decisions seem to insist on money's worth when property is taken in exchange. The statutes, they hold, point out two methods of payment, but only one standard of value, namely, the par value of the stock. Good faith is immaterial, if in fact there is a careless or reckless overassessment of property. Thus, when patents on inventions were assigned to corporations at a valuation considerably above the fair value of the property, or when the value was wholly speculative, the stockholders were held liable for the proportional deficiency on their stock. Bad faith, in the sense of actual intention to defraud, can seldom be alleged and less often proved, for most speculators are hopeful of the future. Overvaluation, resulting in watered stock, is generally practised when several plants are combined into a single concern. In a case, last year, before the Court of Chancery of New Jersey, promoters having secured options on, as they alleged, practically all straw-paper manufactories, sold the property to a corporation, formed for the purpose, at a valuation of more than twice the option prices. The defense was made that the alleged monopoly of business thus secured warranted belief in large profits, but the court declared that prospective profits, a mere expectancy, could not be capitalized and regarded as property under the statute. See v. Heppenheimer, 61 Atl. Rep. 843.

Apart from the difficulty of applying it, the "good-faith" rule seems to lose sight of the true purport of the statutes under which the creditors in these cases commonly seek to enforce their rights. These statutes are really declaratory of a public policy in the regulation of corporations, in favor of the public at large, and especially in favor of prospective creditors. Its capital being the basis of a corporation's credit, the state demands money or its equivalent to be paid by those to whom stock is issued, and gives creditors a direct right, after a corporation's assets are exhausted, to enforce such claim against stockholders who have failed to comply with this condition. The contention is made that inflation is a commonly recognized practice, and no reliance is in fact placed on the declared capital; but it is this very stock-jobbing, whereby inflated stocks are sought to be unloaded on the public, that the state seeks to discourage. Then it is urged, if men who transfer property for full-paid stock are liable to be called for further payment in time of insolvency, desirable consolidations of businesses will be discouraged. The possible evil is highly magnified. For in measuring what is property, a fair and reasonable test should be taken, such a standard as a business man investing his own funds would apply. Courts allow a wide margin for reasonable differences as to values. The good-will of an establishment is surely an item of property, in estimating which even the reasonable profits of the seller and the enhanced value that comes from peculiar factors, such as a monopoly of the trade, are important considerations. But to allow stocks to be given for contingent profits is to speculate at the public's risk. If courts generally would recognize the public policy behind these statutes, the question would reduce itself simply to one of fact in each case, whether, under all the circumstances of the transaction, the par value of the stock was a fair

Wetherbee v. Baker, 35 N. J. Eq. 501; Gates v. Tippecanoe Stove Co., 57 Oh. St. 60; Gamble v. Queens County Water Co., 123 N. Y. 91, 103 (semble). 8 See State Trust Co. v. Turner, 111 Ia. 664.

See Elyton Land Co. v. Birmingham, etc., Co., 91 Ala. 407; Gamble v. Queens County Water Co., supra.

and reasonable price for the property. The objection as to a possible disinclination to transfer property may be obviated, perhaps, by providing for some statutory publicity of the transfer, and thereby charge creditors with full notice of the facts.

CONTRACTS TO EMPLOY ONLY UNION MEN. - In the relations between an employer, a labor union, union members, and non-union laborers, one of the reciprocal rights involved is freedom to enter into or to refrain from contracts of employment. The destruction of this expectancy may be the basis for actions in tort; it is also capable of being surrendered by contract. Although the question of tort arising from interference with the right has called forth much discussion, and although similar contracts limiting expectancy of traders are the subject of numerous cases on the restraint of trade, contracts dealing with labor expectancy are seldom before the courts. The Court of Appeals of New York, reversing the Appellate Division,' has recently sustained a three-cornered contract between an employer, a labor union, and the firm's employees, which provided that only union members should be employed, and only such of those as should be in good standing, and that on request of the union the firm should discharge all others. Jacobs v. Cohen, 183 N. Y. 207. The decision involves two questions: (1) whether an employer can make, with laborers or with a third party, a binding agreement to limit his expectancy in the labor market; and (2) whether laborers may engage among themselves to destroy the expectancy of other laborers. Another New York court has just decided, in accordance with the prevailing law, that an employer's privilege of employing or discharging union or non-union men at his own caprice is protected by the constitutional guaranties. People v. Marcus, 34 N. Y. L. J. 1149 (N. Y. App. Div., Dec. 1905). A workman's freedom of employment must also be a property right, and contracts by either to limit his own freedom will be enforceable unless invalid for some reason of policy.

2

Logically considered, the employer's agreement was to confine his competition for labor to a narrow class, but he did not contract with a competitor, and only such combinations are forbidden, since from them monopoly is more likely to ensue. As contracts for exclusive agency,3 exclusive dealing, and exclusive employment" are freely enforced, there should be not the least objection to the employer's contract.

