fore, it seems to us that the federal supreme court ought not to plant itself entirely upon its construction of state statutes, but rather upon state practice in the ordinary enforcement of decrees of this kind. We know, that the interstate commerce clause is enforced rather for the obtaining of practical results unhindered by technical construction of state legislation, and the same is to be said as to the 14th Amendment. Indeed the limitations in the federal constitution make it the duty of the federal court to look through all disguises in state legislation and to apply in fullest vigor their practical direction. Taking the first of the rules and we see that the apparent debt of record is subject to a defense somewhat like a plea of nul tiel record or to a showing of a want of service giving jurisdiction to render a judgment in personam. The record debt may be displaced by showing a subsequent modification of the decree it claims to be based upon. But it is sufficient it seems to us to show that ordinarily instalments are enforceable as they accrue and it is obiter for the Barber case to have gone any further than this. But, if even under statutes specifically providing that modification may apply to past due instalments, as well as to those to become due, the practice is to have execution or other process to collect them in the absence of application for modification, then such decrees having in their own states definite recognition should have similar recognition abroad. The faith and credit clause should not be applied tech nically, but to give every right to one in whose favor is a judgment or decree, when it is being enforced abroad, that is affixed to it at home. The second rule is inconsistent with the full enjoyment of such a right, and seems, therefore, to us unsound. NOTES OF IMPORTANT DECISIONS FOREIGN CORPORATIONS-CONSTRUC TION WORK AS BEING INTERSTATE COMMERCE UNDER STATUTE REQUIRING LICENSE TO DO BUSINESS.-A contractor in Texas agreed to construct for a Texas company its glass factory, at Fort Worth. He contracted with a Pennsylvania corporation for the building at the factory of three gas producers, with down takes, for $5400. The contract contemplated (and in fact it was the case) that the gas producers were to be shipped from another state. The labor upon the ground and brick, lime, sand and cement cost about one-fifth of the contract price. The contractor paying only $2750 of the contract price, the corporation sought to enforce a mechanics' lien against the plant for the balance, and the glass company claimed that the corporation, not having obtained a license to carry on business in Texas was barred from recovering. The corporation claimed that this was interstate commerce. The corporation had judgment in the trial court and on appeal this was reversed by Texas Court of Civil Appeals. Ft. Worth Glass & Sand Co. v. S. R. Smythe Co., 128 S. W. 1136. The contract in this case was made in Pennsylvania and it was contended that it was virtually a sale of the gas producers. The court said: "It does not appear in the record that appellee was a manufacturer of gas producers and selling them as manufactured products. The obligation and the evidence show that appellee took, executed and performed a contract to furnish and build complete the gas producers in Texas and shipped the material for the purpose into the state and employed the necessary labor and purchased some material in Texas. Such contractual relation between citizens of different states, is not included in commerce between the states, as to be beyond the power of a state to regulate and control." This seems to us a very close ruling, against the foreign corporation. In the first place it looks like there was scarcely more here than installation of what was sold, and that should be looked on as incidental to completeness of delivery in a sale. Such ought not to be looked on as doing business in a state. It is a fact of which courts ought to take judicial notice that installation of machinery by sellers often enters into contracts for its sale because the seller thereby creates a situation for the making of a binding test of its being that which it is warranted to be. In the second place the court should look at the contract reasonably and say what was the principal thing intended by the parties. If a sale was intended that idea should be enforced under commerce regulations. If installation had to be separated in these contracts the probability is. that not only would that increase cost to purchaser, but also he would be deprived, in a measure, of his ability to prove, in some cases, that defects afterwards discoverable in use were embraced either in the express or implied warranty of a seller. AND BANKING-DISTINCTION CHECK BANKS The facts show that the treasurer of the The railroad brought suit only against the Knickerbocker Trust Company and had judgment in its favor in both of the lower courts, the rule well recognized in New York of need of inquiry by one. receiving the check of a corporate officer in his own favor being applied. In our annotation of the opinion reversed by the Court of Appeals we said: principal case is evidently an extension of the rule that a payee who receives corporate or trust funds in payment of the individual debt of an officer or trustee is liable to the corporation or cestui que trust." "The The Court of Appeals overrules this extension. This court says: "The distinguishing feature between this case and the cases re * * lied on to support the judgment which has The Court of Appeals also says: "But it is said that inquiry of plaintiff's deposit bank was not enough, because it was not plaintiff's agent to make representations to third par ties as to the validity of checks drawn upon plaintiff's account. I think otherwise, It seems to me that when a corporation opens an account with a banking institution it confers on that institution the power to determine whether any check drawn upon the bank conforms to the contract between the depositor and the depositary. When it makes a mistake in the determination of such a question, the depositary may be liable to the depositor; but the depositor cannot recover back the money paid on such check to a third person who has received it in good faith relying on the representation of the deposit bank that the check was all right, and has subsequently parted with the money." This last proposition seems sound, but rather broadly stated. It certainly ought not be good, except in favor of another depositary, and then only because the latter acts to his injury in due course of commercial dealing. If the collector of such a check is collecting it for itself as a creditor, any act of the drawee bank or any representation by it ought not to ensue to its advantage arising out of a fraud. It seems reasonable and reasonably necessary, that the Knickerbocker Trust Company, as business is conducted, should not have been held, and this was all that the Court of Appeals was called on to determine. Plaintiff was given leave to amend, and we take it that the only way it could state a case was by alleging the checks were used to pay a debt to it or that it still was in possession of their proceeds or a part thereof. COMMERCE CONNECTING LOCAL WITH INTERSTATE BUSINESS SO AS TO BRING ENTIRE TRANSACTION TO LATTER DESIGNATION.