to bias their judgments. This is not entirely obviated by the second plan, but it is greatly lessened, and after all it may not be said that personal interests of stockholders or directors should be entirely eliminated. The theory of corporate management and the election of directors is that managers to qualify should have a pecuniary interest in the success of a corporation. This is an additional security for the faithful performance of their duties.

In one or two states the rule as to extraordinary dividends is provided for by statute, and, considering that this is a subject not greatly aided by precedents of the common law, because corporations did not then enter so greatly into our life as now, this kind of statute ought to be adopted in other states. It seems to us that the diversity we have mentioned should be taken up by the Commissioners on Uniform Laws and corrected.

NOTES OF IMPORTANT DECISIONS.

INDEMNITY-ACTION BY EMPLOYE AND CROSS-ACTION BY EMPLOYER AGAINST LIABILITY COMPANY.-In Southwestern Surety Ins. Co. v. Thompson, 180 S. W. 947, in Texas Court of Civil Appeals, a suit for personal injuries was begun by a servant against a master, and an employers' liability insurance company was joined as defendant. No question appears to have been raised as to the propriety of such joinder and it may be that some statute in Texas specifically authorizes such joinder or unbroken Texas decision has upheld it. In either case it is something well deserving of notice.

In this suit the master filed a cross-action to recover his expenses in employing an attorney to defend his interests, the liability company having taken the position that it was not liable under its policy for the injury suffered. There was judgment in favor of the servant and against the master for $7,500 and against the company for $5,500, its policy being for $5,000 and $500 presumably for expense incurred by the master. As this $5,500 was to be deducted from the $7,500, this really gives the master the benefit of this $500 expense. This

judgment was affirmed except that it was reformed so as to make the recovery against the insurance company for $5,000 on the ground, that the judgment, so far as the $500 was concerned, should be conditional.

It was said: "We can see no legal objection to a maintenance of the suit for attorney fees, blended with the issues as indicated for a conditional recovery in favor of" the master.

The only point the insurance company made was, not that it was joined as defendant, but that its obligation to the master had not matured, and that issues between the company and insured were confused with issues in the main suit. The point about maturity seems to be admitted, and one of the strange things about the case seems to be that the court decides a case so far as is the contention between the company and insured before it legally could have arisen. It well may be thought also that the plaintiff was given an open road in his contention, where the two defendants were fighting each other.

APPEAL AND ERROR-SUGGESTION BY A COURT AS TO PREPARATION OF STATEMENT OF EVIDENCE AND ITS SETTLEMENT.-An easy and effective method of condensing the evidence in these days of stenographic reports of trials, and thereby not only lessening the expense of appeals, but contributing to clarity in disposition of the only questions in dispute, is pointed out by a judge of the Supreme Court of the District of Columbia. Maass v. Wardman, 44 Washington L. R. 72.

In this case there was a motion by appellee to strike from the records appellant's statement of evidence, as being incomplete and so improperly prepared as to make it impossible for appellee to propose amendments, and to substitute an alleged proper statement prepared by appellee.

The rule of the Court of Appeals of the District is quoted as being sufficient to cover such a case and the motion was disallowed. The trial court then makes the following suggestion: "If a statement of the evidence is prepared with the lines on each page so numbered that each copy shall correspond, and if the party proposing amendments refers at the end of each amendment to the proper page of the stenographer's minutes, where there are such and if the appellant marks upon the several amendments his allowance or disallowance thereof before the proposed amendment is submitted to the court for settlement, the labors of the court, especially in a long case, will be much lightened."

We have been told that in the days prior to the taking down of testimony in shorthand, it was a labor of some difficulty and much tediousness to prepare an acceptable brief of the evidence. Since the stenographer has come in it is an easy matter, if the entire evidence submitted at a trial is to be embraced in a bill of exceptions. But in a brief statement to contain all the evidence necessary for the consideration of the material questions involved the fairest way to do this is by elimination of unnecessary evidence as taken down by the stenographer. To bring about this cuttingout, appellee should have the right to move therefor. His right would rest upon the principle of cutting down costs and presenting the questions at issue in an independent way. The surplusage in bills of exception increases, also, very greatly the labors of appellate courts, and they ought to be much attracted by a clean presentation of the issues really involved.

