize alteration or modification by the holders of a majority of a corporation's stock? The discussion will be directed first to what attributes a corporation has apart from those bearing on its relations with its stockholders; next, to what attributes are …

Negligence Liability Of Artisans And Tradesmen, Jerry L. Moore

Vanderbilt Law Review

The purpose of this Note is to examine certain aspects of the tort liability of nonprofessional persons who engage in a trade or craft which requires skill and abilities not ordinarily possessed by the average man. Since, with such a wide range of subjects, an adequate treatment of all the problems peculiar to each trade would require volumes, it is necessary at the outset to place rather narrow limitations on the scope of this analysis. Perhaps it is best to define the outside limits in the form of two "issues" as follows. When a person engages in a certain trade …

Book Notes, Law Review Staff

Vanderbilt Law Review

Living the Law By Frank E. Cooper Indianapolis: The Bobbs-Merrill Company, Inc., 1958. Pp. xv, 184. $7.50.

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Shared Government in Employment Security By Joseph M. Becker New York: Columbia University Press, 1959. Pp. 501. $6.50.

State Taxation Of Corporate Income From A Multistate Business, Paul J. Hartman

Vanderbilt Law Review

So long as we have a federal system of government, a continuing problem, and certainly one of the most pressing, is that of an effective coordination of taxes. That problem has achieved paramount impor- tance in late years. Because of new and expanding conceptions as to what governments should do for people, our state governments are continually confronted with ever-increasing demands that they provide additional governmental functions and supply more governmental services. The resulting increase in governmental activities and extension of benefits mean urgent needs for additional revenue. As prices have spiraled under the increasing pressure of meeting our domestic …

Subchapter S And Its Effect On The Capitalization Of Corporations, Mortimer M. Caplin

Vanderbilt Law Review

Our federal tax laws encourage the creation of complex capital structures. "Thinning" capitalizations by issuing corporate indebtedness offers well known tax advantages to both shareholder and corporation.' Also, since 1954, issuing preferred stock on incorporation is a standard procedure for side-stepping the "bail-out" prohibitions of code section 306. A "good" capitalization from a tax viewpoint, therefore, will often involve a small base of common stock, a heavier layer of preferred stock and as much debt as the tax adviser believes will be given tax recognition.

Initial Capitalization And Financing Of Corporations, Chester Rohrlich

Vanderbilt Law Review

Since one of the varied uses to which stock purchase options maybe put is as a means of raising, or facilitating the raising, of capital, we deem it appropriate to direct attention to them. Like so many instrumentalities, they are subject to abuse and raise some difficulties, but used honestly and with discretion, they do represent a means (a) of compensating promoters and underwriters and retaining their continuing interest in the financial success of the corporation, (b) of adding speculative attraction to the security with which it is issued, or, less frequently, (c) of raising funds by direct and independent …

Corporate Law Department Communications--Privilege And Discovery, Thomas R. Hunt

Vanderbilt Law Review

With the growth in number and size of corporate law departments, there is increased interest in determining the conditions and areas in which their communications' may be called for, and used, in litigation. As business becomes more complex, requiring adherence to legislation and regulation which allows small tolerance between the licit and illicit, or demanding close attention to administrative detail, the role of the lawyer is amplified. Concurrently, corporate counsel is engaged in areas where the distinction between business and legal considerations becomes decreasingly apparent.

Stock Options And Other Executive Incentive Arrangements, Charles W. Steadman

Vanderbilt Law Review

The immense economic expansion and changes of the post-war period have generated numerous problems. In American business a major product of this is to be found in the difficulty of developing and maintaining the reservoir of executive talent at levels sufficiently high that managerial functions can continue to be performed with an advanced degree of efficiency. The shortage of qualified executives has been widely reported. The competition for those available is intense and increasing.

Unfortunately, it would seem that at the very time the need is greatest the normal incentives for an individual to assume major executive status have been …

New Books And Recent Scholarship, F. Hodge O'Neal, Jordan Derwin, C. Edwin Chapman, Jr.

