Digital Commons Network^™

The Securities Exchange Act Of 1934, John E. Tracy, Alfred Brunson Macchesney

Michigan Law Review

The Congress has enacted and the President has just signed an act for the regulation of stock exchanges, to be known as the Securities Exchange Act of 1934. In order that we may understand the nature of the Act and the reasons for its enactment, it will be well first to consider briefly the organization and functions of stock exchanges, the evils that are claimed to have arisen from their existence, and some of the previous attempts which have been made to prevent the occurrence of such evils.

Effect Of Insolvency Proceedings On Creditor's Right To Interest, Fred T. Hanson

Michigan Law Review

Where the claims of all creditors are of the same class and. assets are insufficient to pay in full the amount due on all claims when insolvency proceedings are begun, the general rule is that interest thereafter accruing will not be included in computing dividends on claims. The reasons usually given for this rule are: (a) The delay in payment is not the act of the debtor but is an act of the law for the mutual benefit of all the creditors. (b) In the case of claims bearing different rates of interest, it would be inequitable to permit the …

The Varying Meaning And Legal Effect Of The Word "Void", Abraham J. Levin

Michigan Law Review

To interpret properly what has been said or written necessitates our going beyond the dictionary into the sphere of action and reality. In its narrowest sense the, meaning of a word is the single effect which is given to it in the specific case. Insofar as nature repeats itself are we able to build up concepts and symbols which function in substantially the same way in different cases. But the mind must always be ready to discard an accepted definition of a word symbol for the particular legal effect which the circumstances demand. The same word or symbol with the …

Amendments To The Securities Act Of 1933, Laylin K. James

Michigan Law Review

Title II of the Securities Exchange Act of 1934 amends the Securities Act of 1933. These amendments make substantial concessions to the persistent and continuous clamor against the Securities Act. They will help to allay some of the fears of corporate managements and merchant bankers. The changes affect the definition section, the exemptions, the prospectus, the civil liabilities, and administration provisions.

Actions-Declaratory Judgments-Jurisdiction To Grant

Michigan Law Review

A will was duly probated in the county court. By it the plaintiff and defendant were appointed guardians of the testator's minor children. The guardians did not get along together, and could not agree as to how the funds of their wards should be invested. Finally, proceedings were properly brought in the county court to have questions concerning the care of the funds settled. While such proceedings were pending, the plaintiff, evidently not content to have the difficulty settled in this manner, brought an equity suit in the district court against her co-guardian under the Declaratory Judgments Act, in which …

Bankruptcy-Debtor Proceedings-Power Of Court To Enjoin State Court Actions

Michigan Law Review

A debtor proceeding was initiated in a Florida federal court and an ancillary proceeding was begun in a New York federal court. The latter court enjoined petitioner, who had obtained a tort judgment against the debtor in a New York state court, which judgment had been affirmed by the Appellate Division, from arguing the case as appellee in the New York Court of Appeals and from continuing to prosecute an action commenced by him (petitioner) against the sureties on an appeal bond filed by the debtor pending the appeal to the Appellate Division. Shares of stock had been pledged by …

Banks And Banking--Holder Of Draft Paid For By Check On Issuing Bank As Preferred Claim Upon Drawer's Insolvency

Michigan Law Review

A depositor presented his own check to his bank and received in exchange a New York draft drawn by the bank payable to a third person. The drawer bank was closed and the draft was dishonored. The depositor redeemed the draft and sought to establish a preferred claim against the bank's assets. In Fulton v. Baker-Toledo Co. the court held that a trust existed in favor of the depositor, under an Ohio statute which declares that when a check drawn by a depositor is presented to his bank for "collection and payment," and such check is charged against the depositor's …

Equity - Admissibility Of Evidence Arising Pendente Lite

Michigan Law Review

In equitable actions "the right to judgment is not limited to the facts as they existed at the commencement of the action, but the relief administered is such as the nature of the case, and the facts as they exist at the close of the litigation, demand." While this quotation may express the general rule regarding the admissibility of evidence arising pendente lite, the difficulties in its application are numerous.

