by law," etc., affirms the legislative intent to make the act retroactive as to all antecedent contracts which have not proceeded to judgment or decree before its passage, and that in so far as it provides that, on a decree for foreclosure of a mortgage executed before the act was passed, defendant shall be entitled to have the order of sale stayed for one year, and that the land must then be appraised, and bring at least 80 per cent. of the appraised value, the act is void as an impairment of contracts.

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BILLS AND NOTES TRANSFER AS SECURITY FOR PRE-EXISTING DEBT. The Supreme Court of Tennessee, in Atlanta Guano Co. v. Hunt, 42 S. W. Rep. 482, hold that the transfer of negotiable paper or of notes payable in property (which are assignable, but non-negotiable, under the laws of Tennessee), as security for a pre-existing debt, and upon an express agreement for a definite extension of time for payment of said debt, is a transfer for value. It appeared there that notes payable in property were delivered to plaintiff by the payee, without indorsement, as collateral security for the latter's own notes held by plaintiff. Upon redelivery of the property notes to the payee for collection, he transferred them before maturity, for value, to a third person, who had no notice of plaintiff's ownership. It was held that plaintiff, having put its agent in possession of notes which showed on their face that the latter was owner, was estopped from questioning the title of the transferee.

APPEARANCE BY ATTORNEY-PRESUMPTION OF AUTHORITY.-The rule formerly obtained in England, and in some of the States of the Union, that an appearance by an attorney for a party without his sanction or authority was deemed sufficient for the court, which would look no further, but would proceed, and leave the party to his remedy against the attorney, unless he was irresponsible, or his appearance was through procurement or collusion with the adverse party. Latuch v. Pasherante, 1 Salk. 86; Denton v. Noyes, 6 Johns. 296; Bunton v. Lyford, 37 N. H. 512. However, the rule in nearly, if not all, of those jurisdictions has latterly been much qualified, and disabused of its ancient rigor. But by the current of the more modern authorities it has been discarded as void of sound reason for its support. Judge Dillon, in Harshey v. Blackmarr, 20 Iowa, 161, very ably demonstrates the injustice of the rule. He says: "It obliges a person to be bound by the unauthorized act of a mere stranger. It binds him by a judgment of a court without a day in court. It relieves the other party of a duty which, in reason, belongs to him, viz., to serve his process, and to see, at his peril, that his adversary is in court. And it carries out this unsoundness by compelling the wrong party to look to the attorney. True, reason and logic would say, if an attorney appeared for me without my knowledge or authority, express or implied, I should not be bound by the act it never ratified or promptly dis

avowed, and if the adverse party, being ignorant of the want of authority, and carelessly omitting. to serve process, or to require the attorney to show his authority, has been damaged, he, and not myself, should be the one to look to the attorney." The inexorable logic of this great jurist has had its effect, so that there is now no longer any doubt but that the enforcement of a judgment obtained and resting upon the unauthorized appearance of an attorney for a party not served may be restrained in equity, irrespective of the question whether the attorney is responsible or irresponsible, or acted by procurement or collusion with his antagonist. Parsons v. Nutting. 45 Iowa, 404; Newcomb v. Dewey, 27 Iowa, 381. The Supreme Court of Oregon has recently passed upon this question in Handley v. Jackson, following the modern rule and holding that in a proceeding to restrain the enforcement of a judgment on the ground that the only appearance of defendant was by an unauthorized attorney, it is competent to hear evidence aliunde, offered for the especial purpose of rebutting the presumption of authority in the attorney.

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CORPORATIONS SUBSCRIPTION TO STOCKPAYMENT-FRAUD OF SUBSCRIBERS.-The conclusion of the Supreme Court of Ohio, in Gates v. Tippecanoe Stone Co., 48 N. E. Rep. 285, on the subject of payment of subscriptions to corporate stock in property at an inflated value is instructive. It was held that where pursuant to an agreement among themselves, partners capitalize the partnership property at a valuation greatly in excess of its true value; create a corporation, under the laws of this State, to continue the former partnership business, fixing its capital stock at a sum equal to the inflated value placed on the partnership property; elect themselves managing officers of the concern; transfer this property, at such inflated value, to the corporation in exchange for its entire capital stock, which they cause to be issued, as fully paid up, to each partner, or as he directed, in proportion to his interest in the partnership; and the corporation, continuing the business, afterwards becomes insolvent,-the transaction will be regarded as a fraud upon the corporate creditors, although none was intended or contemplated by the parties to such transaction. In such case each partner will be regarded as an original subscriber for so much of the stock as was thus issued to him, and credited on his subscriptionf or the actual value only of his interest in the partnership property transferred to the corporation in payment of such subscription. The balance left, after applying this credit, will be deemed a debt due from him to the corporation, and therefore corporate assets.

