cago, R. I. & P. Ry. Co. v. Payne, Ark., 217 S. W. 810.

66. -Workmen's Compensation Act.-A quarrel between a watchman and a superintendent, resulting in a homicide, held to arise out of the employment within Workmen's Compensation Act, though personal matters entered into the controversy.-American Smelting & Refining Co. v. Cassil, Neb., 175 N. W. 1021.

67. -Workmen's Compensation Act.-Where a workman without work for a brief space of time went away from his working place a few yards to speak to a fellow workman in the same room, according to a custom in the factory, and was injured when his sleeve was caught by the suction of an unguarded machine, it could not be said as a matter of law that he was beyond the protection of the Employers' Liability and Workmen's Compensation Statute.-Barber v. Jones Shoe Co., N. H., 108 Atl. 690.

68.-Mortgages Assumption of Payment.Where purchaser of mortgaged premises assumes the payment of the mortgages thereon, he becomes the principal debtor and the original mortgagor becomes only a surety.-First State Bank of Binford v. Arneson, Wash., 186 Pac. 889.

69. -Priority-Where advances are made by senior mortgagee under provision providing for optional advances with no actual notice of a second mortgagee, the advances extend the scope of the lien; the mortgage as to such advances constituting a new lien or incumbrance.-Atkinson v. Foote, Cal., 186 Pac. 831.

70.- -Redemption.-The holder of a sheriff's deed based on the foreclosure of a second mortgage is entitled to redeem from a subsequent sale under a decree foreclosing the first mortgage. Anderson v. Catlin, Kans., 186 Pac. 1027. 71-Municipal Corporations Burden on Streets. Streets cannot be subjected to any other use without the consent of the owners of the fee. Wilson v. Burress, S. C., 101 S. E. 820. 72.-Negligence-Imputability.-Negligence of brother driving a buggy to town to enable his sister to take a train is not imputable to her, the brother not being under sister's control.Lawler v. Montgomery, Mo., 217 S. W. 856.

73. Imputability. One riding in an automobile is barred from recovering for the negligence of a third person if the driver of the automobile is also chargeable with negligence proximately contributing to the accident. -Steinkrause v. Eckstein, Wis., 175 N. W. 988.

74.-Partnership-Defined.-A "partnership" is an association of two or more persons for the purpose of carrying on a business together and dividing the profits between them.-King v. Gants, Okla., 186 Pac. 960.

75. -Profits.-A contract whereby plaintiff, furnishing teams, etc., should receive one-half of the net proceeds earned by a mercantile business, it being agreed that defendant was the owner of the business, and that "all the accounts, stocks, and supplies necessary to carry on such business are the sole property of the party of the first part (the defendant) and shall continue so throughout the length of this agreement," except rolling stock to be furnished by plaintiff, held not to create a partnership.-McPherson v. Great Western Milling Co., Cal.,

186 Pac. 803.

76.-Principal and Agent Declarations of Agent.-The unsupported declarations of an agent that he is the agent of another is incompetent to prove agency.-Sanders v. Barnwell Lumber Co., S. C., 101 S. E. 860.

77-Railroads Compulsory Operation. -A company cannot be compelled to operate its railroad where it cannot do so without loss therefrom, though its other business of lumbering be sufficiently remunerative to absorb the loss and make returns on its entire business.— Brooks-Scanlon Co. v. Railroad Co., U. S. S. C., 40 S. Ct. 183.

78. Warning to Travelers. Automobilists approaching crossing have a right, if the contrary does not appear, to assume that the railroad employes will give the customary warnings. Barrett v. Chicago, M. & St. P. Ry. Co., Iowa, 175 N. W. 950.

79.- Rape-Civil Action.-One upon whom a rape has been committed has a right to settle with the offending party for the injury done her, and may maintain a civil suit to recover damages.-People v. Marx, Ill., 125 N. E. 719.

80.-Reformation of Instruments-Mistake.While in equity a rescission of a contract may be adjudged on the ground of a unilateral mistake in its contents, there must be mutual mis

take, or inadvertence, or the excusable mistake of one party and fraud of the other as to agreement on which the minds of the parties have met, in order that a reformation may be adjudged.-Metzger v. Aetna Ins. Co., N. Y., 125 N. E. 814, 227 N. Y. 411.

81.---Replevin-Burden of Proof.-Plaintiff in replevin must recover on the strength of his own right, and not on the weakness of defendants. Jackson v. City of Columbia, Mo., 217 S. W. 869.

