adequate. If the insurer could set up a defense to an action at law on the policy, reformation would be properly denied. Thompson v. Phoenix Ins. Co., 25 Fed. 296; Craft v. Dickens, 78 Ill. 131. But when the adequacy of the legal remedy is doubtful, equity will grant relief. Green v. The Morris and Essex R. Co., 12 N. J. Eq. 165. There seems to be enough danger here that the erroneous indorsement might be prejudicial to the complainant if an action at law was brought on the policy to justify equity in exercising its jurisdiction.

RESTRAINT OF TRADE-CONTRACT NOT TO ENGAGE IN BUSINESS - RESTRICTION IN Use of Stage NAME. — In a contract of employment, the plaintiff, a motion picture firm, agreed to advertise the defendant, if at all, under the name of "Stewart Rome;" and the defendant agreed never to appear under this name for any one but the plaintiff. The defendant acted under this name for a long time and became a "star." At the termination of his employment with the plaintiff, he signed a contract with a rival firm to act under the name of "Stewart Rome." The plaintiff now seeks to enjoin the defendant from using this name in violation of the contract between them. Held, that the injunction would not be granted. Hepworth Manufacturing Co. v. Ryott, 121 L. T. R. 226 (Ch. Div.).

A person may by contract conclude himself from the use of his own name, and, a fortiori, of a pseudonym, for specified purposes. Vernon v. Hallam, 34 Ch. Div. 748; Zagier v. Zagier, 167 N. C. 616, 83 S. E. 913; Ludwig v. Claviola Co., 144 App. Div. 388, 129 N. Y. Supp. 310. Whether such a contract is void because in restraint of trade depends, by the modern and better view, on the test of reasonableness. If the restraint imposed is only such as to afford fair protection to the interests of the covenantee and is not so broad as to interfere with the interests of the public, the contract is not illegal. Nordenfeldt v. Maxim Nordenfeldt Co., [1894] A. C. 535; Diamond Match Co. v. Roeber, 106 N. Y. 473, 13 N. E. 419; National Enameling & Stamping Co. v. Haberman, 120 Fed. 415. Under this rule, a contract not to engage in business, standing alone, is void. Clark v. Needham, 125 Mich. 84, 83 N. W. 1027; Clemons v. Meadows, 123 Ky. 178,94 S. W. 13. But where a restrictive agreement is ancillary, as in the sale of a business, it may be enforced. Anchor Electric Co. v. Hawkes, 171 Mass. 101, 50 N. E. 509; Freudenthal v. Espey, 45 Colo. 488, 102 Pac. 280; Mills v. Ressler, 87 Kan. 549, 125 Pac. 58. Similarly, such agreements in employment contracts may be valid. Rousillon v. Rousillon, 14 Ch. Div. 351; Knapp v. S. Jarvis, Adams Co., 135 Fed. 1008. Equity may, however, deny an injunction on the ground of gross inadequacy of consideration or because there is a complete remedy at law. Sternberg v. O'Brien, 48 N. J. Eq. 370, 22 Atl. 348. See Mandeville v. Harmon, 42 N. J. Eq. 185, 195, 7 Atl. 37, 41; Keeler v. Taylor, 53 Pa. St. 467, 469, 470. The principal case is supportable on the ground that the scope of the restriction is greater than necessary to protect the interest of the employer. Morris, Ltd. v. Saxelby, [1916] 1 A. C. 688; Herreshoff v. Boutineau, 17 R. Ï. 3; Althen v. Vreeland, 36 Atl. 479 (N. J.). If the restraint were for a reasonable period, i. e. for the life of "Stewart Rome" films owned by the plaintiff, the injunction, it is submitted, should be granted. Cf. Tribune Ass'n v. Simonds, 104 Atl. 386 (N. J.). See 32 HARV. L. REV. 176. And this should be the result even where the reasonable restraint is coupled with another which is unreasonable, provided that the two are distinct and severable by the terms of the contract. Monongahela River Consolidated Coal & Coke Co. v. Jutte, 210 Pa. St. 288, 59 Atl. 1088; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 43 Atl. 723. But in the absence of such severance, equity will not undertake to make over the contract, and the whole being void, there will be no relief as to any part. Perls v. Saalfield, [1892] 2 Ch. 149; Mallinckrodt Chemical Works v. Nemnich, 83 Mo. App. 6.

