68. Negligence-Unsafe Structure.-Where a veneered brick wall of a building had been condemned by city authorities as being unsafe, and the defendant owner had full knowledge thereof, and where it was not shown that the plaintiff knew of the defects, the defendant's negligence in allowing it to remain in an unsafe condition was actionable at the suit of plaintiff, who was injured by its fall while rightfully on the premises (per Christianson, C. J., and Birdzell, J.)Larson v. Russell, N. D., 176 N. W. 998.

69. Nuisance-Sic Utere Tuo.-Where, in spite of precaution taken in operation of stone quarry and rock crusher, rocks escaped and were thrown against plaintiff's house, and the concussion from blasting was so violent as to shake the house, and dust from the crusher and elevator entered the house in such quantities as to render it unfit for habitation, a nuisance existed. Fagan v. Silver, Mont., 188 Pac. 900.

70. Partnership Accounting.. One partner cannot sue the other at law until after a full accounting and balance struck, which accounting is an action on contract, and not ex delicto. -Bertozzi v. Collaso, Ariz., 188 Pac. 873.

for

71. Dissolution. Though the term which a partnership was originally formed had expired, and it was therefore terminable at the will of either party, it was not dissolved as a matter of law by one of the parties ceasing to give his personal services to the partnership as he had therefore been doing for an agreed salary, where his capital and accumulated profits remained in the business, and the other partner never proposed an actual termination of the partnership, and nothing was done towards withdrawing the capital of the partner in question.-Lewellen v. Thomas, Iowa, 176 N. W. 964.

76. Satisfaction of Seller. Where seller contracts to deliver goods and allow credit for an agreed term, and reserves right to withdraw credit and demand cash payment or security before shipment of goods, if buyer's financial responsibility becomes unsatisfactory, that question is to be settled by seller before he parts with goods; but there must by a real want of satisfaction with buyer's financial responsibility, and the refusal to ship without payment or security must be based solely on that ground.— Corn Products Refining Co. v. Fasola, N. J., 109 Atl. 505.

82. -Interest on Legacies.-Where will directed life tenant to pay certain legacies within specified time, it will be assumed in the absence of anything to the contrary, that testator intended life tenant to pay interest, upon failure to make payment of legacies within required time. Security Sav. Bank v. Williams. Iowa, 176 N. W. 971.

83. -Spendthrift Trust. Spendthrift trust held burden only on property given to trustee and not on entire estate.-Phillips v. Phillips, Ark., 220 S. W. 52.

Central Law Journal.

ST. LOUIS, MO., JUNE 18, 1920.

CONSTITUTIONALITY OF TAX ON INCOMES FROM SECURITIES HELD IN TRUST OUTSIDE THE STATE.

This is the open season for taxing incomes. Everybody is doing it and it is at very remarkable income which is able successfully to run the gauntlet of the taxgatherer today. And the Supreme Court in the recent case of Maguire v. Trefry, 40 Sup. Ct. Rep. 417, has encouraged the tax hunters in their search for more game. In that case the Court held that the section of the Massachusetts law taxing the income of a resident of the state derived from trust administered under the laws of another state in securities in the possession of the trustee in such other state does not deny due process of law in violation of Const. U. S. Amend. 14, as subjecting to taxation property beyond the limits and outside the jurisdiction of the state, as the beneficiary has an equitable right, title and interest, distinct from the legal ownership.

Tax laws are proverbially illogical in the principles governing their construction. The Dr. Jekyl and Mr. Hyde effect of all other tax laws is rapidly becoming the chief characteristic of the state income tax laws and the Supreme Court is kept busy jumping from one principle to another in the effort to sustain such laws. Income is called property in one case and taxed as belonging to the owner at his domicile. That is the position taken in the principal case. It is next considered as a part of the corpus, or principal or which it is a product, and therefore taxable in the state where the capital is invested. That was the decision. in the recent case of Shaffer v. Carter, 40 Sup. Ct. 221, where the income from an oil well in Oklahoma belonging to a resident of Illinois was held to be taxable in Oklahoma.

