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47. Good Will-Value.-Where a contract for the sale of a going business conveys also the good will of such business, the seller transfers all the advantages which the business possesses because of his efforts, popularity, and skill in conducting of the business, good will being that property incident to the business sold and the favor which the vendor of a business has won from the public and the probability that old customers will continue their patronage, and such good will is impaired if the new and competing business derogates from the good will sold and the seller in violation of his agreement injures or impairs the advantages due to the good disposition of the public towards the old place of business; in other words, the impairment of good will means the impairment of the value of the business and the place of business which the buyer purchased from the seller.-Scotton v. Wright, Dela., 121 Atl. 180.

48. Injunction-Leave Employment.-In the absence of fraud, or of an express contract not to go into business or to solicit the employer's customers, a driver for a dyer and cleaner, whose business it is to deliver to and solicit tailors' trade, has a right on leaving the employment to try to build up his own business by direct solicitation of the former employer's customers and others, there being nothing secret about getting up a list of tailors, and injunctive relief should have been denied employer.-Goldberg v. Goldberg, N. Y..

200 N. Y. S. 3.

49. Innkeepers - Place of Entertainment.-A "hotel," which, like a "tavern" or "inn," terms now usually restricted to small, old-fashioned establishments, is a house where travelers or others are entertained and furnished with food and lodging, and sometimes other conveniences, is in common understanding, as seemingly recognized by Code 1907, § 7094, a "house of public entertainment," within Code 1907, § 1342, authorizing the Birmingham town council, all the powers of which are given the city commission by Act Sept. 25, 1915 (Gen. Acts 1915, p. 793), § 7, to revoke licenses of such houses if the public safety, peace, good order, or decency require it (quoting Words and Phrases, First Series. House of Entertainment).City of Birmingham v. Bollas, Ala., 96 So. 591.

50. Insurance-Defendants Joined.-Under Civil Practice Act, §§ 211. 212, companies insuring the same goods against loss by burglary may be joined in one action, especially where the policies are substantially the same in form, and each company is liable only pro rata, as common questions of fact, and possibly of law, are involved.-Bossak v. National Surety Co., N. Y., 200 N. Y. S., 148.

51. Discrimination.-A contract by an insurance company, that, in consideration of the purchase of a policy, it would make a loan to the purchaser on real estate owned by him would be invalid, under Rev. St. 1913, par. 3449, as to discrimination.-Western Union Life Ins. Co. v. Musgrave; Ariz., 215 Pac. 536.

52. Immediate Notice.-An automobile liability insurance company whose counsel told insured, after notification of an accident, that he would try to be present at a hearing of the injured party's case before the Industrial Accident Commission, and that he thought they were trying to put one over on him, but would look after him, held not to have waived immediate notice of the accident and loss as required by the policy; insured, who had already forfeited his rights under the policy by failing to give immediate notice, not having been influenced to the prejudice of any such right. -Lewis v. Commercial Casualty Ins. Co., Md., 121 Atl. 259.

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55. Returned Premiums.-The general tractual provisions of an accident insurance policy, stipulating to pay specified amounts for particular designated accidental injuries, is followed by the further provision that if the policy be kept in force for full five years, the company will pay for any such injury, "in lieu of all other benefits," a sum equal to the premiums paid to maintain the policy in force. The total amount of such premiums may be less than the specific indemnities granted and for which the premiums were paid. It is held that the provisions for a return of the premiums in lieu of the specific benefits will in instances operate as a direct limitation upon the amount specifically stipulated to pe paid, and constitute a violation of G. S. 1913, § 3523.-Commercial Acc. Ins. Co. v. Wells, State Com'r of Insurance, Minn., 194 N. W. 22.

56.-Subrogation.-Where an automobile theft policy provided that on payments of loss insurer could be subrogated to insured's rights, by settling with insured for the theft of a motortruck, discovered 75 days after proof of loss, insurer could bring replevin and minimize its loss.-Cancilla v. Firemen's Fund Ins. Co. of San Francisco, Cal., Pa., 120 Atl. 824.

