Digital Commons Network^™

Corporations - Alteration Of Charter Under Reserved Power - Change In Remedy To Enforce Stockholders' Liability, Michigan Law Review

Michigan Law Review

The constitution of Maryland of I 867 provided that owners of bank stock should be liable for debts of the corporation to an extent equal to the value of the stock owned by them. The bank in which the defendants owned stock was organized under legislation of 1870 containing the provision, "this act and every part of it may be altered from time to time, or repealed by the legislature." The Maryland court held that, while the constitution provided no remedy, the right was conferred on each creditor in his individual capacity to be enforced by separate suits against those …

Constitutional Law - Religious Freedom - Compulsory Salute And Pledge Of Allegiance To Flag By School Children -Validity, Dan K. Cook

Michigan Law Review

A Massachusetts statute imposed a duty upon each public school teacher to lead his pupils, at least once each week, in a salute and pledge of allegiance to the flag. Petitioner was in his third year as a pupil in the public schools, and, in obedience to his father's commands, refused to participate in the salute and pledge. For such refusal, the school committee expelled the petitioner from the school, and he thereupon submitted a petition for a writ of mandamus, to compel his readmission to the school. Held, that the writ be denied, inasmuch as the statute did …

Constitutional Law - Zoning - Amendment Of Zoning Ordinance As Impairing Vested Rights, Ralph Winkler

Michigan Law Review

The town plan commission amended the municipal zoning ordinance to permit the erection of an incinerator in a class C residence district. The particular tract upon which the incinerator was to be located had been a municipal garbage dump, and as such, a non-conforming use under the zoning ordinance. The board of health by ordinance declared the garbage dump to be a nuisance. The facts revealed there was an immediate need to dispose of the garbage, etc.; that the erection of an incinerator was the best means of so doing; that the proposed site was a suitable location; that the …

Municipal Corporations - Constitutional Limitations On Amount Of Debts - Obligations Of Other Public Corporations As Debts Of City, Michigan Law Review

Michigan Law Review

The city of Troy, New York, had obtained federal aid for a Public Works Administration project involving the erection of a new high school building, conditioned upon the city's supplying $786,000 as its share of the cost. The constitutional debt limitation did not permit the city to borrow this amount. The legislature came to the aid of the city and enacted a law providing that the bonds should be issued as "general obligations" of the city school district by the district's board of education. The act expressly stated that the bonds should not be considered as part of the debt …

Torts - Prenatal Injuries To Infants, Frank B. Stone

Michigan Law Review

This was an action by the administrator under the survival act. Decedent's mother while a passenger on the defendant's street-car was injured through negligence of an employee. Decedent thus suffered prenatal injuries to his skull from which he died three months after birth. The birth occurred 22 days after the accident and after a normal period of gestation. Held, there is no liability to an infant for prenatal injuries and therefore no cause of action existed in the child or survives to the administrator. Newman v. City of Detroit, 281 Mich. 60, 274 N. W. 710 (1937).

The Effect Of The Contract Clause And The Fourteenth Amendment Upon The Power Of The States To Control Municipal Corporations, E. B. Schulz

Michigan Law Review

Although the power to establish systems of local government is reserved to the states under the Federal Constitution, they are obliged to exercise it in conformity with the limitations, direct or indirect, by which their powers in general are circumscribed. Since a state lacks authority to delegate powers which it does not possess, it may not confer upon municipal corporations, to cite but a few examples, the power to pass ex post facto laws and bills of attainder, to coin money, to emit bills of credit, to regulate foreign and interstate commerce, or to levy taxes for strictly private purposes. …

Interstate Commerce - Constitutionality Of Weight And Size Limitations Of Motor Carriers - Commerce Clause And Due Process Clause, Donald H. Larmee

Michigan Law Review

The District Court for the Eastern District of South Carolina had recently before it a well-presented case, Barnwell Bros. Inc. v. South Carolina State Highway Dept., involving the authority of the state to regulate the size and weight of motor vehicles operating on South Carolina's highways. The South Carolina statute in question limited the width of motor trucks (including semitrailers) to ninety inches, and their gross weight 4 to 20,000 pounds. The validity of this statute was challenged upon three distinct grounds: (1) that it was a denial of due process guaranteed by the Fourteenth Amendment; (2) that the …

