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Central Law Journal.

ST. LOUIS, MO., OCTOBER 11, 1901.

The recent case of French v. Paving Co., 19 Sup. Ct. Rep. 187, 43 L. Ed. 443, has evidently not settled the celebrated controversy over the validity of assessments for street improvements on abutting property owners when in excess of benefits received. It is an axiom so true that even the supreme court cannot disregard it, that no question is ever settled until it is settled right. The ink was hardly dry on the opinion of Justice Shiras, in the case just referred to, when the question was again raised and again decided in favor of the property owner, on a ground claimed to be distinguishable from both the cases of Norwood v. Baker and that of French v. Paving Company. This was in the recent decision of White v. City of Tacoma, 109 Fed. Rep. 32, in which case it was held that while state laws providing for the assessment of the cost of street improvements on abutting property are not necessarily unconstitutional, because the assessments are made in accordance with the front-foot rule, nevertheless where, in practical operation they do confiscate property, they are obnoxious to the fourteenth amendment to the constitution of the United States, and it is the duty of the courts to declare them void. It was also held that special assessments for street improvements do, in practical effect, take property for public use without compensation, and, therefore, deprive the owner of such property without due process of law, unless the property assessed is benefited by the improvement to an extent substantially equal to the amount of the assessment. This statement of the law is apparently right in the teeth of the latest decision of the supreme court, but the principles expressed and adhered to are

so inst

proving a certain street cut it down more than twelve feet below the natural surface of complainant's lot, and that, by reason of such cut, an alley which crossed such street and had been used as a means of egress by complainant's tenants had become impassable, and that the deprivation of the use of the alley had depreciated the value of his property, so that the property was of less value with the street improved than it would have been without the improvement. The court on demurrer, taking the averments as true, said: "These facts certainly make a good case, because the creation of a public benefit at the expense of an individual property owner without any resulting benefit or compensation to him, is contrary to the letter and spirit of the constitution."

Without hesitation we pronounce this decision not only eminently just and equitable, but also among the foremost of the decisions on this question by reason of its clear recognition and elucidation of right principles and sound law. We especially commend the statement of the general rule with which Justice Hanford closes his admirable opinion: "I consider that each case arising under the laws for assessing abutting property to pay for street improvements must depend upon its particular facts. If it appears that an assessment has been levied by competent authority, and that it is fair, and not in excess of the benefits to accrue by reason of the improvements to be paid for, it will be sustained by the courts. It is equally the duty of the courts to restrain the collection of assessments which are shown to be mere attempts to take the property of one for the use of others without compensation to the owner. For reasons already set forth in this opinion, I hold, also, that no determination of the constitutional question involved in this class of cases, by an administrative board or special tribunal created by the state, can

old time effectiveness by reason of its working apparent injustice in hard cases. Any modification of its ancient sternness would be a calamity, tending not only to increase litigation but to make weaklings. out of the people and encourage them to rely more on the strong arm of the court than upon their own common sense and judgment. Entertaining such views we, of course, are inclined to commend most emphatically the decision of the court in the recent case of Brown v. Smith, 109 Fed. Rep. 26, where it was held that one who contracts for the purchase of real estate in reliance on the representations and statement of the vendor as to its character and value, but after he has visited and examined it for himself, and has had the means and opportunity of verifying such statements, cannot avoid the contract on the ground that they were false or exaggerated. The court expresses itself in this language: "Reviewing and considering the testimony, it is manifest that the defendant entered into this contract assuming many things to be true without proper examination, and without using the means of verification at hand. There was no sort of fiduciary relation between him and the plaintiff. They were mere acquaintances, and in their dealings were both on guard, or should have been. He is evidently a gentleman of culture, of intelligence, and experienced in affairs. He is not a ward of the court, nor entitled to its special protection."

This whole subject and the authorities pro and con will be found extensively and exhaustively treated in the case of Johnson v. Merchants' Line, 37 Fla. 499, 19 South. Rep. 640, 37 L. R. A. 518, where the court reached a position just opposite that of the court in the principal case. But it is to be noted that all the states are not content to abide by this position and insist upon their right to tax vessels which operate in their water and receive the protection of their laws. The reason for the position of these states is well stated in the opinion of the court in the principal case: "Sound reasons exist for the right of the state to tax these vessels that are permanently here transacting local business. They receive the full protection of the local government, and, if mere registry in another port is conclusive against the right to tax here, a boat can operate in our local waters, confined entirely to local business, and, if owned elsewhere, may evade all taxation in this state. Such construction should not be adopted unless imperatively demanded by superior authority. Under the revenue law of this state, personal property is taxed at its situs, and without refer

ence to the residence of the owner."