Rule AgainstT PERPETUITIES

- SUSPENSION OF OWNERSHIP — NEW YORK RULE. A father created a trust fund for the maintenance of his family, the income to go to his wife and two daughters, then living, upon his death; and one half of the income to go to each daughter upon the death of both parents, the principal to be distributed equally between the daughters when they should attain the age of thirty-five. A statute provided that such a suspension of absolute ownership of personal property, for more than two lives in being at the date of the instrument, was invalid. (1909 N. Y. CONSOL. LAWS, c. 41.) The wife claimed an enforceable interest in the trust, irrespective of the validity of the limitations to the daughters. Held, that this claim be allowed. Carrier v. Carrier, 123 N. E. 135 (N. Y.).

Since 1828, the common-law rule against perpetuities has been substantially altered by New York legislators, who have conceived its sole object to be a limitation of restraint on alienation. See GRAY, RULE AGAINST PERPETUITIES, 3 ed., § 748. The artificial limit of two lives in being on the period of suspension of absolute ownership has superseded the natural common-law rule of lives in being. 1909 N. Y. CONSOL. LAWS, c. 41; LAWS 1909, c. 45; PERSONAL PROPERTY LAW, § 11. That this arbitrary rule invites litigation is shown by the fact that under it the issue of remoteness has been presented in well over four hundred cases, as compared with a single one previous to its adoption. See GRAY, idem, §§ 749, 750. The principal case is typical of the large majority of them. And unfortunately, in the early decisions, trusts containing any illegal limitations were held invalid in toto. Lorillard v. Coster, 5 Paige, 172; Armory v. Lord, 9 N. Y. 403. Now, however, valid provisions of the instrument are enforced, if the rejection of the invalid limitations will effect no unjust distribution of the estate. Tiers v. Tiers, 98 N. Y. 568; In re Mount, 185 N. Y. 162, 77 N. E. 999. In the principal case, the trust to endure for two lives orly would accomplish a distinct purpose of the settlor, - the maintenance of the family unit during the lives of the parents. The saving rule, being thus applicable, was rightly invoked to sustain the wife's interest.

...

SALES CONDITIONAL SALES - WHETHER INCLUDED UNDER ACT REGARDING MORTGAGES. The plaintiff sold and delivered certain machinery under an instrument providing that title should remain in the seller until full payment of price. A recording statute thus defined mortgages: "All deeds . . . conveying . . property . . . for the purpose . . . of securing the payment of money, whether. from the debtor to the creditor, or from the debtor to some third person in trust for the creditor." (1906 FLA. GENL. STAT., §§ 2494, 2496.) The above instrument was not recorded. The seller replevied from a purchaser from the buyer. If the instrument was a mortgage, the seller could not recover. Held, that he could recover. Dobson Printer's Supply Co. v. Corbett, 82 So. 804 (Fla.).

A transaction wherein possession is delivered but passing of title is conditioned upon payment of price is a typical conditional sale. Nichols v. Ashton, 155 Mass. 205, 29 N. E. 519; American Harrow Co. v. Deyo, 134 Mich. 639, 96 N. W. 1055. A mortgage differs from this in that the original property owner is or becomes the debtor. Campbell Printing Co. v. Walker, 22 Fla. 412, 1 So. 59. And a sale with mortgage back to seller differs from it in that title passes at once. See Frick & Co. v. Hilliard, 95 N. C. 117; Chicago Cottage Organ Co. v. Crambert, 78 Ohio, 149, 84 N. E. 788. So in most jurisdictions statutes relating to mortgages are not held applicable to conditional sales. Nichols v. Ashton, supra; Campbell Printing Co. v. Walker, supra. But the legal effect of each is substantially the same. See Chicago Ry. Equipment Co. v. Merchants' Bank, 136 U. S. 268, 283. It is submitted that the difference in method by which the legal result is reached is immaterial, and that the opposite view is preferable. Hart v. Barney Co., 7 Fed. 543 (Ky.). See 16 HARV. L. REV. 370. But the

statute in the principal case undertakes to define specifically what shall be included in the term "mortgage." It clearly contemplates transactions in which the original property owner is or becomes the debtor. It was therefore rightly judged not to include conditional sales.