It would not be out of the way for court rules to be a little less general and more specific along the lines suggested by the District of Columbia court. In the meantime, attorneys may find an opening therein for advantage in preparation of records for an appellate tribunal.

NEGLIGENCE-CAUSAL CONNECTION IN CONJECTURE OF DEATH.-The wide reach of a jury question is illustrated in a case decided by Supreme Court of Michigan. Kruis v. Grand Rapids, etc. Ry. Co., 155 N. W. 742.

The facts show that a telephone company left a wire dangling in a highway running parallel to an electric railway with a bare third rail. This wire could be thrown against this rail by the wind, or children might be attracted so as to throw it against the rail so as to see the sparks fly. Children went to school along this way, and during the two months the wire hung, they had been seen playing with the wire. On a day when the ground was wet and a wire fence ran near, a deceased, whose administrator was suing, was found dead apparently from shock, the body lying against the fence. There was recovery upon the theory that either the wind, high at the time, or the children, threw the wire against the third rail and the wet ground carried the current to the fence. The fence was electrified and deceased was killed. The court thought "the trial judge committed no error in submitting the question of proximate cause to the jury under the circumstances of this case."

It was shown that the telephone company had been thrice notified of the position of this

wire, but apparently paid no attention to the notice.

Here it does not appear at all that the hanging wire was caused to touch the third rail and the inference is that, if it did, it was not caused to do so by the acts of children as the death would have been discovered by them. It is left, therefore, to attribute the death to the wind and the ground being wet.

Considering that the rule of law is that plaintiff has the burden of showing by a fair preponderance of proof that defendant's negligence causes a particular injury or death, it seems to us that the jury's verdict against the telephone company was under a license to them to indulge in the very widest range of speculation. If it does not represent guess work, pure and simple, with some of the jury going upon one theory and some upon another, it is difficult for us to imagine a case that does.

FOREIGN CORPORATIONS - CONDITIONING JURISDICTION IN SUITS ARISING ELSEWHERE.-New York Supreme Court in Appellate Term, applies ruling by Federal Supreme Court that a state cannot impose on a foreign corporation, as a condition of its doing business therein, that it shall be served with process in an action, the cause of which arises elsewhere. Bagdon v. Phila. and Reading Coal and Iron Co., 156 N. Y., Sup. 647.

It does not appear in the New York case whether it involved or not a cause of action based on tort or arising out of contract. Whether one or the other, however, would seem to make no difference, as Simon v. Southern Ry., 236 U. S. 115, 130, puts claims on contracts and suits for torts on the same footing in this regard, when it was ruled that: "The statutory consent of a foreign corporation to be sued does not extend to causes of action arising in other states."

The Supreme Court argues as to "the manifest inconvenience and hardship arising from such extraterritorial extension of jurisdiction," but this is not greater than any citizen may be subjected to by being temporarily in another state. Comity is all sufficient in such a case and inconvenience is not taken into account. But why speculate about this extension of the principle that a state cannot forbid a foreign corporation from resorting to a federal court as to actions begun by or against it, notwithstanding that a state, as generally ruled, may impose upon a foreign corporation any condition it sees fit to its doing business in its borders? Our ultimate court has so held and that is an end of the matter.

THE ADMISSIBILITY AND WEIGHT
OF
HEARSAY EVIDENCE IN
QUASI-JUDICAL HEARINGS.

The Spirit of Legislation Providing for Administrative Boards Whose Awards Af- | fect Private Right.-The most important of the tribunals, whose decisions relate directly to private or individual right, is the Interstate Commerce Commission. It might, however, be claimed as to that, that the right affected is not a common law right but one regulatory, in that it has its origin in the Commerce Clause of a Constitution, which regards all claim of right thereunder as grantable or not as the functions of our Federal Government may be injured or promoted.

Nevertheless it is the policy of such government to prefer the application of principles of inherent justice where an act is not expressly or by strong implication malum prohibitum.

It has been said that: "The findings of the Commission are made by law prima facie true. This court has ascribed to them the strength due to the judgments of a tribunal appointed by law and informed by experience." Repeating this language, a later case2 adds that: "Its conclusion, of course, is subject to review, but when supported by evidence is accepted as final. * * * The courts will not examine the facts further than to determine whether there was substantial evidence to sustain the order."

