the defendant bank to be applied to a debt W. owed the bank. By mistake, a consignment belonging to the plaintiff was sent on in W.'s name. The hogs were sold, and the agent, in ignorance of the plaintiff's ownership, deposited the proceeds as usual in the defendant bank, which the latter immediately applied to W.'s debt. The plaintiff, learning of the mistake, sues the bank. Held, that the plaintiff may recover. Wilson v. Farmers' First Nat. Bank, 162 S. W. 1047 (Mo. Ct. App.).

On the sale of the hogs the agent held the proceeds in constructive trust for the plaintiff. See Newton v. Porter, 69 N. Y. 133, 140. When the agent, acting for the principal, deposited the funds, by the agency doctrine of identification it was the principal who deposited. Now where a trustee deposits trust funds in his own general account, the bank may apply the money to any existing debt of his if it takes without notice of the trust. School District v. Bank, 102 Mass. 174. First Nat. Bank v. City Nat. Bank, 102 Mo. App. 357, 76 S. W. 489. But for the bank to have the right to apply, the relation of bank and depositor, of debtor and creditor, must exist. Mingus v. Bank of Ethel, 136 Mo. App. 407, 117 S. W. 683. In the principal case the agency was never revoked. So it would seem that in making the deposit the agent acted within his express authority, thus establishing the relation. See STORY, AGENCY, 9 ed., § 470. But even if the agent had no authority to deposit the fund, as the court seems to believe, or if he had been a complete stranger to the parties, it is submitted that the bank should still be protected. A contract of deposit is virtually a contract for the benefit of a third party. Hawley v. Exchange, etc. Bank, 97 Ia. 187, 66 N. W. 152. Where that doctrine is strictly followed, a new obligation arises at once in favor of the third party, i. e., the promisor becomes the latter's debtor. Bay v. Williams, 112 Ill. 91. The relation of debtor and creditor thus established between the bank and W., the bank's right to apply would seem complete. First Nat. Bank v. City Nat. Bank, supra. Of course, where the third party's assent is required to fix the liability (Wood v. Moriarty, 15 R. I. 518, 9 Atl. 427), it would seem that the right should only accrue where assent is given. Or if the third party later disclaims, the bank's defense on this ground is gone. Mingus v. Bank, supra. But even so, the bank might be protected (on the broader doctrine of Price v. Neal, as set forth by Dean Ames in 4 HARV. L. REV. 297). It took the deposit under the bona fide impression that it was to the account of the debtor and so could rightfully be applied to his antecedent debt. The legal title passed, and, as the equities were equal, it is submitted that the bank should be allowed to retain. The principal case would therefore seem wrong.

BILLS AND NOTES CHECKS — TRAVELERS' CHECKS — LIABILITY OF ISSUING BANK WHEN COUNTER-SIGNATURE IS FORGED. - The defendant bank had issued to the plaintiff a traveler's check in the following form: "When countersigned below with the opposite signature Knauth et al. through their correspondents will pay against this check out of their balance to the order of," etc. The check having been stolen, forged and paid, the plaintiff sued to recover his deposit. It appeared that there would have been ample time for the defendant bank to have prevented payment of the check had it been promptly notified of the loss. Held, that the plaintiff can recover. Sullivan v. Knauth, 50 N. Y. L. J. 2821 (N. Y. App. Div., March, 1914).

No previous case can be found which squarely involves travelers' checks. Cf. Samberg v. Am. Express Co., 136 Mich. 639. It is submitted that in form this check represents a certification or acceptance in advance, which becomes effective by the addition of the drawer's counter-signature. When such a check is lost the likelihood of forgery is great, because it carries on its face a facsimile of the drawer's signature. On the other hand, payment at the direction of the forger could frequently be prevented by prompt notice to the issuing bank.

Therefore, it seems not unreasonable to bar the holder if his failure to make known his loss has been a proximate cause in the payment on the forgery. It has been held that an ordinary bank depositor whose signature has been forged may be barred by his negligence if he fails to give prompt notice of an error in his monthly statement. Dana v. National Bank, 132 Mass. 156. In the traveler's check the relation between the holder and the issuing bank, although not as close and continuous, is analogous to that of banker and depositor. The decision in the lower court was in accord with this view. 142 N. Y. Supp. 307.

BILLS AND NOTES - STATUTES NEGOTIABLE INSTRUMENTS LAW: EFFECT ON STATUTE MAKING GAMBLING NOTES VOID:- A statute declared void all notes given for a gambling consideration. Sections 55 and 57 of the Negotiable Instruments Law, subsequently adopted, provide that the title of a person who negotiates an instrument is defective when obtained for an illegal consideration, and that a holder in due course holds the instrument free from any defect of title of prior parties, and from defenses available to prior parties among themselves. The plaintiff was a bona fide holder for value of a note given for a gambling consideration. Held, that the plaintiff cannot recover. Martin v. Hess, 71 Leg. Int. 148 (Munic. Ct. Phila., Feb. 25, 1914).

