8

the parties to a contract have in mind its performance, not its breach? When the damages are assessed as those which it is reasonable to suppose that the parties had in mind, what is really meant is that the law, aiming at compensation but proceeding upon principles of justice, considers it fair to hold a defendant for damages which as a reasonable man he ought to have foreseen as likely to follow from a breach. What he in fact foresaw or contemplated is immaterial. Where special circumstances exist, notice is all important in determining whether the consequences were foreseeable to a reasonable man in the defendant's position; but the defendant's consent implied in fact is no more relevant in fixing the extent of his liability than is the existence of a contract implied in fact where recovery is sought upon quasi-contractual grounds. On principle it matters not if notice of the special circumstances which would make a breach especially disastrous comes to the defendant not from the plaintiff but through other channels.10 The carrier's inability to decline shipments must therefore be considered unimportant in determining his responsibility;" and despite the dicta of eminent authorities to the contrary, the result of most of the decided cases indicates that this is the law.12

THE CONSTITUTIONALITY OF THE FLAG LAWS. In 1900 a manufacturer who had been adorning his cigar boxes with pictures of the national flag was indicted under an Illinois Act forbidding the use of such advertising methods except in art exhibitions. The court held the statute unconstitutional as depriving the defendant of liberty without due process of law; as denying him equal protection of the laws, since art exhibitions were excepted; and as interfering in a matter which was exclusively the concern of Congress. In 1904 a similar statute was held unconstitutional in New York, the court taking the ground that it infringed existing property rights.2 The case against the statutes was simple. They not only deprived people of the liberty of advertising in a certain way, but, if the flag advertisements were already in existence, they deprived people of property as well. This would plainly make them bad under the Fourteenth Amendment unless something could be found to take them out of its operation.

In September, 1905, the Massachusetts law forbidding the use of the state arms in advertising was upheld,3 and a manufacturer was convicted for

8 Professor Williston in 8 HARV. L. REV. 30; Cotton, L. J., in Macmahon v. Field, L. R. 7 Q. B. D. 591, 597.

This test is substantially that adopted in the Code Napoleon, Bk. III, Tit. III, §§ 1149, 1150, 1151, cited by Parke, B., in Hadley v. Baxendale, ubi supra, 346. Cf. La. Civil Code § 1934, and Pothier, Obligations, 2d Am. ed., 71 et seq.

10 See Kelly, Maus & Co. v. La Crosse Carriage Co., 120 Wis. 84. Mr. Smith makes the forcible suggestion that imposing upon the carrier this liability notwithstanding his inability to refuse the contract is simply another illustration of the burdens which he must take along with his lucrative monopoly. 16 L. Quar. Rev. 283. But that the carrier should be allowed to charge higher rates, see 3 Sutherland, Damages, 3rd ed., 2715.

12 Missouri, etc., Ry. Co. v. Belcher, 89 Tex. 428; Deming v. R. R., 48 N. H. 455; Railroad v. Cabinet Co., 104 Tenn. 568. Notice after performance has begun is too late. Am. Express Co. v. Jennings, 38 So. Rep. 374 (Miss). As to how definite the notice must be see Kelly, Maus & Co. v. La Crosse Carriage Co., ubi supra.

1 Ruhstrat v. People, 185 Ill. 133.

2 People v. Van de Carr, 178 N. Y. 425.

3 Commonwealth v. Sherman, 75 N. E. Rep. 71 (Mass.).

using the great seal as a trademark. The court seems to have taken the position that the statute did not deprive the defendant of liberty, since he never had been free to use the state arms as he did. The objection to this theory is that before the passage of the statute state and national emblems had been used for advertising, and yet no one had ever been hindered in the practice, so that if the common law did in truth forbid it, such common law arose neither from custom nor judicial decision.