In this statement it is implied that the members of the Commission shall arrive at their findings, not entirely as a court, referee, arbitrator or jury should, but because they are "informed by experience." This must mean other experience than that which is the support of what is known as judicial notice. This is not founded on special, but on general, knowledge-that which is common to mankind generally.

At the same time there must appear "substantial evidence to sustain" any order of

(1) Illinois C. R. R. v. I. C. C., 206 U. S. 441. (2) I. C. C. v. R. R., 222 U. S. 541.

the commission in its judgment in a particular controversy. This does not, necessarily, mean such evidence as a judicial tribunal would recognize.

Courts often have held, that testimony which is opposed to physical facts, that is to say, to common knowledge, may be disregarded by courts, and no doubt, if a tri

bunal like the interstate commerce commission were to make a finding in accordance with such testimony only, it would be held not to be based on "substantial evidence." But would it be held, that a finding by such commission against testimony upon the ground, that it was opposed to special knowledge of members of the commission, all set out in the finding, was sustained by "substantial evidence?" If not, what figure does the Commission being "informed by experience" cut in the findings it makes?

Would this be construed to relax the rule as to inadmissibility of strictly hearsay evidence or introduce another or other exceptions to such rule? This question leads naturally to the reason of the rule of exclusion.

Reason for the Exclusion of Hearsay Evidence.-We know that what we call the Hearsay Rule is unknown to the Civil law, and its harshness has been inveighed against by text-book writers in cases where death, for example, operated to defeat actions or defenses. One author has spoken of the rule as "the distinctive anomaly of the English law of evidence." The rule, however, in its integrity has been enforced in American courts very greatly upon the grounds laid down by Greenleaf many years ago. He said: "Hearsay evidence is uniformly held incompetent to establish any specific fact, which, in its nature, is susceptible of being proved by witnesses, who can speak of their own knowledge. That this species of testimony supposes something better, which might be adduced in the particular case, is not the sole ground of its exclusion. Its intrinsic weakness, its

(3) 4 Chamberlayne Mod. Ev. §§ 2574, 2700,

2720.

incompetency to satisfy the mind as to the existence of the fact and the frauds which may be practiced under its cover, combine to support the rule, that hearsay evidence is totally inadmissible."

Notwithstanding such weakness and incompetency, yet we know that when we get away from effort "to establish a specific fact," hearsay evidence may be offered to prove collateral facts which may support or oppose evidence in regard to the specific fact-in other words, under cover of exceptions to the rule it is admissible.

The Rule as a Protection to Juries.This weakness and incompetency further secures enforcement of the rule in the fact "that there is danger lest the jury be misled by it, according to it more weight than it is rationally entitled to receive." This, however, seems like an attempt to bolster up a rule not founded in principle, and measurably, at least, it would apply to many of the exceptions to the rule itself. Nevertheless, some English authority distinguishes so far as courts of equity and courts of common law are concerned. Along this line spoke Lord Mansfield in 1811:5 "In Scotland and most of the Continental states the judges determine upon the facts in dis

pute as well as upon the law; and they think there is no danger in their listening to evi

dence of hearsay, because when they come to consider of their judgment upon the merits of the case, they can trust themselves entirely to disregard the hearsay evidence, or to give it any little weight which it may seem to deserve. But in England where the jury are the sole judges of the fact, hearsay evidence is properly excluded,

because no man can tell what effect it might have upon their minds." There is appended a footnote by the editor of this report, which reads: "It is observable that, according to the practice of the English courts, in affidavits which are submitted to

the judges only, hearsay evidence is often admitted and acted upon."

And it was said by Bosanquet, J., in the Berkley case, that: "Where the judges are authorized to deal both with the facts and

the law, a much larger discretion with respect to the reception of evidence may not unreasonably be allowed than in courts of common law, where the evidence, if received by the judge, must necessarily be submitted entire to the jury. By the rules of evidence established in courts of law, circumstances of great moral weight are often excluded, from which much assistance

might in particular cases be afforded in coming to a just conclusion, but which are nevertheless withheld from the consideration of the jury upon general principles, lest they should produce an undue influence upon the minds of persons unaccustomed to consider the limitations and restrictions which legal views upon the subject would impose."