By the law merchant, illegality of consideration, although created by statute, is only an equitable defense. Hopmeyer v. Frederick, 74 Ill. App. 301. See Sondheim v. Gilbert, 117 Ind. 71, 76, 18 N. E. 687. But it is well settled that even a bona fide purchaser for value cannot recover, where a statute declares the instrument absolutely void. Bowyer v. Bampton, 2 Strange, 1155; Unger v. Boas, 13 Pa. 601. The principal case presents the question whether the Negotiable Instruments Law repeals the previous voiding statute, and makes the defense only personal. Since the uniform law provides that the title of one who obtains an instrument for illegal consideration is defective, and that a holder in due course takes free of defects of title of prior parties, it has been held that the former statute is repealed by necessary implication. Wirt v. Stubblefield, 17 App. Cas. (D. C.) 283; Klar v. Kostiuk, 65 N. Y. Misc. 199, 119 N. Y. Supp. 683. Contra, Alexander v. Hazelrigg, 123 Ky. 677, 97 S. W. 353. But this construction of the Negotiable Instruments Law, although it tends to promote the free circulation of negotiable paper, seems improper; for the gambling statute voids the instrument in its inception, and the case is properly not one of defective title, but rather one where no negotiable instrument has ever come into existence. The Negotiable Instruments Law therefore seems to have no application. See Klar v. Kostiuk, 65 N. Y. Misc. 199, 202, 119 N. Y. Supp. 683, 686; 59 U. of Pa. L. REV. 489. Moreover, in view of the strong policy in favor of the gambling statute, a repeal of it should be clear and unambiguous. Alexander v. Hazelrigg, supra. The decision of the principal case would therefore seem correct.

CONFLICT OF LAWS - MAKING AND VALIDITY OF CONTRACTS - FORMAL VALIDITY: WHAT LAW GOVERNS. The plaintiff and the defendant contracted in Oklahoma for the sale of land in North Dakota. The plaintiff sued in Oklahoma for breach of the contract, and the defendant relied upon the North Dakota statute of frauds. Held, that the law of North Dakota governs. Baird Investment Co. v. Harris, 209 Fed. 291 (C. C. A., Eighth Circ.).

The formal, not the essential, validity of the contract is here involved. See article by Professor Beale, 23 HARV. L. REV. 1, 3. On principle, of course, both should be governed by the law of the place where the contract is made, since only the law that applies to the acts of the parties can annex to their promises an obligation of performance. See article by Professor Beale, 23 HARV. L. Rev. 260, 270. But it is now too late to argue for the true doctrine as respects essential validity. Usually, however, it is correctly held that formal validity de

pends on the lex loci contractus, on the principle locus regit actum. Hunt v. Jones, 12 R. I. 265. See DICEY, CONFLICT OF LAWS, 2 ed., 540. This is the better view, even in contracts for the sale of land. See Cochran v. Ward, 5 Ind. App. 89, 93, 29 N. E. 795, 796; WHARTON, CONFLICT OF LAWS, 3 ed., § 693 b. Dicey, however, states that in such contracts the lex situs governs as to formal validity. See DICEY, CONFLICT OF LAWS, 2 ed., 1503, 542. The principal case in result supports this exception, for which there is some American authority. Meylink v. Rhea, 123 Ia. 310, 98 N. W. 779. See Bissell v. Terry, 69 Ill. 184, 190. Of course if the lex situs refuses to recognize that an interest in the land has been created by such a contract, relief in rem cannot be obtained. This, however, should not prevent relief in personam by way of damages such as was sought in the principal case. See 21 HARV. L. REV. 365.

CONTRACTS RESTRAINT OF TRADE - VALIDITY OF RESTRICTIONS AGAINST COMPETITION IN EMPLOYMENT CONTRACT. - The defendant, on accepting employment in the plaintiff's pathological laboratory in London, agreed not to engage in any similar work within ten miles of the plaintiff's laboratory, no limit of time being expressed. The defendant later set up a rival laboratory within the ten-mile limit, and the plaintiff seeks to enjoin him. Held, that an injunction will not be granted. Eastes v. Ross, [1914] 1 Ch. 468.

