Marshall case and many decisions of lower federal courts sustain the jurisdiction of a federal court to enjoin the enforcement of a judgment in a state court on the ground that the injunction acts on the party and not on the court. McDaniel v. Taylor, 196 U. S. 415, 25 Sup. Ct. 255; Nat. Surety Co. v. Bank, 120 Fed. 593, 61 L. R. A. 394; Lehman v. Graham, 135 Fed. 39; Union Ry. Co. v. Railroad, 207 Fed. 745; Port Huron Co. v. Babcock, 223 Fed. 479.

The Marshall and Throckmorton cases were reviewed by the Supreme Court in the case of Hilton v. Guyot, 159 U. S. 113, and a more definite statement of the rule was stated in the following language:

"It has often, indeed, been declared by this court that the fraud which entitles a party to impeach the judgment of one of our own tribunals must be fraud extrinsic to the matter tried in the cause, and not merely consist in false and fraudulent documents or testimony submitted to that tribunal, and the truth of which was contested before it and passed upon by it."

A very interesting application of this principle was applied by that great equity authority, Justice Story, in the early case of Ocean Insurance Co. v. Fields, 2 Story 59, Fed. Cas. No. 10406, which was a suit upon a policy of insurance on a ship. In this case fraud had been set up by the defendant based on the theory that plaintiffs had deliberately cast away the ship to collect the insurance money. They failed on this defense; but were allowed subsequently to show in support of a bill to set aside the former judgment that the fraud consisted in the fact that defendant "bored holes in the bottom of the ship." The plaintiffs in the proceeding to set aside the judgment at law alleged that the latter fraud was not known until after the judgment. Another interesting case is that of Pickens v. Merriam, 242 Fed. 363, where the fraud consisted in deliberate omissions of assets from the inventory and accounts on the part of an administrator which had gone to final decree in the State Court. The federal Court in enjoining the enforcement of this

judgment declared that concealment on the part of the defendant of that which he was required to reveal vitiated the judgment and that plaintiff was not estopped by anything in the proceedings from setting up this fact as ground for enjoining the judgment.

It seems to us that the decision in the Callicotte case is a proper application of the power of a court of equity to prevent fraud and there is nothing about a final judgment which requires that it should be exempt from such power or that it should be enforced in spite of the fact that it is vitiated by fraud against which at the time of the trial it was impossible for the other party to protect himself. And of all frauds none. is more heinous than the simulation of injuries which have not been suffered as a basis for recovery of a judgment for damages, and where such simulation does not rest on the mere perjury of plaintiff and his witnesses, but on a deliberate conspiracy between him and members of his family to delude the defendant, his experts and the court itself, the right arm of any chancellor is long enough to snatch away the fruits of such chicanery even in the hour of victory.

NOTES OF IMPORTANT DECISIONS.

EXEMPTION OF FARMERS FROM OPERATION OF FOOD CONTROL ACT DENIAL OF DUE PROCESS OF LAW.-Two judges (Anderson and Thompson) have held the Lever Act unconstitutional on other grounds than are given in other recent decisions reaching the same result. (See 91 Cent. L. J. 408.) These judges hold that the Act constitutes a denial of due process of law because it exempts farmers and farmers' organizations from its operation. United States v. Armstrong, 265 Fed. 683; United States v. Yount, 267 Fed. 861. In the Yount case Judge Thompson refused to remove certain defendants arrested in his district to the northern district of Illinois for trial under an indictment for violating the Lever Act. He held plainly that an act which permits a farmer to charge what he pleases for his wheat and cattle cannot make a merchant, who

does the same thing, a criminal. The Court said:

"All foods and feeds are the product of the soil and come from the land. Their production and initial distribution is the work of the farmer, gardener, horticulturist, vineyardist, planter, ranchman, dairyman, stockman, or other agriculturist, and all these persons are exceuted from the provisions of the act. All these may with impunity, willfully, and for the purpose of enhancing the price, destroy, waste, or hoard the necessities which come from the farm. These thousands might form a gigantic combination, through any unfair device or discriminatory means, to limit the production or restrict the supply and distribution of these necessaries, that they might make greater gains by extorting excessive profits, and yet such acts, while utterly destructive of the purpose of the statute, would receive the sanction of the law; while these very same acts, committed by any other person not in the favored class, would make him a criminal, and deprive him of his property, or his liberty, or both. Surely such classification is unjust and arbitrary in the extreme, violating both the letter and the spirit of the Fifth Amendment."