Banking Reform By Statute, Robert G. Rodkey

Michigan Law Review

The lamentable failure of our banking system to function satisfactorily in the performance of its duties to the public raises at the outset two kinds of questions. Is there something fundamentally unsound about the structure of our banking machinery or does the trouble reside merely in a lack of understanding on the part of bankers of the proper management of the detailed activities in which banks necessarily engage? Or may the unsatisfactory result be ascribed to a combination of these two alternatives? The position taken in this paper is that the structure of our banking system is inherently unsound and …

Federal Housing And Home Loan Legislation And Its Consequences, Ernest M. Fisher

Michigan Law Review

The laissez-faire policy characteristic of both federal and state policy prior to 1932 in connection with housing was first departed from in a provision in the "Emergency Relief and Construction Act of 1932," passed by the 72nd Congress just before adjournment in July. This provision authorized the Reconstruction Finance Corporation to "make loans to corporations, formed wholly for the purpose of providing housing for families of low incomes, or for reconstruction of slum areas, which are regulated by state or municipal law as to rents, charges, capital structure, rate of return, and areas and methods of operation, to aid in …

Criminal Law And Procedure-Larceny-Hunger And Want As Defense

Michigan Law Review

A large group of unemployed marched on a Red Cross commissary to request a larger ration of flour. After locating the chairman and being answered with a firm and final refusal, a large part of the group went into a private store and carried off groceries without paying for them. At the trial the appellants offered to prove conditions of poverty and want among the unemployed of that county on and prior to the date of the raid, for the purpose of showing a purpose and justification for the raid. Held, such evidence was correctly excluded. State v. Moe …

Constitutional Law - Due Process - Fishing Rights In The Public Waters Of Michigan

Michigan Law Review

The Ne-Bo-Shone Association, Inc., is an Ohio corporation which owns property on both banks of the Pine River for some distance. Following the decision of the Michigan Supreme Court in Collins V. Gerhardt that the stream is navigable and public, the complainant association was ordered to remove obstructions in the stream which hampered the free use of the stream by the public for fishing purposes. Thereupon complainant sought an in junction against certain public officials from taking action to remove these obstructions, claiming that it has the right to exclude the public from this portion of the Pine River, and …

Organized Labor And The Recovery Act, Emmett B. Mcnatt

Michigan Law Review

The enactment of the National Industrial Recovery Act last June inevitably has brought to the fore a number of questions which as yet remain unanswered, including those connected with the application and interpretation of Section 7(a) of the Recovery Act, the subject of this article. Under this section, hailed by labor as a "new Magna Charta," employees are apparently given two interrelated rights - the right to organize with no discrimination against them by employers as a result thereof, and the right to collective bargaining through representatives of their own choosing. Employers are prohibited from interfering with such rights through …

Constitutional Law-Price-Fixing - Changing Attitudes

Michigan Law Review

The urgent need for rebuilding and readjusting our economic system has forced the various governments to devise methods by which to achieve those ends. The legislative enactments resulting from the efforts to bring about a "recovery" are destined to be challenged on the due process ground. The public is keenly concerned not alone in the practicality of the methods selected, but in their constitutionality as well. The recent case of Nebbia v. People is not only of interest to the lawyer; it was accepted as "good copy" in leading lay publications. The Supreme Court affirmed the conviction of one Nebbia, …

Corporations - Right Of Minority Stockholders To Interfere In Corporate Management

Michigan Law Review

In determining the relationship between the majority and minority stockholders of a corporation, the courts are faced with the problem of striking a correct balance between the rights of the plaintiff stockholder, who alleges that he is being oppressed by the majority, and the rights of the majority, acting through the regular corporate machinery, who allege that the corporation is being harassed by a troublesome minority. It is necessary to protect the minority from the machinations of those in control; it is likewise necessary to protect the corporation, as controlled by the majority, from the blackmailer who holds a few …

Federal Practice - Decision Of Questions Preliminary To The Convening Of A Three-Judge Court

Michigan Law Review

Before the district judge can convene a three-judge court, two preliminary questions must be decided. First, is the case within the jurisdiction of the federal courts? Second, is the case one to which the three-judge statute applies?

