The only constitutional limitations upon the right to exclude would seem to be found in the commerce clause, in the right to issue letters patent, and in the omnibus clause, securing the power to enact all necessary laws to carry congressional power into execution. A corporation endowed with federal privileges or engaged in federal business cannot be controlled or regulated by state interference except in the exercise of local police regulations. But by culling expressions from a number of Supreme Court decisions, Mr. Ware has succeeded in enumerating ten limitations. Some of them, based on merest dicta, are rejected by the writer. Two, however, merit consideration. One is based on a decision declaring unlawful the arrest of an engineer of a railroad which failed to take out a permit which by its terms became void upon appeal by the corporation, in any litigation, to the federal courts." The generalization drawn, that the burden imposed on a corporation cannot involve the surrender of a right or privilege secured by the Constitution, leaves out of consideration a square holding, which still stands, that though an agreement not to sue in the federal courts is invalid, the state may make the breach of such agreement a ground for revocation of its license, thus giving the corporation the option of not seeking the federal courts or ceasing to do business in that state.1o The court expressly declared that it could not concern itself with the motive or reasonableness of a state's terms, since the corporation had no constitutional right to do business in the state. Nevertheless, another decision 11 declaring unconstitutional a state provision giving a preference to domestic creditors of an insolvent foreign corporation is deemed, in conjunction with another dictum, as, perhaps, committing the Supreme Court to the doctrine that a state cannot exclude a foreign corporation without good reason or just cause. The soundness of the particular decision is, in the light of the vigorous dissent, highly questionable. But certainly it does not warrant, as the writer himself seems to surmise, the conclusion he seeks to draw. On the whole, the narrow, well-defined limitations upon a state's power over foreign corporations can hardly be said to be extended by recent decisions, a result highly unlikely, whether desirable or not, in view of a want of constitutional justification of the impairment of state sovereignty.

By the

EFFECT OF APPOINTMENT OF RECEIVER ON STATE PRIORITY. common law, the crown was a preferred creditor. Its right of priority, however, was not absolute. It could not be enforced against assets the title to which the debtor had transferred to another before the suing out of the writ of extent (by which the crown's right was enforced), unless, of course, such transfer could be set aside for fraud. Thus it was held that an assignment in trust for the equal benefit of all creditors destroyed the

8 Crutcher v. Kentucky, 141 U. S. 47; Stockton v. Baltimore & N. Y. R. Co., 32 Fed. Rep. 9.

9 Barron v. Burnside, 121 U. S. 186.

10 Doyle v. Continental Insurance Co., 94 U. S. 535. See Beale, Foreign Corp. § 122.

11 Blake v. McClung, 172 U. S. 239. See 12 HARV. L. Rev. 429.

1 King v. Cotton, Par. 112.

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preference. A lien, too, obtained by a third party was secure, but a mere change in custody was of no effect.

4

In this country there has developed a divergence of opinion among the state courts; some holding that the states, as successors to the sovereignty of the king, became invested with his right of priority; and others repudiating the whole doctrine as inconsistent with our altered political conditions. The courts which do adhere to the rule of state priority subject it to the English restriction that it is liable to be defeated pro tanto, by prior legal interests vested in third parties. Thus we find that the leading case on the subject in this country denies the state's claim to preference after an assignment in trust for creditors. And, recently, it has further been held by the supreme court of Maryland that the state's preference did not survive against a receiver in whom the statute vested title to the assets of an insolvent corporation. State v. Williams, 61 Atl. Rep. 297.

8

The result then of an action by the state claiming priority against a receiver, in any jurisdiction where the doctrine of state priority is accepted at all, must turn simply upon the question of receiver's title.

Under the old law, no title was vested in any receiver by the order appointing him, for the order issued from a court of equity which had jurisdiction in personam only and was therefore incapable of dealing immediately with the title to a res. To-day, however, as in the principal case, receivers, and particularly corporation receivers, are by statute invested with title to the debtor's assets from the moment of appointment.10 Certain text

11

writers might well leave one with an impression that courts of equity now assume to pass title, at least to a debtor's personalty, into the receiver without the assistance of any statute. It is true that some statutes have been held to pass title to personalty only, 12 and that some which do not refer expressly to either personalty or realty have been so broadly construed as to pass title to both by implication. 18 But it is believed that no case goes so far as to hold that a court of equity may, without legislative assistance, vest the receiver with title, save mediately by means of an assignment from the debtor. If, then, in a jurisdiction where the state's right to priority against the original debtor is recognized, the state attempts to obtain a preference against the receiver before an assignment, it must succeed in the absence of some affirmative enactment construed to pass title at the time of appointment.

EXTINGUISHMENT OF RIPARIAN RIGHTS. To prevent land from being encumbered, the courts generally have established differing rules for the revocation of parol licenses to do acts affecting land interests according

2 King v. Lee, 6 Price 369.

3 King (in aid of Braddock) v. Watson, 3 Price 6.

In re Henley & Co., 9 Ch. D. 469.