The Court in this quotation calls attention to a principle which the legislatures of the states as well as of Congress are inclined to forget, namely, that all distinctions, exceptions, exemptions and classifications in any law "must always rest upon some difference which bears a reasonable and just relation to the act in respect to which the classification is proposed and never be made arbitrarily and without such basis." Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431. The Connolly case involved the validity of a trust statute of Illinois. The act prohibited any combination of capital, skill, or acts by two or more persons, to create or carry out restrictions in trade, to limit or reduce the production, or increase or reduce the price of commodities, to prevent competition in manufacture, transportation, or sale of commodities and merchandise and other like purposes. The act (Laws 1893, p. 182) contained this section:

"The provisions of this act shall not apply to agricultural products or live stock while in the hands of the producer or raiser."

In an elaborate opinion, the Supreme Court held this section to be repugnant to the Fourteenth Amendment, and to be so interwoven with other sections that its invalidity affected the entire act. In its opinion the Court said:

"It will be seen that, so far as the statute is concerned, two or more agriculturalists or two or more live stock raisers may, in respect to their products or live stock in hand, combine their capital, skill or acts for the purpose of creating or carrying out restrictions in the sale of such products or live stock, or limiting, increasing or reducing their price, or preventin

competition in their sale or purchase,

or establishing the price of such products or stock in hand, so as to preclude free and unrestricted competition among themselves or others, or by agreeing to pool, combine or unite, any interest they may have in connection wit the sale or transportation of their products or live stock that the price might be affected. Ali this, so far as the statute is concerned, may be done by agriculturalists or live stock raisers in Illinois without subjecting them to the fine imposed by the statute. But exactly the same things, if done by two or more persons who shall have combined their capital, skill, or acts in respect of their property, merchandise, or commodities held for sale or exchange, is made by the statute a public offense."

COMPANIES FORMED UNDER DECLARATION OF TRUST ARE ASSOCIATIONS UNDER INCOME TAX ACT.-Lawyers have often suggested as one of the advantages of the trust form of business organization that they would be exempt from corporation taxes and would be exempt from an income tax as an association or corporation. A recent Solicitor's Opinion (No. 56) of the Treasury Department disposes of this attractive inducement in the following language:

"The M Company, which operates under a declaration of trust by the terms of which the trustees are given broad powers of management of the business, which is conducted under the methods and forms ordinarily employed by incorporated bodies, must be considered an association within the meaning of the Revenue Act of 1918, in the absence of a very clear showing that the trustees in fact do not own a legal or equitable interest in a substantial number of the certificates sufficient to permit them, as beneficiaries, to dominate the affairs of the trust. When under the terms of a declaration of trust the control is vested only in the trustees as such, it is necessary to look to the facts in order to determine whether the trustees have acquired a sufficient number of shares of beneficial interest to put the beneficiaries in actual control

Another interesting case is given in Office Decision 654. In this case it appeared that a trust was formed to take over the assets of the partnership business previously conducted by A and B, who, with three other individuals, were named as trustees in the trust agreement. The reason alleged for the change of form of the organization was to permit employes to share in the profits without incurring personal liability, and to prevent dissolution upon the death of any member. Certificates of indebtedness were issued and the employes were allowed to subscribe therefor, giving their personal notes, which were payable from profits earned in the business. The trustees, however. were the principal holders of the certificates. Meetings of the certificate holders were called

by the trustees, but the latter alone had the power to fill vacancies in their number. The trust extended or terminated upon the vote of a two-third interest of the certificate holders. The solicitor held, upon the authority of Malley v. Bowditch, 259 Fed. 809, "that the organization more nearly resembles an association than a trust within the meaning of the Revenue Act of 1918, since the trustees carry on a going business, in which the beneficiaries have voice and control inasmuch as they themselves are at the same time trustees and principal owners. Accordingly returns should be filed under the provisions of the statute applying to corporations."

VALIDITY OF LEASES OF MACHINERY WHICH IN EFFECT PROHIBIT THE PURCHASE OF COMPETING MACHINES.-Some good legal minds are striving, unworthily we believe, to circumvent the provisions of the Clayton Act and state laws of a similar nature making it unlawful to lease `machinery, patented or unpatented, on condition that the lessee shall not use the machinery of a competitor of the lessor.

a

The attorneys for the United Shoe Machinery Company, the most notorious offenders in the attempt to create a monopoly through patented machine, have prepared a new lease designed to meet the terms of these statutes and yet to violate their intent and so cleverly have they succeeded in their work that one Circuit Court of Appeals (1st Cir.) has been so confused by it that they changed their position in a recent case between the argument on the Witherell original hearing and on rehearing.