4

5

6

In October, 1905, under a statute of Nebraska similar to that of Illinois, a merchant was indicted for selling beer bottles with an image of the national flag upon them. Halter v. State, 105 N. W. Rep. 298. The court held that the statute was valid, and based this decision on the only tenable ground, that though the act involved a deprivation of liberty under the Fourteenth Amendment, it could be justified as an exercise of the police power, that by preventing the national symbol from falling into contempt, it fostered the great civic virtue of patriotism, in short, that it was in defense of public morality. It was suggested some time before this decision that the principle lying back of these laws was really the same as that appearing in the case of U. S. v. Gettysburg Electric Ry. Co., where the federal government was allowed to condemn for a park the Gettysburg battlefield. That decision can hardly be quarreled with, for clearly patriotism is as much the concern of the state as are the private virtues. But that the presence of an American flag and a sheaf of national standards on the decorative cover of a cigar box has any real tendency to destroy our love of country, or that one who in good faith sells such a box should find himself a criminal, seems hardly reasonable. The law does accomplish the result of sparing the aesthetic sense of the more cultured classes, but it is still doubtful if such a purpose falls within the police power. A principle which permits the suppression indiscriminately of any human activity, on the ground that it offends against the vague canons of good taste, may not become oppressive while it is honestly administered by dispassionate courts and legislators; but it does remove the last vestige of the rigid guarantee against oppressive legislation, for it is invoked as an addendum to a power which admittedly cuts across every constitutional provision with which it comes in conflict.8

7

RECENT CASES.

APPEAL AND ERROR EFFECT OF CHANGE OF STATUTE ON MANDATE OF APPELLATE COURT REVERSING AND REMANDIng Cause. — In an action by a collector to obtain taxes, the plaintiff was successful in the lower court. On appeal the upper court decreed that as the tax levy was invalid "the judgment is reversed and remanded." Subsequently, but before the mandate of the Supreme Court had been filed in the lower court, a statute was passed validating the levy. In accordance with the new statute the lower court again gave judg

Cf. Bostock v. Sams, 95 Md. 400; People v. Green, 85 N. Y. App. Div. 400. Contra, Att'y-Gen'l v. Williams, 174 Mass. 476; cf. also 17 HARV. L. REV. 275.

8 For a note taking the opposite view, see 35 N. Y. L. J. 670 (Feb. 19, 1906).

ment for the plaintiff. Held, that the lower court committed error in disregarding the mandate of the Supreme Court. Chicago, etc., Co. v. People ex rel. McCord, 38 Chi. Leg. N. 235 (III., Sup. Ct., Feb. 20, 1906).

If a cause is reversed and remanded with specific directions to enter judgment for one or the other party, the function of the lower court is purely ministerial, and probably no discretion would be allowed even if a change of law occurred. Cf. Tourville v. Wabash Rd. Co., 148 Mo. 614. On the other hand, it seems clear that if a case is reversed and remanded with directions that a new trial be allowed, or if being merely reversed and remanded, the opinion of the appellate court indicates that there should be a new trial, then the lower court should of course regard all changes of law made subsequent to the reversal. Cf. Woolman v. Garrenger, 2 Mont. 405. In the principal case, no specific directions were given, but it appeared from the opinion that judgment should be entered for the defendant. Therefore, apart from special circumstances, a new trial should not have been allowed. Treadway v. Johnson, 39 Mo. App. 176. However, the fact that, in the absence of specific directions, the lower court must exercise its judgment in deciding what action should be taken to conform to the opinion of the Supreme Court, ought to vest it with the necessary discretion to enable it to give effect to laws passed after the reversal.

BANKRUPTCY

NATIONAL BANKRUPT LAWS-STATEMENT OF CLAIM AS EVIDENCE. A creditor proved his claim before a referee in bankruptcy by a sworn statement in writing, according to § 57 a of the Bankruptcy Act of 1898. The trustee objected to the claim and offered evidence against it. Held, that the sworn statement is prima facie proof of the indebtedness, and that, the trustee's evidence being insufficient to rebut it, the claim will be allowed. Whitney v. Dresser, U. S. Sup. Ct., Feb. 19, 1906.

The case is in harmony with the decisions of the district courts under the Bankruptcy Acts of 1867 and of 1898. In re Shaw, 109 Fed. Rep. 780; In re Carter, 138 Fed. Rep. 846. The former Act calls the statement of claim a deposition, while the latter drops that term; but, under either, the statement is no more than an affidavit. Neither a declaration, nor a statement of claim against the estate of a deceased person, has probative value though verified by affidavit. But the sworn statement in bankruptcy proceedings is regarded as evidence sufficient to make out a prima facie case, because of the wording of the statute and of the custom of bankruptcy courts. The statute terms the statement "proof," and provides for hearing objections to it, thus putting the burden of going forward on the objector. The burden of proof is not shifted, but until the objector has produced evidence sufficient to overcome the evidence thus offered in favor of the claim, the claimant need do nothing more. In re Sumner, 101 Fed. Rep. 224. As bankruptcy proceedings would be seriously delayed if a mere objection compelled the creditor to offer evidence, the balance of convenience is strongly in favor of the present rule.

