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makes an unauthorized or prohibited contract with a corporation he does it with his eyes open. He takes the risk attendant upon inability to enforce the agreement in a court of justice. It is accordingly somewhat difficult to manipulate the doctrine of equitable estoppel in his favor, in view of the fact that the act of the corporation was not the inducing cause of his present position. Nor does it help matters much to discard the theory that the chartered powers of a corporation are included in the citizen's stock of presumptive knowledge. A court must either go further than this, and declare that the public is presumed not to know what a corporation may lawfully do, or else the judges must prepare to receive proof in a particular case that the limitations of the charter were in fact brought home to the plaintiff. Of course it may be said, and it sometimes is said, that in these cases the term "estoppel" is not used in its technical sense. If this is true, the use of a scientific term in any other than its technical sense is perhaps open to criticism. It is said, for example, that this doctrine is applied "only for the purpose of compelling corporations to be honest in the simplest and commonest sense of honesty." This means, presumably that corporations will not be permitted to do a wrong which would not be sanctioned in the case of an individual. The language just quoted occurs in a case in which a mining corporation borrowed money in order to engage in business in a place not authorized by its charter. A bill was filed by a stockholder to enjoin the prosecution of a suit by the lender upon the evidence of indebtedness. But if under similar circumstances an individual were to attempt to enrich himself unjustly under an illegal contract which was malum prohibitum, it would not be upon the basis of estoppel that his attempt would be frustrated by the courts. The contract would not be enforced, but a recovery in quasi contract would be permitted. If the courts which echo the language of Chief Justice Lawrence were strictly logical, they would either assimilate their views to those which the Supreme Court of the United States professes to hold; or else, at the other extreme, they would discard the view that corporate power is in its nature limited, and would embrace the radical doctrine which was advocated above.

This tendency to work out results upon the basis of a species of primitive estoppel is, however, a tendency which is not without

1 Chief Justice Lawrence, in Bradley v. Ballard, 55 Ill. 413.

The cor

interest. A result more strictly "equitable" might perhaps be reached if the courts were to hold that a corporation, by contracting, warrants its power and right to enter into the agreement. Suppose, for example, that a corporation makes a prohibited contract. In the face of the prohibition the contract will not be specifically enforced. Nor will the plaintiff be permitted to maintain an action upon it. Rights of recovery in quasi contract, however, are not broad enough to meet the requirements of the case. poration will accordingly be treated as having warranted its power and right to make the agreement. The subsequent assertion of a lack of power and right, although theoretically effective so far as disposing of the plaintiff's suit is concerned, now becomes a clear breach of the warranty. The measure of damage in an action for this breach is the value of the contract which the plaintiff has lost. This includes prospective profit and the loss of a bargain. Thus the plaintiff in such a case has every right except the right of specific performance. It goes without saying that such a theory presupposes the abandonment of the view that all the world has notice of the limits of corporate power. It is, of course, a somewhat fanciful theory, but it furnishes an interesting basis for a comparison with the modern German conception of damage by reason of the non-existence of contract, "the negative interest

of contract," as Jhering calls it (Negatives Vertragsinteresse). According to that conception, if A. leads B. to believe that there is a contract when, owing to facts which B. neither knows nor is bound to know, there is not, A., however innocent, is liable for the damages sustained by B. "He [A.] is not liable on the contract, for there is none; nor is he bound to put the other party in as good position as if he had a contract; but he is bound to put the other party in as good position as if there had never been a simulacrum of contract." 1

If we return from the domain of theory to our final survey of existing conditions in American courts, it seems hard to escape a conclusion favorable to the view which results in the enforcement in so many cases of unauthorized and prohibited contracts. Incomplete

1 The language cited is that of Professor Munroe Smith of the Faculty of Political Science in Columbia College, to whom the writer is indebted for this reference to German law. Professor Munroe Smith adds: "I do not find that any German jurist has suggested the extension of the above principle to cases where a contract is void (or voidable) because of incapacity. Perhaps they regard these cases as falling under the restriction of 'grounds of invalidity which the other party was bound to know.'"

