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CENTRAL LAW JOURNAL.
people. But what kind of a 'system' is it
that can be made to work, even roughly, ST.LOUIS, MO., SEPTEMBER 20, 1901
only by resorting to espionage, treachery and plain sneaking; which puts & premium upon
perjury; tempts men to spy upon one anNo more difficult problem of government
other, and surrounds friends with an atmos. exists than the effort to subject all property
phere of mutual suspicion. Considerations equally to the burdens of taxation. The most
of even the lowest plane of morality require lamentable weakness in the whole system of
a reform in this formless system. If enough taxation is that upon personal property.
thought is given to the subject it can be reThe statement can be made without fear of
duced to reason and order." contradiction that the great majority of tax
Undoubtedly the present system of taxapayers make no return whatever on mort.
tion has resulted in dulling and debauching gages, bonds and other intangible securities.
the moral sense of the people. It puts & tax This practice of evasion, seemingly legitimated
on honesty and a premium on the most un. by the unanimity with which it is practiced
scrupulous liar. It is not necessary, however, were it not for the strict oath still required
to offer proof of the utter failure of this to be taken, practically exempts the holders
system. No fact is better known nor more of these securities from taxation.
thoroughly regretted by the people. They An effort has recently been made in the
simply await the suggestion of a remedy. Of city of Chicago to meet this weakness and
the many suggestions for the solution of this failure of the tax system by encouraging the
difficulty which have so far been offered, taxpayers of the city to report any discrep
three stand out with special promi. ancy in their neighbor's return of personal
nence-the single tax, the income tax and the property. The newspapers of Chicago took
graduated business tax. The latter suggesup the idea with avidity and succeeded in
tion contemplates an assessment on the making up several sensational "scoops" over
amount of sales or gross earnings of all busithe affair, and withal the result was quite
ness enterprises. successful at least from the city as
It is not our province, however, to advo. sessor's standpoint. “Some kind friend,”
cate any particular suggestion, such ques. as the informant of the assessor was
tions partaking more of a political than of a invariably referred to, was quite ac
legal nature, but we desire to call attention tive all over the city. One man's assessment of the bar to the serious aspect which the was raised from nothing to twelve thousand question is rapidly taking and the natural dollars, and one lady who was congratulating
attitude of the American people in looking herself on escaping taxation was assessed on
to the legal profession for a practical soluinformation of "some kind friend” for two
tion of difficulties of this character rather hundred and fifty thousand dollars, the value
than to the theoretical speculations of polit. of certain stocks and bonds held by her.
ical scientists and public economists. These are but examples of many increases of assessments ranging from one thousand to A dangerous advance of paternalistic tendone hundred thousand dollars.
encies is noticeable in the frequent success. That the result of this experiment is not ful attempts of legislatures to enact sumptu. everywhere regarded as an enthusiastic suc ary laws under the vague, uncertain and cess, we note the recent comment of the St. seemingly all-comprebensive autbority of the Louis Post-Dispatch as follows:
police power. An instance of this is to be “The success of the higgledy-piggledy, noted in the case of State v. Crescent Cream. called the tax system, has come to depend ery Co., 86 N. W. Rep. 107, where the Suupon some kind friend.' He is the uncom preme Court of Minnesota held that section missioned attache of the assessor's office. 7002 of the General Statutes of 1894, This some 'kind friend is no doubt a very which probibits the sale of cream that contains useful person. He should be suitably re- less than twenty per centum of fat, is a valid warded with money enough to keep him from l exercise of the police power and therefore
constitutional. It is the general concensus of tendency in this country of surrounding the debtor opinion that it is not the proper function of
who was a man of family with almost insur
mountable barriers in the way of special privigovernment to regulate the morals and con
leges and exemptions. The belief is growing duct of its citizens in their relations and in
that the creditor has some rights which ought to tercourse with one another by sumptuary be respected and enforceable even against heads legislation ;-its sole legitimate object is to of family, and especially creditors who have proprotect them in their life, liberty and prop
vided the family with the necessaries of life. erty. Beyond what is necessary for this
Illinois has a statute which looks in this direc
tion. It provides as follows: protection the greatest freedom of contract
"The expenses of the family and of the educaand of business dealings is to be permitted. tion of the children sball be chargeable upon the Sumptuary legislation makes the government property of both husband and wife, or of either of the parent of a great family and its citizens them, in favor of creditors therefor, and in relanothing but weaklirgs under its custody and