& Dobbins Co. v. United Shoe Machinery Co., 267 Fed. 950.

This new lease of Goodyear welt machines does not expressly prohibit the use of other machinery of a similar kind, but provides that the licensee "shall use the said machinery to its full capacity, limited only by the number of welted shoes manufactured by or for the licensee," and that the rental of the machine shall be calculated according to a certain schedule "in respect to each pair of welted shoes manufactured by or for the said licensee which shall have been welted in whole or in part .. by the use of any welting or stitching and sewing machinery."

Under this clever arrangement the lessee can buy and use all the other machinery he wishes but he must use lessor's machinery to its fullest capacity and pay for such use not on the basis of shoes welted by such machinery but on the

basis of all shoes welted by any machines used by or for the licensee.

In its first opinion the Court was inclined to the belief that this was in effect an effort to prohibit the use of competitive machinery and, so believing, held that its contract of lease was void and that it could not recover on its lease for the shoes actually welted on other machines. The Court said:

"The defendant contends that, inasmuch as what the plaintiff is here seeking to recover are royalties based upon the use made by the defendant of machines of others-all royalties based on the use of the leased machines having been paid-and the use of machines of others is, as alleged in the declaration, a breach of the covenant to use the leased machines to their full capacity, the full capacity covenant is in substance and effect a provision or condition binding the defendant not to use the machines of others upon its output. While the covenant to use the leased machines to their full capacity is in terms affirmative, its operative effect, as disclosed in the declaration, is negative, and requires the defendant not to use the machines of others, to the extent that the leased machines are capable of performing its work, or suffer a forfeiture; and, as the agreement of the defendant to pay royalties on its output was evidently inserted, not only for the purpose of requiring the defendant to fulfill the above-described obligation, but to further enlarge and extend its scope, we think it thus became so related thereto that it is in violation of the Massachusetts statute."

On rehearing the attorneys for the plaintiff contended that their lease had no reference to the use of other machines, that they had fixed the rental of their machines at 1 cent for every pair of shoes manufactured by the licensee and that the parties were not deprived of the right to fix the amount of the rental on such basis. This argument seems to have had weight with the Court which thereupon modified its order by remanding the case for a new trial only on condition that defendant amend its answer, if it desires, to include the allegation "that the burden imposed by such agreement is so great that the parties must have understood that the lessee was not to obtain machines from others." Unless the defendant so amended, the Court ordered that judgment be entered for the plaintiff.

It is difficult to understand the Court's position in this matter. Surely no evidence could make any clearer to the Court that the purpose of such a condition in a lease as that set forth in this case was to impose upon the defendant the necessity of using plaintiff's machines and no others and that the rental was fixed in such a manner as to penalize defendant if he used other machines. A court of equity ought to have found no difficulty with this subterfuge.

ACTS OF AGGRESSION WHICH THE COURTS WILL PERMIT WITHOUT IMPOSING LIABILITY FOR CONSEQUENT INJURIES.

"The legal order," says Dean Pound, "is an adjustment of human actions and relations in order to conserve the goods of existence, prevent friction in human use and enjoyment of these goods, and eliminate waste of them. It seeks to do this by securing as many interests as it may with the least sacrifice of other interests." The interests which are to be secured by law are individual interests in personalty, domestic relations and substance; public interests, that is the interests of the State as a juristic person and the interests of the State as a guardian of social interests; and, social interests, that is the interests of society in the general security, the security of social institutions, in the general morals, in the conservation of social resources, in the general progress of society, and in the individual life.2

Dean Pound then goes on to say: "In order to secure as many of these interests as may be, with as little sacrifice of others as may be, we seek to balance or compromise conflicting interests. For this purpose the law selects and recognizes certain interests within certain limits which it endeavors to fix as accurately as possible. The interests so recognized and delimited are secured by means of Legal Rights, Powers, Privileges -conferred on individuals; Duties (absolute, relative), Liabilities-imposed on individuals."

2. The public interest may come in conflict with (a) another public interest, (b) an individual interest, and (c) a social in

terest.

3. The social interest may come in conflict with, (a) another social interest, (b) an individual interest, and (c) a public in

terest.

That is, there are nine types of conflicts which may arise and demand solution. These conflicts do not always appear in isolation or detachment. In a given case two or more may merge in a specific person, incident or situation. And the merger may exist on either or both sides of the controversy.