I

If the restraint of trade imposed is reasonable with reference to the interests of the parties and the public, the contract will be upheld. Nordenfelt v. Maxim Nordenfelt Guns & Ammunition Co., [1894] A. Č. 535; Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 28 Atl. 973. So an agreement, on the sale of good will, that the vendor, during his life, will not compete within a reasonable distance of his vendee, is valid. Marshalls v. Leek, 17 T. L. R. 26; Wood v. Whitehead Bros. Co., 165 N. Y. 545, 59 N. E. 357. If the object of a contract, with restrictions similar to those in the principal case, is to protect the employer's trade secrets, it will also be upheld. Haynes v. Doman, [1899] 2 Ch. 13. There is a strong policy in favor of making possible an effective sale of good will, and of protecting a trade secret just as any tangible asset of its owner. If, therefore, such a contract is reasonable with reference to the interests of the parties, it is clearly valid. See Mason v. Provident C. & S. Co., [1913] A. C. 724, 738, 740. The only object of the contract in the principal case is to prevent a possible competition by the defendant in the future. And while this does not furnish so strong an argument in favor of validity as the above factors, such contracts are not, in themselves, against public policy, even in America. Davies v. Racer, 72 Hun. (N. Y.) 43, 25 N. Y. Supp. 293. The restriction, as regards time and space, would seem on the facts no larger than necessary for the protection of the plaintiff and his assignees. The decision in the principal case therefore seems questionable. The court further touches on the undesirability of depriving the public of the services of the defendants, a consideration not emphasized hitherto in the recent English cases. But this consideration apparently has not been sufficient to overthrow contracts between employer and employee, even in our courts.

CORPORATIONS ULTRA VIRES - CONTINUING CONTRACT MADE FOR AN UNAUTHORIZED PURPOSE. In a suit for the breach of a continuing contract to buy coal, the defendant, an interstate carrier (now plaintiff-in-error), introduced evidence that it had made the contract with the dominant purpose to resell the coal. The court's charge permitted recovery whether or not the vendor knew or had means of knowledge that the railroad was engaged in the business of merchandizing coal. Held, that the plaintiff cannot recover if it knows, or is chargeable with knowledge of, the railroad's unlawful purpose. Chesapeake & O. R. Co. v. McKell, 209 Fed. 514 (C. C. A., 6th Circ.).

Ι

It is ultra vires for a public-service company to engage in collateral undertakings. See I WYMAN, PUBLIC SERVICE COMPANIES, § 703. In cases of loans to a corporation, it has been suggested that the loaning is distinct from the ultra vires application of the proceeds. See 18 HARV. L. REV. 463. Yet it would seem that buying a commodity for the purpose of resale is part of a unit undertaking to trade in that commodity, and therefore ultra vires for a common carrier. Since the railroad could purchase large quantities of coal for its own consumption, the facts which make this contract a part of an ultra vires undertaking are not ascertainable from the charter or certificate of incorporation alone. In such a situation the corporation would be estopped to plead ultra vires against a plaintiff who had contracted and acted in ignorance of the facts. Monument National Bank v. Globe Works, 101 Mass. 57; Miners' Ditch Co. v. Zellerbach, 37 Cal. 543; State Bank v. Hawkins, 71 Fed. 369. See 3 THOMPSON, CORPORATIONS, § 2802. Upon these principles specific performance of a wholly executory contract has been granted, even in England. The case of a continuing contract, especially where, as here, the plaintiff has put himself in a position to perform, seems an even stronger one. Eastern R. Co. v. Hawkes, 5 H. of L. Cas. 331. Since it is the corporation's illegal purpose which taints the present contract, it is submitted that actual knowledge of the company's purpose, or something akin to wilful disregard of facts from which knowledge could be inferred, ought to be fastened on the plaintiff before the defense of ultra vires should be allowed to defeat recovery. Colorado Springs Co. v. American Publishing Co., 97 Fed. 843; Young v. United Zinc Cos., 198 Fed. 593. See THOMPSON, CORPORATIONS, §§ 2772, 2773 and note. However, the Supreme Court has been extremely averse to allowing any recovery on an ultra vires contract, even going so far as to declare that the corporation cannot act ultra vires. The requirement that an outsider, to obtain the benefit of the above doctrine, must first investigate the facts, seems in harmony with this inclination. Undoubtedly, though, this strict rule would not be extended to negotiable instruments, where negligence does not destroy the rights of a holder in due course. For a general discussion of executory ultra vires contracts, see 24 HARV. L. REV. 534.

CRIMINAL LAW - FORMER JEOPARDY — CONVICTION UNDER STATUTE PROVIDING NO PUNISHMENT. The defendant was convicted of a statutory offense for which no punishment was prescribed, but for which he was deprived of certain civil rights. Being later indicted for the same acts under a different section of the code, he set up his former conviction as a bar. Held, that the plea discloses a valid defense. Jenkins v. State, 80 S. E. 688 (Ga. Ct. App.).

