me great -e State vic and eans of al idear ocedure to that fying procedure of the federal courts by vesting in the United States Supreme Court the same power for making rules for the law side that it has always possessed for the equity side, will be enacted into law at the present short session of Congress if suitable representation be made to representatives g law and senators. Let every lawyer inspire as moush many letters as possible. The number of the senate bill is S. 4551; the house bill is H. R. 7572. The form of the short bill may be found in the reports of the Committee on Uniform Judicial Procedure published in the American Bar Association Reports. Dinion ne ci har rmt ators ever ngo mak ? SOLS + i T. W. S. NOTES OF IMPORTANT DECISIONS. MUNICIPAL CORPORATION-IMPRISON MENT FOR FINE AS UNCONSTITUTIONAL. -Kansas City, Mo., has an ordinance providing that any person engaging transportation for himself or goods in any carriage, buggy, wagon, automobile or taxicab and refusing to pay agreed, reasonable or fixed price shall be deemed guilty of a misdemeanor and fined, and upon failure to pay the fine to be committed. In Kansas City v. Pengilley, 189 S. W. 380, decided by Missouri Supreme Court, the facts show defendant was fined and committed to pay $15.40 for the use of an automobile and on appeal this judgment was reversed under Missouri Constitution forbidding imprisonment for debt. The court said: "A fine imposed for the infraction of a valid city ordinance is not within the prohibition mentioned. Is this ordinance valid? It is true it gives the unpaid owner of the vehicle no recovery under it; yet it does make the mere failure to pay an offense punishable by imprisonment. *** It cannot be admitted that the constitutional prohibition may be evaded by the device of declaring a simple breach of contract unless it be conceded that city councils and the legislature are not restricted at all. * * * In this case the ordinance did not require, nor did the evidence tend toward, proof of fraud in the procurement and use of the vehicle. * * * The ordinance constitutes an effort to do indirectly what the Constitution declares shall not be directly done." In discussing the contention that the ordinance was within the state's police power, it was said: "It is urged that the fact that the taxicab company was a common carrier ought to induce a different conclusion. There is no direct proof supporting the fact assumed. The taxicab company is in no wise at the mercy of its patrons. It may require payment in advance if it so desires and thus protect itself. Regulations may be imposed upon patrons of carriers and fines may be assessed for their violation, but such regulations must accord with applicable constitutional provisions. Further the ordinance is not limited to common carriers, but applies by its terms to every horsedrawn or power-compelled vehicle hired for the conveyance of goods or passengers. Again, it is confined to licensed vehicles." The general principle stated as to evasion of the constitutional principle involved seems eminently sound and so are the observations in regard to common carriers. Also it seems to us it ought to include owners of licensed vehicles. Common carriers, while bound to serve all who properly apply for service in the line in which they hold themselves out to render service, yet compulsory service cannot be demanded except upon payment or tender of payment. So far as licenses are concerned these are enforced as revenue measures and owners of vehicles may refuse to render service unless they are made legally satisfied in advance. We do not think even that the intent to defraud in hiring a vehicle would make such an ordinance valid. That may be guarded against by demand of prepayment and ordinances are not to protect people against improvident contracts. tenses or false representations as to his solvency and the company paid in discharge of its obligation a certain sum, this created a liability not released by the obligor's subsequent adjudication as a bankrupt. The court said: "Obtaining the bond by false representations and paying the obligee the amount of the loss should be regarded as one transaction, which amounted to obtaining money by false representations within the bankrupt law. This law does not require that the property shall be obtained by the bankrupt at the instant of making the false representations, nor that it shall pass directly to the bankrupt. In criminal cases the rule relating to the crime of obtaining property by false representations is the same. The parties in the case under consideration intended at the time the false representations were made that the bonding company should assume the contract of suretyship in Dunfee's behalf, and they must have had in contemplation all the results that naturally follow from such a contract. So when the surety company paid the loss to the obligee in fulfillment of its obligation, the law implied that the payment was at the request of Dunfee, and this implication arose from the contract of suretyship itself." The reasoning is not fully satisfying. If, as said, the rule above expressed is the same as in criminal cases, it is thus deemed so because the offense in the actual obtaining looks upon the false representations as evidence in presenti-the efflux of time cutting no figure in the result accomplished. But the obtaining a bond was all that the obligor sought. In obtaining this he secured delivery of a contract that answered the full purpose of the false representations. The payment of the bond was a new consequence of its having been given. The color of his act could not be affected by what the surety did in his own behalf afterward. Then an obligation was raised against the obligor, which in itself was but another contract. It seems to us the statute meant tangible property sought directly through and by means of the false representation. By construction only the contracting of a debt by the bankrupt against himself is called property. All that he obtained was a debt against himself. The statute seems to us to mean the obtaining of property for oneself not creating a debt against himself. INSURANCE-POLICY IN FAVOR OF WIFE SUBSEQUENTLY DIVORCED.