What is an income tax? Is it a tax in rem or a tax in personam? In the principal case the Court calls it a property tax, but declares the property to be in the nature of an equitable interest in the beneficiary to the income of the trust fund. The situs of such income is therefore at the situs of the owner of the income, to wit, at the latter's domicile. In the Shaffer case the Court held that the income was a part of the corpus or principal from which it was derived, and was properly taxed at the place where the capital was invested. Both these theories cannot be true and it is incumbent on the Supreme Court to adopt. one or the other theory in order that income derived from sources outside the state may not be subjected to greater burdens than incomes derived from investments within the state.

It is our opinion that the theory in the present case is preferable to the opinion in the Shaffer case. The income tax is not a tax on the corpus of the estate, but on the income after it has been separated from the principal. It is only an individual that can have an income. An oil well cannot make a profit, but an oil company or an oil well owner can. This distinction was made many years ago of an earlier income tax by Chief Justice Shaw in Bates v. Boston, 5 Cush. (Mass.) 93, where he said:

"The assessment does not touch the fund, or control it; nor does it interfere with the trustee in the exercise of his proper duties; nor call him, nor hold him, to any accountability. It affects only the income, after it has been paid by the trustee to the beneficiary."

We are seeking by this suggestion to induce the Supreme Court of the United States to adopt some definite theory of income taxation so as to avoid the injustice of double taxation which disgraces every other form of taxation. We are aware of the many decisions of the Supreme Court which have permitted the same property to be taxed under different theories in different states. We are aware of the fact that

intangible property can be taxed as a debt in one place, a credit in another and even as tangible property in the place where the evidences of such property are deposited. We are aware of the plausible argument advanced to sustain each form of taxation, that the individual or the property is protected and his right to enforce his rights guaranteed by the state which has a right to tax him for the benefits conferred. But this reason is more plausible than real. It presupposes that we are still only a loose bundle of separate jurisdictions instead of one great nation. State boundary lines should not be permitted to work an injustice upon citizens of the United States which is not suffered by the citizens of any other nation.

We are not opposing the right of the state to enforce different tax assessments upon the same property; we are objecting to the unnecessary and unjust theory that as between the states of the Union, the same property can have a situs in two or three states for purposes of imposing the same tax. If a corporation in Chicago earns one million dollars and a stockholder living in Indianapolis receives a dividend therefrom amounting to one hundred thousand dollars, there is no valid objection to an income tax being levied on the income of the corporation and also upon the income of the stockholder, although in effect it amounts to double taxation. This kind of duplication cannot be prevented where the same property takes different forms. But it does not seem logical or fair to tax the income of the corporation at Chicago and the income of the stockholder both at Chicago, the source of the dividend and also at Indianapolis, the domicile of the stockholder. And this injustice is more apparent, it seems to us, in the case of incomes derived through trustees. If the trustee is engaged in an active business for the beneficiaries, his income as trustee might properly be taxed at his residence, but the share

of each beneficiary in the net income of the trust should not be taxed both at the domicile of the trustee and at the domicile of the cestui que trust.

We believe that the Supreme Court should extend to choses in action the just and logical principle declared in the case of Union Transit Co. v. Kentucky, 199 U. S. 194, 26 Sup. Ct. Rep. 36, wherein it was held that tangible personal property, permanently located in another state than that of the owner-where it had acquired a situs, and was taxed irrespective of the domicile of the owner--was beyond the taxing power of the state, and that an attempt to tax such property at the owner's domicile was a denial of due process of law under the Fourteenth Amendment.