57. Time of Claim.-An insurance agent's mere statement of opinion that proofs of loss need not be filed within the time named in the policy is not a waiver of such requirement.-Simon v. Safety Mut. Fire Ins. Co., Pa., 120 Atl. 822.

58. -Vested Rights.-Under Rev. St. 1919. § 6149, husband on divorce of wife had right to change the beneficiary in a policy to such wife "if living; if not, to his executors, administrators or assigns," the executor or administrator of the deceased having no vested interest in the policy.Mutual Life Ins. Co. v. Tuemler, Mo., 251 S. W. 727.

59.

Larceny-Prohibition Act.-National Prohibition Act. tit. 2, § 25 et seq.. must be construed as a whole in the light of the general object, and, though it is declared that "no property rights shall exist," in liquor illegally possessed, a conviction for larceny of liquor illegally possessed will be sustained, since the value of the chattel to its possessor is not the test as to whether it is subject to larceny.-People v. Otis, N. Y., 139 N. E. 562.

60.

Licenses-Inspection Fees.-In view of San Francisco City and County Charter, art. 2. c. 2. § 1, subd. 15, prohibiting the imposition of license taxes on persons selling or manufacturing goods. etc., at fixed places of business, except such as require permits from the board of police commissioners under chapter 3 or article 8, c. 4, § 7, an ordinance requiring grocerymen to pay a sanitary inspection fee before issuance of certificates by the board of health is invalid, notwithstanding Const. art. 11, § 11, authorizing counties, cities, etc.. to make and enforce local sanitary regulations not in conflict with general laws.-Ex parte Hadeler. Calif., 215 Pac. 562.

61. Municipal Corporations-License.-Evidence of the license number and record of an automobile truck which was contradicted by unsatisfactory evidence as to the ownership of the truck, held to raise a question for the jury as to such ownership.-Ford v. Hankins, Ala., 96 So. 349

62. Negligence-Automobile Guest.-A guest riding in an automobile, traveling at an excessive speed, should caution the driver of danger, protest against it, and, unless delivered from it, he should quit the car, if that may be done with safety, or direct that the vehicle be stopped and, when stopped, got out of it.-Sheehan v. Coffey. N. Y., 200 N. Y. S. 55.

Central Law Journal

St. Louis, November 20, 1923

MODERNIZING THE RULES OF EVIDENCE

There is a growing demand in this country, both lay and professional, that there shall be produced "all the facts before the court and jury," wherein is presented a serious scientific problem, but one not impossible of practical solution. The venerable laws of incompetency are gradually but surely falling away under the axe of advancement and an awakening to the desirability of a greater certainty in the adminIstration of justice. The text writer, Dean John H. Wigmore, may be looked upon as the pioneer accepted text authority on the subject. He has probably done more to restate the law of evidence than any other man. He did it not so much by argument as by an arbitrary ipse dixit that has been complacently accepted by receptive courts. (1 Wigmore Evidence, Sec. 578.)

It fell to the lot of another able law dean and text writer, Judge Martin P. Burks, of the Supreme Court of Appeals of Virginia, both to write and to apply the statute releasing the limitation of incompetency in Virginia. As one of the Codifiers of the Virginia Code of 1919, he prepared the statute; as judge he interpreted it and gave it life, instead of hobbling it. (Epes v. Hardaway, 28 Va. Appeals [Feb., 1923], S. E. Ark.). His opinion supplies one of the most illuminating histories extant of the effort of the legislative department, under the direct guidance of presiding judges and practicing lawyers, "to permit the production of all evidence bearing upon the question at issue," just as in "the business affairs of life it is received and considered by the business world." "It seems proper," said Judge Burks, "that the same rule should obtain in courts of justice which are enforcing rights arising out of

such transactions." Said he, "the purpose of the revisors was to remove disqualifications, not to create them in any case, nor to impose burdens on witnesses already competent.'

