A writer signing "L. M. G." in the Illinois Law Review takes up the subject of "Commercial Paper-Purchaser After Maturity-Equities of Third Persons," and discusses the ways by which paper may be negotiated, citing different court decisions. The writer

says:

"In Justice v. Stonecipher, 267 Ill. 448, the Supreme Court held that the fact that negotiable paper was negotiated after maturity, did not charge the party to whom it was negotiated with latent equities in favor of a former holder against the person negotiating the paper.

Certain negotiable promissory notes bearing the blank endorsement of the payee were left by the owner and holder thereof with an agent for safe-keeping and collection. The agent, after maturity, wrong. fully pledged these notes with a bank as collateral security for his own debt. The bank took, supposing the agent to be the owner and without notice of the rights or claims of the true owner. The Court held that the bank took paper free from the claims of the true owner notwithstanding the fact that it took after maturity.

"The question as to what rights the taker of negotiable paper after maturity acquires, is one of much difficulty, and one upon which the authorities are divergent. An easy solution would have been to say that negotiable paper lost its negotiability when it became over-due. If that view had been adopted, over-due negotiable paper would have stood in precisely the same situation with respect to transfer as ordinary choses in action. It would have been "assignable in equity," viz., the beneficial rights or interests of the transferror, but not the legal title to the paper, could have been transferred. The "assignee" would in general have acquired no other or greater rights than his "assignor" had, and equities available against the assignor would, generally speaking, have been good against the assignee, though he paid value and had no notice. The authorities, however, have repudiated this solution of the difficulty, and have held that over-due paper retains its character of negotiability after maturity, and that the legal title thereto can be passed or transferred in the same manner and to the same extent after maturity as before. 4 Am. Enc. Law, p. 246; 1 Daniel, Negotiable Instruments (6ed.), Sec. 724,

"But while the authorities are thus agreed that negotiable paper can be negotiated after maturity, they are likewise agreed that the rights acquired by one to whom negotiable paper is negotiated after maturity are or may be widely different from those of a person to whom such paper is negotiated before matur. ity. It is agreed that the taker after maturity, takes subject to all equities or defenses

as between the original parties, which would have been available against the party who negotiated the paper to such taker. 1 Daniel Negotiable Instruments, Sec. 725 a; 7 Cyc. 952; Morgan v. Bean, 100 Ill. App. 114.

"As to whether or not such taker also takes subject to the equities against such person so negotiating the over-due paper in favor of (a) former indorsers or holders (not original parties) and (b) third persons, strangers to the instrument, the authorities are not agreed. It has been said that the fact that negotiable paper is over-due and unpaid should be notice to a taker merely that the party ultimately liaable on the paper has or may have some defense; since otherwise he would normally have paid the paper at maturity, and taken it up. See 1 Daniel Negotiable Instruments (6 ed.), Sec. 725a; 2 Randolph Commercial Paper, Sec. 675; Lindsay v. Dutton, 217 Pa. St. 148; Hibernian Bank v. Everman, 52 Miss. 500; Duke v. Clark, 58 Miss. 466. But on the other hand, it has been said that over-due paper is, by the fact it is over-due, discredited generally; that negotiations thereof cannot be deemed in "due course, " and hence that the person to whom it is negotiated takes subject, not only to the defenses of original parties, but also subject to the equities of later parties to, or holders of the paper against the party negotiating the paper (1 Daniel Negotiable Instruments (6 ed.), Sec. 726b; Foley v Smith, 6 Wall. 402; Towner v. McClelland, 110 Ill. 542; Emerson v. Crocker, 5 N. H. 159; Henderson v. Case, 31 La. Ann. 215; Farrington v. Park Bank, 39 Barb. 645; Ford v. Phillips, 83 Mo. 523; Turner v. Hoyle, 95 Mo. 337; Wood v. McKean, 64 Iowa 16; Osburn v. McClel land, 43 Ohio St. 284; McKim v. King, 58 Md. 502), and to equities of third persons, strangers to the instrument, against the party negotiating it. Mohr v. Byrne, 139 Cal. 87-90; Hibernian Bank v. Everman, 52 Miss. 506; Crosby v. Tanner, 40 Iowa 136; In Re European Bank, L. R. 5 Ch. App. 358.