as it is, this doctrine seems to represent far better than the other the enlightened sense of the business world, and the prediction is hazarded that it is destined in its full development to be the doctrine of the future. But while it seems clear that we are still in the midst of the evolution of this department of corporation law, it is yet not impossible to discover the principles upon which that evolution proceeds. It is for this reason that the writer ventures to dissent from the view of Judge Thompson, that "the Anglo-American law upon this subject" is in a state of "hopeless and inextricable confusion." Nor does it seem to the writer to be true "that contradictory decisions are constantly rendered by the same courts; that opposing principles, tending to contrary results, jostle and crowd each other as the ice floes jostle and crowd each other going southward out of Baffin's Bay through Davis Straits; and that the judge seizes upon one of these principles to-day, and to-morrow upon another, and enlarges it or applies it according to the seeming exigencies of justice in that particular case." It is submitted, or the contrary, that the decisions upon corporate power are suscep tible of scientific analysis and classification. It is, however, necessary that the investigator should give up the attempt to relegate this subject to the realm of moral reform, and that he should be content to see in it only the familiar spectacle of a gradual legal development brought about by a conflict between opposing views of public policy.

George Wharton Pepper.


Published monthly, during the Academic Year, by Harvard Law Students.

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THE LAW SCHOOL. — In the November issue a proportionally unprecedented increase" in the number of students in the School was predicted. The returns, complete up to December, fully justify the expectation. The enrolment is greater by sixty-four than it ever has been in the history of the School. The exact registration for seven successive years on Dec. 1, is given below:

1889-90 1890-91

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1891-92 1892-93 1893-94 1894-95 1895-96

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These figures show an increase over last year in each class, but a decrease of four in the number of special students. The third year class is larger than any previous third year class by thirteen. The second year class shows an increase of only three. The greatest gain is naturally in the first year class, which numbers fifty-two more than the next largest first year class.

One reason for the remarkable increase in the number of candidates for the degree doubtless is that this is the last year during which the old rules of admission will be in force. This year, for the last time, all Bachelors of Arts, all "graduates of Law Schools which confer the degree only after an examination upon a two years' course of at least seven months each," and all holders of the degree of Bachelor of Science, or other similar degrees, if they represent "an amount of linguistic training equal to that required of those who offer themselves for examination," all such are admitted without examination to be candidates for the degree of Bachelor of Laws. Those who pass the regular examinations in Latin, French, and Blackstone are also admitted as candidates for the degree.

But, beginning with next year, the new rules will be in effect. By these, only holders of certain specified degrees, and persons qualified to

enter the Senior Class of Harvard, will be admitted as candidates for the degree. All others, including holders of academic degrees who are not on the list, "graduates of Law Schools which confer the degree only after an examination upon a two years' course of at least seven months each," and all who pass the regular examination,- these will be admitted only as special students, and can obtain the degree only by entitling themselves in some way to enrolment as regular students, or by attaining a mark within five per cent of that required for the honor degree.


In connection with these changes in rules, the following table is instructive :

Holders of degrees from Colleges whose graduates are to be admitted as candidates for the degree of LL.B.


Holders of degrees from Colleges whose graduates are not to be admitted as candidates for the degree of LL.B.


Harvard College Seniors on leave of absence from college
Graduates of other Law Schools.
Students holding no degrees






According to the above table, 370 of the 466 students now in the School would be eligible candidates for the degree under the new rules. The other 96, of whom 64 are first year students, would not get the degree except by attaining a mark within five per cent of the honor grade. In all probability, some of the 27 graduates of institutions that are not now recognized officially by the Harvard Law School would be admitted as candidates for the degree, for the list does not pretend to be exhaustive. The Law Faculty reserves the right to consider special cases on their merits.

The decrease in the number of special students is partly traceable to the policy of the Faculty in discouraging all such who do not care to work. Those who are ready to work find it just as easy under the old rules to attain regular standing. Undoubtedly, when the new rules go into effect, the number of specials will increase again. The present small numbers are also doubtless further caused by a prevailing misunderstanding as to the status of specials under the new arrangement. As has already been noticed, the special student will still have the same privileges as regular students, except that if he wishes a degree he must maintain a high standing, and he will not be admitted except on the definitely determined conditions set forth above, which it is needless to repeat. But whatever else may be said, it is generally understood that idlers have no place in the Harvard Law School. Of the nine specials now here, only one is ineligible for regular standing. The rest are enrolled as specials in order to take studies out of the year in which they would be regularly enrolled.

Perhaps the most significant fact in connection with all these figures on the total registration is that the third year class is increased. This is due to nothing so much as to a recognition both of the increase in the quantity of instruction offered and of the advantages of a third year of study.

Below are given three tables showing the sources from which six successive classes have been drawn, both as to previous collegiate training and as to the geographical districts from which the students come.

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