Application of the Rule to Statements of Deceased Persons.-As late as 1876 it was much debated in England whether statements of deceased persons purely hearsay in their character were admissible and there was great consideration of the question in English Court of Appeals, all agreeing that they should be excluded. Mellish, L. J.,

concurring, said: "If I was asked what I think would be desirable should be evidence, I have not the least doubt in saying that I think it would be a highly desirable improvement in the law if the rule was made that all statements made by persons who are

dead respecting matters of which they had personal knowledge, and made ante litem motam, should always be admissible. There is no doubt that by rejecting such evidence, we do reject a most valuable source of evidence."

In Massachusetts there is a statute providing that ground may be laid for the admission of declarations of a deceased by proving to the satisfaction of the judge that

(7) Sugden v. St. Leonards, 45 L. J. P. 49, 34 L. T. Rep. (N. S.) 372.

they were made in good faith before the beginning of suit and upon personal knowledge of the declarant."

In Connecticut, a statute provides that in action by or against representatives of deceased persons, declarations of the deceased relevant to the matter in issue may be received."

These statutes, and very possibly more might be found, represent the view expressed by Mellish, L. J., supra, and show an approval of the admission of hearsay evidence, where foundation preliminary to its introduction is laid.

Summary of Above Holdings. It seems that the hearsay rule is merely an English rule and even there it was only enforced in its rigidity in the courts of common law and not in courts where judges, and not the jury, were to consider it. This judgment by judges took into account its probative force, but the policy that excluded it considered that it was inherently so dangerous for the untrained minds of jurors, that the rule should be broad enough to cover all possible injury. It was deemed likely, that the care of judges was incapable of preventing injury more often resulting, than would result, if the exclusion were universal. A rule of this kind under the English system, a fortiori would apply to American courts, because our judges are more greatly mere moderators in a trial than its directors. But, at bottom, all that is said about the inherent weakness of hearsay evidence and of opportunity being denied of cross-examination does not necessarily include incompetency. This refers to weight and not admissibility. For example, it was laid down in one of our courts, in speaking of exceptions to the rule of exclusion of hearsay evidence, that it comes in "when no better evidence can be supposed to exist." But this exception was said not to

(8) 175, § 66. (9) Foote v. Brown, 81 Conn. 218, 70 Atl. 699; Mulcahy v. Mulcahy, 84 Conn. 651, 81 Atl. 242.

Mass. Stats. 1898, c. 535: Rev. Laws, Ch.

cover the admission of hearsay upon hearsay, 10

Taking it, then, that the ultimate and really controlling reason for the rule of exclusion is the greater evil, that would be wrought in jury trials, than were it to be admitted, the question comes up, what should be the rule in tribunals where no jury trials are to be had? I have been able only to submit suggestive authority in findings by the interstate commerce commission, but there are cases of more direct bearing under Workmen's Compensation Acts, where awards are made by commissions.

English Compensation Cases Excluding Hearsay.-It must be admitted, that in England the hearsay rule is enforced in compensation cases very strictly," but I greatly doubt whether adoption by American states of similar statutes to the English act should be considered to bring over here the rule of construction there announced. This ordinarily applies where one state takes from another state a statute with prior construction thereon. In this case the statute imported is merely taken as fairly representative only of a policy in the awarding of compensation for injuries and it has no bearing on the way our courts should enforce that policy. We should not consider ourselves hampered by the English system regarding rules of evidence, where it disagrees with our system. But, if words. of the English act as to their meaning have been construed as to substantive law, our act employing those words ought to be held to mean as those words had been construed. As an illustration of how one American court regarded the English acts, which as construed held to presumptive prejudice arising out of incompetent testimony before a board, the court said: "We do not think, however, that under the language used in

(10) Gould v. Smith, 35 Me. 513.

(11) Gilhey v. Ry. Co., 3 B. W. C. C. 135: Smith v. Hartman & Holden, Ltd.. 6 B. W. C. C. 719.

(12) Peck v. Whittlesberger, 181 Mich. 463, 148 N. W. 247.