Digital Commons Network^™

Revenue Financing Of Public Enterprises, E. H. Foley Jr.

Michigan Law Review

Courts have been slow to take judicial notice of the growing needs of local communities. Legislatures have restrained municipal corporations from engaging in business enterprises upon the assumption that the object was mere hope of gain, that the investment of municipal funds in such enterprises was simply a speculation, or that the effect was to divert municipal corporations from their legitimate ends and to poach upon the preserves of private enterprise. Novel municipal undertakings have been feared as an entering wedge of state socialism or governmental paternalism. Even when the instrumentality of private adventure was disposed to leave a need …

Constitutional Law-Termination Of Treaties

Michigan Law Review

The treaty power clause in the Constitution is more difficult to supplement by construction than most parts of that document because the mechanism set up was an innovation--a compromise between the tradition of executive treaty-making and the Colonial feeling that powers of government should be given to representative assemblies. There was no recognized institution to serve as a guide for interpretation as, for example, in the case of the jury trial clause. Furthermore, the dual nature of a treaty-it is a compact with the foreign power and also part of the municipal law-is a fruitful source of confusion. So it …

Corporations - Statutes Declaring Watered Stock Void - Effect Upon The Stockholder's Liability To Creditors

Michigan Law Review

Prior to the present era of "blue sky" laws providing for the careful scrutiny by the state of the issuance of stock, the evil of watered stock was sought to be curbed by constitutional and statutory provisions of a prohibitory and often penal nature. These statutes and constitutional provisions very generally take one of two forms.

The Colorado and the Arizona provisions are typical. In practical effect the two types of provisions are indistinguishable. The phrase "bona fide subscribers" in the Arizona form is construed to mean one who actually turns something of value over to the corporation in lieu …

Municipal Corporations - Effect Upon Collection Of Tort Judgments Of Constitutional And Statutory Limitations On Indebtedness And Taxing Powers, Michigan Law Review

Michigan Law Review

In an effort to protect the taxpayer from the extravagance of municipal officials, two types of restrictions, in the main, have been imposed: those limiting the power to contract debts, and those restricting the power to levy taxes. Frequently in an effort to recover and collect a judgment against the city, one or the other of these restrictions is met. Courts seem to hold unanimously that debt limitations apply to the city's obligations in contract and not in tort, but they are divided as to the effect of tax limitations upon collection of a tort judgment. As an example of …

Conflict Of Laws -Enforceability Of Tax Judgment In Courts Of A Sister State - Full Faith And Credit

Michigan Law Review

A court of competent jurisdiction in Wisconsin gave the plaintiff a judgment against the defendants an Illinois corporation, for truces levied by Wisconsin upon income earned in that state. A federal district court in Illinois, relying on a theory that one state should not undertake to enforce the revenue laws of a sister state, dismissed an action on the judgment instituted by the plaintiff. The plaintiff appealed. Held, principles of comity and the "full faith and credit" clause of the Federal Constitution require that the action be entertained. Milwaukee County v. M. E. White Co., 296 U.S. 268, …

Interstate Commerce - Jurisdiction Of Interstate Commerce Commission - "Tacking" Of Intrastate Hauls

Michigan Law Review

The coal company shipped coal from its mines in Pennsylvania by means of its own private railway, river barges, and tugs to a point in Ohio where the coal was unloaded, washed, freed from impurities, and sorted into appropriate sizes. Thereafter it was delivered by the company to a common carrier in Ohio for transportation to points within the state to .fill orders often not received until after the coal left the mines. Held, the haul by the common carrier in Ohio is not subject to the jurisdiction of the Interstate Commerce Commission and is intrastate commerce which may …

Municipal Corporations - Liability To Riparian Owners For Pollution Of Stream

Michigan Law Review

A stream into which the plaintiff in error dumped its sewage flowed through the lands of defendant in error. Odors from the stream, deposits of foreign substances on the banks, and the pollution of the waters about the farm of the defendant in error constituted a nuisance. Held, the city is liable to one suffering from the nuisance, irrespective of whether it is exercising a governmental function in the installation of the sewer system. Oklahoma City v. Tyetenicz, 175 Okla. 228, 52 P. (2d) 849 (1935).

Public Utilities - Judicial Review Of The Rate Base

Michigan Law Review

The Secretary of Agriculture made an order fixing the rates chargeable by the appellant, the rate base being determined by the cost of reproduction new less depreciation. The district court held that, since by congressional act the findings of fact of the Secretary were made conclusive, the court could not make an independent determination of the value but was bound to take the Secretary's valuation if there was substantial evidence to support it. However, the court then went on to review the evidence before the Secretary and concluded that the appellant had failed to show that the valuation was "clearly …

Taxation Of Undistributed Corporate Profits, John B. Martin Jr.