Although most state constitutions prohibit double jeopardy of life or liberty for the same offense, the meaning of the word "liberty" in such provisions has received but little construction. But the same word in the Fourteenth Amendment to the federal Constitution has been construed to mean not only freedom from imprisonment but rights to do ordinary acts. See Allgeyer v. Louisiana, 165 U. S. 578, 589, 17 Sup. Ct. Rep. 427, 431; Ex parte Virginia, 100 U.S. 339, 344. But see 4 HARV. L. REV. 365. It would seem by analogy and from reason that "liberty" in double-jeopardy clauses should similarly be construed broadly. Decisions prohibiting double jeopardy of fines accord with this view. Brink v. State, 18 Tex. Cr. App. 344. A more extreme view is that a second trial after a conviction for which a valid sentence cannot be imposed is as obnoxious and oppressive as after an acquittal. See Hartung v. People, 26 N. Y. 167, 179. The case is distinguishable, however, from one where the former conviction was had upon a defective indictment; in such case the judgment itself is void. People v. Larson, 68 Cal. 18, 8 Pac. 517. The principal case seems clearly correct, for double jeopardy of punishment at least seems prohibited; and the loss of civil rights may be punishment. Gunning v. People, 86 Ill. App. 174;

Commonwealth v. Jones, 10 Bush. (Ky.) 725; Ex parte Lange, 18 Wall. (U. S.) 163, 168, 169. But cf. State v. Jones, 82 N. C. 685.

COMPENSATION

EMINENT DOMAIN - WATERWAY CONSTRUCTED BY CITY THROUGH RAILWAY'S RIGHT OF WAY NECESSITATING STRUCTURAL CHANGES. A city constructed a canal, with walks on either side, through the right of way of a railroad, in order to join certain lakes used for recreation purposes by its inhabitants. This made it necessary for the railroad to build a bridge. Held, that the railroad is entitled to compensation for the value of the land taken but not for the cost of building and maintaining the bridge. Chicago, M. & St. P. Ry. Co. v. City of Minneapolis, 34 Sup. Ct. 400.

For a discussion of the distinction between taking property under the eminent domain power and under the police power, see NOTES, p. 664.

EQUITY - JURISDICTION RIGHT TO ENJOIN A THREATENED CRIMINAL PROSECUTION AGAINST A THIRD PARTY. — A statute forbade the shipment by any one, or the receipt for shipment by carriers, of unpasteurized cream to be carried more than sixty-five miles. The business of the complainant, a dairy company, which depended on the receipt of cream from farmers more than sixty-five miles distant, was thereby being ruined because the farmers and railroad company were afraid to ship. Plaintiff, on the ground that the statute was unconstitutional, sought to enjoin the railroad from refusing to accept goods consigned to him, and also to restrain the Attorney-General from prosecuting for breach of the statute. Held, that equity will not enjoin a criminal proceeding directed against a party other than the petitioner, nor will the railroad company be enjoined from refusing to accept goods offered. Milton Dairy Co. v. Great Northern Ry. Co., 144 N. W. 764 (Minn.).

Whether the court should have refused to grant an injunction against the railroad is not entirely free from doubt. It is usually held that a railroad cannot justify a refusal to serve by pleading an unconstitutional statute. Southern Express Co. v. Rose, 124 Ga. 581, 53 S. E. 185. It may be contended therefore that the railroad, in signifying its unwillingness to receive shipments, was threatening torts involving irreparable injury to the plaintiff, and should be enjoined. However that may be, the court squarely held that, whether or no the statute was constitutional, it would not restrain the Attorney-General from prosecuting the shippers and the railroad unless the injunction was demanded by the persons threatened with prosecution. For a discussion of whether irreparable damage to one's business relations gives a right to enjoin the prosecution of someone else under an unconstitutional statute, see NOTES, p. 668.

EVIDENCE GENERAL PRINCIPLES AND RULES OF EXCLUSION REPAIRS AFTER INJURY AS PROOF OF CAUSATION AND POSSIBILITY OF PREVENTION. The defendant operated an irrigation canal across the plaintiff's land. To show that his orchard was injured by an enlargement of the canal, and that the seepage could have been prevented by cementing the sides, the plaintiff offered evidence of subsequent repairs which had stopped the damage. Held, that the evidence is admissible. Jensen v. Davis and Weber, etc. Co., 137 Pac. 635 (Utah).

It is quite well settled that evidence of subsequent repairs cannot be used to show negligence. It is irrelevant, inasmuch as taking precautions for the future is not an admission of culpability in the past; and its admission is against public policy in that it would deter owners from remedying defects. Aldrich v. Concord & M. R. R., 67 N. H. 250, 29 Atl. 408. In the principal case the evidence is relevant on both the issues for which it was offered. Proof that the damage began and ended with the uncemented condition of the canal is convincing both as to causation and as to whether there was a practicable