EMINENT DOMAIN AND TAXATION AS RELATED TO THE USE OR PURPOSE FOR WHICH PROPERTY IS TAKEN OR TAXES LEVIED.

1. Definitions.-"Eminent domain is that sovereign power vested in the people, by which they can, for any public purpose, take possession of the property of any individual upon just compensation paid to him." On the other hand, taxation is defined to be a "rate or sum of money assessed on the person or property of a citizen by government, for the use of the nation or State."2 And we are told that eminent domain, or the power to take private property for public use, like taxation, belongs to every independent government. Being an incident of sovereignty it requires no constitutional recognition.3

2. Scope of the Discussion. -My intention in this discussion of these prerogatives of government, is to confine myself to those instances where the right of eminent domain and the power of taxation have been invoked, not for the direct benefit of the public in general, but only for the benefit of a few individuals of the State or community. I treat together what may be properly considered as two subjects, because the principles underlying the authorities cited are applicable to both methods of taking private property for public use. Generally speaking, the right of emi. nent domain gives some of the persons who compose the public the power to take, in their individual capacity, the property of others, and use it for certain specified purposes, the only limitation being that those purposes must be public; compensation being made, of course, to the owner. While the right of taxation is exercised by the sovereign power by taking money from individuals for the use of the State in its organized capacity as a government. In the former case the property is taken for a specific public use, for a full consideration paid; but in case such use is abandoned the property reverts to the original owner or his heirs. The chief profit from the use flows to a few individuals, while the public receives an incidental benefit. In the latter case, money once taken by taxation and used by the State is forever lost to the

16 Am. & Eng. Enc. of Law, 511.

2 Burrill Law Dictionary.

3 United States v. Jones, 109 U. S. 513, L. Ed. Bk. 27. 1015.

citizen who pays it; and he is obliged to look for his compensation to the public benefits shed upon all from its expenditure. And again a few individuals reap the chief profit while the public benefit is incidental. These are the distinctions, in a general sense, between eminent domain and taxation.

3. The Use.-In either case the use must be public and not merely private. Upon this question of what constitutes a public or private use: 1. Of the property taken by eminent domain. 2. Of money collected by taxation, the courts have often been called upon to pass. Of these we will consider: 1. Eminent Domain.-It will be best to leave out all reference to the many instances where the question of the use being public has long been settled and is no longer questioned, and give attention to cases of a more doubtful character. In Iowa the power of one to appropriate the land of his neighbor through which to construct a tile drain has been denied. It has been declared within the power of the legislature to grant the right of eminent domain in the establishment of a mill under certain circumstances. Also to appropriate. water for irrigation purposes and lands for necessarily used in the mining industry." But irrigation canals. Also to condemn lands other courts have held to the contrary. And statutes authorizing condemnation of lands for private roads are generally held unconsti tutional. But in Idaho a different rule has been adopted; owing, very likely, to peculiar conditions, that may exist in a sparsely settled, mountainous country. There condemnation of a private or by-road was held within the constitutional provision permitting lands to be taken "for rights of way for the construction of canals *

8

other

or any use necessary for the complete development

Fleming v. Hull, 35 N. W. Rep. 673. See also Bankhead v. Brown, 25 Iowa, 540.

5 Lowell v. Boston, 111 Mass. 454, 15 Am. Rep. 39. 6 Oury v. Goodwin (Ariz.), 26 Pac. Rep. 376: Golden C. Co. v. Bright, 8 Colo. 144; Coffin v. Lefthand Ditch Co., 6 Id. 443.

7 Hand Gold Mining Co. v. Parker, 39 Ga. 419; New Cent. Coal Co. v. George's Creek Coal Co., 37 Md. 537; Gets' Cases, 105 Pa. St. 547; Overman Silver M. Co. v. Corcoran, 15 Nev. 147.

8 Consolidated Channel Co. v. Cent. Pac. R. R. Co., 51 Cal. 269; People v. Pittsburgh R. R. Co., 53 Cal. 694; Sholl v. German Coal Co., 118 Ill. 427, 59 Am. Rep. 379.

