Central Law Journal.

ST. LOUIS MO., MARCH 3, 1916.

THE OLD LAW, THE MISCHIEF AND THE REMEDY AS ENTERING INTO CONSTRUCTION OF UNIFORM STATE LAWS.

So greatly has it seemed to us that the purpose underlying the scheme of uniform state laws been hindered by our courts, that this Journal frequently has animadverted to such obstructions. Particularly have we complained of this in 77 Cent. L. J., 279, in an editorial by way of introduction to two articles in our issue of that date by Hon. Amasa M. Eaton under the titles: "The Attitude of the Bench and the Bar Toward the Uniform Negotiable Instruments Law" and "The Negotiable Instruments in the United States Courts-A Criticism of Methods of Construing Uniform Laws." 77 ibid. 282, 287. 77 ibid. 282, 287. articles were followed by another by Mr. Eaton under the title: "The Negotiable Instruments Law in the Courts of Louisiana-An Illustration as to What is Happening in Other States." 78 ibid. 130.

These

In 79 Ibid. 255, we had the good fortune to print a fourth article by Mr. Eaton under the title: "The Uniform Negotiable Instruments Law in the Courts of Missouri."

In 79 ibid. 370, our editor contributed an article under the title: "The Rule of Construction Back of Uniform Laws" and therein it was sought to emphasize the evil of state and lower Federal courts harking back to priror state construction of local decision, and common law rulings as well, which produced a conflict almost as serious. as before uniform statutes appeared. Among the greatest sinners in this respect were found to be the lower Federal courts, whom we had supposed would have been most earnest for uniformity for many reasons in those several articles pointed out. These courts have referred to the law Merchant as coming within their independent construction of general law, but they never took the Negotiable Instruments Law as

so expressive in this country as is the Law Merchant. There hardly has been a state in the union recognizing that law and we believe there is hardly a state that has not adopted the Uniform Negotiable Instruments Law.

In this "confusion worse confounded" we delight very greatly to notice what the United States Supreme Court has to say in regard to the Uniform Warehouse Receipts Act, in a unanimous opinion delivered by Justice Hughes in Commercial Nat. Bank v. Canal-Louisiana B. & T. Co., 36 Sup. Ct. 194, in which the Supreme Court of Louisiana is reversed.

Recurring a moment to 78 Cent. L. J. 130, discussion by Mr. Eaton of the Louisiana cases decided since the Negotiable Instruments Law was there adopted, we find its Supreme Court citing the law in some cases and ignoring its existence in other cases, causing our author to observe that: "The capricious way in which judges and lawyers sometimes treat the N. I. L. is remarkable."

The Commercial National Bank case supra, offers Justice Hughes an opportunity to justify Mr. Eaton's charge of "capriciousness" against the Louisiana court with respect to its construction of the Uniform Warehouse Receipts Act.

He said: "It is said that under the law of Louisiana, as it stood prior to the enactment of the Uniform Warehouse Receipts Act, the Commercial Bank would not have taken title as against the Canal-Louisiana Bank, and it is urged that the new statute is but a step in the development of the law, and that decisions under the former state statutes are safe guides to its construction. We do not find it necessary to review these decisions. It is apparent that if these uniform acts are construed in the several states adopting them according to local views upon analogous subjects, we shall miss the desired uniformity and we shall erect upon the foundation of uniform language separate legal structures as distinct as were the former varying laws. It was to prevent this result that the Uniform

Warehouse Receipts Act expressly provides: "This act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.' * * * There had been statutes in some of the states dealing with these documents, but there still remained diversity of legal rights under similar commercial transactions. We think, that the principle of the uniform act should have recognition to the exclusion of any inconsistent doctrine which may have previously obtained in any of the states enacting it."

If Justice Hughes does not here pointedly declare that no aid whatever is to be given by all prior decisions upon local statutes we fail entirely to comprehend him. It may be, that there is some source in which precedents may be found for construction of our uniform state laws, but certainly that source is not in any interpretation of former local law, these uniform laws not being steps in the development of of local law. If there is in our common law some aid to their construction, this is to be looked to, but a careful winnowing of state cases to separate the chaff of construction of local law should be observed.