Federal Practice- Declaratory Judgments

Michigan Law Review

Alabama, for the purpose of invoking original jurisdiction, applied to the Supreme Court of the United States for leave to file a complaint in equity against nineteen States to have statutes regulating and prohibiting the sale of goods manufactured by convict labor declared void because in violation of the commerce clause of the federal Constitution. Later, Alabama was allowed to submit an amendment eliminating fourteen States. Held, leave to file bill as amended denied. State of Alabama v. State of Arizona, et al., (U. S. 1934) 1 U. S. LAW WEEK (Feb. 6, 1934), index p. 468.

Torts-Duty To Cut Weeds Around Oil Warehouse-Injury Caused By Occurrence Other Than That For Which Duty Was Raised

Michigan Law Review

Plaintiff's house was located some 400 feet northeast of a wooden warehouse used by defendant for the storage of oils and grease. South and west of the warehouse lay a peet bog, and, between the bog and the defendant's ware. house and entirely on defendant's property was a 25-foot stretch of grass which defendant had neglected to cut down. A smouldering fire in the peet bog flared up under the influence of a strong wind, swept across the land of defendant, set fire to the warehouse and, eventually, crossed a full-width paved street and destroyed plaintiff's house. Held, though …

Sales - Implied Warranty Of Fitness - Restaurateur

Michigan Law Review

Defendant, proprietor of a hotel and dining room, served unwholesome food to the plaintiff who became ill as a result of its impurity. The plaintiff sued for the damages resulting from his illness, on the theory that there was an implied warranty that the food was fit for human consumption. Held, the serving of food for immediate consumption on the premises was not a "sale" within the Uniform Sales Act, and therefore there was no warranty attached under the terms of the Act, and there was no implied warranty of fitness of food so served at common law. Lynch …

The Evolution And Devolution Of Public Utility Law, Edwin C. Goddard

Michigan Law Review

As long ago as 1873, and very likely even earlier, courts were speaking of the public utility in the sense of the public convenience or advantage, a New Jersey court saying, "these prerogatives (of railway corporations) are grants from the government, and public utility is the consideration for them." This has been often quoted by other courts, notably by your Judge Atherton in the famous case of Scofield v. Railway in 1885. But the term "public utility'' as applied to plants or corporations rendering a public service is very new. It is not to be found in the 1904 edition …

Municipal Corporations - Power To License - Discretionary Power In Administrative Officers

Michigan Law Review

The City Council of Philadelphia enacted an ordinance requiring as many officers or firemen as the Director of Public Safety should deem necessary to be present at all athletic contests for profit, and further provided that the officers or firemen so stationed should be compensated at the rate of $5.50 per day by those persons requiring or demanding such service. The plaintiff brought this suit in equity to declare invalid and restrain the enforcement of the ordinance. The lower court held that the ordinance was invalid, but the supreme court reversed this decision and held that this was a valid …

Certain Evasive And Protective Devices Affecting Succession To Decedents' Estates, Alvin Evans

Michigan Law Review

In Anglo-American law for many generations the power of an owner of property to determine the disposal of his estate at death has met with but comparatively few limitations. The statute creating this power was motivated by the assumption that the interest of the owner, reaching even beyond death, is paramount to other social interests. This power is an important item in a capitalistic system. And even if he does not exercise his power, the decedent may rest assured that another statute will do for him approximately what he may be supposed to have desired.

Conflict Of Laws-Jurisdiction In Rem Of Documented Claims

Michigan Law Review

A court has jurisdiction in rem over any res of which it has physical control. But does physical control of a document carry with it the control of the chose in action which it represents? This involves an inquiry as to what extent the chose in action is embodied in the document, to what extent the certificate is itself the res or property. Answers to this question have varied with the type of document and even with the type of suit in which the problem has arisen.

