Central Law Journal.

ST. LOUIS, MO., OCTOBER 1, 1897.

An ordinance of the city of Chicago, imposing a tax upon bicycles has recently been declared invalid by Judge Tuley, one of the judges of the Circuit Court of Cook County. He held, in substance, that the ordinance was void in that it was not properly a license justifiable under the police power of the municipality, but was in reality a tax for the purpose of raising revenue, under a guise of a license, for the city; that it was unconstitutional in that it was not uniform, being a tax of the same amount on property of different values; that it was a tax upon the property of certain designated individuals or classes, which property had already been taxed under the revenue laws according to its value, and was thus forced to bear a double taxation. The action was a suit in equity to enjoin the enforcement of the ordinance in question, and the court held substantially that a court of equity had jurisdiction to enjoin the enforcement of an illegal ordinance such as he held this one to be; that public officers charged with the enforcement of the laws are practically trustees for the tax-paying public, and that the enforcement of an illegal ordinance by such officers was a breach of trust, for the prevention of which a court of equity would take and maintain full jurisdiction.

The case of Bergeron v. Hobbs, recently before the Supreme Court of Wisconsin, in which one of the members of the court dissented in a vigorous opinion, involved the controverted question of the sufficiency of technically irregular incorporation as a defense to an action against the would be incorporators as partners. It appeared that a provision of the Wisconsin statute, under which the defendants attempted to incorporate an agricultural association, required the "filing" of the certificate of organization, with other papers, in the office of the register of deeds. It was held that a deposit of the papers with the proper register, with instructions to record and return them, was not a sufficient "filing" to enable the proposed cor

poration to come into being, and that the defendants were therefore personally liable for claims for labor in improving grounds, and otherwise forwarding the intended corporate enterprise. As the dissenting opinion of Judge Marshall shows, this conclusion is op. posed to the weight of authority. The court cited in support of its view Beach, Priv. Corp. §§ 16, 1626, and 1 Thompson on Corp. §§ 239, 416, 417, to the effect that unless all the conditions precedent to the creation of a corporation are performed, there can be no corporation in fact and that the members of the pretended corporation will be personally liable. Judge Marshall, however, shows very clearly that the force of these text-writers as authority on this point is destroyed by an unsuccessful effort by them "to harmonize conflicting decisions that proceed on theories so opposite that harmony is impossible. If we hold," he says, "with Missouri, Arkansas, and some other States, that unless all the steps necessary to the creation of the corporation have been taken there is no corporate existence, and that the members of the association are personally liable, we, in effect, say that it is not sufficient to enable such members to escape personal liability to show that their organization is a corporation de facto; that nothing short of a corporation de jure will do. But if we adopt the growing doctrine, supported, as we shall show, by the overwhelming weight of authority in this country, that a person who contracts with a de facto corporation, the members of the latter and such person believing, in good faith, in its legal existence, such members cannot be held personally liable, then we concede, necessarily, that it is not essential to freedom from such liability that all the statutory requisites to the existence of a corporation be complied with, because, when that is done, the organization, obviously, is not a corporation de facto only; it is a corporation de jure." The dissenting judge states the true doctrine to be "that it is sufficient to constitute a corporation de facto, as against one who has recognized its corporate existence, that there be a law under which it might exist de jure, an attempt in good faith to organize under said law, and a subsequent user of the assumed corporate powers." "The very meaning of the term de facto," says Judge Marshall in another portion of his able opinion, "indicates that

nothing more is necessary to the existence of a de facto corporation than the exercise of corporate powers in good faith. Corporation de facto-that is, a corporation from the fact that it is acting as such under color of right in good faith. The existence of the law, and some attempt to comply with it, are essential, because without them there can be no assumption of the right to corporate existence in good faith. Persons cannot be said to honestly obtain the right to corporate existence, in the absence of any law authorizing the organization, or in the absence of some honest attempt to comply with such law. The law and such attempt, or user of the franchise, whatever mistakes may be made in so doing-such as the filing of articles of organization when they are required to be recorded or the recording of articles when they are required to be filed, or the filing of such articles in the wrong office, or any other of the numerous mistakes that might be made, make a corporation good everywhere, in all courts and places, till successfully challenged by the State. There is hardly any end of authority, all in harmony on this subject, but we content ourselves by referring to the following additional cases: Hass v. Bank, 41 Neb. 754, 60 N. W. Rep. 85; Lake Church v. Froislie, 37 Minn. 447, 35 N. W. Rep. 260; Snider's Sons' Co. v. Troy, 91 Ala. 224, 8 South. Rep. 658; Stout v. Zulick, 48 N. J. Law, 601, 7 Atl. Rep. 362; McCarthy v. Lavasche, 89 Ill. 270; Hudson v. Seminary Corp., 113 Ill. 618; City of St. Louis v. Shields, 62 Mo. 247; Central A. & M. Association v. Alabama Gold L. Ins. Co., 70 Ala. 120; Palmer v. Lawrence, 3 Sandf. 161; North v. State, 107 Ind. 356, 8 N. E. Rep. 159." The New York Law Journal in connection with the Wisconsin case calls attention to the recent case of Demarest v. Flack, 16 Daly, 337, 123 N. Y. 205. In the course of the opinion in that case the court remarks: "There is an overwhelming current of authority throughout the United States on the point that where a corporation has once come into actual existence through the due observance of the original formalities required for that purpose, subsequent omissions or irregularities in the completion of its organization or the prosecution of its business shall not be available as a defense in matters of contract, either to the

corporation itself or its directors or stockholders, and cannot be taken advantage of by outsiders who have had business dealings with it."