SOVEREIGN

TELEGRAPH AND TELEPHONE COMPANIES LIABILITY TO SUIT OF TELEGRAPH AND TELEPHONE COMPANIES UNDER FEDERAL CONTROL. An action was brought against a telegraph company under federal control for delay in delivery of a telegram. The defense was that the defendant company was being operated by the Postmaster General on behalf of the United States. Held, defense insufficient. Witherspoon & Sons v. Postal Telegraph & Cable Co., 257 Fed. 758 (Dist. Ct., E. D. La.).

The United States cannot be sued without its consent. Stanley v. Schwalby, 162 U. S. 255. This immunity extends to governmental agents and agencies. Maganab v. Hitchcock, 202 U. S. 473. When the transportation systems were taken under federal control, Congress authorized suits against them, but prohibited issuance of process against property so taken over. See 40 Stat. at L. 451. Some courts, in action brought against these systems, have treated the Director General of Railroads as the proper party defendant. Rutherford v. Union Pacific R. Co., 254 Fed. 880; Dahn v. McAdoo, Director General of Railroads, 256 Fed. 549. The courts that treat the systems as being also proper parties defendant recognize them nevertheless as governmental agencies. Jensen v. Lehigh Valley R. Co., 255 Fed. 795; Gowan v. McAdoo, 173 N. W. 440 (Minn.); Johnson v. McAdoo, Director General of Railroads et al., 257 Fed. 757. The government assumed control over the telegraph and telephone systems for the same reasons and purposes as produced control over transportation. See 40 STAT. at L. 904. By proclamation, the President took possession of all systems and assumed complete control, which might or might not be exercised through the then owners and managers. See 40 STAT. AT L. 1807. It would seem, therefore, that they likewise became governmental agencies. Congress made no provision for possible suits against them. Nevertheless, judgments have been rendered against these systems, operating under federal control, when the action was commenced prior to federal control. Western Union Telegraph Co. v. Huffman, 208 S. W. 183 (Tex.); Mummaw v. Southwestern Telegraph & Telephone Co., 208 S. W. 476 (Mo.); Danaher v. Southwestern Telegraph & Telephone Co., 209 S. W. 74 (Ark.). Also, after federal control, one court allowed an injunction to issue against a telephone company. State v. Dakota Central Telephone Co. et al., 171 N. W. 277 (S. D.). Moreover, the companies have secured relief in their own names. City of Amarillo v. Southwestern Telegraph & Telephone Co., 253 Fed. 638; Postal Telegraph & Cable Co. v. Call, District Judge, 255 Fed. 850. On the other hand, they have also been held governmental agencies and so not proper parties. Southwestern Telegraph & Telephone Co. v. City of Houston, 256 Fed. 690; Railroad Commissioners of Florida v. Burleson et al., 255 Fed. 604. And an injunction has been refused because the suit was in substance against the United States. Public Service Commission v. New England Telephone & Telegraph Co., 122 N. E. 567 (Mass.). It might be argued, in support of the principal case, that suits are included in the authority, given by the President's Proclamation, to continue operation of the systems in the usual and ordinary course of business. See 40 STAT. AT L. 1807. But the President or his ministers have no power to authorize actions against the United States or its agencies. Maganab v. Hitchcock, supra.

