Digital Commons Network^™

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 …

Contracts - Fraud -Tests Of Materiality In Deceit And On Rescission For Fraud

Michigan Law Review

Current decisions abundantly show the usefulness and efficiency of remedies based on rescission in contracts induced by fraud, as compared with damage remedies. Modern improvements in the rescission remedies go far to explain their popularity. On the other hand, the tests for "materiality" of misrepresentations that are unavoidably connected with the action of deceit have restricted its utility. Both the advantages of rescission and the disadvantages of damage remedies appear most clearly in a period of rapidly fluctuating and uncertain values. These considerations seem to justify a comparative study of the tests of "materiality" evolved by recent decisions in actions …

Criminal Law And Procedure - Statutory Construction

Michigan Law Review

The rule of strict construction of criminal statutes is fortified and established by innumerable cases of both recent and early vintage. Chief Justice Marshall, in the leading American case of United States v. Wiltberger, said, "The rule that penal laws are to be construed strictly, is perhaps not much less old than construction itself."

Evidence - Admissibility Of Blood-Group Test

Michigan Law Review

The old axiom, "blood will tell," has been given a new lease on life by the work of biochemists and hereditists in the last thirty years. At the beginning of the twentieth century a scientist, Karl Landsteiner, working on the means to make blood transfusions safe, discovered that the New Testament saying, the Almighty "hath made of one blood all nations of men," is not true. He found that human blood is divided into four groups, characterized by the possession or non-possession of certain substances in the serum and the corpuscles of the blood. If one puts a little blood …

Contracts - Consideration - Agreement To Reduce Rent Reserved In Lease

Michigan Law Review

Plaintiff sued defendants, who were trustees of a business trust, to enforce personal liability upon them for accrued rent due under a lease. When the lessee company, which was losing money because of the depression, threatened to vacate the premises, the plaintiff acquiesced in the lessee's demand that the rent be reduced for the balance of the term. Plaintiff sought to recover the amount due under the lease, claiming that the agreement for reduction was without consideration and therefore a nullity. Held, that in view of plaintiff's knowledge of the lessee's financial condition, the latter's agreeing to remain in …

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 …

Negligence - Liability Of Manufacturer To Third Persons - Recovery For Property Damage

Michigan Law Review

Defendant sold a contractor a trial can of waterproofing materials recommended for the interior of silos. The contractor used this on the interior of a watertank being built in plaintiff's barn. While it was being applied the fumes from the preparation came in contact with a kerosene lamp used to light the interior of the tank, causing an explosion which burned the plaintiff's barn. The ingredients of the waterproofing material were highly inflammable and toxic, but the container bore no warning of these facts. Held, that recovery could be had for the damage to plaintiff's property, the evidence being …

Process In Actions Against Non-Residents Doing Business Within A State, Maurice S. Culp

Michigan Law Review

Many state legislatures have undertaken to subject non-resident persons or unincorporated groups, or both, to the power of their local courts in relation to business transacted within their limits. No less than forty States have at one time or another enacted statutes providing for substituted service of process in actions arising out of such transactions. Most of these statutes apply to non-residents generally; but in eighteen States statutes, now or formerly in force, have provided in express terms for substituted service on non-resident partnerships or unincorporated associations. Both types alike provide that service may be made upon an actual agent …

Book Notes

Michigan Law Review

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

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, …

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.

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?

Book Notes

Michigan Law Review

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

Taxation-Federal Estates Tax-Joint Tenancies And Tenancies By The Entirety

Michigan Law Review

H and W acquired title to realty in Illinois in 1909 as joint tenants. H died in 1923. Held, that one-half of the value of this property should be included in the valuation of H's gross estate for purposes of the federal estates tax, per sec. 402 (d) of the Revenue Act of 1921. Griswold v. Helvering, Comm'r of Int. Rev., (U. S. 1933) 54 Sup. Ct. 5, 78 L. ed. 14.

Landlord And Tenant - Liability Of A Mortgagee In Possession Of Mortgaged Leasehold For Rent

Michigan Law Review

On default of payments under a mortgage of a leasehold, the mortgagor and mortgagee agreed that the latter was to go into possession of the premises and manage them with a view to meeting the requirements of the mortgage. The mortgagor also executed a warranty deed of the premises to the mortgagee. On default of rent payments the landlord sued the mortgagee. Held, the defendant mortgagee was in possession merely as agent of the mortgagor and as such was not liable for the rent. Cleveland v. Detroit Trust Co., 264 Mich. 253, 249 N. W. 842 (1933).

Segregation Of Residences Of Negroes, Arthur T. Martin

Michigan Law Review

Most white people do not want Negroes for neighbors. For many years this race prejudice alone seemed adequate to secure the type of domiciliary segregation which the majority desired. In recent years, however, Negro incursions into so-called white territory have become more numerous, and white landowners have resorted to legal devices to secure race exclusiveness in residential sections. In considering the validity of these segregation devices the courts have not ordinarily purported to take into account the social desirability of the end sought. No examination has been made of the factors back of Negro migration into white territory. No thought …

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 - Power To Enact Federal Securities Act Of 1933

Michigan Law Review

The scope and implications of the Securities Act of 1933 have been set out in a recent issue of this Review. Broadly, the Act regulates the issue and sale of securities by requiring registration thereof with the Federal Trade Commission, by specifying certain data to be included in prospectuses relating to such securities, and by imposing sanctions in the form of penal and civil liabilities. The Act purports to be an exercise of the Congressional power "to regulate . . . commerce among the several states" and "to establish post offices and post roads." Various constitutional questions are involved but …