NOTES OF RECENT DECISIONS.

CARRIERS OF PASSENGERS INJURY CROWDED CARS-CONTRIBUTORY NEGLIGENCE, -In Chesapeake & Ohio Ry. Co. v. Lang's Admr., decided by the Kentucky Court of Appeals, it was held that a passenger on a crowded excursion train is not guilty of contributory negligence, in standing on the plat form, there being only standing room inside the cars, and, therefore, there may be a recovery for his death resulting from a collision caused by the negligence of the railroad company, although he might not have been killed if he had been inside the car. The court said, in part: "While the doctrine is that where a passenger voluntarily and unneces sarily places himself in a position of danger, and his own neglect causes the injury, and but for his folly the injury would not have happened, no recovery can be had, it has but little, if any, application to the facts of this case. It is not per se negligence to be upon the platform, says Mr. Beach in his work on Contributory Neglect, and in cases where by cheap rates persons are invited upon and their passage accepted to travel on these excursion trains, it is no defense on the part of company to say that you might have stood in the car and not on the platform and, therefore, no responsibility exists. The tender was in front of the engine, and the view of the approach to the switch obstructed by it, and if not it is manifest that with any sort of care this danger could have been avoided. The jury, however, was told that if from the testimony there was room in any car for the intestate, and that he could have entered the same, and that he remained on the platform where he was injured without the knowledge of the conductor, or against his objections, or that of any agent of the company, verdict should be for the defendant. This instruction was more favorable to the defense than it should have been upon the facts of the record. The entire testimony shows greatly crowded. young ladies seated upon

the

the

cars were

the coal box, with the platform filled with pas sengers, so much so as to prevent those on the ground from entering the cars, and where such inducements are given by which cars are filled inside and out with passengers, it is doubtful whether the position of the passenger on the train, unless so reckless as to knowingly place himself in imminent peril, should be held to be contributory neglect."

VENDOR AND PURCHASER

CONVEYANCE LIABILITY OF

OF DEFECTIVE STRUCTURE GRANTOR. A grantor who delivers to the grantee a deed of land on which there is a defective structure, and surrenders possession thereof to him, is not liable to one of the public thereafter injured because of the defect, since the duty to repair the structure is assumed by the grantee from the time of such delivery and surrender. The Supreme Court of Pennsylvanis so decides in Palmore v. Morris, 37 Atl. Rep. 995. The court says that "the authorities on the exact question are very meager. As between a landlord and tenant at will or for a term, the weight of authority is that the landlord continues answerable, though out of possession, for injuries resulting to third parties from negligently constructed buildings and structures on the land where they were erected by the landlord. The very letting by him of to him known defective property, without stipulation for repair, is significant of continuous negligence on his part. Godley v. Haggerty, 20 Pa. St. 387, and the cases following it down to McKenna v. Paper Co., 176 Pa. St. 306, 35 Atl. Rep. 131. But this is not a letting of the land by a landlord to a tenant; it is an absolute sale, whereby the owner devests himself of title, and all right to possession, or of re-entry for repairs, or for any other purpose. Any future possession in face of his deed, unless there be an independent stipulation to the contrary, would be a palpable trespass; and with his surrender of possession all the duties incident to ownership, as to him, were at an end. From the moment Lodge took possession under his deed the duties theretofore incumbent on Morris, Tasker & Co., were transferred to him, and he became answerable to the public for neglect in their performance. The learned judge of the court below adopts a different event for the commencement of lia

bility on the part of the grantee than possession taken under the deed. He says, "He ought, within a reasonable time, to see that the property which he had purchased, if it was in dangerous condition to the public, was put in repair." That is, he imports into the deed an implied covenant on part of the grantors that they will be answerable to third parties for defects in the building for a reasonable time after the grantee takes possession. Public policy does not demand that such clogs on the transfer of real estate should be imposed by construction, nor does the law warrant such an implication."

TAXATION-LIABILITY OF ASSESSOR FOR MALICIOUS EXCESSIVE ASSESSMENT.-The United States Circuit Court for the Northern District of California, decides in Bailey v. Berney, that an assessor, though acting judicially when listing property for assessment, and not liable for mere errors or mistakes of judgment, is liable for damages resulting from an excessive assessment made maliciously or corruptly. There is undoubtedly considerable conflict of authority on the proposition. Such an eminent jurist as Judge Cooley maintains that, as the duty of an assessor in listing the value of property for taxation is of a judicial character, that officer is clothed with a complete immunity from private suits, not alone for mere errors of judgment, but for his willful, malicious, and corrupt motive in making an excessive assessment. Cooley, Taxn. p. 556. To the same effect are Mechem, Pub. Off. p. 424, § 640, and the following cases: Wilson v. Mayor, etc., of New York, 1 Denio, 595; Weaver v. Devendorf, 3 Denio, 117; Gaslight Co. v. Donnelly, 93 N. Y. 557; Steele v. Dunham, 26 Wis. 393. The only recourse, according to this line of authority, lies in a criminal proceeding against the delinquent assessor for his malicious and corrupt conduct. On the other hand, what seems, at the present day, to be the greater and better weight of authority supports the doctrine that while assessors are not liable to private suits for mere errors or mistakes of judgment in making excessive assessments upon property, so long as they had jurisdiction to make the assessment, they will be held liable in damages for making an excessive assessment with a malicious, corrupt, or other sinister motive. From the