-In 83 Cent. L. J. 200, we considered a decision by Texas Civil Court of Appeals (N. W. M. L. Ins. Co. v. Whitsell, 188 S. W. 22) which held that divorce of a wife caused a cessation of insurable interest in the life of her former husband and made it against public policy for her further to maintain such policy. Here attention is called to a case decided by Kentucky Court of Appeals, which holds that where a marriage has been declared void ab initio, insurable interest in the life of the pseudo husband ceases with the rendition of the decree, but if the woman continues to pay premiums until he dies, she may recover from the company the premiums she pays. In this case there was tender by the company of the premiums which had been paid and the rule that a divorced wife (not one declared never to have been lawfully married) could recover for all premiums paid was conceded as established by Kentucky decision. But it was claimed this rule did not cover the case. Western S. L. Ins. Co., 189 S. W. 429. Thus it was said: "Counsel for appellee contends that the above rule applies only where there has been a divorce from a legal marriage and has no application where the judgment annuls a void marriage. *** The argument is ingenious, and, if sound, leaves a pseudo wife in a very much better position with reference to property acquired by her from the illegal husband during and by reason of an illegal marriage relationship when same is declared a nullity, than a legal wife is left with reference to property acquired by her from her husband during and by reason of a legal marriage when same has been dissolved." The court therefore rejected this reasoning. Where it seems to us is the error of this reasoning is the recognition of any insurable interest in the pseudo wife at any time, whether before or after the marriage was declared null and void. Insurable interest is a question of law as applied to existing facts. Her payment of premiums at any time accomplished nothing and when she continued to pay them after nullity of the marriage was declared she did not have any excuse even in good faith for making the payments. This case differs from the Whitsell case in that the policy there had a lawful beginning. Here it did not. We differed from the ruling of Texas court in its declaring it did not survive the divorce under the rule against wager contracts. The contract here ought to have been deemed a wager contract from its inception and if not then certainly when the marriage was declared a nullity. The decree ought as far as possible to be made to relate back. arr DOUBLE INHERITANCE TAX The inherent difficulties attendant upon the collection of inheritance taxes from estates of non-resident decedents enforceable by reason of the dominion of the taxing state over property in such cases having its situs there, were never better exemplified than in a case recently decided by the Supreme Court of New Jersey.1 The case arose upon the return of a writ of certiorari and the facts are fully recited in the opinion of Mr. Justice Swayze: * *, a resident of Hartford, Conn., in his lifetime pledged certain stocks of New Jersey corporations and other collateral with the Phoenix National Bank of Hartford, as security for a note and died intestate, no part of the note having been paid. The question presented by this case is whether the New Jersey stocks so pledged are subject to the transfer tax under the act of 1914 (P. L. 267). That act, so far as material to this case, imposes the tax when the transfer is by will or intestate law of shares of stock of corporations of this state. The question therefore narrows to whether the testator's will transferred these stocks. He did not own the stocks: at most he had an interest therein, which was subject to the rights of the pledgee, and the pledgee could not be deprived of its property right to transfer the shares to a purchaser and apply the proceeds to the debt. There might or might not be a valuable equity, but all that could be transferred by testator's will was the right to redeem, or, if the stock had been transferred by the pledgee, the right to an accounting and the payment of the balance, if any, after satisfaction of the debt. There could be no transfer of stock within the meaning of the statute until and unless the debt was paid. The pledgee might sell and transfer the New Jersey stocks and apply the proceeds to payment of the debt and leave no equity therein, since their value was less than the debt; in that event (1) Security Trust Company, Executor, &c. v. E. I. Edwards, Comptroller, 99 Atl. 133. the transfer of the stocks would be by vir- "We are not called upon by the facts of "The tax must be set aside." Basis of Claim for Exemption-The prosecutor of the writ based its demands for relief upon the ground that the tax imposed was illegal, unconstitutional and void: (a) By reason of the fact that it is a tax upon property of the estate of a nonresident decedent not situated within the state of New Jersey within the provisions of the statute relating to taxable transfers of property. (b) By reason of the fact that such tax is a taking of property without due process of law within the prohibitions of the constitution of the United States and the constitution of the state of New Jersey. And upon the further ground that the assessment of tax upon the transfer diminishes the security of the pledgee and also thereby subjects the estate of the pledgor to an additional burden and so is illegal, unconstitutional and void: By reason of the fact that such tax constitutes an impairment of the obligation of contracts within the jurisdictions of the constitution of the United States and the constitution of the state of New Jersey. Synopsis of Introduction ArgumentsUpon the argument it was admitted that there would be no controversy if the intestate non-resident decedent had not pledged the shares of New Jersey corporations re (2) Estate of Ames, 141 N. Y. Supp. 793. -- ferred to, for it is the settled law of the state that the Transfer Inheritance Tax Statute is effectual to impose a valid tax upon the transfer, by reason of intestacy, of such shares owned by non-residents. Nor would there have been any question presented as to taxability of the property transferred if the intestate had been a resident decedent and had pledged the shares, for the same statute is also held effectual to impose a valid tax upon the transfer of or succession to all property of intestate residents of the state, excluding of course, real property beyond its boundaries. Delay in Assessment Even if TaxableIt was suggested, however, that prudence would counsel, even in such case, a