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 …

Minority Stockholders And The Amendment Of Corporate Charters, Edward O. Curran

Michigan Law Review

Professor Dodd has remarked that "few branches of corporation law are in a more confused and unsatisfactory state than that relating to the right of minority stockholders to prevent amendments to the corporate charter, to which they have not given their assent, from becoming operative." One of the reasons for this confusion is the fact that some of the cases which still serve as precedents were decided at a time when it was not the usual practice to reserve the power to alter, amend, or repeal corporate charters. The principles of these early cases have been carried over and applied …

Book Notes

Michigan Law Review

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

Criminal Law And Procedure - Repeal Of Statute - Eighteenth Amendment

Michigan Law Review

Defendants Chambers and Gibson were indicted on June 5, 1933, for conspiracy to violate the National Prohibition Act, and for possessing and transporting liquor in violation of the Act. Chambers pleaded guilty, and the case was continued to the December term. The case was called for trial as to Gibson on December 6, 1933. Chambers filed a plea in abatement, and Gibson demurred to the indictment. Held, the repeal of the Eighteenth Amendment, by the adoption of the Twenty-first, proclaimed December 5, 1933, barred further prosecution. United States v. Chambers and Gibson, (U.S. Sup. Ct. 1934) 1 U.S. …

The Securities Act Of 1933, Laylin K. James

Michigan Law Review

In 1907 a Pennsylvania superior court stated in one of its opinions that, "'there is no reason why a man should not be a fool.' As a corollary to that saying, it may be added that there is no reason why a court should protect a fool against the result of his folly. No new feature of rapacity in the buyer is apparent in this instance [ the purchase of property worth $ 5,000 prospectively for $ 500] to make him a worse offender against the law of fair dealing than an army of Shy locks who have preceded him. …

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 …

Bankruptcy - Proof Of Claim For Loss Of Future Rents

Michigan Law Review

A covenant in a lease provided:

" . . . that the filing of any petition in bankruptcy or insolvency by or against the Lessee shall be deemed to constitute a breach of this lease, and thereupon, ipso facto and without entry or other action by the Lessor, this lease shall become and be terminated; and, . . . the Lessor shall forthwith upon such termination be entitled to recover damages for such breach in an amount equal to the amount of the rent reserved in this lease for the residue of the term hereof less the fair rental value …

Bankruptcy - Proof Of Claims For Unaccrued Rent

Michigan Law Review

In the very recent case of Manhattan Properties, Inc. v. Irving Trust Co., the Supreme Court for the first time authoritatively passed on the validity of a claim in bankruptcy by a lessor against the bankrupt estate for loss of future rents due after the filing of the petition. The Court, affirming the decision of the Circuit Court of Appeals, ruled that the landlord's claim was not provable. Mr. Justice Roberts, delivering the opinion of the Court, reviewed the long history of litigation on the subject and was impressed by the fact that although the great majority of the …

Contracts - Offer And Acceptance -Termination Of Offer By Subsequent Higher Bid Of Another

Michigan Law Review

The receiver of an insolvent bank received from one Lorensen bids of $4,500 for the building and $500 for the fixtures of the bank, the bid for the fixtures being conditioned on acceptance of the bid for the building. He received a subsequent bid of $4,600 for the building alone, no mention being made of the fixtures. Lorensen's bid for the fixtures was made on separate paper and was considered as distinct from his bid for the building. The receiver called on Lorensen, notified him of the higher bid {indicating that it had been received without qualification) and tried to …

Corporations - Attacks On Salaries Paid To Corporate Executives

Michigan Law Review

In October, 1933, the former president and chairman of the governing board of one of the world's greatest banks appeared before the Senate Committee on Banking and Currency, in Washington. During the course of the testimony, it was revealed that through the years 1929-33 this executive had received from his bank upwards of $1,100,000 in salary, bonus, and extra compensation. For the two years immediately past, he had served as a director in fifty-nine other corporations, from one of which he had at one time received a salary of $40,000 a year for services as director only, and from another …

Banks And Banking - Reorganization Under Enabling Statutes Requiring Less Than Unanimous Agreement - Effect On Special Deposits

Michigan Law Review

The plaintiff issued drafts to the defendant bank under a special agreement that they were to cover certain checks already cashed or to be cashed. When a balance of such drafts stood at $2,000 in favor of the plaintiff, the defendant bank became insolvent. A North Dakota statute provided that if eighty per cent of the deposit creditors agreed to a plan of reorganization, and such plan was approved by the state bank examiner and the secretary of the guarantee fund commission, it was to be held binding on all other unsecured creditors. Eighty per cent of the depositors of …

Divorce - Alimony - Modification Of Decree - Impairment Of Obligation Of Contracts

Michigan Law Review

A decree of divorce, following the terms of a prior agreement between the parties, ordered the defendant husband to assign to the plaintiff an insurance policy and pay her $105 per month as long as she remained unmarried. Later, the court upon the defendant's petition reduced the monthly allowance to $90, finding that the defendant's earnings had been diminished and that his remarriage had precipitated new family obligations and debts. Upon appeal of both parties, held, that the court had the power to modify the decree to conform to the changed conditions of the parties, and this modification did …