82.- -Growing Crop.-Growing crops are subject to replevin, without regard to whether they are growing or, having matured, have ceased to derive any nutriment from the soil.-Stephens v. Steckdaub, Mo., 217 S. W. 871.

83.-Sales-Acceptance of Option.An option to purchase, once accepted, becomes a binding contract upon the parties thereto.-Sussman v. Gustav, Wash., 186 Pac. 882.

84. Cancellation.-A letter: "Please cancel my back orders. I am in a notion of quitting business and leave to Europe to see my people" -sufficiently showed an intent to cancel or countermand all orders for goods that had not been delivered at the time the letter was written.J. R. Bissell Dry Goods Co. v. Katter, Ark., 217 S. W. 779.

85. -Searchers and Seizures Production of Papers. Knowledge gained by government's wrongful search and seizure may not, on return by order of the court, of the original articles, be used to call on the owners by subpoenas to produce them: so that they may not be punished for disobeying an order to comply with the subpoenas.-Silverthorne Lumber Co. v. U. S., U. S. S. C., 40 S. Ct. 182.

86.-Specific Performance Merchantable Title. -Equity will not require one to take title under a contract providing for good merchantable title unless it is made to appear that the title which the seller seeks to force upon the buyer is such a title.-Crom v. Henderson, Iowa, 175 N. W. 983.

87. Subrogation-Defined.-Subrogation is the substitution of another person in the place of a creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor in relation to the debt.-Graham v. Durnbaugh, Cal., 186 Pac. 798.

88-Telegraph and Telephone-Limitation of Liability. A rule of a telegraph companiy limiting its liability on account of delay in delivery of interstate message to amount received for same held valid and binding.-Klippel v. Western Union Telegraph Co., Kans, 186 Pac. 993. 89.-Tender-Unconditional. It is a correct general rule that every tender by a debtor to a creditor must be absolute and not coupled with conditions, but if the condition interpolated is not prejudicial to the creditor, and is one which the debtor has a right to insist upon, it will not vitiate the tender.-Dozier v. Vizard Inv. Co., Ala., 83 So. 572.

90-Trade Marks and Trade Names - The Change of Name.-Where M. M. Newcomer and others incorporated the M. M. Newcomer Company and later sold the stock and organized a corporation as "Newcomer's New Store," at a location near by, and entered the same or similar business, the latter will be enjoined from the use of the word "Newcomer," evidently adopted by the latter corporaion for the fraudulent purpose of deluding the public and injuring the business of the former.-M. M. Newcomer Co. v. Newcomer's New Store, Tenn., 217 S. W. 822.

91.-Trusts-Income.-Stock of subsidiary corporation, purchased out of earnings of holding company accumulated subsequent to creation of trust, go to life beneficiary of stockholder's estate as income, and not to remaindermen as capital.-Macy v. Ladd, N. Y., 125 N. E. 829. 92.-Usury-Tender.-Plaintiff seking to have a deed canceled as being infected with usury must tender payment of the principal amount of the debt and lawful interest.-Polite v. Williams, Ga., 101 S. E. 791.

93.-Wills-Bequest.-The words of a will, "I give to my sister" named, standing alone, are sufficient to give to the sister an absolute estate.-Dexter v. Young, Mass., 125 N. E. 862.

94.- -Probate.-Where an instrument is merely a contingent will and the condition upon which it was to become effective has failed, it cannot be admitted to probate.-Lee v. Kirby, Ky., 217 S. W. 895.

95.- -Vested Remainder.-The law leans toward vested remainders.-Boston Safe Deposit & Trust Co. v. Wall., Mass., 125 N. E. 853.

Central Law Journal.

ST. LOUIS, MO., APRIL 9, 1920.

ARE MONOPOLIES ILLEGAL UNLESS ACCOMPANIED BY AN ABUSE OF THE POWER CONFERRED BY THE COMBINATION?

The Sherman Act, designed to prohibi: combinations in restraint of trade, has, in the opinion of many lawyers, been construed to death in the recent so-called Steel Trust Decision. United States of America v. United States Steel Corporation (Opinion handed down March 1, 1920).