-The advance the protection of interstate commerce against state legislation receives is proven at about every decision day in the federal supreme court. The most recent illustration of this remark is an extension of the old drummers' case, in which it was held that no license could be imposed for sales by sample. This extension is that where a foreign corporation takes orders for enlargement of photographs and pictures and agrees to deliver to customers in appropriate frame, which the customers for the picture have the option to purchase at factory prices, the sale of each frame is so connected back to transaction for a picture as to make it a part of interstate transaction. Dozier v. Alabama, 30 Sup. Ct. 649. The court said: "No doubt it is true that the customer was not bound to take the frame unless he saw fit, and that the sale of it took place wholly within the state of Alabama. But as was hinted in Rearick v. Pennsylvania, 203 U. S. 507, what is commerce among the states is a question depending upon broader considerations than the existence of a technically binding contract or the time and place where the title passed. It was agreed that the frame should be offered along with the picture. The offer was a part of the interstate bargain, and as it was agreed that the frame should be offered 'at factory prices,' and the company and factory were at Chicago, obviously it was contemplated, if not agreed, that the frame should come on with the picture. In fact the frames were sent on with the pictures from Chicago and were offered when the pictures were tendered, as part of the transaction commercially continuous, and one at prices generally fixed by the contract for the pictures, and by that contract represented to be less than retail or usual prices in consideration, it is implied of the purchase already agreed to be made. We are of opinion that the sale of the frames cannot be so separated from the rest of the dealing between the Chicago company and the Alabama purchaser as to sustain the license tax upon it." Contractually, however, here were two distinct transactions, upon one of which a right of action accrued and the other was only an unilateral contract, if any contract at all. If there was a condition to complete perform ance that the picture should be tendered in a frame offered to be sold at factory price, it would seem that to prevent such tenders would be interfering with interstate commerce. But, at all events, the relation of whether there is not a transaction in interstate com. merce cannot be reasoned out on technical lines. The question presents more a condition than a theory. And proceeding along in this way we greatly doubt whether, as has been recently held by Texas Court of Civil Appeals, a contract to install machinery for a local plant, entered into by a manufacturer of the machinery can be deemed the transacting of local business, requiring a foreign corporation to take out a license as a condition of being allowed to sue in a state court. Ft. Worth Glass & Sand Co. v. S. R. Smythe Co., 128 S. W. 1136. The contract in that case was "to build," etc., but as the supreme court holds that there need be no binding contract, SO we may imagine that the mere form of a contract does not greatly matter. The question is of effect on interstate dealing. IRRIGATION-OWNER OF A PRIOR RIGHT TO WATER FOR DIRECT APPLICATION, PRIVILEGED TO STORE SAME FOR FUTURE USE. Can the owner of a prior right to make direct application of appropriated water for irrigation purposes during the irrigation. season, store the same for use later in the season? The existence of the right has been recognized, but the extent of the right has only been passed on in two cases, one in Colorado1 and the other in Oregon.2 The question decided in the Colorado case is clearly stated by Gabbert, J., as follows: "The question presented by the appeal is the right of the owner of a priority for direct irrigation to store the water thereby represented, for use later in the season." The majority of the court upheld the right, but narrowed it strictly to the con (1) Seven Lakes Reservoir Co. v. New Loveland & Greely Irrig. Land Co., 40 Colo. 382, 93 Pac. 485, 17 L. R. A. (N. S.) 329, 10 C. L. 2013. (2) Williams v. Altnow, 95 Pac. 200. ditions set forth as above. The court says: "The particular question presented by the appeal has not been determined in the concrete by any previous decision of this court; but it is by no means a new one, because it merely involves the application of principles which have been announced in numercus cases. A priority to the use of water is a priority right which is the subject of purchase and sale, and its character and method of use may be changed, provided such change does not injuriously affect the rights of others."3 The withdrawal of the water and storage for future use does not in any manner injuriously affect other appropriators, nor does it lessen the common source of supply to any greater extent than had the water been directly applied as had previously been done. Two principles must be kept in mind, however, in applying this rule, namely, that no one must suffer by the withdrawal of the water for storage, and no more water must be withdrawn, measured by volume and time, than the previous use allowed. This rule is certainly a reasonable and just one, for it permits the greatest good to be derived from the use of the water. On this point the court said: "It appears from the record that the stockholders of appellant, instead of planting crops which require irrigation during the early part of the season, utilize their lands by growing crops which do not require irrigation until about August, when the direct supply through the ditches is not sufficient to furnish the volume of water necessary to irrigate such crops. And so, instead. of supplying the