Contracts - Liability Of The Assignee Of A Land Contract - Reformation By Extrinsic Evidence

Michigan Law Review

Defendant Campbell assigned a contract to purchase land from the plaintiff to the defendant bank, the evidence being undisputed that the assignment was additional security for an existing indebtedness of Campbell. A printed form containing a promise by the assignee to pay the purchase price was used. The name of the assignee was left blank in order that the name of a prospective purchaser could be filled in if an anticipated sale materialized. In an action to foreclose the land contract the vendor asked for a deficiency judgment against the defendant bank. Held, that the vendor was not entitled …

Searches And Seizures - Reasonableness Of Arrest - Use Of Evidence Secured Through Unreasonable Arrest- Statutory Changes

Michigan Law Review

Police officers patrolling Detroit streets in a radio-equipped police car stopped a taxicab in which defendants Stein and Massie were riding. From the statement of the court, the officers' attention was attracted to the cab "because it was 'driving pretty fast,' about 32 miles per hour." The police car pursued it for a block or more; as it drew abreast of the cab defendant Stein was seen to reach into his pocket as if to take something out and put it behind him. "There was something about the cab, probably aside from its speed, which suggested to officer Sullivan that …

Criminal Law And Procedure - "Public Enemy" Statutes - Constitutionality

Michigan Law Review

Defendants were convicted of the crime of being disorderly persons within the meaning of section 167, Michigan Public Acts, 1931, No. 328, which provided that "any person who engages in an illegal occupation or business . . . shall be deemed a disorderly person. Proof of recent reputation for engaging in an illegal occupation or business shall be prima fade evidence of being engaged in an illegal occupation or business." Police officers testified as to the reputation of the defendants for being bootleggers, stick-up men, robbers, and murderers. Held, that section 167 of the statute is unconstitutional and void …

Process In Actions Against Non-Resident Motorists, Maurice S. Culp

Michigan Law Review

Personal service on the defendant within the jurisdiction of a State is the conventional form of process in personal actions. But considerations of convenience and public need have resulted in recognizing an additional form of process in personal actions against nonresident motorists. Statutes in 35 States authorize the commencement of suit against the non-resident motorist by substituted service on a public official of the State where the cause of action arises; the official is made for this purpose the agent or attorney of the non-resident motorist.

It is proposed herein to discuss (1) the constitutional basis of such legislation, and …

State Taxation Of Interstate Motor Carriers, Paul G. Kauper

Michigan Law Review

Motor transportation for hire, as indicated earlier in the article, has become a business of large proportions and, like every other business, should be subject to the ordinary business taxes. More particularly, since it is a form of public transportation, it should be subject to the same kinds of taxes that are exacted from other businesses of the public utilities type.

Constitutional Law - Federal Control Over Crime - Scope Of Power To Regulate Crime Under The Commerce Clause

Michigan Law Review

The increase of criminal activities interstate in scope, and the growing dissatisfaction with state enforcement of local laws, have focused attention of late upon the power of Congress to regulate crime under the commerce clause of the Constitution. Outstanding among proposals for congressional legislation are the following: making interstate felonies federal offenses; punishing criminals who flee across state lines after committing a crime; and restricting the sale and transportation of firearms. Most, if not all, of this suggested legislation must rest on the commerce clause for its validity. We purpose here to discuss the nature and scope of this power, …

Federal Practice -Appeal And Error - Review Of Denial Of Motion For New Trial

Michigan Law Review

The federal appellate courts have, in a great many decisions, refused to review the denial of a motion for a new trial made in a lower federal court. The very recent case of Fairmount Glass Works v. Cub Fork Coal Co. once again presents the problem, and Justice Brandeis, writing the majority opinion, follows the prior holdings. In this very excellent opinion the learned Justice presents the reasons for the result generally reached, and enumerates some of the exceptions in a manner which should tend to clarify much of the doubt which has existed in this field of appellate jurisdiction.