The defendant corporation in this case was the result of the merger of one hundred and eighty independent concerns. There was ample evidence to show that the company, at the time of its organization, controlled about ninety per cent of the steel business, and that the purpose of the organization was "to monopolize the steel trade." This finding was by Judges Wooley and Hunt in the District Court (223 Fed. 161). The District Court, however, found that the defendant did not, at the time suit was filed, control more than 49 per cent of the steel business and that it had abandoned its purpose to monopolize the trade and to fix prices, for which reasons the District Court concluded that defendant should not be dissolved nor in any respect held responsible for the sins of its organizers. The Supreme Court affirmed the decree dismissing the Government's bill by a vote of four to three, Justices Bran deis and McReynolds, not sitting and Justice Day with Justices Pitney and Clarke dissenting.

Probably the most important principle announced by the Court in this case as the basis of its decision is that the intent and even the actual accomplishment of the organizers of a so-called combination in restraint of trade to effect a monopoly have no bearing on the question whether the combination is in fact illegal at the time suit is instituted. The court declared that their

consideration was not "of what the corporation had power to do or did, but what it has now power to do and is doing." Under this rule it would seem that any illegal combination using its power unlawfully to control prices and production could quickly suspend its illegal practices on the first sign of a storm of executive displeasure and continue to be "good" until the suit subsequently brought had been dismissed when it could promptly resume its illegal practices. It would simply be a case of the "devil was sick, the devil a saint would be." The Court admits that the illegal practices of the defendant continued as late as the year 1911, including attempts to control prices, which practices the Court declares were "abandoned nine months before this suit was brought." The Court further declared that there was not evidence "that the

abandonment was in prophecy of or dread of suit; and the illegal practices have not been resumed nor is there any evidence of an intention to resume them." This last re

mark is due, no doubt, to the rule as to the "dangerous probability" of a resumption of illegal practices announced in the case of Swift & Co. v. United States, 196 U. S. 396.

Justice McKenna, who writes the opinion for the majority of the Court spends much effort at ridiculing the government's contention that the possession of the power of monopoly is itself illegal. He speaks of the "contradictions" involved in this theory and writes a school-boyish essay on elementary principles of logic which seem to have no purpose to serve except to divert the mind from the main point at issue. In the Standard Oil Case, 221 U. S. 77, the Court had distinguished, very properly, it seems to us, between acts done in violation of the statute and the condition brought about by the merger which "in and of itself is not only a continued attempt to monopolize but also a monopolization." In the present case Justice McKenna regards only the acts done in restraint of trade and not the condition produced by the merger as being illegal. But the merger itself,

"apart from works," created a monopoly which the Court was required to strike down. The learned Justice insists, however, that though the defendant is colossal in size and capable of exerting a tremendous influence in its particular field, yet such power was not now being exercised and had not been exercised, since the suit was filed, except for good. The opinion calls attention to the fact that customers and competitors made no complaint against the defendant; that prices were maintained at a certain level to which all competitors adhered; that the company did not seek to cut prices and that, so far from stifling competition, its competitors have actually thrived. Then Justice McKenna gets in at this point one of his plausible antithetical expressions intended to demolish the government's contention at one blow. After the referring to the success of defendant's competitors the Court says that "if this success was against the competition of defendant, we have an instance of movement against what the government insists was an irresistible force; if in consequence of it, we have an illustration of the adage that 'competition is the life of trade' and is not casily repressed. The power of monopoly in the corporation under either illustration is an untenable accusation."

The Court by thus requiring the government to prove acts of the defndant in restraint of trade as well as a "condition of monopoly" before it can demand a decree of recovery makes it practically impossible for the government to prevent the monopolies which are now increasing at a rapid rate. One of our correspondents informs us of an attempt at the present time to merge all the paint and varnish manufacturers in the country. We see no obstacle in the way of such mergers if the element of monopoly is no longer sufficient, in view of the Steel Trust Decision, to make a business combination illegal under the Sherman Act. Under this rule, any corporation, by a process of benevolent assimilation of other firms, may gradually obtain control of certain lines of business, and, if it does

not seek to drive out all of its competitors from the market and does not seek to extort too great profits out of its monopoly, it is not an illegal combination. This rule is contrary to all the previous decisions of the Supreme Court and to the clear intent of the Sherman Act itself.