Michigan Law Review

The legislation proposed by President Roosevelt in his message of March 3, 1936, to prevent automatic avoidance of taxation by non-distribution of corporate profits, does not represent a new and previously unheard of system of taxation. It embraces, on the contrary, the gist of proposals made by various individuals and organizations extending back as far as the year 1864 when Congress passed, a Revenue Act providing that "gains and profits of all companies, whether incorporated or partnership . . . shall be included in estimating the annual gains, profits, or income of any person entitled to the same, whether divided …

The Fiction Of Peaceful Picketing, Frank E. Cooper

Michigan Law Review

Efforts of labor organizations during the past decade to secure the enactment of legislation guaranteeing strikers the privilege of peaceably picketing their employers' places of business, appear to have gained for union members no more than a Pyrrhic victory. Although at least nineteen states now have statutes intended to prohibit judicial interference with peaceful picketing, a review of recent cases in this ever timely field indicates that in general such laws have been construed to limit the privileges of pickets to activities so pusillanimous as to be of little aid to the strikers and of little annoyance to employers. In …

Contracts-Agreements For Leasing Departments In Retail Stores

Michigan Law Review

An important merchandising device, largely developed within the last fifteen years, is the "leasing" of certain departments by proprietors of retail stores to outsiders who agree to operate them as integral units of the owner's business. It has been estimated that more than sixty per cent of department stores and more than forty-eight per cent of specialty stores had leased departments in 1930, with the average number of such departments per store in each class at 4.6 and 2.5 respectively.

Eminent Domain - Slum Clearance And Low-Cost Housing Program As Public Use

Michigan Law Review

A New York statute set up a public corporation with power to investigate and study housing conditions in the city, and to plan and carry out projects for the clearance of slums and the providing of housing accommodations for persons of low income. The corporation sought to condemn certain property owned by the defendant, who resisted the proceeding on the ground that the taking was not for a public use and therefore violative of the Fourteenth Amendment and a similar provision in the state constitution. Held, that the taking was for a public benefit and that therefore the constitutional …

Book Notes, Michigan Law Review

Michigan Law Review

This department undertakes to list and, when possible, describe briefly current books on law and matters closely related thereto.

Constitutional Law-Police Power -Validity Of Compulsory Unemployment Insurance Act

Michigan Law Review

Complainants asked for a declaratory judgment that the New York Unemployment Insurance Act is unconstitutional. They contended that the law, providing for the payment of limited unemployment benefits out of a fund raised by a uniform payroll tax imposed on all employers, takes property without due process of law. Held, that the law is valid, violating neither the state nor the Federal Constitution. W. H. H. Chamberlain, Inc. v. Andrews, 271 N. Y. 1, 2 N. E. (2d) 22 (1936).

Uniform Corporation Laws Through Interstate Compacts And Federal Legislation, Robert S. Stevens

Michigan Law Review

It is the purpose of the present article to suggest that another means of accomplishing the end exists in the possibility of an interstate compact for uniform corporate legislation, coupled with supplementary federal legislation appropriate to make the interstate compact effective.

Trusts - Restraints On Alienation - Ability Of A Divorced Wife To Reach The Corpus Of A Spendthrift Trust For Alimony Claim

Michigan Law Review

Testator placed the residue of his estate in trust, and, after making provision as to one-third of the principal and income for his widow, left the remaining two-thirds to his children, or their children by right of representation, the net annual income to be paid to them in convenient installments for twenty years after his death, the principal share of each to be transferred in four as nearly equal installments as possible at five-year intervals. By a codicil, executed after plaintiff, the wife of one of testator's sons, had announced her intention of securing a divorce, it was provided that …

Wills - Election To Take A Bequest Or Devise

Michigan Law Review

The testator made a bequest of $2,000 to the First Lutheran Church. This bequest was to be paid by the testator's sons, who were made residuary legatees on condition that they pay the $2,000. The sons asserted a constitutional provision that no man shall be compelled to erect, support or maintain any religious order against his consent as a defense to any payment required of them. Held, the bequest was valid on the theory that there was no compulsion to pay as the sons could elect not to take under the will. However, if the sons did take, they …

Book Notes, Michigan Law Review

Michigan Law Review

This department undertakes to list and, when possible, describe briefly current books on law and matters closely related thereto.

Front Matter, Michigan Law Review

Michigan Law Review

Front Matter for Volume 34, Issue 8 of Michigan Law Review

Horace La Fayette Wilgus, Michigan Law Review

Michigan Law Review

This is an abstract from a memoriam for Horace La Fayette Wilgus to appear in the University of Michigan Council and Senate Records.