A few years ago the spirit of advancement in Virginia was such as to cause the Legislature to erect a commission to revise. the Code. It was happily composed of experienced men instead of the average legislator. It "undertook to make material changes in the law governing the competency of witnesses to testify, so as to remove practically all disqualifications and permit the courts to hear all evidence bearing on the question at issue just as is usual in the business affairs of life." Conviction for felony now merely affects the credit of the witness, but does not disqualify him. Legatees and devisees are competent to testify without suffering forfeiture. competency of husband and wife as witnesses was materially enlarged, excepting uncorroborated testimony in divorce cases.

The

The first application of this meritorious legislative effort at a sensible judicial search for the truth arose out of the denial by counsel of the right of the survivor of a transaction to testify. The learned advocate seemed unable to grasp such a solecism. It presented an excellent opportunity for interpretation by the author of the Act, a law teacher, a practical lawyer, a text writer on practice and procedure, who was the judge. The opinion recites that "in order to meet the difficulties that may arise in consequence of a removal of disqualifications, the revisors have added a new section declaring: In an action or suit by or against a person who, from any cause, is incapable of testifying, or by or against the committee, trustee, executrix, administrator, heir, or other representative of the person so incapable of testifying no judgment or decree shall be rendered in favor of an adverse or interested party founded on his uncorroborated testimony; and in any such action or suit, if such adverse party testi

fies, all entries, memoranda, and declarations by the party so incapable of testifying made while he was capable, relevant to the matter in issue, may be received as evidence."

The reason for the statute as furnished gives both a human and an economic appeal. Said the Court, "it was believed that this section, together with the great safeguard of cross-examination, would be ample protection for the estates of persons laboring under disability or who are incapable of testifying." Then comes the forceful and prophetic words set down in the first lines hereof and which we respectfully but earnestly commend to the profession. "In the business affairs of life all evidence bearing upon the question at issue is received and considered by the business world, and it seemed proper that the same rule should obtain in courts of justice which are enforcing rights arising out of such business transactions."

We shall never reach the extent of unlimit in vogue in the French courts nor is such an opera bouffe necessary in order to achieve the end desired. It is a meritorious custom of the common law, that at the trial of a case a statement of the facts of the cause of action, from which the alleged legal liability can be drawn, must be presented upon a permanent mandatory record. Anything beyond is corum non judice and void. So all irrevelant evidence must be excluded. The doctrine of res adjudicata and the protection afforded by due process of law are in this way preserved, which imports the participation of the State as the third party as well as the finality of the litigation.

But, while the evidence is confined to the issues created by the record, the limit upon it should be gauged by the common sense view of the business world. This is the principle settled by the Virginia law and which is worthy of emulation. It is within these broad limitations that the obligation was created and was breached. Courts are more and more coming down to

the level of laymen in the mechanics of the law. It originated under James I. that hater of mystery, when he abolished all Latin from the courts and, for that matter, from the Church. While pleading, as now practiced, is a mystery yet unsolved by the lawyer and to which judges are still devoting fifty per cent of their time, the rules of evidence are proving a close rival. But the pleadings are never seen by the layman while the application of the rules of evidence occur in his presence. The incompetency of a reputable citizen as a witness, known to the community as possessing first-hand knowledge is popularly ascribed "to the smartness of the successful counsel"; it is attributed by counsel to sacred principles and inexorable laws many centuries old. Now it appeals very strongly that the layman thought out his reason and the lawyer absorbed his; that both are justified in their respective positions, but that both view the situation in error. The lawyer simply called antiquity to his aid. He might as well have snatched a leaf from the "Blue Laws" of the sixteenth century immured a law-abiding man of today-and such an improbability with measurable frequency happens. The latter would have been futile under the condemnation of a righteously indignant public opinion, because the layman's education had advanced beyond the spell of witchcraft. The former stands in all its pristine glory because the lawyer's education has not advanced to the faculty of adducing the whole truth. There is no one else to do it. And that is the point. Shall we predict, without too serious an objection, that some Greenleaf, Jr., will within the fullness of time rewrite the Senior's great epic, saving the immutable canons, but refining the other in the cauldron of twentieth century juridicial improvement? Unless we greatly err, the conservative Old Dominion has made a splendid start.