In the Union Transit Company case the Supreme Court exposed the unreality of the old fiction masquerading as a mixim"mobilia personam sequuntur”—and fixed the situs of tangible personal property at the place of its actual situs. Now let the Supreme Court do the same thing for intangible personal property. Let the Court declare the situs of a chose in action for purposes of taxation, or, if you please, for all purposes to be at the domicile of the owner. Business demands and is entitled to a clear decision on this point. Ii A of Louisville owes B of Cincinnati $500 on a note payable to a bank in New York and the note is deposited with other securities with a bank in Chicago, it is ridiculous to say that the $500 can be taxed in Kentucky, Ohio, New York and Illinois. And now comes the income tax on the interest. Where shall this be assessed? Shall the same old injustice be wrought and the same old fallacies be brought forward in justification as in the case of other intangible property? Choses in action represent the bulk of the wealth of the country today and their situs for all purposes should be definitely determined.

OF DESCRIPTIVE WORDS MAY BE REGISTERED WHEN ACCOMPANIED BY DISCLAIMER.-The Supreme Court has corrected an unwarranted practice of the Patent Office in refusing to register trade-marks which contained words descriptive of the goods or devices represented by the trade-mark. Estate of Beckwith v. Commissioner of Patents, 40 Sup. Ct. Rep. 414.

In the Beckwith case the plaintiff sought to register a trade-mark in the form of a seal containing the face of an Indian in the center, with the encircling words, "Round Oak Moistair Heating System." This was enclosed in a circular border of oak leaves. The Commissioner found that the trade-mark was lawfully registrable except for the words, "Moistair Heating System," which petitioner was required to delete before the Commissioner would register the trade-mark. The Court of Appeals sustained the Commissioner of Patents but were in turn reversed by the Supreme Court.

The Court of Appeals based its decision on Section 5 of the Trade-mark Registration Act which reads as follows:

"Provided that no mark which consists * * * merely in words or devices which are descriptive of the goods with which they are used, or of the character or quality of such goods, * * * shall be registered under the terms of this act."

The Supreme Court calls attention to the fact that this section of the trade-mark law is only declaratory of the rule previously announced by the Court. After citing many authorities to prove the older rule, the Court said:

"Thus the proviso quoted, being simply an expression in statutory form of the prior general rule of law that words merely descriptive are not a proper subject for exclusive trade-mark appropriation, if the application in this case had been to register only the words 'Moistair Heating System,' plainly it would have fallen within the terms of the prohibition, for they are merely descriptive of a claimed property or quality of the petitioner's heating system-that by it moisture is imparted to the air in the process of heating. But the application was not to register these descriptive words 'merely,' alone and apart from the marks shown in the drawing, but in a described manner of association with other words, 'Round Oak,' which are not descriptive of any quality of applicant's heating system, and as a definitely positioned part of

an entirely fanciful and arbitrary design or seal, to which the Commissioner found the applicant had the exclusive right. Since the proviso prohibits the registration not of merely descriptive words but of a 'trade-mark which consists * * * merely' (only) of such words-the distinction is substantial and plain -we think it sufficiently clear that such a composite mark as we have here does not fall within its terms."

Previous to the decision of the Court of Appeals denying registration to any trademarks containing any matter which was merely descriptive, it was the custom of the Patent Office to register such trade-marks on petitioner filing a disclaimer as to the purely descriptive matter. This practice, although unauthorized by statute, is commended by the Supreme Court in the following terms:

"While there is no specific provision for disclaimers in the trade-mark statute, the practice of using them is commended to our judgment by the statement of the Commissioner of Patents that, so far as known, no harm came to the public from the practice of distinguishing, without deleting, nonregistrable matter in the drawing of the mark as registered, when a statement, forming a part of the record, was required that the applicant was not making claim to an exclusive appropriation of such matter except in the precise relation and association in which it appeared in the drawing and description. It seems obvious that no one could be deceived as to the scope of such a mark, and that the registrant would be precluded by his disclaimer from setting up in the future any exclusive right to the disclaimed part of it."