One

"It would seem that the situation with respect to equities of intermediate parties or holder, and that with respect to equities of strangers, is not, in all cases the same. indorsing regotiable paper has been said to be virtually drawing a bill of the same tenor and effect as the instrument indorsed. 1 Daniel Negotiable Instruments, Sec. 669. Where negotiable paper is indorsed over-due, the indorsement must be deemed analogous to the drawing of a bill payable on demand (since the period of maturity is already past at the time of indorsement). It has frequently been held that negotiable paper indorsed overdue is, with respect to such indorser, demand paper (7 Cyc. (3 ed.) 847; 2 Randolph Commercial Paper (6 ed), Sec. 672; 1 Daniel Negotiable Instruments, Sec. 611; Uniform Negotiable Instruments Law, Sec 7), and hence, not over

due until a reasonable time after the date of the indorsement. Where the equities or defenses in favor of an indorser of overdue pa per are involved, it would seem that the paper could not be deemed over-due until after the expiration of a reasonable time from the date of the indorsement, and if, in the meantime, the paper has been negotiated to one taking without notice of these defenses or equities and paying value, the latter would take the paper as not over-due with respect to such indorser, and hence, free from the defenses or equities in his favor. See Hill v. Shields, 81 N. Car. 250. These considerations would, however, scarcely be applicable in the case of equities in favor of third persons or of former parties or holders against such indorser. Assuming the correctness of the theory that over-due paper is discredited generally, there would seem to be no reason why such equities (against an indorser of over-due paper) should not be available against any subsequent taker even though he took for value and without notice. In Re European Bank, L. R. 5 Ch. App. 358. (It has been suggested that a purchaser of over-due paper should be charged with the undisclosed equities in favor of any and all parties whose names appear on the instrument since inquiry can be made of them. Zeiss

The

V. Potter, 105 Fed. R. 671-675). matter may be looked at from a somewhat different point of view. It would seem that the rights of those taking over-due negotiable paper cannot be less than the rights of assignees of ordinary choses in action. But in many jurisdictions an assignor under a written assignment of a chose in action is estopped to assert latent equities in his own favor as against remote assignees taking for value and without notice. McNeil v. Tenth National Bank, 46 N. Y. 325; McCarthy v. Crawford, 238 Ill. 38-46; Otis v. Gardner, 105 Ill. 436. In those jurisdictions an indorsement of overdue negotiable paper would clearly operate similarly to the written assignment of a chose in action, to estop the indorser from asserting, as against a subsequent taker, undisclosed equities or defenses in his own favor. Duke v. Clark, 58 Miss. 465-474.

"While the rights of the taker of over-due paper cannot be less than those of an assignee of a chose in action, it is held, in most jurisdictions, that in one important respect, at least, they are greater. It is generally held that the over-due taker takes subject only to equities inhering in the. paper itself-not to "collateral equities.' 1 Daniel Negotiable Instruments (6 ed.) Sec. 725. Set-offs are not in general deemed "inherent" equities, and hence an over-due taker does not take subject to them. Ibid. In fact, a statutory set-off is a mere procedural right, and not, properly speaking, a defense or equity at all. Being a creation of statute it is wholly controlled by the statute of its creation. In general these statutes permit a set-off only in favor of a defendant against his debtor when the latter is the real or nominal plaintiff (or would be

such, aside from procedural statutes) and do not apply where the plaintiff is not the debtor and sues in his own name and has the right to do so independently of procedural statutes.

"The court in the principal case distinguished two earlier cases, Hide and Leather Bank v. Alexander, 184 Ill. 416, and Merchants' Loan and Trust Co. v. Welter, 205 Ill. 647. In both of those cases, negotiable notes indorsed by the payees in blank were left, together with the trust deeds securing them, in the hands of one S. for renewal. 8. did not have the papers renewed, but wrongfully negotiated the notes when over-due to secure his own debt. It was held that the pledgees of the over-due notes took subject to the rights of the true owners, since the pledgees took the paper when over-due. The court in the principal case professes to distinguish these cases on the ground that S. was not vested with the legal title while the agent in the principal case was so vested. However, S. was, in any view, given by the owner apparent legal title, since the notes were left in his hands indorsed in blank by the payee. Whether the agent or depositary is given by the owner an actual legal title for a special purpose, or only possession with an apparent legal title for a special purpose. would seem immaterial when the rights of purchasers in good faith are concerned. is submitted that the two cases above referred to are indistinguishable from and contrary to the principal case. See also Towner v. McClelland, 110 Ill. 542, likewise in apparent conflict with the principal case.