tion thereto they may be sued, jointly and sepa
rately." control, whereas, in its true aspect, it should
The U. S. Circuit Court of Appeals was rebe nothing but the servant and retainer of a
cently called upon to construe this statute in the strong people. The police power, therefore, case of Walker v. Houghteling, 107 Fed. Rep. 619, as an attribute of sovereignty, is to be used where they held that where a house was rented to only for the purpose of affording protection
defendant under a written lease signed by de
fendant, and the premises were occupied as a to the life, liberty and property of the whole
dwelling by defendant and wife, the contention community, and not for the prevention of
that an action could be maintained only on the fraud or unfair dealings between individ lease, and against defendant alone, because the uals. In the adulteration of food products this instrument was in writing and signed by defenddistinction can be easily recognized. There
ant, and not as an action for use and occupation, is first that adulteration of food products
under the statute, against defendant and wife,
could not be sustained, since the statutory action wbich is injurious to the general health and
was not merely remedial, but created a liability that which is not. In the former case the
against the husband and wife, independent of adulteration endangers the life of the com. any relation of landlord and tenant. The court munity and is a proper subject of legislative said in part: regulation under the police power. In the
"The family expense statute under con
sideration, on the contrary, is not simply second class of cases, where no injury to the
remedial. It creates a right in favor of health or life of the community is threatened,
the creditor, and a liability against the busand especially, as is often the fact, where the band and wife. It introduces into the law a new adulterated product is itself beneficial and character of obligation. It is, in no sepse, an wholesome, little reason and authority can be
additional method of enforcing the relation of
landlord and tenant, which was the sole purpose seen for the interference of the legislature any
of the common-law action for use and occupation. more than in any of the other innumerable
The existence of the lease, in an action like this, instances in wbich man takes advantage of is, of course, a material fact. It tends to show his neighbor by misrepresentation and fraud. the value of the use and occupation. It may, by The ordinary remedies at law are sufficient
virtue of its force as a contract, set a limitation to protect and compensate the unfortunate
upon the amount that can be recovered. But it
is not the basis of the suit. The suit is founded victim in such cases, and where the law af
upon the provision of the statute that the wife, fords no remedy, the stern rule of caveat as well as the husband, sball be liable for family emptor impresses him with the fact that this expense; and upon the fact that the use of a life is in large measure the survival of the dwelling house is, witbin the meaning of this fittest, in which to be successful all the senses
statute, a family expense. The circumstance
that the subject-matter is the use and occupation must be awake and active, and prevents him
of real estate is an incident only; the determinafrom falling intɔ that languid dependence upon
tive fact is that, like flour and groceries, this use the strong arm of the government, which is | was for family purposes." so disastrous to all ambition and achievement.
HOMESTEAD - INVESTMENT OF PROCEEDS OF NOTES OF IMPORTANT DECISIONS. SALE OF HOMESTEAD.-An interesting question
in the law of homestead recently arose for deciHUSBAND AND WIFE - "FAMILY EXPENSE sion in the case of Chamberlain v. Leland (Tex.), STATUTES"--LEASE.--Of late years there has 62 S. W. Rep. 740. In this case defendant and been an increasing reaction against the earlier wife occupied town property as a homestead, and after the death of the wife, and defendant was no quite far enough in that direction, and should longer the head of a family, he sold the home | mark the limit of the rule of law announced in stead, and moved on a 2,200-acre tract which he those cases." owned, and applied the proceeds of the homestead to the payment of a mortgage on that tract,
CORPORATIONS_SALE OF ASSETS-RIGHTS OF and thereafter sold 2,000 acres of it, but contin
CREDITORS.--An interesting discussion on the ued to reside on the remaining 200. Held, that
right of a corporation to sell its assets to another defendant was not entitled to a homestead in the
company in fraud of its creditors is to be noticed 200 acres. The court said in part:
in the recent case of Hurd v. New York Laundry "At the time Leland sold his city home
Co., 60 N. E. Rep. 327, where the New York stead, it was exempted from forced sale,
Court of Appeals held that a corporation cannot, altbough he was not then the head of a
where the rights of a creditor have inter vened, family, because it had been exempted dur
with the consent of its stockholders, sell its plant ing the existence of his family, which was dis
and retire from business, taking the stock of the solved by death of his wife and the majority of
purchasing corporation in payment therefor, his son. Under the rule laid down in Taylor v.