ARE NON-RESIDENTS ENTITLED ΤΟ EXACTLY THE SAME ACCESS TO COURTS AS ARE RESIDENTS?-No provision of the Constitution is more necessary to the preservation of national unity than Article 4, Section 2, providing that citizens of each state shall be entitled to all privileges and immunities of citizens of the several states. In the category of rights protected by this provision of the Constitution is the right of a non-resident to enter the courts of a state on the same terms substantially as residents. But in a recent decision the Supreme Court has held that this does not mean that a nonresident is entitled to exactly the same rights as residents, but simply that the terms on which they may enter the courts shall be adequate. Canadian Northern Ry. Co. v. Eggen, 40 Sup. Ct. Rep. 402.

In the Eggen case the plaintiff, Eggen, a resident of North Dakota, recovered a judgment in the District Court for the District of Minnesota on a cause of action for in

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juries received by the plaintiff two years before while the plaintiff was in the ploy of the defendant Railway Company in the City of Humboldt, Saskatchewan, Canada. This judgment was reversed by the Circuit Court of Appeals for the reason that by the laws of Canada, this action should have been brought in one year from the time the injury was sustained. The reason for the decision of the Court of Appeals was a statute of Minnesota providing as follows:

"When a cause of action has arisen outside of this state, and, by the laws of the place where it arose, an action thereon is there barred by lapse of time, no such action shall be maintained in this state unless the plaintiff be a citizen of the state who has owned the cause of action ever since it accrued."

The general rule in this class of cases is that the law of the forum will govern as to the time in which an action can be brought unless the limitation is imposed specially in the law creating the right of action. In other words, as to the general statute of limitations the lex fori rather than the lex delicti controls, since in such a case it is a question referable to the remedy rather than to the substantive right created by the foreign law. In Minnesota, the limitation on actions of this character is six years. The decision of the Court of Appeals, therefore, would be correct if the statute quoted above, applying a different rule to non-residents, infringes, as the Court of Appeals declares it does, the plaintiff's constitutional right to the "privileges and immunities" enjoyed by citizens of Minnesota.

The Supreme Court, however, takes a different view of the question and holds that Article 4, Section 2, of the Constitution is not violated by the statute relied upon by the defendant railroad company. The Court in its opinion makes a very important declaration as to the power of a state to discriminate against non-residents in respect to the right of access to the courts of the state. Court said:

The

"This constitutional requirement is satisfied if the non-resident is given access to the courts of the state upon terms which in themselves are reasonable and adequate for the enforcing of any rights he may have, even though they may not be technically and precisely the same in extent as those accorded to resident citizens. The power is in the courts, ultimately in this court, to determine the adequacy and reasonableness of such terms. A man cannot be said to be denied, in a constitutional or in any rational sense, the privilege of resorting to courts to enforce

his rights when he is given free access to them for a length of time reasonably sufficient to enable an ordinarily diligent man to institute proceedings for their protection."

This

It is interesting to note that from a time very early in our history, it has been customary to impose different requirements upon non-residents than upon residents as a condition of resorting to the local courts. is particularly true in the case of security for costs which is very generally required of a non-resident, but not of resident citizens. So also in cases of attachment where a nonresident's property may be attached for reasons which would not justify an attachment of the goods of a resident. Of such requirements it has been said by the Supreme Court that "it has never been supposed that regu lations of that character materially interfered with the enjoyment by citizens of each state of the privileges and immunities secured by the Constitution to citizens of the several states." Blake v. McClung, 172 U. S. 239, 256, 19 Sup. Ct. 165, 172.

WHAT IS A "HIGHWAY?"-A DISCUSSION OF ENGLISH DECISIONS.

In a case lately before the Divisional Court (Mr. Justice Darling) the authorities cited disclosed an interesting series of attempts by our judges to frame a sufficiently wide definition of the term "highway." Such a task might be deemed comparatively simple, but our readers will form their own conclusions after a perusal of what is underwritten, as to the success or otherwise of the attempted definitions.

Lord Hale in Austin's (Katherine) Case1 said: "If a way lead to a market or were a way for all travelers and did communicate with a great road, etc., it is a highway." In 1 Hawkins C. P.,2 it is defined as a way "which is common to all the king's people whether it lead to a market town or only from town to town." Lord Coleridge in 1876: "The common definition of a highway that is given in all the text