Service Co. v. American Ins. Co., 213 Mich. 523, 181 N. W. 1007, 14 A. L. R. 183; Traynor v. Automobile Mut. Ins. Co.. 105 Neb. 677, 181 N. W. 566, 14 A. L. R. 195; Rydstrom v. Queen Ins. Co., 137 Md. 349, 112 Atl. 586, 14 A. L. R. 212. See also Moblad v. Western Idemnity Co. (Cal. App.) 200 Pac. 750.

"In these cases the meaning of the word 'collision' is extensively set out. and so needs no repetition here. Because of this development and extension of the word's meaning, some insurance companies in policies insert express exclusions of contracts with roadbed or way, ditch, or gutter, railroad ties or rails, or those contacts with the earth or other object primarily due to upsets or overturns. None of these exclusions are in this policy, but there is a limited one of 'loss or damage to any tire due to puncture, cut, gash, blowout, or other ordinary tire trouble,' due to 'being in accidental collision with any other automobile, vehicle or object'; that is, from the possible or probable meaning of 'collision' defendant expressly excluded tire damage from contact with glass, tacks or stones, and other hard objects on the surface or imbedded and a part of road or earth, or from contact with ruts, depressions or other surface irregularities.

"This must have been done, lest otherwise these common incidents of an auto's ordinary progress be held to be within the meaning of 'collision,' as used in this policy, and it is indicative that unexcluded contacts with road or earth, causing other than tire damage, were by the parties deemed to be within the meaning of the 'collision clause' aforesaid. In view of the premises and the rules of interpretation applicable thereto, it is believed that the damage to plaintiff's auto was caused by a collision within the intent of the policy in suit."

CORPORATIONS DOING BUSINESS WITHIN THE STATE.-The New York Law Journal for January 24, 1923, contains the following:

"In the case of Rosenberg Bros. & Co., Inc., v. Curtis Brown Company, which appears on the first page of this morning's Law Journal, the United States Supreme Court held that the coming into this state by officers of a corporation at various intervals for the purpose of purchasing merchandise for the corporation is not the doing of business within this state.

"This is in accord with the rule previously enunciated by the United States Supreme Court in Cooper Mfg. Co. v. Ferguson (113 U. S., 727) that the performance of a single

or isolated transaction within the state is not the doing of business within the state.

"The decisions upon this subject divide so closely that it is very difficult to lay down a rule that will serve to define what the doing of business within a state is (see editorial, New York Law Journal, August 30, 1922).

"The Supreme Court itself has said that the results must depend largely upon the facts of each individual case (People's Tobacco Co. v. Am. Tobacco Co., 246 U. S. 79). It has been held that the maintenance of an office and of agents within the state for the purpose of soliciting business does not constitute the doing of business within the state by a corporation (Green v. Chicago B. & Q. R. R., 205 U. S. 530). However, when the corporation went one step further and the agents were authorized to make collections and to receive payments within the state it was held that the foreign corporation was then doing business within the state (International Harvester v. Kentucky, 234 U. S. 579).

"These cases are sufficient to illustrate that the Supreme Court was correct in pointing out that each case must for the most part stand alone. The case under discussion is in accord with the previous decisions, in that no regular course of business was conducted within this state, and all the cases have held that this, at the very least, is necessary before the corporation is doing business within this state.

WORKMAN INSTALLING ELECTRIC TRANSFORMER ENGAGED IN INTERSTATE COMMERCE.-A workman was injured while installing a new rotary converter and transformer in an electric substation, and connecting it with wires to the main or conductor bus that carries the electric current to an electric railway's trolley wires. The new transformer was to take the place of an old one, which regulated the current used in the operation of the railway company's cars in interstate commerce, and was an instrumentality essential to the successful operation of the railway. Held, that the work was one of repair and maintenance, and that the workman so engaged was employed in interstate commerce, within the meaning of the federal Employers' Liability Act. Halley v. Ohio Valley Electric R. Co., W. Va., 114 S. E. 572.