NOTES OF IMPORTANT DECISIONS.

PUBLIC SERVICE COMMISSION-REVIEW BY COURT OF FINDINGS OF FACT.-By the Public Service Commission Act of Missouri it is provided, that the commission shall preserve all the maps, plats, letters, documents and evidence introduced at the trial of a case and upon its transfer to a Circuit Court for review, the court shall hear it "on the evidence and exhibits introduced before the commission," and the case "shall be tried and determined" by the court "as suits in equity." When it goes on appeal, the Supreme Court hears it upon the same record. The point was urged by the commission's counsel that its findings of fact are conclusive upon the court. Railroad v. Public Service Commission, 181 S. W. 61.

Missouri Supreme Court said in answer to this contention that: "Every court and jurist of the state understands how a cause in chan

cery is tried and determined. If not the entire, the full substance of the entire evidence must be brought to this court; and, while we will defer somewhat to the findings of fact made by the trial court, yet we are not arbitrarily bound thereby. The trial in this court is practically de novo, and after due consideration given to all evidence, this court will accept, modify or reject the findings of the circuit court and make such finding as the law and evidence may warrant. *** The same is true of the findings of the commission in this class of cases."

Thereupon the court goes into a very involved statement of facts, and pursues an argumentation in regard to them in which it disagrees with the findings of fact made by the commission and reverses its holding. It is not said at all that no substantial evidence was submitted to the commission, but the court merely fails to look at the effect of the facts as the commission did.

It seems to us that the court pursues an exceedingly literal method of construction of the statute. While a case is to be "tried and determined" by the court "as suits its equity," this does not mean, necessarily, that evidence or the lack of it shall be looked at in the same way. For example, suppose it were said in the body of the act that hearsay evidence, might be received. This would be respected, though in an ordinary trial in equity it would be disregarded.

It seems to us the court ought to have regarded the general purpose of the law as vesting in the commission, as a merely administrative body, the right to pronounce conclusions and have them respected as those of a tribunal of specially informed men. If you do not presuppose some such power granted, you get nowhere in the appointment of such a commission. It is supposed to build up rules like courts build up rules for their own government.

What seems to us was intended was, that, if a commission is shown to violate some rule of law, by appeal to the courts it may be kept in line, and the entire record sent to a court for its full understanding, as applied to the evidence, of the importance of any alleged infraction of statute or constitutional law. The court's ruling appears to us very like a sticking in the bark.

COMMON CARRIERS RECOVERY OF CONSIDERATION WHERE CONTRACT IS FORBIDDEN ENFORCEMENT. In Louisville & N. R. Co. v. Mottley, 219 U. S. 467, 34 L. R. A. (N. S.) 671, it was decided that a contract, whereby one was granted free trans

portation in interstate commerce. in consideration of settlement of a damage suit. came under subsequent regulation forbidding its being carried out. The vested right obtained by the contract was held to be upon notice that it might be affected by the regulatory power of commerce under the commerce clause to be exercised as already exercised.

In this case it was said: "Whether, without enforcing the contract in suit, the defendants in error may, by some form of proceeding against the railroad company, recover or restore the rights they had when the railroad collision occurred, is a question not before us, and we express no opinion upon it." The same court does pass an opinion on this question in the case of N. Y. C. & H. R. R. Co. v. Gray, 36 Sup. Ct. 176.