5 Robinson v. Bank of Darien, 18 Ga. 65, 96.

6 Freeholders of Middlesex Co. v. State Bank, 30 N. J. Eq. 311.

7 State of Maryland v. Bank of Maryland, 6 Gill & J. (Md.) 205.

8 Art. 23, § 382, Code of Public and General Laws of Maryland.

9 Keeney v. Home Insurance Co., 71 N. Y. 396.

10 Cf. Re Attorney-General v. Atlantic, etc., Co., 100 N. Y. 279.

11 Alderson on Receivers 211, note 4; Beach on Receivers, 2d ed. 202, note 4; 23 Am. & Eng. Encyc. of Law 1046.

12 Skinner v. Terhune, 45 N. J. Eq. 565.

18 American National Bank v. National, etc., Co., 70 Fed. Rep. 420.

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to the circumstances of the permission. If the parol license is to do an act on the licensor's land which will create an easement, it is revocable even though the licensee has acted to his detriment.1 When, however, the permission is to do an act on the licensee's land which will extinguish an already existing easement, the license if acted upon becomes irrevocable.2 The application of these rules to the disposition of water rights in a stream has been confused. An early English case, the result of which has been apparently followed in England and in some states in this country, held that a parol license to an upper riparian owner to divert water could not be revoked when acted upon. This decision was based on the theory that a riparian owner's rights depended upon actual use of the stream. The court regarded the parol license acted upon as in effect an acknowledgment that the owner no longer intended to use the stream, and so an abandonment of the right. This conception of riparian rights has since been abandoned. It has become established that the riparian owner has a natural right to the flow of the water as an incident to his property independent of use.

Another view by which Liggins v. Inge is explained is to regard this natural right as analogous to an easement, since it imposes a restraint on the upper owner's use of his land. Accordingly, a license to divert, though it causes a permanent damage to the licensor's land, is a license to extinguish an easement and hence irrevocable. Some of the text-writers apparently have taken this view. The objection to it is that, even if the hypothesis be granted, the conclusion does not follow, for it should be against the policy of the law to allow such an easement to be extinguished by parol license when the result is also to abridge a natural right. This very objection points to another solution: to regard this derogation of a natural right not as the extinction but rather as analogous to the creation of an easement. When the riparian owner acquires the land, he receives a collection of natural rights, among them the right to take the water from the stream. Depriving him of the right is creating an interest against his land which might well be classed as an easement, though it is not within the technical definition. Indeed, the definition is immaterial; whether it is called an easement or the extinction of a natural right incident to property, both expressions signify the same thing, the creation of an interest in land. Such an interest should be subject to the same formalities necessary to transfer any estate in land. Thus the California Supreme Court has recently considered the transfer by parol license of a similar right to waters in a stream to be within the Statute of Frauds. Churchill v. Russell, 82 Pac. Rep. 440.

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8

A parol license, then, to divert water from a stream should be revocable, like any other parol license to create an easement. When, however, as in

1 Fentiman v. Smith, 4 East 107. Lee v. McLeod, 12 Nev. 280, contra.

2 Morse v. Copeland, 2 Gray (Mass.) 302.

3 Liggins v. Inge, 7 Bing. 682.

4 See Davies v. Marshall, 10 C. B. (N. s.) 711.

5 Addison v. Hack, 2 Gill (Md.) 221.

Embrey v. Owen, 6 Exch. 369. See Goddard, Easements, 6th ed., 83.

7 See Gould, Waters, 1st ed., § 322; Angell, Watercourses, 7th ed., § 316.

8 See Gale, Easements, 1st ed., 2.

See Doyle v. San Diego Land and Town Co., 46 Fed. Rep. 709: Veghte v. Raritan Water Power Co., 19 N. J. Eq. 142 (reversed in 21 N. J. Eq. 463 on another ground). See also Farnham, Law of Waters, 1st ed., 2345.

10 See Pomeroy, Riparian Rights, 1st ed., § 15, for law peculiar to California and other western states.

this California case, there is an agreement founded upon a valid consideration, and partly performed so as to alter materially the position of the party performing, the case may be brought within the established equitable doctrine allowing specific performance of parol contracts.11

JURISDICTION IN AN ACTION FOR INFRINGEMENT OF FOREIGN PATENT. In the United States the courts will entertain suits for foreign torts, whether common law or statutory, unless the cause of action is repugnant to the public policy or morals of the home state; and the question of whether the lex fori would give a remedy for the same cause arising within the state, is considered only as evidence of whether morals or policy would be offended against by such action. The English rule as laid down in the case of The Halley, which must now be taken as settled law, is less liberal than the American, and denies that the courts have jurisdiction to entertain any suit for a tort committed abroad, unless the act would have been tortious by the principles of the English law. A late case in Victoria has denied the right to sue there for the infringement of a patent in New South Wales, one of the justices taking the ground that the combination of chemicals complained of, if it had been made in Victoria, would not have infringed any patent there existing. Potter v. Broken Hill Proprietary Co. (1905), Vict. L. Rep. 612.