It

NEW PENSION APPROPRIATION Numerous inquiries are coming to the office of the state board of pensions as to when the appropriation of $28,000 made by the special session of the legislature will become available. Chairman W. D. Matthews of the board, also commissioner of charities and corrections, has made the following statement:

"None of this money is available for this current year, which ends June 30, 1916. The $20,000 appropriated at the regular session, which will be available for next year, and the $28,000 appropriated by the special session, will give the board of pension commissioners a total of $48,000 for the fiscal year beginning next July 1, and increase the pension from $20 a year to $30 a year. Those who are now drawing pensions will get an increase of $2.50 a quarter, and there will be money enough to add 600 pensioners to the roll, but as Section 7 of the pension law requires the board to pay this out at the end of each quarter and the first quarter of the new current year will end September 30, 1916, there can be no increase allowed to those now on the roll, nor can any names be added to the pension roll until the board's meeting the first Monday in October, 1916.''

Jesse L. Deck of Decatur, Ill., writing to the Illinois Law Review of Springfield, Ill., gives a very pertinent discussion of the law which affords "immunity" to a person who "turn state's evidence" or give evidence may against someone else on pledge that he will go free. The writer indites his letter on "The Enlargement of the Immunity Statute of Illinois," and says:

"It should be the aim of every lawyer to advocate, and assist in the fair, impartial and effective administration of justice by our courts, and to this end he should lend his aid and influence toward the passage of such leg. islative measures as will cause the administration of the law to be most efficient. In view of the foregoing, every member of the legal profession should be constantly on the alert to discover needed reforms in our court procedure, and having discovered such to make the same known to the profession with the hope that such discussion may thereby be evoked as will cause the legislature to put the same in useable form in the shape of legislation.

"From some years of experience as a public prosecutor, the writer has found great necessity for the enlargement of the scope of the present "immunity statute of Illinois, so that the same may be made of general application in criminal cases.

"Under the present statute, whenever in any investigation before a grand jury, or the trial of any person charged with bribery or attempted bribery, it shall appear to the court that another person than the one charged is a material and 'necessary witness in the cause and that his testimony, if given, would tend to criminate himself, the court may cause an order to be entered of record that such witness be released from all liability to be prosecuted or punished on account of any matter about which he may be required to testify, and upon such order being entered, such witness shall be compelled to testify, and when he does, such order forever after constitutes a bar to any indictment, information or prosecution against him on account of such evidence so given by him.

"This was certainly a much needed statute in bribery cases at the time it was passed. Indeed, convictions could rarely ever be procured in such cases without this statute, for the reason that under our law both the briber and the recipient of the bribe are criminals, and bribery being a crime that is usually committed when only the two persons immediately involved are present, the evidence for an indictment and conviction could not otherwise be obtained, as both parties excepting for this statute, would be in a position to claim their constitutional privilege exempting them from giving evidence, with the result that no evidence could be obtained.

"It will be observed that in Illinois, immunity is limited to the cases above suggested. Why limit the provisions of this very salutary statute to bribery and attempted bribery cases only? There are many other forms of crime now difficult of proof which could be rendered comparatively easy to establish if this statute was of general application. To illustrate: In gaming cases it is usu. ally quite difficult, and in many cases impossible, to obtain convicting evidence, for the reason that, as a rule, all the persons present at the commission of the crime are parties to it. When these persons are called upon to testify against another to the transaction if they all claim their privileges, which they usually do, no evidence is forthcoming, with the result that all of the parties to the crime go free and unwhipped of justice. There is no good reason known to the writer, and it is his belief that none can be asserted, why the "immunity" statute should not be such that two or more persons to this kind of a transaction can be legally exempted from prosecution on account of testimony given in such cases, and then compelled to testify against the other persons implicated, as is now true in bribery cases. It is submitted that if this were possible a long step would be taken toward ridding many communities of our state of the gambling evil, which in many localities is a positive menace to the well-being of society, and in all where practiced in such to a greater or less extent.

"What has been said as to gaming, in this connection, is of equal cogency to many other forms of law violation, such as lynchings, riots, and other forms of infractions of the law that will readily suggest themselves.