Justice McKenna is at great pains to prove the serious consequences to defendant's business and to the business of the country in general which would result from the dissolution of the defendant corporation. He calls attention, also, to the inevitable modern tendency to form larger units of business organization and to "integrate" various lines of business which are complementary to each other. Justice McKenna delights in the word "integration" and admits that the idea involved in that word is the basis and justification for the economic processes involved in so-called mergers. It is an advantage to a steel company to own and produce its own iron ore; to operate its own steamship lines for the purpose of tranporting its products; to own its own coal mines and coke ovens; to have separate mills to produce different kinds of merchantable iron products instead of producing different kinds in one mill. To thus "integrate" a business with its supplies and with its markets, huge capital and abundant resources are necessary. This argument is familiar to every student of economics. It may be true in principle and we are not gain-saying its truth. But, even if true, its conclusions run counter to the provisions of the Sherman Act which, however beneficial such mergers may be, prohibit all combinations which produce a monopoly. The Sherman Act may be a detriment to the business growth of the country from the standpoint of the economist, but, even so, it is not in the province of the Supreme Court virtually to repeal the act by implication. The people might prefer to restrict business in some particulars in order to secure what they regard as a greater benefit for themselves. If the people, speaking through their repre

sentatives, are opposed to the creation of colossal business organizations by process of the merger of competiting companies, it is not for the Supreme Court to point out the inexpediency of such a policy and the injury it might do to our world trade, as Justice McKenna is so careful to do.

197; Addyston Pipe Company v. United States, 175 U. S. 211, 238; Harriman v. Northern Securities Co., 197 U. S. 244, 291; Union Pacific Case, 226 U. S. 61, 88. While it was not the purpose of the Act to condemn contracts which in a lawful manner seek to expand one's own business and further legitimate trade, it did intend effective

clearness of its thought-a notable characteristic of Justice Day's opinions thoroughly proves how far astray the majority of the Court has wandered in the present decision. Justice Day said:

"I agree that the Act offers no objection to the mere size of a corporation, nor to the continued exertion of its lawful power, when that size and power have been obtained by lawful means and developed by natural growth, although its resources, capital and strength may give to such corporation a dominating place in the business and industry with which it is concerned. It is entitled to maintain its size and the power that legitimately goes with it, provided no law has been transgressed in obtaining it. But I understand the reiterated decisions of this court construing the Sherman Act to hold that this power may not legally be derived from conspiracies, combinations, or contracts in restraint of trade. To permit this would be practically to annul the Sherman Law by judicial decree. This principle has been so often declared by the decisions that it is only necessary to refer to some of them. It is the scope of such combinations. and their power to suppress and stifle competition and create or tend to create monopolies, which, as we have declared so often as to make its reiteration monotonous, it was the purpose of the Sherman Act to condemn, including all combinations and conspiracies to restrain the free and natural flow of trade in the channels of interstate commerce."

Justice Day is sustained in his statement of the construction of the Sherman Act by the cases which during the last thirty years have construed this law. Pearsall v. Great Northern Ry. Co., 161 U. S. 646; TransMissouri Freight Assn. Case, 166 U. S. 290, 324; Northern Securities Case, 193 U. S.

combinations or contracts of whatever form which unduly restrain competition and unduly obstruct the natural course of trade, or which from their nature, or effect, have proved effectual to restrain interstate commerce. Standard Oil Co. v. United States, 221 U. S. 1; United States v. American Tobacco Company, 221 U. S. 106; United States v. Reading Co., 226 U. S. 324; Straus v. American Publishers' Assn., 231 U. S. 222; Eastern States Lumber Association v. United States, 234 U. S. 600.

If the Steel Trust decision prevails the distinction between "good trusts" and "bad trusts," once the subject of ridicule and the butt of satirical jibes will have become established in the law by the solemn pronouncement of four judges of the Supreme Court. If the United States Steel Corporation is not a monopoly in restraint of trade, neither was the American Tobacco Company, nor the Standard Oil Company, nor Swift and Company, which recently, and, as it seems, to us, rather prematurely, in view of this decision, submitted to a decree of partial dissolution. If monopolies, irrespective of whether they are good or bad, are not prohibited by the Sherman Act, then let us quit talking about monopolies as being illegal but confine the inhibitions of the Sherman Act to such transactions which in themselves effect a restraint of trade. But in such event the dissolution of a combination into its constituent companies would hardly be the proper remedy unless the merger itself, by reason of effecting a monopoly, whether accompanied by acts in actual restraint of trade or not, is illegal.

NOTES OF IMPORTANT DECISIONS.

