pired, had been stolen, and the true owner claimed to recover them from the hotel-keepers. The latter pleaded that they had a lien as innkeepers. It was held, however, that the true owner was entitled to recover them, as the transaction between the innkeepers and their guest was a money-lending transaction, and no question of innkeepers' lien arose.

There have been a number of decisions of late on restrictive covenants, and, generally speaking, it may be said that such bargains have gradually been receiving more and more recognition. Woodbridge & Sons v. Bellamy, L. R. 1911, 1 Ch. 326, is a return to the older doctrine, in virtue of which the courts showed a disinclination to enforce contracts which tended to prevent a subject earning his livelihood. There Eve. J. held that a solicitor who had given an undertaking not to practice within a certain district broke such undertaking by writing from his office altogether outside this district to a person within it, demanding payment of a debt. But the court of appeal unanimously reversed this decision, the Master of the Rolls saying that if he had put a different interpretation on the undertaking, he would have to consider whether it was not void as being contrary to public policy.

In

The "one man company" is well-known to English lawyers and business men. The phrase refers to a sole trader-to use colloquial language-converting himself into a company, and getting the benefit of limited liability notwithstanding that his business is carried on as it was prior to the conversion. We have now the "one man meeting" of shareholders. East v. Bennet Bros., L. R. 1911, 1 Ch. 3, 163, all the preference shares were held by one person, and no further issue of preference shares could be made unless such issue was sanctioned by an extraordinary resolution of the holders of the existing preference shares present at a meeting of such shareholders. The one holder "met" and "consented" to a new issue. It was held that the requirements of the memorandum had been fulfilled.

Another interesting company case and one which should act as a warning to persons who may be disposed to listen to the blandishments of company promoters is In re London & South Western Canal Ltd., L. R. 1911, 1 Ch. 346. There some unfortunate persons had accepted shares from the promoter of a company to qualify them for directorships. They gave no consideration, and realy held the shares in trust for the promotor. When in due time the company came to be wound up, this fact was brought

before the liquidation judge, who ordered the directors to pay the liquidator the highest value the shares had during the time they held them.

In Cummings v. Stewart, 1911, 1 Irish Reports 236, a person had acquired a license to use a patent subject to a liability to make fixed payments to the patentee during a number of years. The licensee's working of the patent did not apparently prove profitable, and in order to get rid of his liability for the payments he bethought himself of a provision in his license authorizing him to transfer it "to any limited company he may form to carry on his business or the business connected with or arising out of the said patents and this license." He thereupon formed a private company, consisting of two shareholders, each with a one-pound share, transferred the license to it and claimed to be free from royalties. The court, however, held that such a company did not come within the clause above stated: it was not a company formed either for the purpose of carrying on the licensee's business or of working the patents, but, in substance, formed merely for ridding the licensee of liability.

It is doctrine of the common law that any obligation founded on a pactum illicitum is void. Instances of this principle being applied, however, are not of frequent occurrence, but it was pleaded in defence in Smith & Sons v. Buchanan, 2 S. L. T. 387, where, after a proof, the court found that a partner of the plaintiff's firm obtained the defendant's promise to pay the sum sued for by agreeing not to prosecute the defendant's son for embezzlement, and held the obligation founded on to be void.

Section 27 of the Patents and Designs Act, 1907, empowers the Comptroller of Patents, subject to appeal to a single judge, to revoke a patent on the sole ground that the patented article or process is manufactured or carried on exclusively or mainly outside the United Kingdom. In re Green's Application, 1911, 1 Ch. 754, the question was discussed as to the point of time as at which this jurisdiction ought to be exercised. Could a process be said to be "carried on" if, as a matter of fact, the works were closed at the moment when the petition was presented. Parker, J., thought that it could if the works were merely closed for the day (as on Saturday afternoon); and he seemed to think that it could even in the case of a more extended stoppage, if that were temporary only, due, for example, to over-production or other business causes; but he declined to consider that the manufacture could

IS THE UNITED STATES JUDICIARY POWERLESS TO HURT THE BUSINESS OF A TRUST?