STATUTE CONSTRUCTION ESTATE TAX OF FEDERAL INHERITANCE TAX. A petition was brought by an executor to determine whether, in the absence of any express directions in the will, the federal estate tax should be charged entirely against the residue of the estate or apportioned pro rata among all the

devisees and legatees. The Act of Congress of 1916 provided for an "Estate Tax" to be levied on the net estate transferred upon death. (39 STAT. 756, c. 463; 39 STAT. 1000; 40 STAT. 300.) Held, that it is chargeable entirely against the residue. Plunkelt v. Old Colony Trust Co., 124 N. E. 265 (Mass.).

The executor charged the federal estate tax pro rata among three legatees. This account was affirmed by the Surrogate, reversed by the Appellate Division, and on appeal, held, that it is chargeable entirely against the residue. In re Hamlin, 124 N. E. 4 (N. Y.).

The Massachusetts and the New York courts both reach the same conclusions for exactly the same reasons. The difference between an estate tax and a legacy tax is well recognized. See Minot v. Winthrop, 162 Mass. 113, 124, 38 N, E. 512, 516. A legacy tax is a tax upon the right to receive property by will as distinguished from a tax upon the right to devise property, and so is chargeable upon the individual legacy. An estate tax is one imposed upon the net estate transferred by death and not upon each individual succession resulting from death. In re Roebling's Estate, 89 N. J. Eq. 163, 104 Atl. 295. Hence it is chargeable upon the estate and therefore upon the residuary fund. At the time Congress enacted the statutes under consideration legacy taxes were common in the states. See RANDOLPH, UNITED STATES INHERITANCE AND TRANSFER TAXES, 1917, p. 54. Previous federal legislation, the Act of 1898, imposed a legacy tax. See 30 STAT. AT L. 464. This act had been held constitutional. Knowlton v. Moore, 178 U. S. 41. If Congress had intended a legacy tax it would have followed the language of that act. Moreover, the intention of Congress to enact an estate tax is evident from the records of legislative proceedings in connection with the passage of the law. See Report No. 922, 64th Congress, 1st session, 5. The instant decisions, of importance practically, seem certain to be followed.

TAXATION · PROPERTY SUBJECT TO TAXATION GOOD WILL OF A BUSINESS. To ascertain the value of the intangible property in Arizona belonging to a foreign corporation, the board of equalization capitalized the net profits realized by the corporation from Arizona sales in 1917 at 25 per cent, and deducted from the result the value of the corporation's tangible property within the state. This valuation was distributed among the counties of the state in the proportion of their several contributions to the gross sales of the corporation, with instructions to the county authorities to enter on the assessment rolls the words: "Tangible and intangible valuation of property above enumerated based on excessive earnings." Arizona statutes provide that all property of whatsoever kind or nature is subject to taxation. (1913 ARIZONA REV. STAT., Title 49, c. 4, §§ 4846, 4847.) Held, that the assessment was unwarranted. Standard Oil Co. v. Howe, 257 Fed. 481 (Circ. Ct. App.).

Although a tax on excessive earnings was not authorized by the statutes of Arizona, the court might well have confirmed the assessment, on the ground that it related to the good will of the plaintiff's business. The court failed to regard the result produced, but considered simply the method used. See Great Northern Ry. Co. v. Okanogan County, 223 Fed. 198, 201. Statutes authorizing a tax on foreign corporations doing business in interstate commerce in terms of gross receipts have often been held constitutional, being construed as substantially imposing a tax either on the property of the corporation within the state or on the privilege of doing business there, the value of which is measured by the gross earnings. State v. U. S. Express Co., 114 Minn. 346, 131 N. W. 489; Maine v. Grand Trunk Ry., 142 U. S. 217. See McHenry v. Alford, 168 U. S. 651, 671. That business good-will is a form of property is well recognized to-day. People v. Roberts, 159 N. Y. 70, 53 N. E. 685. See 16 HARV. L. REV. 135. And it may be taxed at the place of business. Adams Express Co. v. Ohio State Auditor, 166 U. S. 185. See Joseph H. Beale, "Jurisdiction to

Tax," 32 HARV. L. REV. 587, 601. Hence it would seem to be subject to taxation under the Arizona statutes. Though the reasoning in the principal case seems erroneous, it should be noticed that the question of fact as to the value of the good-will could have been more accurately determined by the equalization board by taking as a basis of computation the average profits over a series of years, rather than the net profits of a single year.