ATTORNEY AND CLIENT-CONTINGENT FEESUNCONSCIONABLE PERCENTAGE AND RIght of CLIENT TO DISCHARGE ATTORNEY.-At a time when the honor of the profession of law was more prominent than its business aspect, the practice of taking contingent fees was frowned upon and placed the offender in a lower and more dishonorable strata of practitioners. Gradually, however, the justice and necessity of such contracts in certain instances have been generally recognized although courts and laymen still view them with suspicion. Two interesting questions arising in connection with such contracts were passed upon in the recent case of Henry v. Vance, 63 S. W. Rep. 273, where the Supreme Court of Kentucky held that, where attorneys, having come into

NOTES OF IMPORTANT DECISIONS. possession of a letter making inquiry as to the

TAXATION-RIGHT OF STATE TO TAX VESSELS REGISTERED IN FOREIGN PORT, BUT OPERATING IN THE TAXING STATE.-A very important and much disputed question of law is the right of a state to tax vessels registered under act of congress in the port of another state where such vessels operate exclusively in the taxing state. In the recent case of Northwestern Lumber Co. v. Chehalis County, 64 Pac. Rep. 909, the Supreme Court of Washington held that ocean-going tugs owned by a lumber company, and exclusively used within the state, and managed and operated by residents of the state, are subject to state taxation, though such tugs are registered at a port situated in a foreign state.

Under act of congress (Rev. St. [U. S.] sec. 4319) vessels must be registered at its home port and under the decisions of the United States Supreme Court are taxable only at such port.

heirs of a certain person who had died in Nova Scotia, leaving a large fortune, made a contract with the heirs, whom they had no trouble in indentifying, undertaking to recover their interest in the estate for a contingent fee equal to 35 per cent. of what might be recovered, the fees appear at first blush to be so unconscionable that slight additional circumstances will be held sufficient to sustain the charge of fraud in procuring the contract.

Another important question in the case was the right of a client to discharge his attorney where the latter has agreed to take the case on a contingent fee. On this point the court held that a client may discharge his attorney at any time, with or without cause, even where a contingent fee has been agreed upon; the remedy of the attorney, if the discharge was without cause, being an action on a quantum meruit for services already rendered, or, if no services had

been rendered before the discharge, an action to recover damages for a breach of the contract,—a declaration upon the contract as if constructively performed not being good.

On this point the court said: "The relationship of attorney and client is so peculiarly one of confidence and reliance that it would not do to require a party to continue in his service one whom he distrusts, or whose capacity he no longer believes in, nor to permit the attorney, under such circumstances, to continue the relationship, where the lack of confidence would seriously impair his efficiency, and interfere with his full opportunity to serve the party and the court as his office requires. That the client has the right to discharge his attorney at any time with or without cause, even in a case where a contingent fee has been agreed upon, cannot be well doubted. Mechem, Ag. 856. If the discharge is for cause, the question of fee may become eliminated, or give to the client even a right to an action over. If the discharge is without cause, and after the attorney entered upon and performed part of the services, he will undoubtedly be entitled to recover at least to the extent of the value of the services rendered. But generally the attorney should be relegated to an action to recover on quantum meruit, where he has been prevented by the client, or other fact not his fault, from fully discharging the services contemplated by his contract. Moore v. Robinson, 92 Ill. 491; Duke v. Harper, 8 Mo. App. 296; Quint v. Mining Co., 4 Nev. 304; Scobey v. Ross, 5 Ind. 445; Telegraph Co. v. Semmes, 73 Md. 9, 20 Atl. Rep. 127; Wilson v. Barnes, 13 B.Mon. 330, and Bank v. Barclay (Ky.), 60 S. W. Rep. 853."