BOARDING-HOUSES LIABILITY OF BOARDING-HOUSE KEEPER - Loss OF GUEST'S PROPERTY. While the plaintiff was a guest in the defendant's boarding-house, her jewels were stolen from her room by another guest. There was evidence of want of care on the part of the defendant in providing keys to the rooms and in the selection of guests. Held, that a boarding-house keeper owes the duty of reasonable care for the safe-keeping of guests' baggage. Scarborough v. Cosgrove, [1905] 2 K. B. 805.

The liability of an innkeeper for the loss of his guests' baggage closely approaches that of an insurer. Coskery v. Nagle, 83 Ga. 696, 6 L. R. A. 483; see 17 HARV. L. REV. 47. No such liability, however, is imposed upon a boarding-house keeper. Manning v. Wells, 9 Humph. (Tenn.) 746. Whether the latter is under any obligation for the safe custody of a guest's property is not well settled in England. It has been there held, however, in apparent conflict with the decision of the principal case, that a lodging-house keeper owes no duty in this respect. Holder v. Soulby, 8 C. B. (N. S.) 254. On the other hand, the American decisions on this point accord with the present case. Smith v. Read, 6 Daly (N. Y.) 33. An insurer's liability was originally imposed upon

innkeepers to protect travellers against loss at the hands of thieves with whom the innkeepers would often connive, and the risks of theft to which travellers are still subject have been deemed sufficient to warrant the continuance of the rule. While a boarding-house guest, being more permanently situated than a mere traveller, needs less protection than the latter, his risks would seem to be sufficiently great to require the exercise of reasonable care by the boarding-house keeper.

BROKERS STOCKS CARRIED ON MARGINS LIABILITY OF BROKER FOR SALE WITHOUT NOTICE TO CUSTOMER. - Held, that a sale by a broker of stock carried on margin, without notice to the customer of the time and place of sale, constitutes a conversion in the absence of a special agreement by the customer authorizing a sale without notice. Content v. Barmer, 34 N. Y. L. J. 1899 (N. Y., Ct. App., Feb., 1906). See NOTES, p. 529.

CONSTITUTIONAL LAW - DUE PROCESS OF LAW - ADMINISTRATION OF ESTATE OF LIVING PERSON. After the plaintiff had been more than seven consecutive years absent from the state, he was presumed dead, and his estate was administered under a statute. The defendant, an executor of a testator who had left a legacy to which the plaintiff was entitled, paid the money to the latter's administrator. Later, the plaintiff appeared and demanded the legacy from the executor. Held, that he may recover it. Selden's Executor v. Kennedy, 52 S. E. Rep. 635 (Va.).

a

Aside from statute, the administration of the estate of living person is absolutely void for lack of jurisdiction of the probate court. Scott v. McNeal, 154 U. S. 34; see Griffith v. Frazier, 8 Cranch (U. S.) 9, 23. Consequently, the validity of the payment by the defendant to the administrator must depend upon the constitutionality of the statute under which it was made. It was formerly said that the legislature could never authorize the administration of the estate of an absentee who was in fact living, without violating the "due process "clause of the Fourteenth Amendment. 11 HARV. L. REV. 264; Clapp v. Houg, 12 N. Dak. 600. Yet because a state, under its general authority to settle estates of deceased persons, is unable to administer estates of living persons, the conclusion does not follow that it lacks the very necessary power to provide by special legislation of a proper kind for administering the estates of those who are absent for an unreasonable time. And it has been held that, where the legislature provides for suitable notice and adequately safeguards the property of the absentee, it may confer upon its courts power to administer his estate, even though he be alive, after a reasonably long absence has raised the presumption of his death. Cunnius v. Reading School District, 198 U. S. 458. But the statute under review in the principal case failed to make any such provisions whatever.

CONSTITUTIONAL LAW-EMINENT DOMAIN RIGHT OF WAY FOR MINING PURPOSES. Under a Utah statute providing for the exercise of eminent domain to facilitate the working of mines, the defendant in error brought suit to condemn a right of way for an aerial bucket line across a placer mining claim of the plaintiff in error. The Supreme Court of Utah decided that this was a public use. Held, that this holding does not result in deprivation of property without due process of law within the meaning of the Fourteenth Amendment. Strickley v. Highland Mining Co., 26 Sup. Ct. Rep. 301.