Vanderbilt Law Review

The years since World War II have brought extensive developments in the field of corporation law and practice. Many states have enacted a completely new corporation statute' or a new blue sky law. At the same time, "federal corporation law" and federal securities regulation have grown substantially. Legislatures and courts in many states have given some recognition to the distinctive problems of the close corporation. A number of highly publicized proxy fights have spurred developments in the law applicable to the proxy system. Some courts have enunciated interesting legal principles applicable to the sale of corporate control. And just last …

Book Reviews, John C. Wahlke, Walter P. Armstrong, Jr.

Vanderbilt Law Review

The State Legislative Institution By Jefferson B. Fordham Philadelphia: University of Pennsylvania Press. 1959. Pp. 109.

reviewer: John C. Wahlke

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Handling Accident Cases By Albert Averbach Rochester: The Lawyers Co-operative Publishing Co. 1958. Pp. xii, 1505.

reviewer: Walter P. Armstrong, Jr.

Recent Cases, Law Review Staff

Vanderbilt Law Review

Antitrust Act--Discriminatory Practices--Defenses Available to Charge of Discrimination in Furnishing Services and Facilities

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Bankruptcy--Priority of Wages--Employer's Contributions to Welfare Funds Are Not Entitled to Priority as Wages Due to Work

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Constitutional Law--Social Security Benefits--Automatic Suspension of Deported Person's Social Security Benefits a Denial of Due Process

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Constitutional Law--Union Shop Agreement Under Railway Labor Act Violates Constitutional Rights of Employees

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Corporations--Securities and Exchange Act of 1934--Liability of Director for Profits on Stock Acquired Prior to Election as Corporate Official

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Damages--Quasi Contract--Exemplary Damages in Quasi Contract When Defendant is Guilty of Fraud

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Evidence--Other Crimes--Admissibility of Evidence …

Fifteen-Year Survey Of Corporate Developments, 1944-1959, Miguel A. De Capriles

Vanderbilt Law Review

The foregoing survey, it is believed, amply demonstrates the kaleidoscopic variety of the corporate developments of the past fifteen years, even though for obvious reasons much of the detail has had to be omitted. General conclusions are difficult to draw. It seems likely that the success of capitalist enterprise in this, period and the self-imposed improvement in standards of corporate. Fanchon & Marco, Inc. v. Paramount Pictures, 202 F.2d 731 (2d Cir. management have retarded the underlying trend toward expansion of the role of government in the regulation of economic affairs. There has been no occasion for new dramatic statutory …

State Taxation Of Corporate Income From A Multistate Business, Paul J. Hartman

Vanderbilt Law Review

There was a time when state and local taxes were perhaps only a minor factor in determining where a new business would locate and were probably not seriously considered in connection with most locational decisions. In recent years, however, because of the need for additional revenue on the part of state and local governments and the resulting increases in varieties and amounts of taxes, business must give more attention to the question of state and local taxes in deciding where to locate and operate. In this discussion of state taxation of corporate income from multi-state operations, we will include taxes …

The Tax Treatment Of Collapsible Corporations, Boris I. Bittker

Vanderbilt Law Review

Introductory.-Section 331 (a) (1) of the Internal Revenue Code provides that a complete liquidation of a corporation is to be treated by the shareholder as a sale of his stock, which will ordinarily produce capital gain or loss, and section 334 (a) provides that the shareholders' basis for property acquired on the liquidation is its fair market value at the time of distribution. These rules, which are of long standing, led to the tax avoidance device known as the "collapsible corporation," which in its turn led,in 1950, to the enactment of what is now section 341. As will be seen, …

The Corporate Guaranty, Arthur M. Kreidmann

Vanderbilt Law Review

Corporate business, with increasing frequency, is conducted through subsidiary and affiliated corporations. Normally, one or two of the entities in a multi-corporate enterprise enjoy a highly rated credit standing. The remaining corporations, engaged in selling, marketing, maintenance, or other functional activities, are often under-capitalized and cannot alone develop their credit resources. Similarly, many businesses which fall without the pale of the parent-subsidiary-affiliate relationship are commercially interdependent and can operate only with the aid of a corporation whose credit position is strong. Material men and contractors, manufacturers and suppliers, sellers and customers typify such relationships connoting a business nexus.