Practical Results Of Federal Equity Rule 75 (B) As To Restatement Of Testimony In Narrative Form, Marion L. Severn

Michigan Law Review

During the twenty-four years since the adoption of the narrative form for records on appeal in the federal courts under Equity Rule 75 (b), there have been some printed comments and criticisms of the rule as well as informal and unrecorded discussion by the bench and bar. The more recent comments on the working out of the rule vary little from the prophecies made soon after its adoption. There is not much of value that can be added to the theoretical discussions of the rule either by its proponents or its opponents. But there remain certain highly important practical questions: …

Trusts-Restated And Rewritten, Harry W. Vanneman

Michigan Law Review

Two books were published during the past year which are of the greatest importance to those of the legal profession who are interested in the law of trusts. Professor Bogert's seven volumes appeared first, followed shortly by The Restatement of the Law of Trusts by the American Law Institute, of which Professor Scott, of the Harvard Law School, was the reporter. Professor Bogert, of the University of Chicago Law School, was a member of the Institute's Committee on Trusts. Since 1927, therefore, when the Institute began work on the Restatement of Trusts, Professor Bogert apparently has been working …

State "Blue-Sky" Laws And The Federal Securities Acts, Russell A. Smith

Michigan Law Review

With the current revival of business has come increased activity in the securities markets. Corporations are taking advantage of low money rates to refund outstanding issues and, to some extent, to obtain new money for corporate purposes. If the upturn in business proves to be substantial, rather than merely a temporary, government-induced short-time swing, the issuance of securities for the purpose of financing capital improvements will doubtless accelerate. Questions arising under the various laws, federal and state, for the regulation of the sale of securities will become increasingly important. Persons interested in the issuance and disposal of securities desire, of …

Constitutional Law - Bituminous Coal Conservation Act Of 1935 - Congressional Power Under The Commerce Clause To Regulate Labor Conditions In Local Industry And Fix The Price Of Sales In Interstate Commerce

Michigan Law Review

By its sweeping decision invalidating the Bituminous Coal Conservation Act of 1935, the Supreme Court precluded any future use of the commerce clause by Congress as a basis for federal regulation of labor conditions in local industry, whether on the theory that production is interstate commerce or that labor conditions directly affect interstate commerce.

Constitutional Law - Minimum Wage Decision - Future Of Legislation By States

Michigan Law Review

The shadow of a thirteen-year old decision which many had hoped was laid forever again fell upon the field of minimum wage legislation as the Supreme Court invalidated the New York minimum wage law for women. With this holding, which came as a surprise to many, the issue of the constitutionality of minimum wage legislation was again thrust into the limelight, and with the two great political parties wrestling with the problem of party programs, the decision may have political repercussions, of a force as yet incalculable. Before considering the future of minimum wage legislation, let us take a brief …

Corporations - Rights Of Creditors Of Insolvent Corporation - Greater Than Rights Of Corporation

Michigan Law Review

The dissenting and majority opinions of Justices Roberts and Cardozo in the recent case of McCandless v. Furlaud are illustrative of basically divergent conceptions of the status and function of the corporate receiver. In the following examination and evaluation of these conflicting positions, attention will be directed chiefly to those situations involving the problem of promoter's profits. The language and attitude of the courts, however, is typical of that adopted in all cases in which the questions considered arise and the conclusions suggested are of general application.

Reorganization Without Consent Of Creditors - Section 77b (B) (5)

Michigan Law Review

On May 15, 1936, the Circuit Court of Appeals for the Seventh Circuit denied a petition for leave to appeal from an order confirming a plan of reorganization under Section 77B of the Bankruptcy Act in the case of In re Garfield Arms Hotel Building Corporation. The property of the debtor, consisting of a furnished hotel building, was encumbered by a first mortgage bond issue of $254,500 with interest at six and one-half per cent in default since October 16, 1929. There was a second mortgage of $50,000 and accrued interest as well as approximately $22,000 in judgments against …

Taxation-Federal Estate Tax-Inclusion Of Proceeds Of Insurance Policies In The Gross Estate

Michigan Law Review

It was only natural that the framers of our revenue acts, always on the lookout for new sources of revenue, should have turned their attention to the proceeds of insurance policies when they were dealing with the subject of death duties. It was natural for two reasons: first, the purchase of an insurance policy is nearly always prompted by some vague contemplation of death, and the receipt of the proceeds from a policy is intimately connected with death, in view of the fact that death normally is the event that brings about the maturity of the policy; and second, if …

Constitutional Law - Interstate Commerce - State Occupation Tax On Operation Of Radio Broadcasting Station

Michigan Law Review

A domestic corporation, owning and operating two radio stations, both broadcasting well beyond the state's borders, sought to enjoin the enforcement of an annual occupation tax equal to one per cent of gross income from business within the state. It was admitted that while a state might impose a property tax on a business engaged only in interstate commerce or a tax solely to support regulation in the exercise of the state's police power, an unapportioned gross income tax on a business engaged in intrastate and interstate commerce would be an unconstitutional burden on interstate commerce, although a net income …

Constitutional Law-Religion In The Public School

Michigan Law Review

Plaintiff sued as a taxpayer to enjoin defendant from permitting the use of school buildings by organizations of pupils based on religious affiliations and from directing the reading of excerpts from the Bible in the public schools. Plaintiff contended that in so far as the Greater New York Charter impliedly authorized the use of the Bible for such purposes, it was unconstitutional. Held, the action of the school board was proper, and injunction denied. Lewis v. Board of Education of City of New York, (N. Y. Sup. Ct. 1935) 285 N. Y. S. 164.