Distinguishing this from certain other cases, the Court said:

"We think the present case can be distinguished from the cases of McKee v. Ohio Valley Elec. Co., 78 W. Va, 131, 88 S. E. 616,

Roberts v. United Fuel Gas Co., 84 W. Va., 368, 99 S. E. 549, and Shanks v. Delaware, L. & W. R. Co., 239 U. S. 556, 36 Sup Ct. 188, 60 L. Ed. 436, L. R. A. 1916C, 797. In the McKee case the workman was killed by a fall of earth while working in an excavation under a wooden trestle on which the railway's track crossed a small stream, and near the supporting timbers thereof, intended for an abutment of a steel bridge to take the place of the trestle and to be used in lieu thereof, when completed; but he was not repairing or altering the trestle nor working on it, or on the track,, or anything else actually used in the operation of the railroad. In the Roberts case the plaintiff was injured while employed by defendant in digging a ditch for a pipe line which was to be used in interstate commerce. Judge Williams in the course of his opinion says:

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"The work of excavating the ditch was purely construction work within the state, and was clearly separable and distinguishable from defendant's commercial business. The pipe line to be laid in the ditch was not part of defendant's means or appliance for carrying on either intrastate or interstate commerce, nor could it become such until the pipe was laid. This is altogether unlike a case where an employee is injured while engaged in repairing an existing means or appliance already devoted to a commercial purpose, as, for instance, the work of repairing an existing railroad track, bridge or depot, which is already devoted to commerce.'

"In neither of these two cases cited by counsel for defendant was the workman engaged in doing any work of repair upon an instrumentality that had been in actual use in interstate commerce. But it is otherwise in the instant case The old transformers and the main bus had been in actual use in interstate commerce for years. The old transformers were being replaced, if the or ders to Powers were being followed, and he says they were. The new transformer was being connected up to serve in lieu of the old one. Clearly this is a work of repair."

A Memphis lawyer entered his condemned client's cell: "Well," he said; "good news at last."

"A reprieve?" exclaimed the prisoner eagerly. "No, but your uncle has died leaving you $5,000, and you can go to your fate with the satisfying feeling that the noble efforts of your lawyer in your behalf will not go unrewarded." -Chicago Ledger.

VALIDITY OF AGREEMENT BY ADMINISTRATOR OR GUARDIAN

TO SELL REALTY

By Dewey A. Dye, Bradentown, Fla.

A situation of some interest which is not confronted every day in the practice of law arises when a guardian or administrator makes an agreement to sell real estate, before the person acting in this representative capacity has authority granted by an appropriate Court of competent jurisdiction to make such sale. It is the general rule that a guardian or executor does not merely by virtue of the office have any charge or control of the real estate, and it is in the light of this rule that this situation is gone into.

The general rule with reference to most contracts by persons acting in a representative capacity is, that the representative whether a guardian or administrator or a trustee can make no contract binding, on the estate which they represent, but the contract creates a personal liability and the seller, purchaser or contractor must look to the representative for satisfaction or performance, and the representative must in turn look to the estate represented for compensation.1

Applying this general rule which is established by practically all authorities the question arises can such a contract when made with reference to the sale of real property be specifically enforced, or give use to an action for damages when the person acting in this capacity is without authority, to enter into such agreement and if not what the rights of the respective parties are in relation thereto.

It has been held with reference to guardians and administrators that there is no power in the person acting in this representative capacity to contract for the sale of real estate before authority to do so

(1) Sanford v. Howard, 29 Ala. 684, also 55 Ala. 493: 21 Cyc. 115; Andres v. Blazzard (Utah), 54 L. R. A. 354, holds cannot bind estate unless ex: pressly authorized by law; 2 Florida 360 at 368 holds children cannot claim benefit of guardians contract, they are not parties to it, hence it must follow they cannot be bound thereby; with reference to Administrators power to bind estate, see 19 Florida 714.

has been granted. Such a contract not only is not binding on the estate, but is void, as it is at war with the interest of the estate represented and thus is opposed to public policy. This is the rule in jurisdictions which have passed upon this question.3

As has been shown, it is a general rule that any contract made by such representative creates a personal liability, but it is the opinion of the writer that in such a situation as mentioned in this article, no personal liability arises, for the reason that the power and authority of a guardian, administrator or similar fiduciary is limited as a matter of law. All persons are presumed to know the law, and are charged to the same extent as though they did, hence the reason for holding the representative personally liable in such a case does not exist.