Tax Considerations In Selecting A Form Of Foreign Business Organization, Walter W. Brudno

Vanderbilt Law Review

The provisions of the Internal Revenue Code which are of particular relevance to the planning of foreign operations are few in number and are generally deceptively simple in phraseology. The substantive provisions consist of those sections which specify rules for determining the source of income, for calculating the credit for foreign taxes paid in respect of foreign source income, and for allowance of concessional treatment accorded Western Hemisphere Trade Corporations, United States Possessions Corporations, and China Trade Act Corporations. Measures designed to prevent tax avoidance which are of particular relevance are those which relate to acquisition of corporate control for …

Conflict Of Laws In Labor Matters In The United States, Stuart Rothman

Vanderbilt Law Review

A sampling of the ways in which the subject of conflict of laws has been treated in the United States in labor matters will be undertaken. However, the term "labor matters" may be regarded as embracing a multitude of topics, and this presentation by no means purports to be encyclopedic. Indeed, questions concerning conflicts between laws of the federal and state governments have been purposely excluded, though admittedly they loom large in domestic law and jurisprudence. On the other hand, the subjects considered are deemed illustrative of the domestic approach to the problems involved.

Decedents' Estates, Trusts And Future Interests, Herman L. Trautman

Vanderbilt Law Review

The subject matter will be discussed under three headings: "Dece- dents' Estates," "Trusts," and "Future Interests." The section on Decedents' Estates will include developments concerning intestate succession, wills and those problems of fiduciary administration involved in the settlement of decedents' estates; the fiduciary administration problems involving trusts will also be discussed in that section. The developments of the year include court decisions, new legislation, and the work of the Section on Real Property, Probate and Trust Law of the Tennessee Bar Association on proposed legislation.

State And Local Taxation, Paul J. Hartman

Vanderbilt Law Review

That the field of state and local taxation is bedoming much more important, as well as increasingly active, is shown by a number of recent significant major developments that are of interest and concern to taxpayers and their counsel everywhere. Ten state tax cases are already on the United States Supreme Court docket for consideration during the Term commencing October 5, 1959.' During the past term at least a half dozen important state tax cases were decided by the Supreme Court, including the epochal Northwestern-Stockham decision, which threw much of the legal profession, as well as many taxpayers, into a …

Procedure And Evidence--1959 Tennessee Survey, Edmund M. Morgan

Vanderbilt Law Review

This survey of Procedure and Evidence is in most respects merely a horizontal digest of the cases which have been published between June 1, 1958, and June 1, 1959. Only a few decisions are of the character and importance that would call for comment in regular course in a law review like the Vanderbilt Law Review. Many of them are mere illustrations of inexcusable disregard by counsel of our applicable statutes and rules and previous decisions of our appellate courts interpreting them. Whether this sort of treatment of the subject is justifiable is open to serious question. The answer depends …

Constitutional Law--1959 Tennessee Survey, Elvin E. Overton

Vanderbilt Law Review

A smaller number of cases have been selected for inclusion in this year's survey. Seven cases are included, including one federal court decision dealing with a municipal ordinance. In addition, two specific acts of the General Assembly are noted although there has as yet been no opportunity for the courts to rule upon them.

Annual Survey Of Tennessee Law, Harold Seligman

Vanderbilt Law Review

The subject of administrative law in Tennessee remained generally static in the year in review. The supreme court held consistently to its line of decisions concerning review of administrative actions in the limited number of decided cases concerning the subject. The 1959 General Assembly of Tennessee made some sweeping revisions in the organization of several departments of government and various agencies and boards but these changes were solely for purposes of administrative efficiency and economy with no practical jurisdictional, regulatory or substantive effect.