Trusts - Tentative Trusts - Right Of Settlor To Set-Off Against Insolvent Bank, Ralph Winkler

Michigan Law Review

Plaintiff brought this bill in equity to compel the receiver of an insolvent bank to set off a deposit against the plaintiff's liability as an indorser on a note, the maker of which was unable to discharge the debt. The account was opened by the plaintiff as "trustee" for his minor son. He had exercised complete control over the account and had made numerous withdrawals for his own purposes. Held, set-off denied. The deposit created a tentative trust; and until revocation the son was the equitable owner thereof. Since the right of set-off is determined by the state of …

The Power To Carry On The Business Of A Decedent, Harry Adelman

Michigan Law Review

The continuation of a business for the sole purpose of making a profit is clearly beyond the scope of liquidating the estate of a decedent. It is rather a trust of the business, created for the benefit of the creditors of the decedent and persons entitled to share in the distribution of the estate. The business is managed as a normal going concern, on a somewhat permanent basis, rather than as a temporary means of preserving the value for an advantageous sale.

Champerty And Maintenance - Validity Of Contingent Fee - Contracts By Laymen To Prosecute And Collect Claims Against The Government, Charles R. Moon Jr.

Michigan Law Review

It has often been said by the American courts in recent years that the doctrine of champerty, due to changes in the law of assignment of choses in action and other changes of conditions from those prevailing in England at the time of the origin of the doctrine, is no longer applicable in all its stringency. That conditions have changed cannot be denied; however, neither can it be denied that champerty is a very live doctrine today. The real basis for the doctrine of champerty is that certain contracts are contrary to public policy. When we realize this, we see …

Evidence - The Use Of Corporate Minutes In Evidence, Francis T. Goheen

Michigan Law Review

In their treatment of the principles applicable to the use of corporate minutes in evidence, the courts and the text writers have, with little or no explanation, used the language of both the parol evidence rule and the best evidence rule. Most often the question is rather summarily dismissed, and the court's opinion generally discloses very little in the way of enlightening information regarding the reasons for the exclusion or the admission and effect of the offered minutes. If general propositions are to be formulated relative to the use of corporate minutes under given conditions, such propositions must be based …

Insurance - When Contracts For Contingent Performance Of Acts Other Than Payment Of Money Constitute Insurance, Charles W. Allen

Michigan Law Review

A recent case presents the many difficulties that confront the courts in determining whether a given contract is one of insurance. Plaintiff was a glazier. For a fixed payment he agreed with his customers that during a certain period he would repair and replace, if broken, their store-front glass. Penal proceedings were instituted against plaintiff for failure to comply with the insurance laws. He brought an action to enjoin prosecution of the proceedings. It was held that the contracts were not insurance contracts and that plaintiff was entitled to the injunction.

Bankruptcy - Corporate Reorganization - Effect Of Release Of Collateral Obligor On Dissenting Creditors, Edward D. Ransom

Michigan Law Review

The federal district court confirmed a plan of reorganization of debtor corporation, under section 77B of the Bankruptcy Act, which expressly released defendant from liability as guarantor of bonds of the corporation and provided for cancellation of the bonds and substitution of new certificates of stock. The plaintiff, a bondholder, made no objection when the plan was submitted to the court; objection by other bondholders was overruled. The plaintiff brought suit in municipal court on the defendant's guaranty. Defendant pleaded the confirmation of the plan by the district court as res adjudicata. The trial court denied the plea and entered …

Negligence - Contributory Negligence - Infant Plaintiff's Violation Of Statute, Wayne E. Babler

Michigan Law Review

A nine-year old boy, who ran out into the street without looking in both directions, and thus violated a statute, was injured by an automobile the driver of which was allegedly negligent. Held, it is not negligence as a matter of law for a nine-year old boy to step into the street without looking both ways, notwithstanding the penal statute. Michalsky v. Gaertner, 53 Ohio App. yr, 5 N. E. (2d) 181 (1937).