It is taken to be axiomatic that when the reason for a rule ceases to exist or has no application the rule ceases to exist or is not called into operation; hence by analogy, reasoning from the line of authorities which hold that an agent is not personally liable on his contract made for a principal without authority if the person contracted with knows the principal has not granted such authority to his agent, should be applied to this situation, and the purchaser trading with a guardian or administrator is trading with a person whose authority is limited, as a matter of law, the extent of which he is bound to know,5 hence he cannot look to the representative for redress. It has been so held in at least one well-considered case.6

The gravamen of the offense which allows a person to recover from an agent who acts without authority is founded in deceit and if the person contracting with has not as a matter of fact, or as a matter of law been deceived, he cannot recover for (2) Ibid, note 1.

(3) 23 Corpus Juris, page 154; 15 Am. and Eng. Cyc., 58; see also 67 L. R. A. 977 and 52 Southern 902.

(4) Principal and Agent, 21 R. C. L. 93. 38 Ann. Cas. 772 and note; Tedder v. Riggin, 65 Florida 153; 61 So. 244.

(5) Hedgecock v. Tate, 168 N. C. 660-85SE34. (6) Ibid, note 5.

his loss which, while unfortunate, may be said to be damnum absque injuria.7

With reference to the personal liability of the representative, it may be stated as a general rule that the fiduciary would not be personally liable upon a naked contract for the sale of land belonging to the estate represented, made without authority, still an exception may be said to exist when there are apt words in the contract which create a personal liability in the nature of a warranty or covenant.

DISCLOSURE IN INSURANCE CONTRACTS

By Donald MacKay, Glasgow, Scotland

There have been several cases lately which indicate a disposition on the part of our judges to apply more strictly than heretofore the rule of the common law that the validity of the contract of insurance implies the utmost good faith on the part of the insured and as a corollary to this that he has made the fullest disclosure of all facts and circumstances affecting the risk. As our readers will know insurance com

panies were and are generous in the matter of interpreting contracts, not insisting on technicalities, or obscure conditions that may have escaped the notice of their clients and being generally easy as to settlement of claims. This laxity appears to have communicated itself to the courts, but now owing possibly to the knowledge that such generosity of construction was being abused, there is a reaction in favor of the stricter application of the law and in particular of the rule as to disclosure. We have already noticed one or two recent instances of this, and the judgment in the case of the Spathari which has been issued after a prolonged trial in the Scottish courts is the occasion of our writing on the subject again.

Now in marine insurance-to which branch of law the case specially relatesthe law as to disclosure is codified in the

(7) Ibid, 4-5-6.

Marine Insurance Act of 1906, and as the statements in that measure are in general principle applicable to all forms of insurance we cannot do better than quote the relative sections.

"Section 17. A contract of Marine Insurance is a contract based upon the utmost good faith and if the utmost good faith be not observed by either party, the contract may be avoided by the other party.

"Section 18. (1) Subject to the provisions of this section the assured must disclose to the insurer before the contract is concluded every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which in the ordinary course of business ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the

contract.

"(2) Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk.

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(3) In the absence of inquiry the following circumstances need not be disclosed, namely:

"(a) Any circumstance which diminishes the risk.

(b) Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge and matters which an insurer in the ordinary course of his business as such ought to know.

"(e) Any circumstances to which information is waived by the insurer.

"(d) Any circumstance which it is superfluous to disclose by reason of any express or implied warranty.