*

In this case defendant in error had a contract with a railroad to pay it so much cash and so much transportation to be used in travel on its line into another state, for a map to be made for the railroad by the defendant in error. It paid the cash and partly fulfilled the other part of its contract, when the Hepburn act was passed making transportation upon such a consideration unlawful. The railroad thereupon refused further performance. It was sued for recovery. in money for the value of the unperformed part of the contract. There was recovery and this is affirmed in an unanimous opinion. It was said: "In the present case the railroad company acted strictly in accordance with the law, when it refused any longer to furnish transportation to defendant in error in performance of the contract of November, 1900. But from this it by no means follows that it could refuse to make compensation in money for the unpaid purchase price of the map. The judgment of the state proceeded upon the ground that since the contract had been fully performed by Gray, so that the railroad company had received the entire benefit of it and since the delivery of the particular consideration stipulated for had been prohibited by the act of Congress, the became company thereupon bound upon general principles of justice to pay him an equivalent in money for the balance of the consideration. In so holding the court was simply administering the applicable principles of state law and did not run counter to the act of Congress."

ING OUT OF PROMISE TO APPLY INSURANCE ON LOSS TO DEBTS OF PROMISSOR.-In Implement Co. v. Mord en, 228 Fed. 111, decided by Fifth Circuit Court of Appeals, it was held, that, where a bankrupt whose stock in trade was destroyed by fire, wrote some and told others of his creditors before proceedings in voluntary bankruptcy were begun, that he would pay them out of his insurance as far as it would go, he thereby created an equitable lien on the fund superior to his claim of homestead in property in which the fund was invested.

The court in reaching this conclusion cites cases in which there were contests between creditors regarding claims by some of them, but it finds no case involving the precise point it was adjudicating. It starts out by stating matter in the way of an estoppel against the claimant and supposedly those who claim an interest under him.

end.

Thus it is said: "As matters stood when these statements were made, it was open to the creditors by attachment or garnishment proceedings to subject the policies of insurance or amounts payable on them, to liens in their favor. The debtor's voluntary undertaking to dedicate to the payment of his debts the collections to be made on these choses in action was calculated to induce his creditors to forego legal proceedings looking to the same What he did stands on a different footing from a mere promise by him to pay his debts unaccompanied by a reference to specified property and a manifestation of an intent to charge it. Under familiar principles, a court of equity gives to an agreement that certain property shall be appropriated to the payment of an indebtedness the effect of creating a charge upon that property."

Without discussing the question whether there is sufficient in the promise made to create an equitable lien in favor of one creditor over another, we yet greatly doubt whether the principle that would do this is broad enough to cut out the operation of homestead laws, giving to these the liberal construction approved by courts. Certainly no argument in the way of estoppel could operate, because the homestead is for the benefit of a debtor's fam ily. And even if his creditors were led to forego their remedies, had they have exercised them they would not have been able to avoid the debtor's right to a homestead. His promise

was to do something in the future. It is different to talk about dedicating what has come into one's possession and the mere fulfillment of a promise in the future to dedicate something.

JUDGMENT-FAITH

AND CREDIT FOR DECREE AFFECTING LAND IN ANOTHER STATE.-By the decision in Fall v. Eastin, 215 U. S. 1, 70 Cent. L. J. 1, it was settled by

majority view, that a decree in a divorce suit awarding interest in land in another state had no validity under the faith and credit clause of the constitution, nor is a deed made by a court commissioner by virtue thereof to be regarded as any evidence of title.

In that case it seemed to be conceded, that a court of equity has jurisdiction to render such a decree, but it must be enforced by compelling the party against whom it has been rendered to execute the proper conveyance, this to be by "proceedings in the nature of contempt, attachment or sequestration," there being jurisdiction of his person.

a

In Bodie v. Bates, 156 N. W. 8, decided by Nebraska Supreme Court, there was suit by a divorced wife for a judgment against former husband, basing her action upon the decree in Arkansas, he owning a large amount of real estate in Nebraska.

The action was sustained. The majority opinion discusses the question of the intent of the Arkansas chancellor to embrace the husband's holdings in Nebraska and the evidence was held to show he did not so intend. The dissent, representing views of three of seven members of the court, goes upon the theory that the Arkansas decree was binding on the wife, and protected by the faith and credit clause. Neither of those opinions refers to Fall v. Eastin, supra, but the seven judges appear to be in agreement that had the Arkansas decree intended to embrace the Nebraska land it would have been held binding.