such stock being issued to an individual stockBoulware, 17 Tex. 74, the exemption continued
holder, without any agreement on his part to pay to Leland, notwithstanding the family was ex the corporate debts. The court said: tinct. When Leland moved upon the 200 acres of "Stripped of all speculations and assumptions, land now claimed for a homestead, he could not we have here the case of a corporation which acquire an exemption in that (place, because he is in debt. While so indebted its officers enter was not then the bead of a family, unless it be
in to an agreement under which substantially true that his former homestead was in fact con all its of assets are transferred to another corverted into and became the land now claimed by poration, which is thereafter to continue the bin. In the case of Schneider v. Bray, 59 Tex. business. In payment of this transfer the pur668, the owner of the homestead exemption, a chasing corporation issues some of its capital widow, whose family was dissolved by the death stock, not to the selling corporation, nor yet to its of her husband, excbanged the exempted home officers as trustees, but to the principal stockstead for a place in Blossom Prairie, in Lamar holder as an individual. When the creditor uncounty, Tex., with the intent to immediately oc
dertakes to assert his rights the stock is reissued cupy it as a home, and did in fact move upon it to the late treasurer of the selling corporation, as such, and continued to reside thereon. This
who has become the president of the purchasing court held that the home which was acquired in corporation, and he distributes the same without exchange for that which was exempted took the regard to the claims of creditors. This is the place of the former homestead, and was itself transaction that is sought to be defended under protected from forced sale. In the case of Wat the authority of Holmes & Grigg Mfg. Co. v. kins v. Davis, 61 Tex. 414, a widow whose family Holmes & Wesse! Metal Co., 127 N. Y. 252, 27 N. bad consisted of herself and husband continued E. Rep. 831. The statement in the opinion in that to occupy the homestead after the death of case, to the effect that a corporation has power, her husband, and, contemplating the pur with the consent of all of its stockholders, to sell chase of the land in suit, sold her home, its plant to another corporation and to retire and invested the money received, 'in the from business. taking payment in the stock new home, to which she immediately re. of the other corporation, was entirely corinoved, and continued to occupy as a home. The rect as qualified by the facts before the court. court held that this was, in effect, an exchange of | No rights of creditors intervened, the stockone place for the other; that it came within the | holders had all consented, and the question arose rule announced in Schneider v. Bray, and the between the parties to a promissory note given new homestead was exempted from the claims of for some of the stock. Here we have an entirely creditors. In the case before the court, Leland different condition of things. The stockholders owned the land in controversy before he sold his consent, but the creditor objects. When he dehomestead. Consequently he did not exchange mands payment of his claim he is referred to the his home in the city for the land sought to empty shell, which is all that is left of the live be protected from sale, as was the case incorporation whose tangible assets constituted a Schneider v. ' Bray. Neither did he buy the trust fund for the payment of his debt at the property now in question with the proceeds of time of its creation. When he seeks to follow this the bome which be had in Waco, as: in Watkins fund, be is told that the capital stock of the v. Davis. It follows that the property now defendant in the hands of those wbo may be claimed by him does not represent that which he bona fide holders is his only resort. This is not bad previously occupied, and the facts of this the law. In the recent case of Cole v. Iron Co., case bear no such analogy to the cases cited 133 N. Y. 164, 30 N. E. Rep. 847, Judge Finch, above as will justify the application of the same speaking for this court, said: “As against the rule of law to the decision of this case. We are creditor, the transfer to the Millerton Company of the opinion that the cases of Schneider v. Bray was illegal and in fraud of his rights. The assets and Watkins v. Davis, before cited, have gone of a corporation are a trust fund for the payment of its debts, upon which the creditors have an society, but this seems to bave been, in part equitable lien, both as against stockholders and at leas:, in consequence of certain statutory all transferees, except those purchasing in good
provisions directing that the rector, warden faith and for value. Bartlett v. Drew, 57 N. Y. 587 ; Brum v. Insurance Co. (C. C.), 16 Fed. Rep.