water to which they are entitled for direct irrigation in the early part of the season, they store this water for use later to mature crops, like beets and potatoes, which do not require irrigation until about the month of August. It would be unfortunate indeed if the law were such (3) Fuller v. Swan River Placer Min. Co., 12 Colo. 12, 19 Pac. 836; Strickler V. Colo. Springs, 16 Colo. 61, 25 Am. St. Rep. 245, 26 Pac. 313; Cache La Poudre Irrig. Co. v. Lar. & W. Res. Co., 25 Colo. 144, 71 Am. St. Rep. 123 53 Pac. 318, 10 C. L. 2013. that it could not be adapted to changed conditions resulting from the character of the crops grown by those engaged in agricultural pursuits. If water for direct irrigation can only be utilized for that purpose, the result would be to retard agricultural progress and limit the growth of agricultural products to those which can be matured by means of direct irrigation early in the season. If the judgment of the trial court should be sustained upon the theory that one owning a priority for direct irrigation may not cease to utilize it for that purpose upon crops in May, June and July, and store it for use, during the same season, thereafter, the result would be to take from the owner of such a priority his rights and confer them upon others growSuch a ing crops of a different nature. rule would make the right to the use of water dependent upon the character of crops grown, instead of upon the right to utilize it in any manner which does not injuriously affect the vested rights of others." In his response to a petition for a rehearing, Gabbert, J., states his reasons more strongly than before why the decision should stand, and more clearly defines what has been determined in the case. He says: "The arguments of counsel for appellee and amici curiae, in support of petition for rehearing for appellee, are evidently based upon an erroneous assumption of what has been determined in this case. It is contended that adjudication decrees are disturbed, and that appellant, by the decree directed,. will be rewarded an enlarged use of water represented by its purchases, both in quantity and time. It must be borne in mind that this decision is based upon the fact, which is undisputed, that the stockholders of appellant are growing crops which do not, from their nature, require irrigation during the early part of the season, but do later, and that they desire to utilize the water in controversy for this purpose. Based upon these facts we have declared, what has time and again been decided by this court, that the character and method of use of a priority to the use of water may be changed, provided such change does not injuriously affect the rights of others, and that appel lant is entitled to divert and store the water represented by the priority purchased for the use of its stockholders for application to crops later, but in no greater quantity and at no other or different time than could be diverted and applied to the land directly to nourish crops requiring irrigation at the time of such diversion; or, otherwise expressed, appellant is permitted to divert and store the water in controversy, but this right is measured and fixed by the limitations which the law would impose upon its use for diversion and application to crops requiring irrigation at the time of such diversion. This does not conflict with any previous decisions of this court; but, on the contrary, is sustained by Colorado Mill. & Elevator Co. v. Larimer & W. Irrig. Co., 26 Colo. 47, 56 Pac. 185. See Mill's Irrigation Manual, sec. 56." And, further: "Neither are any priorities disturbed; but, on the contrary, the decree directed leaves the relative rights of the parties to this appeal precisely as they were; whereas, if the judgment of the lower court should be affirmed, the result would be, where an appropriator had no use for water represented by his priorities in the early. part of the season because of the fact that he was growing crops of a character which did not require irrigation during that period, and he could not store it at that time for use upon these crops when later it was necessary to irrigate them, to take from him and give to another." Colorado Cases Distinguished.-In the case under discussion, counsel contended that it was contrary to New Loveland & G. Irrig. & Land Co. v. Consolidated Home Supply Ditch & Reservoir Co., and Ft. Lyon Canal Co. v. Chew. The court distinguishes as follows: "In the New Loveland case it was determined that the appro (4) 27 Colo. 525, 52 L. R. A. 266, 62 Pae. 366. (5) 33 Colo. 392, 81 Pac. 37. priation of water for the irrigation of lands during the irrigation season gave the appropriator no priority of right to store water during the nonirrigating season for future use. This does not conflict with the opinion in the case at bar. No right to store water during the nonirrigating season is conferred. The gist of the decision in the Chew case is, that the owner of a water right would not be permitted to do double duty. When he had applied it for the purpose for which it was appropriated, he could not loan or lease it to another for irrigation purposes; but that is not this case. The stockholders of appellant do not at once apply the water diverted; but appellant is allowed to divert and store for their use the volume of the priorities in question, which it would be entitled to divert for application by its stockholders to land directly, to mature crops requiring water at the time of such diversion, so that but one use of the appropriations in question is made, and that use does not, under the limitations we have specified, result in any greater draft upon the river than if the water had been directly applied to land at the time of diversion. The Colorado and Oregon Cases Distinguished.-It will be noticed that in the Colorado case the point is distinctly made that water can only be appropriated during the regular irrigation season, and for use later in the same season, and on land that was entitled to its use by reason of priority of appropriation. There are no side questions or exceptions or qualifications in this decision. In the Oregon case, the water was stored for use upon lands other than those for which the original appropriation was made, and which were not irrigated at the time when the subsequent appropriations were made. JOHN E. ETHEL. Colorado Springs, Colo. (6) That is, could not loan or lease it over appropriators junior to him and confer it upon other appropriators junior to those ignored, where such loaning would operate to the injury of the ignored appropriators. |