9 Logan v. Stogdale (Ind.), 24 N. E. Rep. 135; 6 Am. & Eng. Eney. of Law, 529 and cases; Welton v. Dickson (Neb.), 57 N. W. Rep. 559. A railroad company

In

of the material resources of the State."'10 dividuals may occupy rivers with dams and booms for logging purposes." A Massachusetts statute attempted to authorize the taking by eminent domain of certain property for the purpose of establishing a public library; but the court held the act unconstitutional, as the purpose was really private. 12 An act of congress, of March 3, 1893, appropriating land at Gettysburg, Pa., for the purpose of preserving lines of battle and to mark tactical positions of the armies on the field, held unconstitutional as not for a public use.13 An act of the legislature providing for the construction of drains for agricultural, sanitary or mining purposes, across lands of others, held unconstitutional as not a proper exercise of the right of eminent domain.14 Under the constitution of Colorado, permitting the taking of land for reservoirs, flumes, drains, ditches and milling purposes, it has been held that a right of way may be condemned over private lands for a ditch to carry water to operate an electric light plant.15 Where a railroad company sought to condemn land for a road over which it could reach a private manufactory, a steel mill, and transport freight to and from such mill, it was held that the purpose was private." 16 A Michigan statute authorizing a cemetery company to condemn lands for the purpose of enlarging its cemeteries was held unconstitutional because the purpose was private.1

17

Where Purpose is Part Public and Part Private.-Where power is granted by statute to condemn lands for a navigable canal there is no power to take water to sell for private use.18 So the statutes authorizing the exer

11 Lancaster v. Kennebeck Co., 62 Me. 272; Cotton v. Miss. Boom Co., 22 Minn. 372; Borcherdt v. Wausau Boom Co., 54 Wis. 107.

12 Cary Library v. Bliss, 25 N. E. Rep. 92, 151 Mass.

364.

13 United States v. Certain Tract of Land, etc., 67 Fed. Rep. 869.

14 In re Theresa Drainage Dist. (Wis.), 63 N. W. Rep. 288.

16 Lamborn v. Bell (Colo.), 32 Pac. Rep. 989. Pittsburgh, W. & K. R. R. Co. v. Benwood Iron Works, 8 S. E. Rep. 453, 31 W. Va. 710.

Board of Health of Tp. of Portage v. Van Hoesen, 49 N. W. Rep. 894.

18 Cooper v. Williams, 5 Ohio, 391; Buckingham v. Smith, 10 Ohio; 288; Varick v. Smith, 5 Paige, 137.

cise of the power are strictly construed.19 And if an attempt is made to join a private with a public purpose the entire grant or power will be void; as where a water-works company attempted to condemn a right of way for the purpose of supplying the city with water and also to sell power to private parties.20 So where a railway company alleged that property was needed for its right of way and also for the "alteration of river street," it was held that condemnation for railroad purposes was valid, but for street purposes invalid, and the blending of the two purposes gave the court no jurisdiction to condemn, and therefore the proceedings were void. In a leading case in Nebraska22 it was held: 1. That the use of water for irrigation purposes was a public use, in the constitutional sense. 2. That to the legislature and not to the mitted the power to determine the exigencies requiring the exercise of the power of eminent domain. But on this last point see Pittsburg, W. & K. R. R. Co. v. Benwood Iron Works, 23 where it is held that the question is a judicial one. Where a company undertook to furnish water to three different

courts had been com

24

villages, it was held that lands might be taken for a canal, although the company will aslo use the canal to furnish water to private persons from whom it secured the water right. Also the surplus of water above what is required for public use may be used for private purposes, where the latter is only incidental to the main purpose of supplying the public.25 And the same rule was applied where a dam was built for the purpose of furnishing water to a public canal but there was a large surplus which was disposed of to private parties. 26

2. Taxation.-When taxes are levied for other than governmental purposes and certain individuals receive the direct and chief