Under the New York doctrine that procuring without fraud or intimidation the discharge of a fellow servant is not actionable unless done with an improper motive, a contract to effect the same result will of course be unobjectionable unless it be inspired by malevolence." By another view,

1 Jacobs v. Cohen, 90 N. Y. Supp. 854; 18 HARV. L. REV. 471.

2 Gillespie v. The People, 188 Ill. 176. See also State v. Julow, 129 Mo. 163.

3 Central Shade Roller Co. v. Cushman, 143 Mass. 353.

4 Chicago, etc., Railroad Co. v. Pullman Car Co., 139 U. S. 79, 89.

5 Pilkington v. Scott, 15 M. & W. 657.

6 National Protective Ass'n v. Cumming, 170 N. Y. 315; followed in Wunch v. Shankland, 179 N. Y. 545; 59 N. Y. App. Div. 482. See also "Interference with Contracts and Business in New York," by E. W. Huffcutt in 18 HARV. L. REV. 423, 439.

7 See Curran v. Galen, 152 N. Y. 33; affirmed but distinguished in National Protective Ass'n v. Cumming, supra.

8

to prevent employment of a laborer is a prima facie tort, unjustified by labor competition.9 Apparently it would follow that an agreement which prevents employment is illegal. But it is believed that the general statement needs qualification, and that the decisions are best explained upon the principle that justification is withheld only where the competitive injuring pressure is applied through unwilling outsiders, and because of the interference with those third parties. 10 Consequently, a contract peaceably obtained with the outsider, in this case the employer, removes that objection. Obviously, fraud or force in obtaining the agreement would for a different reason render it unenforceable. Nor does it seem that the laborers' contract is against policy as a restraint of trade. From an economic standpoint a combination of rival laborers limits competition as truly as does a combination of rival merchants, but the courts now discriminate, and favor contracts between laborers, although they are intended to stifle competition and raise wages.11 By analogy to the modern cases on restraint of trade,12 public policy should not countenance such contracts when they afford more than a reasonable business protection to the parties, and when their result approaches monopoly; but until further decisions readjust the balance between the policy of unfettered contract and the abhorrence of monopoly, it appears that the common "union shop" contracts will be enforced.

EJECTMENT FOR ENCROACHMENTS ON LAND ABOVE THE SURFACE. Although an action on the case for a nuisance is allowed both in England and in the United States for projections of parts of buildings over adjoining land,' the advantages of ejectment have led in this country to attempts to apply it to such situations. The cases, however, are so few and contradictory that there is still occasion for a reference to fundamental principles in the effort to work out a correct result. In legal contemplation land is regarded more as a solid or volume than as a surface, although its third dimension is necessarily indeterminate. As it may be divided vertically, so there may be horizontal divisions, and there may be an estate in the minerals underneath or in the upper story of a house without ownership of the surface. It is quite possible, therefore, that there should be several estates coextensive with the same lateral limits, and that different occupants should be in possession above the surface, on the surface, and below it. But as description of land in the ordinary form presumptively includes everything above and below the surface, so possession of the soil is presumed to extend up and down unless rebutted by the possession of another. For example, it has been held that where adequate adverse possession of the surface gave title to it, the title did not cover mines in operation underneath.2

8 Erdman v. Mitchell, 207 Pa. St. 79. See also "The Closed Market, the Union Shop, and the Common Law," by Wm. Draper Lewis, in 18 HARV. L. REV. 444, 451. Plant v. Woods, 176 Mass. 492.

10 See 17 HARV. L. REV. 65.

11 Cf. Commonwealth v. Hunt, 4 Met. (Mass.) 111. Fisher, 14 Wend. (N. Y.) 6, representing the earlier view. 12 See Nordenfelt v. Maxim, etc., Co. (1894), A. C. 535.

But see contra, People v.

1 Fay v. Prentice, 14 L. J. C. P. (N. s.) 298; Codman v. Evans, 89 Mass. 431.

2 Delaware and Hudson Canal Co. v. Hughes, 183 Pa. St. 66.

It would be surprising, therefore, if ejectment were restricted to ousters from the surface estate, and it has not been so restricted. From early times up to the present, ejectment has lain for the wrongful occupation of a mine or of the upper story of a house. What difference in principle is there in the case of projecting eaves, walls, bay-windows, and foundation stones? The dispossession of the owner from a part of his land, though small, has been actual and permanent in its nature. The disseisor may not be personally present, but he has subjected the land to a purpose of his own to the exclusion of the owner. The fact that the instrument of occupation does not rest on the soil is of no consequence. The upper stories of a great office building in New York have been built depending for their support on an adjoining building, yet they would seem to constitute an effectual occupation of the premises. There is no greater difficulty in the sheriff delivering possession than in the case of underground encroachments from neighboring land.

