Co. v. Western Union Tel. Co., 119 Fed. 294. At common law the defendant is not a bona fide purchaser for value, as an executory promise is not such value as to cut off equities. Brown v. Welch, 18 Ill. 343; Keyser v. Angle, 40 N. J. Eq. 481, 4 Atl. 641. Under the Uniform Sales Act, value is defined as any consideration sufficient to support a simple contract"; but this provision is omitted from the act as adopted in New York, and common-law principles, therefore, prevail in that state. As the defendant can thus make no use of the goods sold him by the plaintiff, it seems clear that the warranty was broken and he should not be forced to pay for them.

SPECIFIC PERFORMANCE

- DEFENSES - INADEQUACY OF CONSIDERATION. - The defendant, through a real estate agent, agreed to convey real estate worth about $12,000 and pay in cash $15,000 in exchange for city property of the plaintiff's worth about $15,000. The defendant's agent was secretly receiving a commission on the deal from the plaintiff. Held, that specific performance will not be granted. State Security & Realty Co. v. Shaffer, 20 Det. L. N. 772 (Mich. Sup. Ct., Sept. 30, 1913.)

The exercise of equity's jurisdiction to compel specific performance of a contract rests upon the sound discretion of the court in view of all the circumstances. Norris v. Clark, 72 N. H. 442, 57 Atl. 334. This specific-performance jurisdiction will not be exercised where the agreement is unconscionable, even though equity would not be justified in setting aside the contract. Cathcart v. Robinson, 5 Pet. (U. S.) 264. So, where there is evidence of unfair dealing or sharp practice coupled with inadequacy of consideration in the contract, specific performance will be refused. Woolford v. Steele, 27 Ky. L. Rep. 88, 84 S. W. 327; Shoop v. Burnside, 78 Kan. 871, 98 Pac. 202. By statute in some jurisdictions specific performance will not be granted unless it appears that the consideration was adequate. White v. Sage, 149 Cal. 613, 87 Pac. 193. But inadequacy of consideration alone is not generally enough to justify a refusal to enforce the contract specifically. Coles v. Trecothick, 9 Ves. 234; O'Brien v. Boland, 166 Mass. 481, 44 N. E. 602. If, however, the inadequacy is so great as to shock the conscience of the court and be decisive evidence of unfair dealing, specific performance will be refused. Clitheral v. Ogilvie, 1 Desaus. Eq. (S. C.) 250. In such a case the hardship on the defendant is so great as to overcome any hardship on the plaintiff resulting from the denial of an incident of his contract, and equity is better served by leaving the purchaser to his remedy at law. See Seymour v. Delancey, 3 Cowen (N. Y.) 445, 517. How gross the inadequacy must be depends on the circumstances, but the principal case seems in accord with the trend of modern authority on this point. See Worth v. Watts, 74 N. J. Eq. 609, 611, 70 Atl. 357, 358. The court need not have based its decision entirely on this ground, however. The fact that the defendant's agent received a commission from the plaintiff without the knowledge of the defendant would seem to be sufficient evidence of collusion to justify a refusal to decree specific performance. Fish v. Leser, 69 Ill. 394; Palmer v. Gould, 144 N. Y. 671, 39 N. E. 378; Young v. Hughes, 32 N. J. Eq. 372. See 15 HARV. L. REV. 318, 741.

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STATUTES INTERPRETATION MEANING OF "MANUFACTURING ESTABLISHMENT." A bankrupt company imported preserved cherries, which it colored, flavored, bottled, and placed upon the market as "Maraschino cherries." Creditors who had furnished supplies claim a lien upon the bankrupt's property under a statute providing for such security where the business is a "rolling mill, foundry, or other manufacturing establishment." KY. STAT., § 2487; (U. S.) ACT, July 1, 1898, c. 541; BANKRUPTCY ACT, § 64 b (5); 30 STAT. AT LARGE, 563. Held, that the lien attaches. In re I. Rheinstrom & Sons Co., 207 Fed. 119 (Dist. Ct., E. D. Ky.).