The Uniform Statute Of Limitations On Foreign Claims Act, David H. Vernon

Vanderbilt Law Review

In July, 1957, the National Conference of Commissioners on Uniform State Laws approved a Uniform Statute of Limitations on Foreign Claims Act.1 Section 2, its only substantive provision, reads as follows: Section 2. [Periods of Limitation on Foreign Claims.] The period of limitation applicable to a claim accruing outside of this state shall be either that prescribed by the law of the place where the claim accrued or by the law of this state, whichever first bars the claim. As promulgated, the Conference proposal amounts to a limited borrowing statute calling for the application of the law of the place …

Business Associations--1959 Tennessee Survey, F. Hodge O'Neal

Vanderbilt Law Review

The Eighty-first General Assembly enacted a considerable number of significant statutes affecting business organizations or their activities. One of the new statutes made important changes in the Securities Law of 1955. Several of the statutes were designed, or at least professed to be designed, to encourage the commercial and industrial development of Tennessee. On the other hand, Tennessee courts handed down during the survey period only two or three opinions touching on business associations questions, and those questions were of but little importance. In general, this article discusses the statutes first, then the judicial decisions.

Contracts -- 1959 Tennessee Survey, Paul J. Hartman

Vanderbilt Law Review

The distinction between an implied contract (implied in fact) and a quasi contract (implied in law) was presented in a somewhat unusual fashion in the federal case of Holbert v. United States decided by the District Court for the Eastern District of Tennessee. Whether or not a federal district court had jurisdiction over plaintiff's case turned on whether the claim was based on implied contract or on quasi contract.

One of the grounds on which the Tucker Act confers jurisdiction on federal district courts to entertain actions against the United States is where the claim is based "upon any express …

Agency--1959 Tennessee Survey, Kenneth L. Roberts

Vanderbilt Law Review

Several decisions of the Tennessee and sixth federal circuit appellate courts during the survey period dealt with the nature and scope of duties owing by master to servant. A prefatory review of applicable common law principles should aid understanding of these cases.

Broadly categorized, the master's common law obligations to his servant are fivefold. (1) To afford a reasonably safe place to work. The servant must be protected from dangers known to the master or those which might have been discovered by the exercise of reasonable diligence. If the danger is known or patently obvious and appreciated by the servant, …

Labor Law And Workmen's Compensation--1959 Tennessee Survey, Paul H. Sanders, J. Gilmer Bowman, Jr.

Vanderbilt Law Review

What is the meaning of the term "actual cash value" in the standard fire policy? The middle section of the court of appeals, following a prior Tennessee case and the weight of authority, held that the phrase is synonomous with "market value" only where the goods are readily replaceable in a current market. Where there is no market, or where the market value is inadequate to properly indemnify the insured, "actual cash value" means the "'value to the owner' or the loss he suffers in being deprived of the goods." Since the goods involved in this case were personal effects, …

Restitution--1959 Tennessee Survey, William Wicker

Vanderbilt Law Review

A defrauded party to a contract may ask for the alternative right of cancellation of the contract and restitution of the consideration, rather than a right to damages for being led into the fraudulent transaction. This restitutionary remedy is the right of the defrauded party to be restored to the situation which he occupied prior to the fraudulent transaction.

In Bluff City Company v. Davis, seller falsely represented that an automobile was new, and buyer relied on that representation. Within a reasonable time after buyer learned that he had bought a used automobile, he offered to return it. It was …

Torts--1959 Tennessee Survey, Dix W. Noel

Vanderbilt Law Review

As usual, a considerable number of cases involving tort law were decided during the survey period. One of the decisions involves a point of first impression in this state, the matter of whether an unborn child comes within the scope of the wrongful death statute. A number of the decisions serve to clarify existing rules, or to carry these rules a step further in applying them to new situations. There were also some significant statutory developments, including the changes in the Railroad Precautions Act.

Insurance--1959 Tennessee Survey, William R. Andersen

Vanderbilt Law Review

What is the meaning of the term "actual cash value" in the standard fire policy? The middle section of the court of appeals, following a prior Tennessee case and the weight of authority, held that the phrase is synonomous with "market value" only where the goods are readily replaceable in a current market. Where there is no market, or where the market value is inadequate to properly indemnify the insured, "actual cash value" means the "'value to the owner' or the loss he suffers in being deprived of the goods." Since the goods involved in this case were personal effects, …