The Supreme Court of the United States has sent its mandate to the Circuit Court of the United States in New York in the American Tobacco Company's case, and this mandate in effect commands that court to break up the American Tobacco Comany, root and branch, and reorganize it in conformity with the views of the Supreme Court. I assume this means that the Cir

cuit Court is to dissolve the corporation called the American Tobacco Company and create another and new corporation. This

means that the business of the American Tobacco Company is to be destroyed, as the destruction of the corporation would mean the ending of its business.

The tangible property of the American. Tobacco Company would, I presume, about pay its fixed charges, but the company annually earns some thirty millions of dollars, which is produced by its business, so that its business represents a capital of possibly five hundred millions of dollars. As was said by Mr. Justice Brewer in Monongahela Co. v. U. S.:1

"The value of property, generally speaking, is determined by its productivenessthe profits which its use brings to the owner." All of this huge business of differently stated property is to be blotted out and destroyed with no compensation whatever to the owners.

There had been no issue made in the case pertaining to this command of the court. It was made by the court without parties having been heard from upon it. There was neither issue nor argument. The court reached its conclusion from its own inner consciousness, and if it made an error in doing so it is a tribunal great enough to correct that error.

In 1865 it made a rule of practice for itself that was repugnant to the Constitution of the United States, and when this was shown to it in

one of the greatest cases that was ever disposed of by it, it decreed as follows:

"And the amendment of the second rule of the court, which required the oath prescribed by the act of Congress of January 24th, 1865, to be taken by attorneys and counsellors, having having been unadvisedly adopted, must be recinded."2

I want to call attention at the outset to the fact that the Sherman law does not provide that if a party violates its provisions he shall forfeit the profits he makes by such violation of it.. The sixth section of the law provides that property in tran

situ between the states in violation of the

law, may be seized and condemned in judicial proceedings. But that is the only penalty provided by the law which looks as though Congress thought that was the limit of its power.

No proposition in our law is better settled than that the business which a man has built up by years of toil and expense and energy, is his property as much as his house and lot. But it is argued that the business of the American Tobacco Company was built up in defiance of the law. Let us see just how this matter stands.

The American Tobacco Company was chartered in 1890. Five great partnerships were stocked into it to create it. These partnerships represented an immense aggregation of capital, and they had built up an enormous business, which also went into the new company. No word had ever been said against anyone of these five concerns. Their capital and business had both been acquired in strict conformity with the law. All of that capital and that business. is now the property of the American Tobacco Company.

A very great proportion of the business. that the American Tobacco Company has done since it was first formed, has been Ex-party Garland,

(2) 381.

4th

Wallace at

p.

(3) See "Words and Phrases," vol. 6, pp. 5710 and 5700, word "Property." See also Waldron v. Walker, 32 L. R. A. N. S. 293, and particularly the brief of Mr. Lange, p. 294, where a great array of authorities is collected. See Board of Trade of Chicago v. Christie Grain Co., 198 U. S. 236.

done in strict conformity with the law, so that its present capital and business consists of its original capital and business, acquired in conformity with the law, that part of its business and capital acquired since 1890 by lawful means, plus that part of its business and capital acquired since 1890 in violation of law. It is impossible, of course, to say what part of its present capital and business represents acquisisions made in conformity with the law and what part represents acquisitions made in defiance of law But it is obvious that a very great part of its present capital and business represents acquisitions lawfully made. If the Supreme Court's decree is literally carried out, all of this immense mass of property that was lawfully acquired is to be totally destroyed, without compensation of any kind. Can this be done consistently with the Constitution of the United States?

The principle of equitable estoppel crops up in every turn and corner of the common law, making, as the Supreme Court of the United States said in Jeter v. Hewitt,* "White, black and straight crooked." There was a principle known to the Civil Law as confusio honorum. Chancellor Kent thus states it in Vol. 2 of his Commentaries:5

"With respect to the state of a confusion of goods where those of two persons are so intermixed that they can no longer be distinguished, each of them has an equal interest in the subject as tenants in common, if the intermixture was by consent, but, if it was wilfully made without mutual consent, then the Civil Law gave the whole to him who made the intermixture and compelled him to make satisfaction in damages to the other party for what he had lost."

Strangely enough, exactly the reverse was the case in the common law. Kent thus states the doctrine of it:

"The common law gave the entire property without an account to him whose prop

erty was originally invaded, and its distinct character destroyed. If A wilfully intermix his corn or hay with that of B, or cast his gold into another's crucible so that it becomes impossible to distinguish what belongs to A from what belonged to B, the whole belongs to B."

