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Power OF MUNICIPAL CORPORATIONS TO RegulATE HOURS OF EMPLOYMENT.-In State v. Ray (1902) 42 S. E. 960, the Supreme Court of North Carolina declared unreasonable and void an ordinance which required barrooms, grocery and dry goods stores to close during the summer months at 7.30 P. M., except on Saturdays. The defendant in the case was the owner of a dry goods store. As the legislature had not conferred upon the municipality by its charter or by statute any special authority to pass the ordinance, the question before the court was whether an authority to regulate the closing of stores could be implied among the general incidental powers of the corporation.
Statutes limiting the hours of employment of various industries have been held constitutional in a number of jurisdictions, although, as they have differed considerably in their provisions, some have been declared void. But in considering the lawfulness of a municipal ordinance of the same nature, another factor enters besides that of constitutionality. Even though it should be granted in any particular case that the legislature might have enacted the ordinance as a general statute applicable to the whole State, the question remains whether the legislature intended to delegate its power in the matter to the municipal corporation to be exercised within its corporate limits. It is a well established principle of law that municipal corporations can exercise no powers but those which are conferred upon them by the act by which they are constituted, or such as are necessary to the exercise of their corporate powers, the performance of their corporate duties, and the accomplishment of the purposes of their association.” Shaw, C. J., Spalding v. City of Lowell (1839) 23 Pick. 71.
In every case the extent of these powers, whether expressly granted, implied, or indispensable to the purposes of the corporation, is a question of construction. If there is a reasonable doubt, caused by the terms used by the legislature in its grant of power, as to the presence or absence of a particular power, the ordinance is to be strictly construed, and the doubt is to be resolved in favor of the public and against the corporation. This rule of construction is especially necessary when the ordinance abridges a common or natu•ral right. Dillon, Mun. Corp. 4th Ed. $$ 89, 91, 325.
The conclusion reached by the court after an application of this fundamental rule of the law of municipal corporations to the facts as presented in State v. Ray was undoubtedly correct. If an incorporated municipality should be permitted, without special authority, but as one of its general incidental powers, to regulate, within its corporate limits, the hours of employment of legitimate industries, it is difficult to see where the line would be drawn between the powers reserved by the legislature and the implied powers of the municipality. These powers are not coextensive. In Leonard v. City of Canton (1858) 35 Miss. 190, the court said: “The power of the corporation is merely something added as to the particular locality to the general powers of government; or, in other words, it is special jurisdiction, created for specific purposes, and like all such jurisdictions, it must be confined to the subjects specially enumerated.'
Under the clause contained in most charters giving the corporation power to make regulations “for the better government of the
city," ordinances closing stores on Sunday, or saloons at certain hours at night, have been generally upheld when they did not conflict with State laws on the subject. St. Louis v. Cafferata (1856) 24 Mo. 94; Morris v. City Council of Rome (1851) 10 Ga. 532. But to permit the municipal authorities to determine the hour of closing shops on week days would be a wide extension of the police powers of the corporation which the courts have not as yet considered reasonable or necessary. The only case which seems in any degree to support the validity of the ordinance in question is State v. Freeman (1859) 38 N. H. 426, where an ordinance prohibiting restaurants from being kept open after 10 P. M. was held a reasonable regulation authorized by the general welfare clause of the charter. In Barbier v. Connolly (1884) 113 U. S. 27, and Soon Hing v. Crowley, Ib. 703, the Supreme Court upheld an ordinance prohibiting washing and ironing in public laundries from ten o'clock at night until six in the morning. The reasonableness of the ordinance appeared in the fact that it was necessary as a fire regulation for the protection of the city; local conditions justified the measure. But in State v. Ray no conditions peculiar to the town, as distinguished from the rest of the State, made it necessary, for the sake of the public health or welfare, to interfere with the free enjoyment of private property by passing an ordinance closing all stores at 7.30 in the evening. In determining the reasonableness of an ordinance “the court will have to regard all the circumstances of the particular city or corporation, the objects sought to be attained, and the necessity which exists for the ordinance." Dillon, Mun. Corp. 4th ed. $ 327.