Damages - Insurance Contract - Right To Recover Present Worth Of Future Payments On Life Policy, James W. Mehaffy

Michigan Law Review

An insurance policy provided for the payment of 3 1/2 per cent interest on the amount due beneficiaries until they attained the age of 21, then payment of the entire amount. The policy also contained a double indemnity clause. The insured died under circumstances leaving it doubtful whether the double amount should be paid. Upon application by the guardian of the minor beneficiaries for payment of the double amount in the manner stipulated, the defendant company refused payment of more than the face value of the policy on the ground that the proofs of accidental death were not sufficient. Plaintiff …

Taxation - Jurisdiction To Tax Intangibles - Business Situs, William Stout Gordon

Michigan Law Review

The appellant, a Delaware corporation doing business in Minnesota, held the controlling interest in the stock of a large number of banks in numerous states. It transacted its corporate business and fiscal affairs in Minnesota and maintained a business office there. A property tax was imposed by Minnesota upon appellant's shares of stock in Montana and North Dakota state banking corporations. Appellant contended that, since Montana and North Dakota had imposed a property tax on the same shares, the Minnesota tax was contrary to the Fourteenth Amendment. The Court held that the shares of stock had acquired a "business situs" …

Trusts - Foreclosure Of Mortgage Held By Trustee - Disposition Of Proceeds Of Sale, Gerald M. Stevens

Michigan Law Review

Trustees foreclosed mortgages in which they had invested trust funds and which were in default. Sale of the land brought less than the principal and interest of the mortgages. Beneficiaries of the trust sued for an accounting to determine the respective rights of life tenant and remaindermen to the proceeds of the sale. Held, the net proceeds were to be apportioned between life tenant and remaindermen. To be treated as principal was a sum which, if invested at the rate of interest current for trust investments, would have produced during the period from default till final sale an income …

The Theory And Practice Of Pre-Trial Procedure, Edson R. Sunderland

Michigan Law Review

Pre-trial civil procedure under the English common-law system consisted only of pleading. Whatever the rules of pleading could accomplish in the way of defining and restricting issues contributed to the efficiency of the trial. What could not be done by the rules of pleading could not be done at all.

The great weakness of pleading as a means for developing and presenting issues of fact for trial lay in its total lack of any means for testing the factual basis for the pleader's allegations and denials. They might rest upon the soundest evidence, or they might rest upon nothing at …

Damage As Requisite To Rescission For Misrepresentation: Ii, Glenn A. Mccleary

Michigan Law Review

For the purpose of an analytical study of the decisions involving rescission for misrepresentation in which the damage problem has been considered, it seems convenient to classify the cases into three groups: (1) where the representee obtains the very thing that he expected to get, but it is worth less than he was led reasonably to expect under the representations made to him; (2) where the representee obtains something substantially different than he was led to expect; and (3) where the representee obtains the very thing that he expected and it is as valuable as he expected it to be, …

Conflict Of Laws - Guest Motorists -How Far Is The Lex Loci Delicti Controlling In The Forum?, M. M. Howard

Michigan Law Review

Before the advent of the "guest statutes," the decisions of all but a very few states recognized no degrees of negligence and measured the duty of the automobile host towards his non-paying guest by due care under all the circumstances-the "ordinary negligence" rule. In the few exceptional states, the decisions required the plaintiff to prove "gross," "wilful," or "wanton" negligence on the part of his host in order to maintain his action. And within the last decade nineteen states have adopted "guest statutes" which, with varying language, adopt the "gross negligence" rule. Since the rule of the lex loci delicti …

Eminent Domain - Public Housing And Slum Clearance As A "Public Use", Wayne E. Babler

Michigan Law Review

The recent legislation providing for housing and slum clearance raises the interesting and practical problem of whether a taking of land for such housing and slum clearance purposes by means of an eminent domain proceeding is condemnation for a "public use," within the meaning of that term in eminent domain proceedings. Such a taking was held to be for a public use in the recent case of Spahn v. Stewart.

Executors And Administrators -Abatement Of Legacies - Intention Of Testator As Determined From Nature Of Legacy And Surrounding Circumstances, Victor P. Kayser

Michigan Law Review

When testator's estate is insufficient to pay all bequests provided for in his will, they normally abate in a definite order. For example, specific and demonstrative legacies are payable in toto before general legacies, which in turn must be paid before residuary gifts of personalty. Specific devises are free from abatement to pay pecuniary bequests; the same has been said of residuary devises. If there are insufficient assets to satisfy any class in full, bequests therein abate pro rata.

