material, for, as defendant had received all the substantial benefits until the contract had ceased to be executory, he cannot terminate it for some breach thereof, thus putting the case within the scope of Lovell v. St. Louis Mutual Life Insurance Co.21 The fact that the defendant did not know that the patent had been assigned complicates the question as to whether there was a waiver of breach, but as there was no legal duty to notify defendant, the doctrine that a party to a contract, who does not regard the contract terminated by breach, is liable to all obligations thereunder, must apply.22

In the principal case, with its peculiar facts, it is submitted that the court reached the right conclusion. The fact that there was no substantial infringement was established by the verdict of the jury, so the whole question resolves itself into a consideration of the effect of the act of Seligstein, who, by assigning the patent to plaintiff, put it out of his power to protect the patent23. If defendants had known of the breach, then there would have been an opportunity for them to elect to terminate the contract or to waive the breach and substitute a new contract. As waiver must be a voluntary relinquishment of a known right, and the ignorance of the defendants as to the breach made it impossible for them to have an assenting mind to a new contract, neither of these theories can apply. The case is one where a party to a contract put it out of his power to perform, and yet the other party secured the benefits during the whole period, ignorant of a breach of a vital term, and, due to the circumstances, sustaining no actual injury because of the breach. If, as claimed by the plaintiff, the contract called for independent performance by the parties, he could clearly recover, for the breach by one party would be no excuse for non-performance by the other. On the other hand, by construing the covenants as calling for dependent concurrent performance, plaintiff by showing performance or substantial performance would be allowed to recover. This seems to be the ground upon which the court in the principal case relies, for an analysis of the facts shows that the defendant received substantially all benefits under the contract. Thus although there was a breach which, if known to defendant, would have been ground for termination of the contract, substantial performance has been established, and defendant's remedy is by counterclaim or separate action if he has sustained any damage by the breach. Another view is that maintained by the Appellate Division, namely, that a dependent condition was broken, and that defendant was thereby discharged from his obligation to pay the royalty, thus completely ignoring the doctrine of substantial performance.

The facts in this case, i.e., defendant receiving all the benefits under a contract the breach of which was unknown to him until the termination of the contract period, present a situation somewhat analagous to that provided for in the Sales Act, New York Personal Property Law, sec. 125, subdivision 1, where a recovery of the reasonable value of goods delivered in part performance of a contract

21111 U. S. 264 (1883), at p. 274.

"Frost v. Knight, L. R. 7 Exch. 111 (1872); Howard v. Daly, 61 N. Y. 362 (1875).

23 Supra, note 20.

is allowed, if the other party accepted and used the goods expecting that complete delivery was intended. Under the general New York common law rule, however, a person who had only partly performed could not recover even in quasi-contract24. But there seems to be a gradual tendency in New York toward the New Hampshire doctrine25, that a party in default upon a contract who has bestowed benefits upon the other, may recover the reasonable value thereof in quasicontract, even though he had not himself fully performed 26. It would seem that the proper solution in the principal case would be to allow plaintiff to recover in quasi-contract the reasonable value of the benefits enjoyed by the defendant, which in this case would be at the contract rate minus any damage sustained by virtue of the breach. While the result reached would be the same as that of the Court of Appeals in the principal case, the recovery upon the ground of a quasi-contractual obligation is more logically reached than by resorting to the doctrine of substantial performance.

Nelson R. Pirnie, '21.

Contract: Statute of Frauds: Oral contract not to be performed within one year.-Tyler v. Windels, 186 App. Div. (N. Y.) 698 (1919), involved a determination of whether an oral contract, by its terms not to be performed by either contracting party within one year from the date of its making, is taken out of the Statute of Frauds by full perormance on one side. The evidence showed that the plaintiff and the defendant entered into an oral agreement, whereby the plaintiff was to be employed for a period of eighteen months for the sum of $350 a month and an additional bonus of twenty per cent upon the profits earned by the business during such employment. The plaintiff fully performed all the terms of the contract and was paid the agreed monthly compensation together with the bonus for the first twelve months of the employment, but the defendant refused to pay the bonus for the last six months of his service. Suit being brought on the contract, the defendant pleaded the one year section of the Statute of Frauds and decision was rendered in his favor on the ground that the agreement by its terms could not be performed within one year from the date of making, and there being no note or memorandum made in writing, the contract "was void.'