We believe that the justice erred in his interpretation of the rule which he was applying, when he insisted that the criterion was whether the physical actions of the defendant would have been actionable if stripped of their context of local rights and obligations and transferred to the home state. The rational basis of the English rule is the feeling that the courts should not be required to hear suits for foreign causes of action which would have been deemed trivial or impolitic if they had arisen at home. But the infringement of a patent right would have been a tort if it had occurred in Victoria. And to argue that the physical acts of the defendant would not have been an actionable infringement of patent in Victoria because there was no patent there to infringe is as irrelevant as to argue that the blow of a defendant sued in England for an assault in France would not have been a tort in England because the person of the plaintiff would have been safe across the channel. This particular infringement could not have occurred in Victoria, but the essential fact is that if an infringement had occurred there, redress would have been given under Victorian law.

The broader interpretation suggested above, as opposed to the construction of the Victoria judge, makes the English rule more nearly consistent with that applied in similar cases in America, and with the general common law rule as to foreign contracts, which allows recovery unless the agreement sued on was against the morals or policy of the home state; and there is no consideration of principle or expediency offsetting the failure of justice which arises from allowing a tortfeasor to escape restitution by moving

11 Devonshire v. Eglin, 14 Beav. 530.

1 Herrick v. Minneapolis, etc., Ry. Co., 31 Minn. 11; Dennick v. Railroad Co., 13 U. S. II.

2 Cf. Leman v. Baltimore, etc., R. R Co., 128 Fed. Rep. 191.

The Halley, L. R. 2 P. C. 193; cf. Phillips v. Eyre, L. R. 6 Q. B. 1-28.
Columbia, etc., Ass'n v. Rice, 68 S. C. 236.

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across a boundary line. Unfortunately, by sheer weight of authority and sanction of time, the rule must still stand that there can be no recovery for trespass to foreign realty, though even here there is some dissent." Otherwise the one sensible and consistent principle to be applied to personal actions is that laid down by Dicey, that "any right which has been duly acquired under the law of any civilized country is recognized and in general enforced by English courts," unless "the enforcement of such right is inconsistent with the policy of English law." "

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RECENT CASES.

AGENCY TERMINATION OF AUTHORITY POWER COUPLED WITH AN INTEREST. The plaintiff's intestate delivered to her agent her savings bank book in the defendant bank, together with a power of attorney to deposit and draw money. After her death, but before the defendant learned of her death, the defendant made payments to the agent. There was no evidence of an intention on the part of the intestate to make a gift or pledge to the agent. Held, that the bank is liable for the amount paid over, as the power of the agent was not coupled with an interest and was therefore terminated by the death of the principal. Hoffman, Administrator, v. Union Dime Savings Institution, 109 N. Y. App. Div. 24. See NOTES, p. 287.

AGENCY UNDISCLOSED PRINCIPAL'S RIGHTS WITH RESPECT TO THIRD PERSONS OFFER TO CONTRACT ADOPTED BY UNDISCLOSED PRINCIPAL BEFORE ACCEPTANCE. - A, in his own name, made an offer to sell a certain crane to the defendant. The plaintiff then purchased the crane and authorized A to proceed with the transaction as his agent. The defendant afterwards accepted the offer. Held, that the plaintiff cannot sue the defendant on the contract. Mooney v. Williams, 5 N. S. W. 304.

When a simple contract is made by a person acting as agent for an undisclosed principal, that principal may, in certain cases, be sued and sue on the contract in his own name. Paterson v. Gandasequi, 15 East 62; Sims v. Bond, 5 B. & Ad. 389. The true basis of this anomalous doctrine seems to be that although the contracting party is really the agent, yet the relations existing de facto between the agent and his principal render it just that under certain circumstances the principal be allowed to sue and be sued as if he were the real contracting party. See Railton v. Hodgson, 4 Taunt. 576, 577 (note). Otherwise the recognized exceptions to an undisclosed principal's liability are wholly illogical. See STORY, AGENCY, 9th ed., § 449. But the agency must at the very latest exist when the contract is closed. Subsequent ratification will not suffice where the agent purports to act as principal. Keighly, etc., Co. v. Durant, [1901] A. C. 240. It seems, however, that this relationship need not be contemporaneous with the express offer. The offeree theoretically accepts that offer which he has reasonably been led to believe the offerer is making to him at the moment of his acceptance, the offer being regarded as continuing till this time. But at this moment when the theoretical offer is made and accepted, the offerer is agent. The principal may, therefore, have the right to sue. Practically, it is an undesirable formality to require the withdrawal of an offer merely to repeat it immediately in identical language after the offerer has become agent for the undisclosed principal.

5 British, etc., Co. 7. Companhia de Moçambique, [1893] A. C. 602; Allin v. Conn, etc., Co., 150 Mass. 560.

6 Little v. Chicago, etc., Ry., 65 Minn. 48.

7 Dicey, Conflict of Laws 22, 32.