VALIDITY OF RESTRICTIONS IN RESTRAINT OF EMPLOYMENT UNNECESSARY TO PROTECT THE PROMISEE.-Attorneys sometimes overreach themselves by attempting too much. This is especially true in the case of stipulations in a contract in restraint of trade or employment; in such matters it is best not to demand too much. This caution finds ample justification in the plaintiff's complete defeat in the case of Stores v. Abrams, 108 Atl. Rep. 541: In this case plaintiff entered into a contract to employ defendant as manager of its store in Bridgeport, Conn., in consideration of which the latter agreed not to engage himself in the same line of business or "connect himself with any firm engaged in business similar to that of the party of the first part, for a period of five years." The Court held that this restriction against the right of employment was too severe and void as contrary to public policy. The Court said:

"Under the law, restrictive stipulations in agreements between employer and employe are not viewed with the same indulgence as such stipulations between a vendor and vendee of a business and its good will.

"In the latter case, the restrictions add to the value of what the vendor wishes to sell, and also add to the value of what the vendee purchases. In such cases also the parties are presumably more nearly on a parity in ability to negotiate than is the case in the negotiation of agreements between employer and employe.

"In a restrictive covenant between a vendor of a business and the vendee, "a large scope for freedom of contract and a correspondingly large restraint of trade" is allowable. In a restrictive covenant between employer and employe on the other hand, there is "small scope for the restraint of the right to labor and trade and a correspondingly small freedom of contract."

The general policy of a strict construction of contracts in restraint of re-employment as against the former employer is well settled by authority. See Rogers Mfg. Co. v. Rogers, 58 Conn. 356, 20 Atl. 467, 7 L. R. A. 779, 18 Am. St. Rep. 278; Eureka Laundry Co. v. Long, 35 L. R. A. (N. S.) 119, note; Simms v. Burnette, 16 L. R. A. (N. S.) 389, note; Herbert Morris, Limited, v. Saxelby, (1916) 1 A. C. 688; Mason v. Provident C. & S. Co., (1913) A. C. 724; Nordenfeldt v. Maxim H. G. & A. Co., (1894) A. C. 565; Id., 11 Reports, 27; Konski v. Peet, (1915) 1 Ch. 530; Herreshoff v. Boutineau, 17 R. I. 3, 19 Atl. 712, 8 L. R. A. 469, 33 Am. St. Rep. 850,

On the question of the validity of the particular restrictions in this case the Court declared that it went far beyond what was neces

sary and that all plaintiff would be allowed to exact was an agreement providing that the defendant, while connected with a competing business, should not solicit trade from persons who were customers of the plaintiff at the store where defendant was formerly employed. This rule follows the English rule announced in Konski v. Peet (1915), 1 Ch. 530.

The present case, as we said in the beginning, should be a warning to attorneys not to exact too much from an employe on leaving a former employment. This warning is emphasized by the Supreme Court of Rhode Island in the case of Herreshoff v. Boutineau, 17 R. I. 7, 19 Atl. 469, 8 L. R. A. 469, where the Court said:

"Covenantees (in contracts in restraint of trade between employer and employe) desiring the maximum protection have, no doubt, a dif ficult task. When they fail, it is commonly because, like the dog in the fable, they grasp too much, and so lose all."

A recent English decision (Hepworth v. Ryott, 89 L. J. Ch., p. 69) holds that the contract of a "movie" actor not to use his pseudonym, "Stewart Rome," in any capacity after the end of his employment was invalid as "extending beyond what was reasonably necessary for the employer's protection."

RIGHT TO USE EVIDENCE GAINED BY UNLAWFUL SEARCH AND SEIZURE.—Evidence secured by an unlawful search and seizure cannot be used nor required to be produced and this rule shall hereafter apply to corporations as well as to persons is the important rule announced by the United State Supreme Court in the recent case of Silverthorne Lumber Co. v. United States, 40 Sup. Ct. Rep. 182.

In this case after the two Silverthorne brothers had been arrested under an indictment charging a single specific offense, their place of business was searched without a warrant. The trial court ordered the papers returned, but permitted the district attorney to make copies and photographs. The Silverthorne brothers were ordered to bring the original books and documents before the grand jury. On their refusal to do so they were adjudged as being in contempt, the brothers sentenced to imprisonment and the corporation fined. On appeal the Supreme Court, by a vote of seven to two (the Chief Justice and Justice Pitney dissenting), reversed the judgment of contempt and held that evidence thus illegally secured could not only not be used by the Government but the defendant himself could not be required produce evidence, knowledge of which was