delay or suspension of appraisal or assessment until the contract of pledge terminated, so that the security of the pledgee be not diminished and the obligations of the contract be not impaired, for it is not inconceivable that the property pledged as collateral might so depreciate in value, as sometimes happens, that upon the extinction of the pledge the equity would be without value. conflict with universally accepted principles of the law, the imposition of tax thereupon falls to the ground. In the first place, there is unanimity among the authorities that the interest of the pledgor in relation to the property pledged is to be defined as a right of redemption merely. In the second place the situs of such right, (i. e., chose in action) is upon no ascertainable theory ascribable elsewhere than to the domicile of the non-resident decedent. It is there and nowhere else that the right must be enforced." Surrogate Fowler's Opinion in the Ames Case-In the Estate of Ames, referred to approvingly in Judge Swayze's opinion, Mr. Surrogate Fowler, the able jurist of an adjoining jurisdiction had held that under the New York Transfer Tax Act pledged property of non-residents was not taxable, the learned surrogate saying: "Did the decedent's interest in the bonds of the Northern Pacific Company, which, together with the stock of the American Sugar Refining Company, were pledged with the Mercantile Trust Company for the payment of the loan made to the de Erroneous Assumptions by Tax Officials cedent by the company constitute property, -The assessment reviewed in the case was made evidently upon certain erroneous assumptions by the taxing authorities: First. That the interest of the non resident decedent in relation to the pledged New Jersey shares is necessarily an interest in the shares within the meaning of the statute, and, Second. That the situs of such or of any interest in relation to said shares, in case the pledgor is a non-resident, is necessarily within the state of New Jersey. It was further argued that both of these assumptions being found gratuitous and in (3) Carr v. Edwards, 55 Vroom 667; Sawter v. Shoenthal, 83 N. J. L. 500; Eastwood v. Russell, 81 N. J. L. 672. (1) Eastwood v. Russell, supra; Howell v. Edwards, 96 Atl. Rep. 186. within this state at the date of his death? The title to the bonds was in the Mercantile Trust Company, and at the time of decedent's death his interest in the bonds were merely a right to redeem them from the trust company by payment of the loan for which they were pledged. There is no evidence that any demand was made upon the decedent by the trust company for the payment of the loan. Until such a demand had been made the decedent was not indebted to the trust company, and the company would have no right to dispose of the collateral security. Therefore it would appear that at the time of decedent's death he did not own the bonds or any part of them, and that his only interest in them was a right to redeem them. This, however, was not a right to any particular bond or bonds. it was not a right to any particular prop (5) Penfold v. Edwards, 87 N. J. L. 462; Miller v. Edwards, 85 N. J. L. 517. (6) 141 Ν. Y. Supp. 793. 1 No. prine ax there nanim erest propert tof hrig asic re tha enth se A re an er e erty located in this state. It was merely a "The same reasoning applies in regard to edly by a laudable desire to prevent an apparent transfer of New Jersey shares from escaping taxation, but they failed to observe the larger aspects of the case: If decedent had sold his shares before he died, no tax could be claimed. The right to sell is no more necessarily an incident to the lawful ownership thereof than the right to pledge such shares and the resulting status of the property in either case removes it from the scope of a transfer tax act, such as the one under which the assessment was made. An argument frequently heard when no other is at hand in support of such a tax as in the cases considered is that failure to impose the tax upon some theory or another will open the door to an easy method for non-residents to evade this tax entirely. This argument should have no more the General Electric Company, but merely weight than the assertion that non-residents a chose in action it was not taxable under the Transfer Tax Laws of this state." "The only taxable assets were the shares of the General Electric Company which were not pledged, and from the value of these should be deducted the New York commissions and expenses of administration. Order fixing tax reversed." Pledged Property Not Transferable-It may be contended that the difference in the views of courts of different states as to where the title to stock in pledge lies, whether in pledgor or pledgee, may compel a different result from that reached in the cases reviewed. But such a consideration should have no weight for the reason that wherever the title to the stock may be lodged, the contract of pledge has destroyed its one essential attribute by reason of which statutes such as the one under con sideration operate at all, to wit: the attribute of transferability. In making the assessment complained of the taxing authorities were moved undoubt *(7) Matter of Phipps, 77 Hun, 325; aff'd 143 N. Y. 641; Matter of Chabot, 44 App. Div. 340; aff'd sub nom; Matter of Zefita, 167 N. Y. 280. can devise no better way of roasting pigs than by burning down their houses. If there is evasion intended, why not the simpler method (it is believed so much in vogue among non-residents) of endorsing stock certificates of New Jersey corporations in blank during lifetime or of disposing of such investments altogether? Although it appears that none of the pledged New Jersey shares has been actually redeemed, the argument was anticipated that the transfer of such shares upon redemption by the administrator would be subject to tax and the judgment should therefore suspend taxation instead of reversing the assessment and exempting the estate from tax. This contention if made in the case of a resident decedent would undoubtedly be compelling and it has been so deemed, but when urged in the case of the non-resident decedent it will be seen to have no merit whatsoever. The tax imposed by the statute under consideration is upon the universal succession to or transfer of the property of the decedent to his personal representatives. It is the status of the property at the time of death that deter : t |