Norfolk, Va.

THOMAS W. SHELTON

NOTES OF IMPORTANT DECISIONS

THEFT OF FUR COAT FROM PORCH NOT COVERED BY INSURANCE POLICY.-It is held by the Court of Appeals of Maryland, in Fidelity & Deposit Co. v. Panitz, 120 Atl. 713, that no recovery can be had for the theft of a fur coat, stolen from a porch, under a policy of insurance covering theft from the interior of insured's apartment. That the porch had no exterior entrance, was held to be immaterial. We quote from the opinion of Adkins, J., as follows:

"It seems to us that the reason for the express restriction of the risk incurred by the policy to goods contained in the interior of the apartment is obvious, and that the word 'interior' should be given a common sense meaning. The mere fact that no exterior entrance to the porch is provided has no bearing, when the purpose of the restriction is considered. If it did, then a porch of the same character on the first floor should be considered as the interior of the first floor apartment.

"In the latter case a thief could more easily step over the rail; but it is a matter of no serious difficulty to climb up to the second floor or to reach up with a pole. It is just such a risk that the terms of the policy excludes.

"The only case cited by either side that seems to be in point is Driver et al v. State, 18 Ala. App. 261, 89 South. 897, cited by appelant. This was an indictment for theft of seed corn under section 7324 of the Code of 1907: Any person who commits larceny from or in any dwelling house, storehouse. smokehouse, etc., on conviction must be imprisoned in the penitentiary not less than three nor more than six years.

"The law as it stood prior to that time omitted the word 'from.' In the case cited the Court referred to the earner case of Henry v. State, 39 Ala. 680, in which it was held that the taking of goods from the banis ter or rail of the porch attached to the dwelling house would not come under the earlier statute, and that such taking was not a taking 'in' the dwelling house The word 'from' was incorporated in the later act to meet the decision in the Henry Case. The Court added:

"'Our undertanding, however, of the holding in the Henry Case, is that the Court merely held that, while the porch may, in some sense, be a part of the horse, it was not

under section 3170, in the dwelling house, in such a sense as that a felonious taking therefrom would constitute a taking in the dwelling house. A taking from the dwelling house is very different from taking in the dwelling house.'

"Chase v. Hamilton Ins. Co., 20 N. Y. 52, cited by appellee, merely decides that the words 'dwelling house' are to be construed as including the kitchen, although the subject of the risk is described in the application as a stone dwelling house, and the kitchen attached is a wooden kitchen "

DIFFERENCE BETWEEN VALUE OF SECURITIES RECEIVED ON REORGANIZATION AND STOCKHOLDER'S INVESTMENT HELD TAXABLE INCOME.-It is held by the Supreme Court of the United States, in Cullinan v. Walker, 43 Sup. Ct. 495, that upon reorganization of a corporation and the exchange of securities, the difference between the value of the securities received by a stockholder and the amount of his investment, constitutes taxable income. In part the Court say:

"Cullinan insists that his gain so ascertained was merely an incident of a reorganization. This was equally true in the Phellis and the Rockefeller Cases. It is sought to differentiate those cases on the ground that there the distributed stock of the new corporation was technically a dividend paid out of surplus, and that here the segregation is not of that character. But the gain, which when segregated becomes legally income subject to the tax, may be segregated by a dividend in liquidation, as well as by the ordinary dividend. If the trustees in liquidation had sold all the assets for $6,000,000 in cash, and had distributed all of that, no one would question that the late stockholders of Farmers' Petroleum Company would, in the aggregate, have received a gain of $5,900,000, taxable as income. The result would obviously have been the same, if the trustees had taken in payment, and distributed, bonds of the value of $6,000,000, in some new corporations. And the result must also be the same where that taken in payment is $3,000,000 of such bonds and $3,000,000 in stock of a third corporation. All the material elements which differentiate the Phellis and Rockefeller Cases from Eisner v. Macomber are present also here. The corporation, whose stock the trustees distributed was a holding company. In this respect, it differed from Farmers' Petroleum Company,

which was a producing and pipe line company. It differed from the latter, also, because it was organized under the laws of another state. It is true that, at the time this Delaware corporation's stock was distributed, it held the stock of the new oilproducing company and likewise the stock of the new pipe line company. But the Delaware corporation was a holding company. It was free, at any time, to sell the whole, or any part, of the stock in either of the new Texas companies and to invest the proceeds otherwise. By such a sale, and change of investments, all interest of the holding company in the original enterprise might be parted with, without in any way affecting the rights of its own stockholders. When the trustees in liquidation distributed the securities in the three new corporations, Cullinan, in a legal sense, realized his gain, and became taxable on it as income for the year 1916."

CONSTRUCTION OF STATUTE REQUIRING MACHINERY TO BE GUARDED.-The statute regarding the protection of employees using machines was intended to cover all appliances, machines, and machinery in manufacturing plants, and to extend its protection to all persons employed in such establishments, whether working at and with the machines or about them, and a machine is "dangerous" in such sense that the employer is required to guard it, if, in the ordinary course of human affairs, danger may be reasonably anticipated from the use of it without protection. Το "guard" a dangerous machine within the meaning of the statute is to provide it with a guard, that is, any device, fixture, or attachment designed to protect or secure against injury from it. To "guard" a stamping press within the meaning of the statute, held to impose the duty to provide a device to warn the operator that the upper die is descending and to push his hand from under it, if he does not remove

it himself in time. The statute leaves it priImarily to the master to determine whether a machine needs guarding or fencing, and, if 30 the means and the manner of complying therewith, subject to the duty, which is absolute, to exercise all ordinary care with respect to the matter, and if there is a safety device known and in general use which will prevent injury to employees, a master in failing to guard his machine with such device fails to exercise ordinary care. Simon v. St. Louis Brass Mfg. Co. (Mo. Sup.), 250 S. W. 74.

HAS A COURT OF EQUITY POWER TO ENJOIN PARADING BY THE KU KLUX KLAN IN MASKI

By

Chas. B. Griffith,

Attorney General of Kansas.

Donald W. Stewart, Assistant Attorney General.

The question propounded above, in view of the recent riots and disturbances in Ohio, Pennsylvania, New Jersey and Oklahoma, is a timely one. The remedy suggested is novel and so far as we can ascertain has been raised for the first time in Kansas. It may serve to provide a legal, orderly method of disposing of a situation and practice that is fraught with grave danger to the peace and dignity of any State.

The Attorney General of Kansas has ruled that public parades by masked members of the Ku Klux Klan are a disturbance of the peace. That ruling has been followed in portions of Kansas. It is a disputed question and has never been ruled upon by any court.

The Klan of Fort Scott, Bourbon County, Kansas, recently advertised a public parade in mask to take place in the City of Fort Scott on the evening of October 6th, 1923. The attention of the Attorney General was called to this proposed parade and on October 5th, 1923, a petition and application for an injunction was filed in the District Court of Bourbon County, Kansas, in the name of the State on the relation of the Attorney General and County Attorney.

The petition named the State as party plantiff and Thomas Daly, John Doe and Richard Roe as defendants. Mr. Daly is alleged to be the leader of the Fort Scott Klan and the only member definitely known to the State. The petition alleged in substance, among other things that the defendants, and many others unknown to the State, would, unless enjoined by the

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