and vestrymen, or the trustees, consistory, 143; Mor. Priv. Corp. $ 791. The Millerton
or session, of any church, congregation or Company was not such a purchaser. It parted religious society, incorporated under the laws with nothing. It knew and participated in the
of New York, shall administer the temporaliillegal purpose to destroy the National Com
ties thereof and hold and apply the estate and pany, to make it utterly insolvent, and to deprive its creditors of the trust fund upon wbich they
property belonging thereto, and the revenues had the right to rely, and so they were at liberty of the same, for the benefit of such corporato set aside the transfer so far as it barred their tion, according to the rules and usages of the remedy, and to enforce their equitable lien
church or denomination to wbich said cor. upon the property in the hands of the trans
poration shall belong, and making it unlawful feree.'”
to divert such estate, property, or revenue, THE NON-LIABILITY OF CHARITABLE
to any purpose except the support and mainAND ELEEMOSYNARY INSTITU
tenance of such church, or religious or beperTIONS FOR NEGLIGENCE CAUSING
olent institution or object connected with the PERSONAL INJURIES OR DEATH. *
church or denomination, to which such cor
poration shall belong. As indicated by Missionary Societies, Churches and Ceme. the corporate title and admitted by the pleadteries. With respect to corporations created ings, defendant was a religious corporation for the promotion of religion and benevolence | duly organized under tbe laws of New York, by the establishment of hospitals, asylums and the question for decision presented to and other institutions, within whose walls per the court was whether, under the laws of that sons inclined to a life of charitable works state, the plaintiff could maintain an action may follow that life by caring for and relieving to recover damages for injuries sustained by pain and disease, and wherein the gifts of reason of the pegligence of an employee of the private benevolence are accumulated for the defendant, there being no allegation that such purpose of organizing such relief upon some employee was lot qualified for the work he was definite plan and with a veiw to the perpetuity engaged to perform, or that there bad been of the relief dispensed, substantially the same any negligence on the part of the officers of immunities and exemptions have been ex the corporation in his selection. The court tended by the courts as in the case of chari observed that there was no allegation in the table institutions maintained by state,city and pleadings that the corporation was possessed county taxation. Individual and collective of any other funds except those for the supprivate philanthropy and benevolence are en port and maintenance of the charity. “It couraged upon like grounds of public policy. has no capital stock, no financial return is It is said in support of such immunity, first, made to its members, and, as far as appears. that if a liability were admitted the trust | its officers serve without compensation. Unfund might be wholly destroyed and diverted der such circumstances it is merely an instrufrom the purpose for which it was given, thus | ment of law to accomplish a certain object. thwarting the donor's intent as the result of . The donor of its funds have selected it as a negligence for which he was in no, wise re | trustee for this object, and the estate, propsponsible ; and second, that since the trustees erty and revenue in its hands are impressed cannot divert the fund by their direct act from with the trust for that purpose, and it does the purposes for which it was donated, such not seem to me to be lawful to divert them to fund cannot be indirectly diverted by the any other, and consequently none of these tortious or negligent acts of the managers funds can be diverted to the payment of the fund or their agents or employees. of damages for a personal injury received by
I find that in one instance immunity from | a stranger at the hands of an agent not shown liability in tort was extended to a missionary | to be unworthy or unfit for the purpose for which he was employed."'