An examination of authority reveals that there not only are jurisdictions holding that a contract by its terms possible of performance by one of the parties within a year from its making is unaffected by the statute', but also that several disagree with the decision in the principal case, and hold that a contract not possible

"Catlin v. Tobias, 26 N. Y. 217 (1863); Smith v. Brady, 17 N. Y. 173 (1858). 25 Britton v. Turner, 6 N. H. 481 (1834).

26 See Mernagh v. Nichols, 132 App. Div. (N. Y.) 509 (1909), where there was a contract for services for a year, default, but recovery for services rendered, less defendant's damages. See also Oliver v. McArthur, 158 App. Div. (N. Y.) 241 (1913); 8 Mich. L. R. 70.

Smalley v. Green, 52 Ia. 214 (1879); McClellan v. Sanford, 26 Wis. 595 (1870); Wolfe v. Fleming, 103 Ind. 115 (1885); Berry v. Doremus, 30 N. J. L. 399 (1863); Holbrook v. Armstrong, 10 Me. 31 (1833).

of performance by either party within a year is taken out of the statute by full performance on one side. Although there is a difference in the terminology of the statutes in several states, in so far as it affects this question it is immaterial whether they declare such contracts void, or merely refuse to allow suit to be brought on them, as in either case recovery on such an agreement is in contravention of the statute. One line of decisions arbitrarily holds that full performance by one party takes the contract out of the statute; practically no reasoning being found to uphold such a doctrine. In Wehner v. Bauer the question is dismissed with the terse statement that: "The Statute of Frauds has no application to a contract which has been fully performed and executed by one of the contracting parties." In Marks v. Davis3 it is said: "We can safely say that the rule is firmly established in this state that a full and complete performance of a contract by one of the contracting parties takes the contract out of the Statute of Frauds; and that the party performing his contract may sue upon it in a court of law, and that he is not compelled to abandon it and sue in equity or upon a quantum meruit." Like decisions have been rendered in Indiana, and South Carolina". It is difficult to perceive how a void contract can be validated, or suit be brought on a contract which by statute is not to be the basis of an action, merely because one party has executed the duties it imposed on him, while the remainder of the contract is executory. Such a determination, although taking cognizance of the Statute of Frauds, arbitrarily disregards its express terms.

There is another line of decisions reaching the same result through the use of estoppel. Since the plaintiff has relied on the agreement and has fully performed, the defendant is not permitted to set up the statute in bar to his recovery. This use of estoppel is based on the principle that a statute enacted for the purpose of preventing fraud cannot be availed of in the perpetration of such an injury, and has been applied in Illinois, Minnesota', Arizona, California, Massachusetts1o, and Missouri". To permit the defendant to set up the statute would be to subvert the purposes on which it is founded, and while there may be no actual fraud in the defendant's acts, it would be unconscientious to refuse plaintiff recovery on the contract, and would result in a denial of the rights intended to be conferred by it.

This doctrine of estoppel seems to be consonant with the justice and equity of the situation, and still does not involve an unwarranted limitation of the operation of the statute. In cases involving a contract not affected by the Statute of Frauds, it is held that where the plaintiff has fully performed, his measure of recovery in a suit on a quantum meruit is the sum fixed by the contract, and not

2160 Fed. Rep. 240 (1908).

372 Mo. App. 557 (1897).

'Lowman v. Sheets, 124 Ind. 416 (1887).

'Bates v. Moore, 2 Bailey (S. C.) 614 (1831).

"MacDonald v. Crosby, 192 Ill. 283 (1901); Curtis v. Sage, 35 Ill. 22 (1864). "Brown v. Hoag, 35 Minn. 373 (1886).

Diamond v. Jacquith, 14 Ariz. 119 (1912).

Seymour v. Öerlichs, 156 Cal. 782 (1909).

10Glass v. Hulbert, 102 Mass. 24 (1869).

"Bless v. Jenkins, 129 Mo. 647 (1895).

the reasonable value of his service12. Since this rule has apparently been applied in cases on a quantum meruit for work done on an oral contract void by the Statute of Frauds 13, what real difference does it make whether the plaintiff sues in contract or on a common count? To refuse to permit him to introduce the agreement in evidence in a suit on the contract because of the statute, and then admit the same contract under a common count as conclusive evidence of the value of his service, appears highly technical, and a matter of form and not of substance or principle.