benefit of the levy, nevertheless the purpose must be public and for the benefit of the public; and the benefits must accrue directly to the municipality wherein the taxes are levied and paid.27 "If there be no benefit but a flagrant and palpable departure from equity in the burden imposed *** it must be regarded as an aggression and unconstitutional. ''28 Two things must concur, the purpose must be public, and there must be a public benefit accruing to the tax payer; nor is a legislative declaration or decision that a given purpose is public always conclusive.29 In the last case cited a tax was authorized by legislative enactment to aid the Jefferson Liberal Institute at Jefferson; but the court found it to be a private school, and in the opinion the following principles were laid down: "Nor will the location of the institution at Jefferson and the incidental benefits which may arise to the people of the town sustain the tax. This is not the kind of public benefit and interest which will authorize a resort to the power of taxation. Such benefits accrue to the people of all communities from the exercise, in their midst, of any useful trade or employment and the argument, pursued to its logical result, would prove that compulsory payment or taxation might be made use of for the purpose of building up and sustaining every such trade or employment, though carried on by private persons for private ends or the purpose of mere individual gain and emolument." Whiting v. The Sheboygan & Fond Du Lac R. R. Co,30 the court held that a donation to a railroad company could not be sustained and that a tax levied to pay it was void on the ground that the use was private and not public; but the court held that a subscription to its stock would be valid. And these rulings were approved by that court in 1878.31 But in Nebraska bonds in aid of a railroad are authorized by the constitution;32 and many courts have held, in the case of rail27 1 Desty on Tax., 274, 281.

28 Id. 286-7.

In

29 Cooley on Const. Lim., 494; Curtis v. Whipple, 24 Wis. 350.

roads, that the use is always public; while other authorities have followed the rule announced by the Wisconsin court."4 A tax to raise a bounty to pay soldiers was held invalid as not being for a public use.35 Also in

89

a case where aid bonds were voted to the La Grange Iron & Steel Co., to assist in the erection of a rolling mill.36 Aid bonds voted to a manufactory of iron bridges were held void;37 and bonds voted to aid manufactur. ing.38 But the taxing power may be exer. cised to provide for the payment of bonds issued for the purpose of supplying the people of a city with natural gas. In some cases it has been held that where an industry was subject to public supervision the purpose was sufficiently public to support a tax in aid of it, as in case of a toll mill, the rate of toll being fixed by public authority. But in the case of a steam grist mill, not regulated by the public, the aid bonds were held invalid. So a beet sugar factory, not manufacturing for toll, nor subject to public regulation, cannot be aided by taxation.4 But as in the case of eminent domain, it has been held that where the purpose is double, that is, part

42

88 Beekman v. S. & S. Ry. Co., 3 Paige, 45; Bloodgood v. M. & H. Ry. Co., 18 Wend. 1; Bridgeport v. Railway Co., 15 Conn. 475; Sharpless v. Mayor, 21 Pa. St. 148; Thomas v. Allegheny Co., 7 Law Reg. 92; Talbot v. Dent, 9 B. Mon. 526; Cheeney v. Hooser, Id. 330; Railroad Co. v. Clinton Co., 1 Ohio St. 77; Steu benville Ry. Co. v. Township, Id. 105; Cass v. Dillon, 2 Id. 607; Ryder v. Railroad, 13 Ill. 516; Strickland v. Railroad, 21 Mass. 209; Olcott v. Fond du Lac Co., 16 Wall. 678, L. Ed. Bk. 21, 382.

34 See 2 Burr. Law Dict. 509; Blackw. on Tax Tit. 7; Cooley, Const. Lim. 479; Booth v. Woodbury, 5 Am. Law Reg. (N. S.) 202; Phila. Assn. v. Wood, 39 Pa. St. 344.

35 State ex rel. McCurdy v. Tappan, 29 Wis. 435. 36 Cole v. City of La Grange, 113 U. S. 1, L. Ed. Bk. 28, 896, citing Loan Assn. v. Topeka, 20 Wall. 655, L. Ed. Bk. 22, 455.

37 Parkersburg v. Brown, 107 U. S. 487, L. Ed. Bk. 27, 238.

38 Allen v. Jay, 60 Me. 124; Lowell v. Boston, 111 Mass. 454; Weismer v. Douglass, 64 N. Y. 91; In re Eureka Co., 96 N. Y. 42; Bissell v. Kankakee, 64 Ill. 249; English v. People, 96 Ill. 566; Railway Co. v. Smith, 23 Kan. 745.

39 State v. Toledo (Ohio), 26 N. E. Rep. 1061.

40 Burlington v. Beasly, 94 U. S. 310, L. Ed. Bk. 24, 161; Osborne v. Adams Co., 106 U. S. 181, L. Ed. Bk. 27, 129; Traver v. Merrick Co., 14 Neb. 327, 15 N. W. Rep. 690; State ex rel. Perry v. Clay Co., 20 Neb. 452, 30 N. W. Rep. 528.

41 State ex rel. Adams Co., 15 Neb. 568, 20 N. W. Rep. 96; Osborn v. Adams Co., 7 Fed. Rep. 441, 109

U. S. 1.

42 Getchell v. Benton, 30 Neb. 870, 46 N. W. Rep.

468.