Those are consequences arising out of the doctrine of equitable estoppel. It is most strange that an equitable doctrine of this sort should be found in the common law, but wanting in the civil law. But such is the case here." "If grain be taken and made into malt, or money taken and made into a cup, or timber taken and made into a house, it is held in the old English law that the property is so altered as to change the title."

The doctrine would probably be challenged at the present day in respect to the particular cases mentioned, but the general be conceded everywhere at this day, to-wit: principle at the foundation of them would that a man may lose title to his money through the principle of equitable estoppel and another may gain title to it without consideration, through the same principle.

All this is important in this discussion in the way of illustration only, but it is very important in that way. It shows that by the principles of the common law a man may get rich through the principle of equitable estoppel, though he acquired his gains The results are produced by the principle without paying hard cash or labor for them. of equitable estoppel. Society says there must be an end of discussion and of litigation. That it is better an injustice shall be worked than that social order shall be liable to disturbance.

The principle is illustrated by what happens in the case of a pickpocket. A successful merchant is also a skilled pickpocket. He has made a fortune of one hundred thousand dollars, in part by each method of trading. Will you, when he has retired from business, say to him, "You

(6) P. 364-5, Marg. (7) Ib. 364.

must surrender $25,000 of your fortune because that part of your fortune was made by pickpocketing?" The principle in the case of the pickpocket is this: If the victim catches him in the act, he has a right to recapture his money by physical force, but if the thief escapes with the money and gets it intermixed with his own, so that the victim cannot identify his money, the victim's money becomes the thief's money, and the thief is only a debtor to the victim to the amount he has stolen. The right of the victim to the identical money stolen ends with the thief's escape, and title to that money has passed to the thief. After that the thief is to be punished for his crime and may be sued by the person robbed, but the money stolen has become the thief's money.

lation of the navigation laws of both governments, as precluding the court from granting any relief. The court said: "The answer to the objection appears to me to be this, that the plaintiff does not ask to enforce any agreement adverse to the provisions of the act of Parliament. He is not seeking compensation and payment for an illegal voyage. That matter was disposed of when Taylor (the defendant) received the money; and plaintiff is now only seeking payment for his share of the realized profits. . . As between these two, can this supposed evasion of the law be set up as a defense by one against the otherwise clear title of the other. Can one of two partners possess himself of property of the firm and be permitted to retain it, if he can show that in realizing it, some provision

.

land, and was this: The plaintiff and defendant were partners in a vessel, which, being American built, could not be registered in Great Britain, according to the navigation laws of that kingdom. Nor could the owners, who were British subjects, residing in England, have her registered in the United States. They undertook to violate the laws of both countries by having her falsely registered in Charleston, S. C., as owned by a citizen and resident of that place. In this condition she made several trips which were profitable; and the defendant colluding with Robertson, the American agent, in whose name the vessel had been registered, refused to account with plaintiff for his share of the profits, or to acknowledge his interest in the ship. When plaintiff brought his suit in chancery in England, the defendant set up the illegality of the traffic, and the vio

(8) This is what Henley's case, 1 Va., cases 145, means. See also Commonwealth v. Boudrie, 4th Gray 418, U. S. V. Bettie Read, 2 Crauch CC., 159.

(9) 2 Phillips Chancery.

manner affected by what the court is asked to do between the parties. . . . The difference between enforcing illegal contracts and asserting title to money which has arisen from them, is distinctly taken in Tenant v. Elliot, and Farmer v. Russell, and recognized and approved by Sir Wiliam Grant in Thomson v. Thomson."

The same principle is adopted by the SuStates preme Court of the United in Brooks v. Martin.10 That case was this: During the Mexican war Congress passed an act providing that the soldiers should have a right to locate claims for land in the public domains of the West. But it provided that no one should buy the soldier's right to the land until a certificate should be actually issued to him. Brooks and Martin formed a partnership to buy up these rights before the certificates were issued and they did buy them up, many of them in open and flagrant violation of the law. Brooks went out into the wilderness and located them, sold them and realized a

(10) 2 Wallace, 70.