"The theory of the proposed "immunity bath" is, that it is better to provide means of punishing some who are connected with violations of the law, than that all who are parties to the same may be permitted to go free, by reason of privilege, which precludes the obtaining of convicting evidence. Under our present system all that participants in crime have to do, often, to perpetuate themselves in the violation of the law is to agree among themselves that each will claim his privilege, if called upon to testify, and when this is done, the ends of justice are, in many cases, completely foiled and baffled as to all. The result is that in such cases the administration of the law is made an absolute farce. Certainly any means of the law's own undoing, inherent within itself, should be speedily removed from our methods of orderly procedure, and every possible means for the effective administration of our criminal law provided.

"The writer realizes that it may be said by some that the proposed reform would vest in the law enforcing agencies, of the state un

due power; but when it is considered that it can be so arranged that its exercise will be effective only when the discretion of the court is moved, by a proper showing, it would seem clear that there will be no danger to the liberties of our people in the expansion of our immunity statute in the particular mentioned.

"The writer submits that a long felt need will be accomplished when the statute mentioned is made by the legislature of general application to all forms of crime, and this article is contributed to the end that it may somehow aid in bringing about this muchneeded reform."

"WHAT IS A TREAT?''

Under the above caption the Virginia Law Register publishes an editorial discussing the different phases of what is meant by "treating" and calls attention to the fact that the legislature of that state will soon be called upon to legislate upon the control of the liquor traffic. The editor believes for the interest of his readers that "while we are upon the subject" in passing we may discuss some of the laws which have been enacted concerning the liquor traffic and the constructions placed upon them. The editorial follows:

"In England, in several portions of the Kingdom the civic authorities had issued what are called "orders," making it an offense for any person to "treat" a soldier. The City of Southhampton, acting under authority given by the law, formulated an order making it an offense for any person to treat a soldier at a public house within a radius of six miles from Bargate. Two soldiers soon thereafter went into a public house together and drank; one paid for his own drink, got change and handed it to his companion, who thereupon ordered a drink for himself and paid for it with the money so given him. The judge considered this was a treat, and while refusing to convict under the case at bar because it was the first which had come up under the new order, intimated that he would convict in any other case brought before him in which the order was violated. We suppose that in this case the bench was right, because the drink was really bought while the two men were together, and it would be a mere evasion to say that this was not actually standing treat. The London Law Journal, however, takes the contrary view and contends that the order was aimed at the mischievous practice in accordance with which A stands B, C, and D, drinks, with the intention that B will presently follow suit, then C and D. But we do not agree with our contemporary. The law was aimed-and wisely, we think-at preventing one man from furnishing another with a social glass, a practice which too often leads to two drinks, where one only would have been taken but for the treating habit, and the statute being criminal in its nature should be strictly construed. But the Journal raises several questions as to whether, if A goes into

the public house when B is drinking and asks B to lend him a sixpence to get a drink, this would be treating. We think clearly not. It is the social feature of the drinking together and paying for other men's drinks, at which the act is aimed.

One question not raised by our contemporary is this: Suppose two soldiers go into a public as our English brethren call the bars -and the landlord gives them two drinks on the house would this be treating? We think it would.

Then the question comes up-if Col. Jones and Captain Smith go to the house of Squire Thompson and the Squire sets up his bottle on them, would not this be treating, or would the court take into consideration that to "stand treat" refers almost exclusively to paying for another man's drink at a public bar?

Of course, when all the barrooms and hotels in Virginia cease to sell liquor, treating will be impossible and therefore no such law would probably be passed, but the question is one of some interest, if only from the amusing standpoint."'

REMARKABLE CRIMINAL RECORD

"The United States is the criminal nation of the world, "Warden J. H. Codding of the Kansas penitentiary said in a lecture before the Westminster forum, recently. "There are 100,000 murderers loose in this country today. More than 10,000 murders are committed annually, and the cost of crime aggregates $3,500,000 a day-just what the cost of conducting the Civil war was during the fiercest part of the struggle.

"In Germany 90 per cent of convictions follow crime, in England 50 per cent, but in the United States only 2 per cent.

Not

"Criminologists have found that our crim. inal element is practically native born. a great number of foreigners apply for admission to our penitentiaries. As a rule, convicts have been found to be city raised, and a country bred criminal is a rare specimen.

"We must cleanse the city, if we are to reduce the crime record. Congestion and liquor are great factors in leading the young city man astray and statistics show a greater per cent of youthful criminals with every year.