The apparently chaotic state of the authorities on the construction of the term "manufacturing establishment" is due to the fundamental principle that the intent of the legislature is the controlling consideration. Corresponding terms of similar statutes may well receive opposite interpretations in two jurisdictions, because of a difference in the legislative policies expressed by the two statutes. Commonwealth v. Northern Electric L. & P. Co., 145 Pa. 105, 22 Atl. 839; People ex rel. Brush Elec. M. Co. v. Wemple, 129 N. Y. 543, 29 N. E. 808. It is submitted that the court in its search for a "logical rule" to fit all cases attempts to realize the impossible and fails to give proper weight to general principles of construction. As the statute in the principal case gives one class of creditors a priority over another, it should be strictly construed against the lien claimants. See Rogers v. Currier, 13 Gray (Mass.) 129, 134. The principle of ejusdem generis, that where particular words are followed by a general term the latter is designed to include only things of a like class with those previously enumerated, tends to show that only large industrial concerns were within the purview of the statute. Pardee's Appeal, 100 Pa. St. 408; Newport News, etc. Co. v. United States, 61 Fed. 488. And from the evidence quoted in the opinion, it seems a fair inference that the policy of the statute was to stimulate development of the state's mineral resources. Previous Kentucky cases present some authority for a broader interpretation. Winter v. Howell, 109 Ky. 163, 58 S. W. 591; Bogard v. Tyler, 119 Ky. 637, 55 S. W. 709. But it is submitted that the principal case involves too great a departure .from this policy.

TAXATION

GENERAL LIMITATIONS ON THE TAXING POWER-CONSTITUTIONALITY OF DISCRIMINATORY TAX ON FOREIGN CORPORATIONS DOING INTRASTATE BUSINESS. Two foreign corporations who had long done intrastate business in Massachusetts objected to an excise tax, imposed on foreign corporations alone and based on their capital stock, as being contrary to the Constitution. Held, that the tax is constitutional. Baltic Mining Co. v. Massachusetts, 34 Sup. Ct. 15.

For a discussion of the question of taxation of foreign corporations, see NOTES, p. 275.

TAXATION PARTICULAR FORMS OF TAXATION INCOME TAX CALCULATION OF INCOME OF MINING COMPANY. — In assessing the income of a mining company under section 38 of the federal corporation tax of 1909, U. S. COMP. STAT. SUPP. 1911, p. 947, the collector subtracted from the total proceeds of ore sold, the expense of mining it, but not its original value in the ground. Held, that the tax was properly assessed. Stratton's Independence, Limited, v. Howbert, 207 Fed. 419 (Dist. Ct., D. Colo.), affirmed by U. S. Supreme Court, Sup. Ct. No. 457 (Dec. 1, 1913).

A land company which had leased a mine was assessed under the federal corporation tax on the royalties received from the proceeds of the sale of ore. Held, that such royalties do not constitute income. Sargent Land Co. v. Von Baumbach, 207 Fed. 423 (Dist. Ct., D. Minn.).

The Supreme Court settles this conflict in favor of the view that proceeds from the sale of ore is income. The conflicting decisions of the federal district courts each find support in authority. Commonwealth v. Ocean Oil Co., 59 Pa. 61; United States v. Nipissing Mines Co., 202 Fed. 803. Against the view taken by the Supreme Court it is urged that ore in the ground is capital, and that therefore its sale cannot yield an income. This argument hardly accords with the actual facts. Mining consists in exploring, raising, and selling natural deposits which, when the mine is opened, are imperfectly known, and therefore non-existent for economic purposes. The "value in the ground" comes into being gradually with the progress of the mine; hence it is really

income, and may fairly be taxed as such when its final realization in cash furnishes a convenient opportunity. It seems certain that this result must be reached under the new income tax, for much of the Supreme Court's reasoning is equally applicable to that statute, and the very small deduction expressly allowed to mine-owners "for depletion of ores" necessarily implies that the cash receipts derived from such depletion are to be treated as gross income." INCOME TAX ACT, § 2, B, G, b. Such is the rule under the English statute, where the inference is less compelling. Alianza Co. v. Bell, [1906] App. Cas. 18. Contra, but overruled, Knowles & Sons v. McAdam, L. R. 3 Exch. D. 23.

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STANDARD OF CARE

TELEGRAPH AND TELEPHONE COMPANIES WHETHER COMPANY MUST EXERCISE ORDINARY OR GREAT CARE TO KEEP ITS INSTRUMENTS IN WORKING ORDER. -The defendant telephone company used a night bell to give the operator notice of calls. Owing to a defect in the mechanism of the bell, it failed to ring, and a call by the plaintiff was not answered. Held, that the telephone company is bound to use only ordinary care to keep its facilities in working order. Southern Bell Telephone Co. v. Glawson, 79 S. É. 488 (Ct. of Appeals, Ga.).