A conflict of interests arises when an act of aggression has been done or a duty has been omitted. This act or omission is the starting point for liability, and the person acting or omitting to act must make good such damage as is the proximate consequence of his act or omission, unless he can show that his conduct is justified, or that he is authorized or permitted to do as he did. As Dean Pound puts it:

"One who intentionally does anything which on its face is injurious to another must repair the resulting damage unless he can (1) justify his act under some social or public interest, or (2) assert a privilege because of a countervailing individual interest of his own which there is a social or a public interest in securing.

It is the purpose of this article to examine some types of cases in which the courts have balanced the interests involved and to indicate some of the kinds of acts of aggression which the courts will permit without imposing liability for consequent injuries.

1. Where There Is a Duty To Act.-It has long been the rule of law that when a man acts in the pursuance of a duty imposed by legal authority he shall be pro

(4) See my article. "Proximate Cause and Legal Liability." 90 Central Law Journal, 188.

(5) Roscoe Pound; Outline of a Course on the History and System of the Common Law. Page

47.

tected from the consequences of his acts. The duty is usually imposed because of a public interest in the existence of the state or a social interest in the general security. The hall-mark of the duty to act is this; a failure to act will be punished. For example, if a Sheriff is given a proper warrant and is told to arrest the person named therein and he refuses, the penalty dealt out to him is swift and certain. Or if a soldier refuses to fight in the face of the enemy a court-martial gives him short shrift. In both cases the person must do as he is told or take the penalty of his refusal. In all fairness, therefore, when a duty is properly obeyed security must be given from evil consequences due to the obedience.

A very early case, decided in 1347, which protected a sheriff from the consequences of his acts is Rex v. Compton." The sheriff was sent to arrest certain thieves. On arriving where they were, he showed them his warrant and ordered them under arrest. They resisted the arrest, a general fight followed and one of the thieves. was killed. The sheriff was indicted for feloniously killing the thief. The jury acquitted him. Thorp, C. J., said: "They have acquitted you of this charge and we acquit you. And I say well to you that when a man kills another by his warrant he may well avow the fact and we will freely acquit him without waiting for the King's pardon by his charter in this case."

That this decision is good law today is shown by the case of State of West Virginia v. Laing. Here the facts were that two United States deputy marshals raised a posse and went after one H, who was a local "bad man" and had already resisted arrest by federal officers.

them for murder. A writ of habeas corpus was sued out and the prisoners were discharged. Goff, Circuit Judge, said:

"We do not find it necessary to discuss the distinction existing between felonies and misdemeanors, nor the common law rules applicable to the justification of officers, when endeavoring to arrest parties charged with such offenses respectively. . The appellees were as members of said posse, discharging an important duty imposed upon them by law-a duty they did not seek but one they were ordered to perform. What they did was what reasonable men under like circumstances will always do. They acted under the responsibility of great power which for that occasion was theirs, and they did not abuse it nor did they betray it. . The appellees were representing the government of the United States in enforcing the orders of its courts. It was the duty of that government to see that such orders were respected as well as the duty of. that court to see that the appellees, who have properly discharged the obligations that had been imposed upon them by the laws of the United States, are protected from arrest and punishment by any other authority whatsoever.

A State court has not the right to arrest, convict and punish an officer of the United States for an act lawfully done by him in the discharge of his official duties."s

As a public officer is protected if he kills. a man in the discharge of his duty it follows a fortiori, that he will be protected if he just wounds another in the discharge of his duty. And this is true even though the process upon which the officer acts has been issued by a person who has no jurisdiction, so long as the process is valid on its face.10 But an officer is under no duty to arrest a man without a warrant unless an illegal act is being performed in his presence,11

See also, Hammond v. State, 41 So. 761; 147 Ala. 79; People v. Mathews, 58 Pac. 371; 126 Cal. xvii.

(9) Tuck v. Beliles, 153 Ky. 818.

(10) People v. Warren, 5 Hill (N. Y.) 440; Emerson v. Lowe Mfg. Co., 49 So. 69, 159 Ala. 350.

(11) Emerson v. Lowe Mfg. Co.. 49 So. 69. 159 Ala. 350; Gambill v. Cargo. 43 So. 866, 151 Ala. 421; Allen v. Fromme, 126 N. Y. S. 520; Eldredge v. Mitchell, 102 N. E. 69, 214 Mass. 480; Delaney v. Lindsay, 46 Pa. Sup. Ct. 26; Condon v. Carr. 111 N. Y. S. 721; Coleman v. State, 49 S. E. 716, 121 Ga. 594; Hughes v. Commonwealth, 41 S.