TORTS DAMAGES-NERVOUS SHOCK FROM FRIGHT CAUSED BY SPOKEN WORDS. - The defendant, a private detective, in order to induce the plaintiff to show him some letters, said to her: "I am from Scotland Yard. You are the woman we are after. You have been corresponding with a German spy." Because of the fright induced by these words, the plaintiff became seriously ill. The jury found that these threats and false statements were made for the purpose of frightening the plaintiff. Held, that the plaintiff could recover. Janvier v. Sweeney and Barker, [1919] 2 K. B. 316.

Upon the question of a recovery for nervous illness induced by fright without physical impact the authorities are still at variance. See 28 HARV. L. REV. 359-363; 15 HARV. L. REV. 304. For a variety of reasons, most jurisdictions deny a recovery where the action is based upon negligence. Nelson v. Crawford, 122 Mich. 466, 81 N. W. 335; Spade v. Lynn R. Co., 168 Mass. 285, 47 N. E. 88; Mitchell v. Rochester Ry., 151 N. Y. 107, 45 N. E. 354. Contra, Dulieu v. White, [1901] 2 K. B. 669. The same is true where the negligence consists of spoken words. Braun v. Craven, 175 Ill. 401, 51 N. E. 657. But even the courts that allow no recovery in negligence cases say that there would clearly be a recovery where the act was a wilful wrong. Jeppsen v. Jensen, 47 Utah, 536, 541, 155 Pac. 429, 431; Davidson v. Lee, 139 S. W. 904, 907 (Tex. Civ. App.); Spade v. Lynn R. Co., supra, 290, 89. There is decisive authority that where the words or the act alone constitute an admitted tort, the defendant is liable for any nervous illness resulting proximately. Lonergan v. Small, 81 Kan. 48, 105 Pac. 27 (assault); Engle v. Simmons, 148 Ala. 92, 41 So. 1023 (trespass); Garrison v. Sun Pub. Ass'n, 207 N. Y. 1, 100 N. E. 430 (slander). Threats of bodily harm sent by letter and causing illness by reason of apprehension of violence have also been held to be ground for an action. Houston v. Woolley, 37 Mo. App. 15; Grimes v. Gates, 47 Vt. 594. But, in spite of numerous dicta, there are very few square decisions in favor of recovery for the consequences of fright induced by spoken words, where the words do not otherwise constitute an admitted tort. The principal case is therefore to be regarded as an important one in reaffirming the right of recovery established in an earlier English case. Wilkinson v. Downton, [1897] 2 Q. B. 57.

TRUSTS - POSTPONEMENT OF ENJOYMENT OF THE INTEREST OF A SOLE CESTUI QUE TRUST - MERGER of Legal AND EQUITABLE ESTATES. - The testator devised certain realty to his wife in trust for herself for ten years and then to herself absolutely. He expressed a desire that the estate should remain intact during the trust period, but placed no restrictions on alienation and gave his wife the power in her will to designate a successor in the trusteeship. Accordingly she empowered her grandson to convey the land in fee. The latter, after the death of the testator's widow but before the expiration of the ten years, contracted to convey the land. Held, that he could pass good title. Odom v. Morgan, 99 S. E. (N. C.) 195.

Generally, if both the legal and equitable title to real estate held in trust become vested in the same person, there will be a merger resulting in absolute ownership and the consequent termination of the trust. Swisher v. Swisher, 157 Iowa, 55, 137 N. W. 1076. See Woodward v. James, 115 N. Y. 346, 357, 22 N. E. 150, 152. See I PERRY ON TRUSTS, 6 ed., 347. But this rule does not operate mechanically; where termination of the trust might injure the interests