But testator may vary the order of abatement, may provide for the prior payment of any bequest he chooses. The most …

Bills And Notes - Execution By Uauthorized Representative - Effect Of Knowledge By Payee, Erwin B. Ellmann

Michigan Law Review

Payee accepted defendant's promissory note, executed as guardian, and agreed not to hold him personally accountable. Though familiar with all material facts, the parties mutually mistook defendant's authority to bind the estate of his ward, and when such lack of authority was discovered, plaintiff sued on the instrument for personal judgment. Held, the maker is not liable, since Section 20 of the Negotiable Instruments Law will not be allowed to override the intention of the parties declared at the time of issuance of the instrument.Annis v. Pfeiffer, 278 Mich. 692, 271 N. W. 568 (1937).

Patents - Equity Pleading - Sufficiency Of "Short Form" Of Bill Of Complaint - Burden Of Proof Of Validity Of Patent Infringement Suit, Julian Caplan

Michigan Law Review

Complainant brought suit for infringement of letters patent and used the so-called "short form" of bill of complaint. Defendant moved to dismiss the bill for insufficient facts to constitute a cause of action, since there were no allegations of compliance with the statutory provisions for issuance of a patent. The District Court and the Circuit Court of Appeals for, the Eighth Circuit sustained the demurrer, but the Supreme Court held that under Equity Rule 25 the short form of bill of complaint contained all the ultimate facts necessary for complainant to state a cause of action. Mumm v. Jacob E. …

Public Utilities - Collections - Discontinuance Of Service, Charles E. Nadeau

Michigan Law Review

Defendant's rate schedule provided for a minimum charge of $1 per month for each month of the year. Plaintiff was connected to defendant's system in May. The first electric bill included four dollars as the minimum charge for the months from January to May, defendant claiming that the minimum charges ran from the first of the calendar year. Plaintiff paid for the other items but refused payment of the four dollars. Service was discontinued in July. The lower court decided that it did not have jurisdiction to give either an injunction or damages. Held, where an account is honestly …

Waters And Watercourses - Extent Of Riparian Land - Compensation On Condemnation, Gerald M. Stevens

Michigan Law Review

Plaintiff owned a ranch comprising over 45,000 acres and fronting for six miles on the North Platte river. One and a half miles of the river frontage were taken by eminent domain proceedings for a dam and reservoir. Plaintiff claimed the value of his whole ranch was reduced by the loss of water rights, by the destruction of sheltering trees and brush, by the creation of a potential hazard to cattle, and by the threat of floods from breaking dam or dikes. He recovered damages on that basis. Reversing the judgment, the court held, riparian rights attached only to …

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.

Libel - Right Of Privacy -Auction Sale Of Debts, Gerald M. Stevens

Michigan Law Review

A creditor put his claim into the hands of one Power, who held himself out as an advertiser of accounts for sale. Power threatened several times by letter to advertise the debtor's account for sale at auction unless it was paid immediately. No payment was made; and a "flaming orange handbill" was printed and circulated about the debtor's neighborhood. It offered for sale to the highest bidder the debtor's and twenty-three other accounts. It contained, further, the statement that all accounts were guaranteed correct and undisputed and a solicitation for merchants' accounts to be similarly disposed of. Thereupon the debtor …

Torts - Liability Of Power Company To Resident For Non-Performance Of Contract With City To Keep Street Light Burning, Paul R. Trigg

Michigan Law Review

Defendant public utility was under contract to a municipality to light the streets. Plaintiff, a local resident, was injured in an automobile collision which, he alleged, was caused by defendant's negligent failure to keep a certain street light burning. Defendant demurred. Held, that the demurrer was properly sustained. Tollison v. Georgia Power Co., 53 Ga. App. 795, 187 S. E. 181 (1936).

Trusts - Power Of Trustee To Invest By Savings Deposit, James W. Mehaffy

Michigan Law Review

The guardian of an incompetent veteran placed trust funds in his hands in the savings department of a trust company. The trust company was closed by order of the state bank commissioner on March 4, 1933, and failed to reopen. Held, the guardian is not chargeable with the loss, this being a proper investment of the funds. Hines v. Ayotte, (Me. 1937) 189 A. 835.