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BANKRUPTCY PAYMENT OF MONEY PREFERENCE.-That the payment of money is a "transfer of property" within the meaning of the bankrupt act defining preferences is now definitely settled by the decided weight of authority. In the recent case of Landry v. Andrews, 48 Atl. Rep. 1036, the Supreme Court of Rhode Island held that a payment of money by an insolvent in discharge of a debt is a "transfer" of "property," within the provisions of the federal bankrupt law against preferential transfers of property, and, if made to a creditor having reasonable cause to believe that it was made with intent to give a preference, it can be recovered by the trustee in bankruptcy. The court reviews the question as follows:

"The fundamental argument in support of the demurrer is that a payment of money is not a transfer of property within the provisions of the bankrupt law. It is true that the bankrupt law does not specify money as a class of property. In section 60d it even uses apparently distinguishing terms in the words 'pay money or transfer property.' Still we cannot resist the conclusion that the word "property," as used in the law, was intended to include money. The word 'property' is evidently used as a generic term, intended to include money as the readiest and

most valuable form of property, since it is the product of all kinds of property reduced to its standard of value. If this is not so, then a bankrupt who could not transfer property to a creditor by way of preference could himself sell the property and transfer the proceeds with impunity. We do not see that the law can be so narrowly construed. Our opinion of the statute is confirmed by the recent decision of the circuit court of appeals, seventh circuit, in Re Ft. Wayne Electric Corp., 99 Fed. Rep. 400, 39 C. C. A. 582; also In re Fixen & Co., 4 Am. Bankr. Rep. 10, 96 Fed. Rep. 748. Assuming, then, for the reasons stated, that money is included in the term "property," two questions arise: Is it within the meaning, of a 'transfer' when it is paid to a creditor upon his own debt, or for his benefit, and, if so paid, can it be recovered by the trustee? The word 'transfer,' as defined in the act, includes 'the sale and every other and different mode of disposing of or parting with property, or the possession of property, absolutely or conditionally, as a payment, pledge, mortgage, gift or security.' If an insolvent debtor cannot part with goods in payment of a debt, there is no reason why he should be allowed to part with money for the same purpose. We refer now only to a payment made and received, as alleged in the declaration, with an intent to give a preference over other creditors. Whether a payment, made in the course of business to a creditor who has no reasonable cause to believe that it was so made, is within the law, we are not called upon to decide. This question has arisen, in several cases with varying opinion. See In re Ft. Wayne Electric Corp., supra; In re Fixen & Co., supra; In re Smoke, 4 Am. Bankr. Rep. 434, 104 Fed. Rep. 289; In re Hall, 4 Am. Bankr. Rep. 671. These cases differ on the subject whether a payment to an insolvent's creditor in the ordinary course of business is a preference. They all imply that there can be no question when the creditor knows the facts."

THE STIPULATIONS IN TELEGRAPH

BLANKS.

It may be laid down as a general rule that telegraph companies are, in their relations to the general public, in a measure subject to the restrictions governing common carriers. They are bound to furnish equal facilities to all persons and corporations belonging to the classes which they undertake to serve. They may not refuse to furnish service because their instruments are patented, or because the license under which they carry on their business is con

1 Del. & A. T. & T. Co. v. State, 3 U. S. App. 30; Budd v. N. Y., 143 U. S. 517.

2 Del. A. T. & T. Co. v. Del., 50 Fed. Rep. 677.

ditional upon their refusal to carry the messages of certain persons or corporations without the specific authorization of their licensor. They may not, in other words, discriminate against particular persons or corporations. They cannot by any contract. with their patrons, wholly exempt themselves from liability for such damage as may ensue by reason of the negligence or ignorance of themselves, their agents, servants or operators. To this extent, at least, telegraph companies may said to be common carriers, and the likeness may be further emphasized inasmuch as telegraph companies are, even as are common carriers, permitted to limit their liability only by special contract where loss is liable to result by reason of the negligence of themselves, their agents or servants."

Opposed to this view, we have that taken by the Massachusetts court in the case of Grinnell v. Telegraph Co. Stating the opinion of the court Gray, C. J., says: "The liability of a telegraph company is quite unlike that of a common carrier. A common carrier has the exclusive possession and control of the goods to be carried, with peculiar opportunities for embezzlement or collusion with thieves; the identity of the goods received with those delivered cannot be mistaken; their value is easy of estimate and may be ascertained by inquiry of the consignor, and the carrier's compensation fixed accordingly; and his liability is measured by the value of the goods. A telegraph company is intrusted with nothing but an order or message, which is not to be carried in the form in which it is received, but is to be transmitted or repeated by electricity, and is peculiarly liable to mistake; which cannot be the subject of embezzlement; which is of no intrinsic value; the importance of which cannot be estimated except by the sender, nor ordinarily disclosed by him without danger of defeating

of damages for failure to transmit or deliver which has no relation to any value which can be put upon the message itself."