? “It is true,"the in a defective condition whereby ope coming court further remarked, "that most of the on its premises by invitation was seriously adjudged cases are those in which hospitals or injured, although its general objects are of other charities of tbat character were sought such a nature as to endow it with legal capacto be subjected to liability. But all of them ity to take a charitable gift. And the fact proceeded upon the ground that it would be a tbat the funds of a cemetary association were diversion of the trust funds if they could be | artually applied to a considerable extent, in compelled to pay damages out of them, and charity, is no more material, in Massachusetts, in this respect we think that religious corpo. to relieve a mere religious society from liarations are upon the same footing with hospi bility, than evidence of a similar application tals, or other charitable institutions. The ob of a part of his income by a private citizen jects of the association are certainly as | would be in a suit against him. worthy and the trusts as sacred as in any The Sisters of Charity.-Inasmuch as hosother class of cases, and their liability in pitals and asylums under the control of the such actions as this must be denied.” But religious orders aid to lighten public burdens on the other hand where it appeared that the | by relieving the community from the necessity plaintiff, while attending a church conference for resorting to taxation to establish and was injured without her fault, by falling over maintain such institutions, justice and sound a dangerous wall which defendant congrega policy would seem to require that they be tion had constructed on the premises, it was extended the same privileges and immunities held in Massachusetts that the jury were justi- that would be claimed by the state should it fied in finding that defendant was guilty of | undertake similar enterprises. Therefore, a breach of duty to keep its premises safe for | although the facts showed the admission of plaintiff and others coming thereon by its in plaintiff to the private pay patients’departvitation. The application of the rules on ment” of a public charitable hospital conwhich defendant's liability depends is not ducted by the sisters of chạrity, under an affected by the consideration that this is a express contract that she should bave a prireligious society and that plaintiff came there vate room and medicines and should be corsolely for her own benefit or gratification. | stantly attended by a skillful, experienced and It makes no difference that no pecuniary trained nurse, and that the very best of care profit or other benefit was received or ex should be taken of her, for which she agreed pected by the society. The fact that plaintiff to pay, and did pay, the hospital $25 per week came by invitation is enough to impose on the and the nurse so furnished to be paid $3 per defendant the duty which lies at the founda- | day additional, but a nurse was furnished who tion of this liability; and that, too, although had only been on probation for a course the defendant in giving the invitation was of instruction for a short period of time, actuated only by motives of friendship and and in disregard of the order of her suChristian charity.3 And so a corporation, perior, through forgetfulness or gross carealthough much of its work is of a religious | lessness, left an uncovered hot water bag and charitable nature, but whose purposes in the bed in which plaintiff was 'to be are also social and include the giving of lect- | placed while under the influence of an ures and theatrical and other entertainments anaesthetic after an operation, and from for the benefit of its members, the provision of a gymnasium and of athletic sports for
* An article by this writer on "Torts of Charitable Institutions Maintained by Taxation” appeared in the CENTRAL LAW JOURNAL of July 26, 1901.
1 Chapter 176, Laws 1876, sec. 1. A similar statute exists in Illinois, SS 42 and 43, ch. 32; Corporations, 1 Starr & Curtis' An. St. p. 623.
6 Goodell y. Young Men's Christian Assn., 29 N. J.
Eq. 32. promoting the health, and also engaging in
& Donnelly v. Boston Catholic Cemetery Assn., 146 the sale of food at a coffee or lunch counter, Mass. 163, 15 N. E. Rep. 505, 5 New Eng. Rep. 741. A is not within the exemption which protects
city owning a cemetery, in a vault erected upon
which an employee is injured, owing to the neglipublic charitable corporations from liability
gence of the superintendent of the cemetery whose for neligence,* in allowing its floor to remain orders and directions the employee was bound to
obey, was held liable for such injuries, on the ground ? Haas v. Missionary Society of the Most Holy Re. that the cemetery and vault were a source of benefit deemer, 6 Misc. Rep. 281, 26 N, Y. Supp. 868.
and advantage to the corporation, and involved the s Davis v. Central Congregational Church of same responsibility for their unsafe and improper Jamaica Plains (Mass.), 34 Am. Rep. 283.
management which pecuniary and proprietary inter4 Chapin v. Holyoke Young Mer's Christian Assn., ests entail upon natural persons. City of Toledo v. 165 Mass. 280, 42 N. E. Rep. 1130.
| Cone, 41 Ohio St. 149.