The majority opinion might be good, however, on another theory which was discussed but not passed upon in Fall v. Eastin, because the form of action did not call for a ruling. This theory is, that the foreign decree would be valid to establish equities in favor of a plaintiff and the Nebraska action being for a money recovery, the equities could be considered. But as against this theory it might be urged that Arkansas statute gave to plaintiff a certain proportion in defendant's land and nothing else could be sued for. But as against this, again, it might be claimed, that to enforce this would be to give to a statute extraterritorial operation.

POWER OF THE GOVERNMENT OF THE UNITED STATES TO OWN AND OPERATE RAILROADS, ETC.

The excerpts from the opinions of United States judges given in the following pages clearly show that there is no constitutional objection to government ownership of railways that lead from one state to another. There might possibly be some objection if the railroad was located entirely within state lines, but even this is doubtful, if the road was used as a mail line, or carried interstate articles of commerce.

The National Bank case1 clearly establishes the right of Congress to create a corporation, a right which although invoked early after the adoption of the constitution, remained questioned until this decision. This opinion is also important in showing the liberal construction that is to be given to the constitution as to the implied powers existing. If Congress could create a corporation with powers to do certain things, the conclusion is irresistible that it could pass laws for the government itself to do the same things.

2

Under the power to regulate commerce it has authorized the construction of railroads, highways," bridges, etc. That, if necessary, it could condemn them seems to be upheld under the power of eminent domain, as illustrated in the matter of postoffice sites, highways, forts, lighthouses, roads, etc., and memorial cemeteries." The latter is certainly a very liberal construction of the implied powers existing in Congress. While the State might pass laws affecting railroads, under the police power of the State, yet if such laws in any way placed an unreasonable restriction upon the use of the railroad, they would be held invalid, and the laws of

1. May Create Corporation.-a. General Discussion of Implied Powers. The Government of the United States then, though limited in its powers, is supreme, and its laws, when made in pursuance of the constitution, form the supreme law of the land.

Among the enumerated powers, we do not find that of establishing a bank or a corporation. But there is no phrase in the instrument which, like the article of confederation, excludes incidental and implied powers, and which requires that everything granted shall be expressly and minutely described. A constitution to contain an accurate detail of all the subdivisions of

which its great powers will admit, and of all the means by which they may be carried into execution would partake of the prolixity of a legal code and could scarcely be embraced by the human mind. Although among the enumerated powers of government we do not find the word Bank or Incorporation, we find the great powers to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies.

The sword and the purse, all the external relations, and no inconsiderable portion of the industry of the nation are entrusted to its government. It can never be pretended that these vast powers draw after them others of inferior importance merely be

cause they are inferior. Such an idea can never be advanced. But it may, with great reason, be contended that a government, intrusted with such ample powers, on the due execution of which the happiness and prosperity of a nation depends, must also be intrusted with ample means for its execution.

The exigencies of the nation may require that treasure raised in the North should be transported to the South; that raised in the East conveyed to the West, or that this order should be reversed.**

The government which has a right to do an act, and has imposed on it the duty of performing that act, must, according to the dictates of reason, be allowed to select the means; and those who contend that it may not select any appropriate means, that one particular mode of affecting the object is excepted, take upon themselves the burden of establishing that exception.*** The several powers of Congress may exist, in a very imperfect state, to be sure, but they may exist and be carried into execution, although no punishment should be inflicted. in cases where no punishment is not expressly given. Take for example, "the power to establish post offices and post roads." This power is exercised by the single act of making the establishment. But from this has been inferred the power and duty of carrying mail along the post road. from one post office to another. And from this implied power, has again been inferred the right to punish those who steal letters from the post office, or rob the mail.

We admit, as all must admit, that the powers of the government are limited and that its limits are not to be transcended. But we think the sound construction of the constitution must allow to the national legislature that discretion with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it, in a manner most beneficial to the people.