We cannot agree with the learned court in these views. The question concerning the possibility of embezzlement or criminal collusion forms little or no part of the question at issue. If, however, that be material, we cannot see that the possibility is less remote in the case of a telegraphic message than in that of more material matter in transit under the control of a common carrier of goods. The opportunity for fraud, collusion, even actual embezzlement, is as much present in the one case as in the other. May we not compare the position of the telegraph company with that of the warehouse man who becomes bailee of grain, not to return the actual shipment, but a similar quantity of a similar standard, there may not be, beyond a certain point, a possibility of embezzlement, but both may surely have opportunities for larceny. That the message is not to be transmitted in the form in which it is received is immaterial; the Morse code is as pregnant with meaning to a properly competent telegrapher as is the written form in which the message is tendered to the telegraph company for transmission; the liability as to error, no greater in the one form than the other. The possibility of mistake may be guarded against by special contract limiting liability, or specially and expressly stating the valuation of the subject-matter tendered for transmission. If the sender insist upon the telegraph company assuming the commonlaw liability of the common carrier, wherein lies any hardship? It may charge him such rates as will permit the repetition of the message, and if this latter be accomplished it has, according to its own view, as evidenced by the ordinary stipulation in telegraph blanks covering this point, protected itself against the possibility of error, etc.,

as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract."

The main question at issue, however, in a consideration of the stipulations in telegraph blanks is: To what extent, if any, may a telegraph company, by special contract, limit or avoid liability for its negligence, or that of its agents or servants? We may assume that where there is error in the transmission of a telegraphic message, in the absence of evidence to the contrary, the presumption must be that the mistake resulted from the fault of the telegraph company. It may be stated, at the outset, that the general, if not universal, form taken by special contracts between telegraph companies and their patrons, limiting liability for error or delay in transmission and delivery, is that of stipulations upon the reverse of the blanks furnished by such companies and upon which messages tendered for transmission are required to be written, or affixed, such stipulations being expressly referred to upon the face of the form. held that these stipulations form an integral part of the contract which the sender has entered into when he subscribed his name to his message upon the face of the blank."

It is

There can be no doubt that where a stipulation in a telegraph blank avoids, in general terms, all liability in damages, it is void.10 It would seem to follow that where the stipulations, taken together, have the effect of permitting the telegraph company to escape all liability, the special contract, if contract it may be termed, is equally void. Telegraph companies, however, do not, as a rule, tender contracts of this nature. They have, in the main, incorporated into their blanks a stipulation avoiding liabilty, beyond the cost to the sender for transmission and delivery, unless the message be repeated by the receiving, to the transmitting office at additional cost to the sender. It may be said that such stipulation is, in general, a

telegraph company an insurer, it may limit its liability by special contract with its patrons in any proper manner. It is subject to many accidents that would seem to justify such precautions, yet, acting within its legal rights, it tenders to the public a form of contract which, if accepted, places it in the position of an insurer and protects the user absolutely. Acceptance of the more liberal contract is, in no sense, a sine qua non, but the telegraph company limits its liability if the sender fails to avail himself of that form of contract for transmission under which the company accepts general liability. Alvey, J., says:12 "The appellant (telegraph company) could not, by rules and regulations of its own making, protect itself against liability for the consequences of its own willful misconduct, or gross negligence, or any conduct inconsistent with good faith. It was bound to use due negligence, but not extraordinary care and precaution. The appellee, by requiring the message to be repeated, could have assured himself of its dispatch and accurate transmission to the other end of the line, if the wires were in working condition; or, by special contract for insurance, could have secured himself against all consequences of non-delivery." To this ruling the Maryland court has assented, holding that such regulations will not apply and such stipulations will not be recognized in cases where no effort has been made by the telegraph company or its agents to put the message upon its transit.13 In Texas such stipulations have been declared valid, the court regarding them as an integral part of the contract between the sender and the telegraph company, and in California the court, while seemingly disposed to accept the validity of stipulations of this nature, holds that where the telegraph company is guilty of gross negligence it is liable for the damages sustained, notwithstanding the special contract limiting liability. It would seem that in these cases a

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