An exception to the general rule that public service companies must exercise the highest degree of care consistent with performance of the service, exists in the case of telephone and telegraph companies. A majority of cases require only ordinary care under the circumstances. Western Union Telegraph Co. v. Hays, 63 S. W. 171 (Tex.); see Ellis v. American Telegraph Co., 13 Allen 226, 234. Some authority imposes a duty to use the utmost care. Marr v. Western Union Telegraph Co., 85 Tenn. 529, 3 S. W. 496. See Fowler v. Western Union Telegraph Co., 80 Me. 381, 388. The latter cases seem preferable, for the considerations of public policy which support the rule are applicable to all public services. See 27 HARV. L. REV. 178. The difference, however, between the standard of the utmost care and the standard of reasonable care under the circumstances, with due emphasis laid upon the importance of the circumstances, seems more rhetorical than actual, even in public service. Gardner v. Boston Elevated Ry. Co., 204 Mass. 213, 90 N. E. 534.

TORTS - INTERFERENCE WITH BUSINESS - DAMAGE TO BUSINESS REPUTATION BY WRONGFUL ACT. - The defendants, falsely representing themselves to be the husbands of the two females who accompanied them, obtained rooms in the plaintiffs' hotel for immoral purposes, and conducted themselves in an obscene and disorderly manner, to the disturbance of the other guests. The plaintiffs sue for loss of patronage consequent upon the defendants' acts. Held, that a demurrer to the plaintiffs' declaration be overruled. Hall v. Galloway, 135 Pac. 478 (Wash.).

The reasoning upon which the court upholds the declaration is that the facts stated amount to a private nuisance. Sullivan v. Waterman, 39 Atl. 243, 20 R. I. 273. But it is not necessary to bring this wrong under the vague definition of a private nuisance in order to grant recovery. Relief should be afforded on general principles of tort liability. As a part of good will, the right to business reputation has been recognized as a valuable property right. Boon v. Moss, 70 N. Y. 465. Business reputation is carefully protected from injury caused by false spoken or written words. Ostrom v. Calkins, 5 Wend. (N. Y.) 263; Ohio & Mississippi Ry. Co. v. Press Publishing Co., 48 Fed. 206. Equity will enjoin the infringement of it by the wrongful use of an established trade name. Millington v. Fox, 3 Myl. & Cr. 338. The enjoyment of this right has also been protected by an injunction against imitating, in other respects, the plaintiff's manner of doing business, as by the use of similar uniforms for servants. Stone v. Carlan, 3 Code Rep. (N. Y.) 360. In the principal case the defendants have violated this right by intentionally engaging in conduct, the

natural consequences of which were to cause damage to the plaintiffs' business reputation, and there is obviously no justification. All the essential elements of tort liability are present, therefore, although it is difficult to bring the action within any existing classification. Rice v. Coolidge, 121 Mass. 393.

TORTS - LIABILITY OF A MAKER OR VENDOR OF A CHATTEL TO THIRD PERSONS INJURED BY ITS USE - NATURE AND GROUNDS OF LIABILITY — The defendant negligently allowed some poisonous matter to get into some meat which it was canning. The plaintiff bought some of this meat from a third party relying on the defendant's representations as to the purity of its products. Because the plaintiff served this bad meat to a customer his trade was injured. A demurrer to a declaration alleging these facts was sustained by the lower court. Held, that such ruling is error, as there was an implied warranty to all subvendees that the goods were fit. Mazetti v. Armour & Co., 135 Pac. 633 (Wash.).

It is well settled that a warranty only runs to the warrantor's immediate vendee. Prater v. Campbell, 110 Ky. 23, 60 S. W. 918; Post v. Burnham, 83 Fed. 79; but see Childs v. O'Donnell, 84 Mich. 533, 538, 47 N. W. 1108, 1109. This strict rule as to warranties has doubtless influenced courts that have held that a vendor should not be liable in tort in cases where there is no privity of contract between the parties. The latter conclusion is clearly unsound. But courts should not go to the other extreme and hold manufacturers absolutely liable to all persons for injuries from their products. The defendant in the principal case would be liable for negligence, indeed, on principle and by the weight of authority. Tomlinson v. Armour & Co., 75 N. J. L. 748, 70 Atl. 314; Ketterer v. Armour & Co., 200 Fed. 322. Contra, Nelson v. Armour Packing Co., 76 Ark. 352, 90 S. W. 288. Furthermore, there is a liability imposed in many states on one who makes an honest misrepresentation, in favor of one who justifiably has relied thereon, provided the former had better means of knowledge as to the truth of the statements than the party injured. Goodale v. Middaugh, 8 Colo. App. 223; Kellogg v. Holm, 82 Minn. 416, 85 N. W. 159. Contra, Sims v. Eiland, 57 Miss. 83. See 24 HARV. L. REV. 415, 427 et seq. Generally, in cases similar to the principal case, it would be difficult to prove actual reliance on express statements, such as advertisements. But as the plaintiff has alleged such reliance it would seem that on demurrer he could recover for the damage resulting therefrom. Blood Balm Co. v. Cooper, 83 Ga. 457, 10 S. E. 118. Cf. Roberts v. Anheuser-Busch Brewing Ass'n, 211 Mass. 449, 98 N. E. 95.