J. W. Reavis, '21.

Corporations: Right to amend certificates of incorporation.-In the case of People ex. rel. Cayuga Power Corporation v. the Public Service Commission, 226 N. Y. 527 (1919), the plaintiff was a corporations organized under the laws of this state. The certificate stated that it was organized under article 7 of the Transportation Corporations Law. The business, however, was to be a private one, with no element of public service. In the words of the certificate, the company was to "generate and distribute electricity, solely on or through private property, for railroad or street railroad purposes, or for its The new corporation issued stock of par value of $75,000, and placed a mortgage on its plant to secure $200,000 of bonds, and proceeded to manufacture electricity for its own use and that of its tenant, the Cayuga Cement Corporation.

own use.

In December, 1916, the certificate was amended, the new powers to include "manufacturing and using electricity for producing light, heat, or power, and in lighting streets, avenues, public parks and places, and public and private buildings of cities, villages, and towns within this state." At the same time the authorized capital stock was increased to $200,000, franchises were obtained from neighboring towns, and the plant was enlarged. In April and June, 1917, the plaintiff filed two petitions with the public service commission; the first praying permission to construct an electrical plant and exercise public franchises in enumerated towns and villages, and the second praying that the bonds and stocks already issued be approved and authorized.

The public service commission dismissed both petitions, on the ground that the corporation was private in its origin, and that the

12Porter v. Dunn, 131 N. Y. 314 (1892); Dermott v. Jones, 2 Wall. (U. S.) I (1864); Pusey & Jones Co. v. Dodge, 3 Penn (Del.) 63 (1900); Campel v. Dist. of Col., 2 MacAr. (D. C.) 533 (1876); Kelley v. Foster, 2 Binn. (Pa.) 4 (1809); Woodward's Quasi Contract, p. 414; Wald's on Pollock Contracts (Williston's ed.), p. 337.

13 Fuller v. Rice, 52 Mich. 435 (1884); Murphy v. DeHaan, 116 Ia. 61 (1902); McGlucky v. Bitter, I E. D. Smith (N. Y.) 618 (1852); Du-King Mfg. Co. v. John T. La Du, 36 Minn. 473 (1887); Philbrook v. Belknap, 6 Vt. 383 (1834).

See Public Service Commission Law, sec. 2.
'See Transportation Corporation Law, sec. 60.

ex parte amendment of its certificate had not turned it into a public one. Section 18 of the Stock Corporation Law permits a certificate to be amended "so as to include therein any purposes, powers or provisions which at the time of such alteration may apply to corporations engaged in a business of the same general character. The question before the Court of Appeals, therefore, was whether the purposes of the plaintiff corporation, as stated in its amended certificate, were "of the same general character" as those stated in the original certificate. The Court of Appeals, Cuddeback, J. dissenting, answered this question in the negative.

There would seem to be no doubt as to the correctness of this decision. While the certificate of incorporation of the plaintiff company recites that it is made pursuant to the provisions of the transportation corporation act, its purposes and objects, as declared in the certificate, are entirely inconsistent with the purposes for which such transportation corporations are created. It is plainly a mere business corporation, its purposes being in harmony with section 2 of the Business Corporations Law. The certificate as amended complied with section 60 of the Transportation Corporations Law, its objects and purposes being those of a public service corporation. It would appear almost axiomatic that a private business corporation and a public service corporation are not corporations "of the same general character." The Business Corporation Law itself excepts transportation companies from the lawful business which may be carried on by business corporations.

In the state of Ohio, under a much broader and more liberal statute on this question, the case of State v. Taylor holds that a corporation organized for the purpose of making and furnishing gas and electricity for heat, light, and power cannot amend its articles of incorporation so as to become a gas, electric, and traction company, with power to maintain a street railroad. The Ohio court goes on the theory that it changes substantially the original purpose of the corporation, and is therefore illegal. This case would seem to be exactly in point, forbidding a private corporation from so amending its articles of incorporation as to make itself a public service corporation. This decision is all the more worthy of note in that the Ohio statute permits amendments "so as to modify, enlarge, or diminish the objects or purposes for which it [the corporation] was formed."

It would appear, therefore, that both on grounds of policy, and in the light of authority, the decision of the New York court, that a corporation organized for private purposes cannot by ex parte amendment change itself into a public service corporation, was undoubtedly the correct one.

Lansing S. Hoskins, '20.

Stock Corporation Law, sec. 18. 'Business Corporation Law, sec. 2. 555 Ohio State 61 (1896).

"Italics are writer's.

"General Code of Ohio, sec. 8719.