"In Kansas, in 1910, there were 162 persons in jail for every 100,000 population. Missouri had three and a half times that per cent, and Massachusetts, 'the wettest state,' eight times.

"The cigarette has been a great factor in the delinquency of boys. Once let the fingers become stained with the habit and no cure will redeem the boy."

Mr. Codding condemned the jury system as "no good." He advocated a system whereby three to five judges of the Criminal Court should sit in judgment on all cases.

TOO MANY JUDICIAL DISTRICTS

In its investigation of state departments and institutions, the efficiency and economy commission, created by the last Kansas legislature, will look into judicial affairs, says a dispatch from Topeka.

"That Kansas has too many judicial districts is admitted by everybody, even the district judges themselves. Several attempts have been made in recent years to redistrict the state for judicial purposes or to adopt a new method whereby the district judges can be assigned to work by the chief justice of the Supreme Court. But the trouble is these reforms have always been sprung when the legislature was in session and the judges would get busy and kill them. For some reason the average member of the legislature stands in mortal fear of his district judge.

"Last winter when the judicial reapportionment bill was pending, the judges turned the screws and the members of the house jumped around like a lot of school boys. They will do the same thing next winter, unless the commission gets busy and formulates some feasible plan of consolidating districts and puts it out early enough so that the people can get the legislators pledged to the program before election day. That's the only way the judicial system can be renovated.

"Ex-Senator John Myers of Jackson County, when he was in the senate, gathered up a vast fund of information as to the number of days each district judge in the state worked for the year previous. Some of them worked less than eighty days in the whole year. Others worked night and day for the entire time. Still the drones received as much salary from the state as the hard working judges. And when the bill came up for consideration the drones had ample time to come to Topeka and lobby against the bill, defeating it.

"Of the thirty districts, perhaps a half dozen could be wiped out without impairing the judicial system. Then the judges in some of the districts, where business is light, could be assigned to assist in the districts where the work was heavy. In that way the over-worked judges would be given relief and litigants in those districts would receive speedier justice. "The lawyers of the state would welcome such a change. They realize the injustice of the present system. But they cannot go out and make the fight for such a reform. They have to practice law before the judges. So it will be up to the laymen to make the fight and the economy and efficiency committee can start the ball by bringing in its recommendations early in regard to judicial reform."

TAXES RUN ENTIRE YEAR

Income taxes for 1915 were assessable for the entire year, according to an opinion from. the attorney general's office rendered State Auditor Howard. The income tax law, passed

at the 1915 session of the legislature, did not become effective until June 17, and as the tax covers the whole calendar year, the question was raised by some subject to the tax, that they should not be required to pay tax on incomes covering the entire year. Investigation by the attorney general's office revealed that similar questions in other states had been decided by the Supreme Courts of those states to the effect that tax was assessable for the entire year, no matter when the law went into effect. Construing the law as does the attorney general makes a difference of about $100,000 in favor of the state.

GAS ORDER ISSUED

All corporations or firms in the state furnishing gas for domestic use are required to at all times maintain an equipment that will furnish an adequate supply of gas for heating, cooking and general domestic use, in an order issued by the corporation commission. The order is the result of an investigation lasting over several months following complaints coming to the commission from many parts of the state concerning a shortage of gas.

The order becomes effective April 20, and each one of the companies involved is directed that it must comply with the provisions of the order. A strict accounting will be required and prosecution will follow quickly any company that is found evading the order.

OIL INSPECTION LAW ANNULLED The Kansas oil inspection law, which was similar to one in force in Oklahoma up to a year ago, has been declared unconstitutional by the Kansas Supreme Court. The fees exacted by the law were intended to only go to the extent of paying for the inspection, but considerably more than that amount was collected thereby, and the court decided that instead of being a police measure the law was a revenue measure and therefore unconstitutional.

In the decision of the court it was ordered that $123,789.04 which had been collected under protest in the operation of the law, should be returned to the companies paying it. The Standard Oil Company, it is said, paid $100,000 of the amount, and gets this much in return.

The court held that an inspection law which exacts fees sufficient to pay the costs of the inspection would be constitutional. A fee of

10 cents a barrel had been charged. The decision leaves Kansas without an oil inspection law. In 1913, shortly after the law was passed by the legislature, some of the smaller oil companies began protesting against paying the fee, but were unsuccessful in gaining any relief. Their contention was that the state could pass a law under which fees cov ering the cost of inspection only could be charged. They claimed that it could not be