TRIAL PROVINCE OF COURT AND JURY-RIGHT OF APPELLATE COURTS TO DIRECT A JUDGMENT NOTWITHSTANDING VERDICT. - The defendant at the trial of the present action requested a directed verdict which, upon the evidence presented, should have been given. The request was refused, however, and the jury found a verdict for the plaintiff. A Massachusetts statute provides that the Supreme Court under such circumstances may direct the entry of a judgment for the party in whose favor a verdict should have been directed below. The defendant, excepting to the ruling of the lower court, requested that this be done. Held, that the court will direct that judgment be entered for the defendant. Bothwell v. Boston Elevated Ry. Co., 102 N. E. 665 (Mass.).

The United States Supreme Court recently denied the right to direct the entry of a similar judgment on the ground that the plaintiff's constitutional right to trial by jury required a new trial. Slocum v. N. Y. Life Ins. Co., 228 U. S. 364, 33 Sup. Ct. 523. See article on this question by J. S. Thorndike in 26 HARV. L. REV. 732. The practical inconvenience of such a decision is obvious. The parties must undergo the annoyance and expense of a new trial though the evidence warrants only a directed verdict, and though the

plaintiff has had his day in court and has failed to produce sufficient evidence to raise a jury question. The principal case, then, seems clearly correct. Hay v. City of Baraboo, 127 Wis. 1, 105 N. W. 654.

TRUSTS

RESULTING TRUST - CONVEYANCE TO HUSBAND FOR CONSIDERATION FURNISHED BY WIFE. - A husband purchased land with money advanced by his wife for that purpose from her separate estate, taking title in himself. There appears to have been no agreement as to which should have title, nor does it appear that the wife knew that title was held by the husband until several years afterward, when he deserted her, and she filed her bill to have a trust declared. Held, a trust will be enforced. Orr v. Orr, 70 Legal Int. 684 (Pa. C. P., Delaware Co., Oct. 1913).

Where land is conveyed to A. upon consideration furnished by B., a stranger, a trust is presumed to result in favor of B. Ex parte Vernon, 2 P. Wms. 549. However, where A. is B.'s wife, for whom it is his duty to provide, the consideration furnished is presumed to be an advancement. McCartney v. Fletcher, II App. Cas. (D. C.) 1; Dunbar v. Dunbar, [1909] 2 Ch. 639. The same presumption applies in Pennsylvania when the person furnishing the consideration is the wife. McCormick v. Cook, 199 Pa. 631, 49 Atl. 238. Upon this presumption the result of the principal case is perhaps open to criticism, for the evidence relied on to rebut it is purely negative. By weight of authority, however, consideration furnished by a wife for a conveyance to her husband gives rise to the same presumption of a resulting trust as in the case of strangers. Martin v. Remington, 100 Wis. 540, 76 N. W. 614; Matador Land & Cattle Co. v. Cooper, 39 Tex. Civ. App. 99, 87 S. W. 235. It is submitted that the latter view is correct, for in the absence of a duty to provide, the reason for presuming a gift fails. Moreover, the ascendency which the marital relation gives to the husband renders such protection peculiarly necessary to the wife. For a criticism of these presumptions with regard to resulting trusts and a discussion of the effect of statutes relating thereto, see article by James Barr Ames, 20 HARV. L. REV. 555-557.

BOOK REVIEWS.

A TREATISE ON THE LAW OF PUBLIC UTILITIES. By Oscar L. Pond. Indianapolis: The Bobbs-Merrill Company. 1913. pp. liv, 954.

In this treatise on the special law of municipal utilities the author undertakes the ambitious task of ascertaining the nature of the municipal corporation as expressed in the law and in the construction which the courts have given to the powers conferred upon the municipality by the state, and also of discovering what limitations are placed on municipal activity by our constitutions as construed by the courts. He broadens the inquiry to discover how far the judicial construction of the law with regard to the taxation and sale of municipal public utilities facilitates or impedes the cities in the discharge of these new duties imposed by the ownership and operation or the proper regulation and control of municipal public utilities. And he enters into the discussion of what are the most efficient methods of regulation and control available to the state or municipality over the operation by private capital of municipal public utilities. Indeed, he shows throughout that he appreciates that unless the strict regulation by governmental authorities which we are trying out proves effectual, we shall be driven perforce to a further extension of governmental control to the point of municipal ownership, already reached in many communities.