"Section 19. Subject to the provisions of the preceding section as to circumstances which need not be disclosed, where an insurance is effected for the as

sured by an agent, the agent must disclose to the insurer.

"(a) Every material circumstance which is known to himself, and an agent to insure is deemed to know every cir cumstance which in the ordinary course of business ought to be known by or to have been communicated to him, and

"(b) Every material circumstance which the assured is bound to disclose unless it come to his knowledge too late to communicate it to the agent."

The case of the Spathari was an action against underwriters by the owners of that vessel and her cargo for recovery of insurance money consequent upon the sinking of the vessel. The defense was failure to disclose material facts and circumstances which entitled the insurers to avoid the contract in terms of the statute above quoted.

It was urged in argument on behalf of the plaintiffs that as the Marine Insurance Act of 1906 was a codifying statute, decisions anterior to its date purporting to expound and apply the common law might still be referred to as authoritative. That

contention was accepted subject to this qualification, that cases anterior to the statute might still be referred to in so far as they could be construed as interpreting and applying the rules set forth in the statute, but a decision which could not be construed in a manner reconciliable with a reasonable interpretation of the words of the statute had no longer any authority. The case of Haywood v. Rogers (4 East 590) was held to fall under the latter category, for as the trial judge put it, "I have difficulty in seeing how consistently with the principle of 'the utmost good faith' it could even be held to be superfluous to disclose to the insurer a fact which if known would influence the judgment of a prudent insurer in fixing the premium."

Another authority relied on by the claimants was Joel v. Law Union & Crown Insurance Co., 1908 2 K. B. 431-a casc subsequent to the statute-in which it was

explained that a policy is not vitiated by the non-disclosure of a circumstance which though material, is not one which the person insuring might reasonably be supposed to deem to be material. That doctrine,

however, was held only applicable to special cases of which the following was cited as typical. If, for instance, a potato merchant in an agricultural district without the intervention of any agent familiar with insurance and shipping, insured against perils of the sea and consignment of potatoes to a foreign port, and thereafter the underwriter contended that the policy was voidable by reason of the nondisclosure of a certain special circumstance known only to the merchant, the latter could competently answer, "Be it that this circumstance was at the time for special reasons a material one, that was not a thing which I knew or which in the course of my ordinary business I could presumably be expected to know ought to be disclosed."

Now in the case of the Spathari, the facts, the non-disclosure of which was relied on as material for avoidance of the contract, were as follows: The vessel having been brought by a Greek in Glasgow acting in the interests of a Greek syndicate in the Levant, was by arrangement transferred directly to the plaintiff, a British subject whose interest therein was intended to be of a limited and temporary character. After her arrival in Eastern waters the right of property in her was to be transferred to the Greek who originally purchased her and she was to pass into the control of a syndicate or group of local Greek gentlemen who were to endeavor to form a company registered under British law to take her over. Meantime the Greek gentleman in Glasgow was to be manager of the vessel, he was interested in the cargo and he was to pay the disbursements of the voyage and to be entitled to the freight.

At the time of these transactions (192021) it was very difficult to insure Greek ships. The reason of this was that at a time when there was a great slump in ships

prices an extraordinary number of insured Greek ships had sunk in a mysterious. way. The result of these sinkings was that rightly or wrongly underwriters were of opinion that a peculiar risk attached to the insurance of Greek ships, namely, the risk that the ship would be scuttled by the Greek owner.

"The question for me," concluded the learned judge, after fully reviewing the evidence, "is whether (these circumstances) were material from the point of view of an underwriter. In my view of the weight and import of the evidence, the vessel, if these facts had been disclosed, was at that time uninsurable in the ordinary market and on the ordinary terms. Accordingly I am constrained to hold that those facts were material. I must further hold that they were facts the materiality of which persons engaged in shipping or insurance business knew or ought to have known to be material. They were not disclosed. Accordingly in view of the terms of the statute, I must hold that the policy is voidable and that the plaintiff cannot recover under it."