The court rests its decision on a late case upholding another Utah statute giving the right of condemnation for private irrigation ditches. Clark v. Nash, 198 U. S. 361; see 17 HARV. L. REV. 493; 6 COLUMBIA L. REV. 46. The local issue in all these cases is the troublesome question, - what constitutes a public use? See 15 HARV. L. REV. 399. Some recent adjudications seem still to adhere to the narrow test that the use must be by the public directly or by some quasi-public agency. See Healy Lumber Co. v. Morris, 33 Wash. 490. But however state courts may decide this, the federal question involved is whether a statute holding that a particular use is public for the purpose of taking private property, is so plainly unwarranted as to be in violation of the Fourteenth Amendment. While in Clark v. Nash, supra, the Supreme Court

expressly denied a possible inference that private property might be taken whenever the public interest may be promoted, the present opinion strongly tends that way in deferring very liberally to the public policy of a state, based on peculiar local conditions, as interpreted by legislature and state courts. The use here sustained as public is, however, in line with a suggestion of Professor Wambaugh, of the Harvard Law School, that the right of eminent domain may be exercised to enable individuals more effectively to utilize the forces of nature.

CONSTITUTIONAL LAW - EVIDENCE - APPLICATION OF PRIVILEGE AGAINST SELF-INCRIMINATION TO CORPORATIONS. - Semble, that the privilege against self-incrimination contained in the Fifth Amendment to the Constitution does not extend to corporations which are being prosecuted by the State. Hale v. Henkle, U. S. Sup. Ct., March 12, 1906. See NOTES, p. 523.

TO SUE.

CONSTITUTIONAL LAW - Powers of the EXECUTIVE-Governor's Right The attorney-general of Mississippi was requested by the governor to bring suit enjoining the carrying out of a contract by the board of control, deemed by the governor unconstitutional. Upon the attorney-general's refusal (though the record did not disclose the fact). the governor brought suit in the name of the State. Held, that the bill is dismissed. Henry v. State, 39 So. Rep. 856 (Miss.). See NOTES, p. 524.

CONSTITUTIONAL LAW-SEPARATION OF POWERS - DELEGATION OF LEGISLATIVE POWER. By Act of March 3, 1899, Congress provided that whenever the Secretary of War should have good reason to believe any railroad or other bridge to be an unreasonable obstruction to navigation, he should, after a proper hearing, require the parties controlling such bridge to make any necessary alterations. It was further provided that if the alterations were not made within the prescribed time, criminal proceedings should be taken. Held, that the Act is not unconstitutional as a delegation of legislative power by Congress. United States v. Union Bridge Co., 36 Pitts. Leg. J. 197 (U. S. Dist. Ct., W. D. Pa., Feb. 9, 1906).

For a discussion of the principles involved, see 19 HARV. L. REV. 203.

DAMAGES - MEASURE OF DAMAGES DAMAGES IN CONTRACTUAL ACTIONS. The plaintiff sued the defendant carrier for negligent delay in the transportation of scenery. Held, that the measure of damages is the reasonable rental value of the property. As to whether, by giving notice of the special circumstances to the carrier, the plaintiff could have recovered special damages or special profits, quære. Weston v. Boston and Maine Rd., 34 Banker and Tradesman 541 (Mass., Sup. Ct., Feb. 26, 1906). See NOTES, p. 531.

EASEMENTS CONTRACT FOR DISPLAY ADVERTISEMENTS. The owner of a building agreed in writing to allow the defendant to display a sign on the side of it for one year. Subsequently the owner leased the building to the plaintiff, who took with notice of the above contract. The plaintiff removed the defendant's sign and brought suit in equity to restrain the defendant from attempting to replace it. Held, that the contract created in the defendant a right in the nature of an easement, which was not terminated by the lease to the plaintiff. Levy v. Louisville Gunning System, 89 S. W. Rep. 528 (Ky., Ct. App.). See NOTES, p. 526.

EQUITY CONSTRUCTIVE TRUSTS - STATUTE OF LIMITATIONS AS DEFENSE TO INNOCENT CONSTRUCTIVE TRUSTEE. The complainant, as receiver in bankruptcy of a corporation, filed a bill against the stockholders of the company to recover, inter alia, certain dividends which had been paid out of capital, more than six years before. It appeared that the defendant Downs received these dividends without notice that they were improperly paid. Held, that Downs, though originally liable as a constructive trustee to refund, will be protected by the statute of limitations, since he received the dividends in good faith,