It seems hard to escape from the above considerations. The courts that refuse the action rest their decisions mainly on the apparent intangible nature of the invasion, which they regard as effecting not a loss of possession, but merely an injury to its exercise." Some recent Wisconsin cases adopt the view that where the plaintiff has occupied to the line under the projecting eaves he has elected to treat the encroachment as a mere trespass. This reasoning is evidently founded on the notion that an ouster, to be effective, must be from the whole of a vertical plane, including the surface, but the fallacy in thus mistaking a presumption for a necessity has already been shown. New York has vacillated, but the latest case on the question decides that ejectment will lie for a telephone wire strung without right over the plaintiff's premises. Butler v. The Frontier Telephone Company, 109 N. Y. App. Div. 217. A more extreme case within the principle could scarcely be imagined, but evidently no requisite is lacking. The defendant assumed continuous control of the wire, and used it for his own business purposes. It was not a dead wire abandoned on the premises, and control yielded up. On this distinction a different result might be reached in the case of overhanging branches of trees, for there in many instances the adjoining landowner makes no assumption of possession.9

ATTACHMENT OF GOODS FOR WHICH A NEGOTIABLE DOCUMENT OF TITLE IS OUTSTANDING. - At common law the title to goods in the possession of a bailee could not be transferred without attornment.1 As that rule interfered with the freedom of commerce, bills of lading and warehouse receipts became, by the custom of merchants, representatives of the goods, and their

8 Comyn v. Kyneto, Cro. Jac. 150; Moragne v. Doe d. Moragne, 39 So. Rep. 161 (Ala.).

Ford v. Lerke, Noy 109; Brady v. Kreuger, 8 S. Dak. 464.

5 Sherry v. Frecking, Duer (N. Y.) 452; Murphy v. Bolger Brothers, 60 Vt. 723See McCourt v. Eckstein, 22 Wis. 153.

6 Cf. Quicksilver Mining Co. v. Hicks, 4 Saw. (U. S. C. C.) 688.

7 Aiken and Ketchum v. Benedict, 39 Barb. (N. Y.) 400. See Norwalk Heating and Lighting Co. v. Vernam, 75 Conn. 662.

8 Rasch v. Noth, 99 Wis. 285.

See further 14 HARV. L. REV. 291.

1 Rich v. Alfred, 6 Mod. 216.

transfer had the same effect as the delivery of the goods themselves in passing the transferrer's interest. When the custom of merchants was incorporated into the law, the mercantile view of documents of title was not adopted in its entirety. Merchants believed that they should be the sole representatives of the goods, so that no interest in the goods could be gained except through them. The law went the full length in accepting that principle as applied to commercial paper, and in most jurisdictions the maker of a note or the acceptor of a bill of exchange cannot be garnisheed unless the instrument is reached. But in regard to documents of title a half-way position was taken, and though the receipt is a representative of the goods, as was recently held by the Kentucky Supreme Court, the goods also represent themselves, and an attachment of them prevails against a subsequent purchaser of the receipt without notice of the attachment. Kentucky Refining Co. v. Bank of Morilton, 89 S. W. Rep. 492.*

Professor Williston, of the Harvard Law School, at the request of the Commissioners on Uniform State Laws, has prepared a draft of a Sales Act which has been considered by the Commissioners at two national conferences, and which they hope to adopt in its final form this year. One of the most difficult points to be decided is as to what change shall be made in the existing law on this question of transferring property by documents of title. There is a strong sentiment in favor of adopting the extreme mercantile view and forbidding any attachment of the goods. Farmers and planters who store their crops in local warehouses and borrow money at financial centers find lenders unwilling to accept the receipts as security because there may be an attachment on the goods. The strongest objection to the mercantile view is that, by putting the goods beyond the reach of attachment, it is made easy for dishonest bailors to evade their creditors, an inevitable result if the documents of title are the only representative of the goods.5

Efforts have been made to reach a compromise which will make the instruments more negotiable than at present and still leave it possible to attach the goods. It was suggested that the goods be attachable, but that a subsequent bona fide purchaser of the receipt should prevail. The objection is that receipts have no date of maturity, and as a purchaser might appear years later with the receipt, it would be unsafe for the bailee to surrender the goods to the attaching creditor. As the act is now drawn, the existing law is un hanged except that a transferee of the document who takes it for value within ten days of its issue prevails over a prior attaching creditor of whom he had no notice. It is purely a compromise measure, and business men feel that it does not go far enough. Business conditions demand that the transfer of title of goods in storage or transit be made as easy as possible, and, as the more freely the documents of title are negotiable, the less opportunity creditors have to attach the goods, the question is, shall the interests of creditors give way before the necessities of the business world? There is still a chance that the answer will be in the affirmative, and that the extreme mercantile view will be accepted, or at least that, in the final draft of the act, the ten-day period will be materially extended.

See Benjamin, Sales, 7th ed., §§ 815, 817.

8 Hutchins v. Evans, 13 Vt. 541.

See Roudebush v. Hollis, 21 Pa. Co. Ct. 324; Landa v. Holck & Company, 129 Mo. 663.

See Collins v. Smith, 12 Gray (Mass.) 431.