CORPORATIONS-LEGAL CONTROL WITHIN THE MEANING OF STATUTE. - In view of the present-day statutes prohibiting mergers of competing quasi-public corporations an instructive decision is Chicago Union Traction Co. v. City of Chicago (III. 1902) 65 N. E. 470. A municipal ordinance required the giving of transfers where one street railway “controlled, owned, leased or operated" another. An action for the penalty imposed being brought against the Union company for failure to issue transfers over the Consolidated lines, it appeared that the stock of the latter was held in trust for the stockholders of the former, whose president was empowered to designate the proxies who should vote thereon. The corporate existence of the Consolidated company was not surrendered, but the Union company, through its president, had complete domination of its directorate. The two companies were operated practically as one. Under these circumstances the defendant was adjudged to have control of the Consolidated company within the meaning of the ordinance. Among the authorities cited by the defence that of Pullman Co. v. Missouri Pacific Ry. Co. (1885) 115 U. S. 587 most troubled the court. There the railway had contracted to run only Pullman cars on all roads it should "control by ownership, lease, or otherwise.” It had purchased practically all the stock of the Iron Mountain Ry., whose line it operated as part of its own system through its elective power over the directorate. This, however, was held not to be legal control, and hence the contract was not applicable to the Iron Mountain road.
The only distinguishing principle between these cases is one of construction. And this was the argument most convincingly urged by the Illinois Court though, it must be confessed, without complete satisfaction to the technical mind. The Pullman case was one of contract. Parties are free to word an agreement as they wish. They may expressly include a case of beneficial ownership in its operation. Since they failed to do so no public policy argued against the application of legal principle. The governing power of a corporation is the board of directors. When that body remains extant it is difficult to see how there can be legal control unless the board is at all times subject to the controller's orders. If one's power over corporate acts arises merely from ability to select the directors at the regular elections he does not have such legal control of the entity. His influence is merely persuasive. He has no legal right to have his orders obeyed. That is precisely the position of the majority stockholder. Our most frequently quoted work on corporations has proved the source of great confusion in the decisions by saying: The existence of a corporation independent of its shareholders is a fiction. Its rights and duties are in reality the rights and duties of persons who compose it, and not of an imaginary being." MORAWETZ, Private Corporations, 2nd. ed. $$ 1,227. It is utterly destructive in theory and confusing in practice to hold the majority stockholder for any purpose to be the corporation. See, for such a decision, San Diego Gas Co. v. Frame (Cal. 1902) 70 Pac. 295. And to say that he has legal control of the entity is hardly less erroneous.
But the decision at issue did not involve a contractual obligation. The question was as to the application of a legislative enactment imposing a public duty. True, it might be well for legislators to expend upon the framing of laws something of the acumen which is exercised by those to whom they are applied. Nevertheless there is ground for the distinction set up by the Illinois Court. It urges with considerable strength that the duty rests “not merely upon the technical owner, but upon the real beneficial owner.”. Certainly the defendant was that, even though it did not have the legal control. In opposition to the result reached is Atchison etc. Ry. Co. v. Cochran (1890), 43 Kan., 225. But the weight of authority seems in its favor, courts appearing reluctant to effectuate the theories of corporation law where they discern a practical evasion of a public duty, Stockton v. Central Ry. Co. (1892), 50 N. J. Eq., 52; id., 50 N. J. Eq., 489; Pennsylvania R. Co. v. Commonwealth (1886), 29 Am. & Eng. R. R. Cas. 145.
Definitions of Falsk PRETENCES AND CHEATING IN Jury InSTRUCTIONS. — The inception and the development of the statutory offence of obtaining money by false pretences and the distinction between that offence and the common-law crime of cheating are suggested by apparently conflicting charges to juries in two recent cases, one in New York and the other in Delaware, on the question, whether or not, in order to convict the accused, it was necessary to show that the offence was of a nature, not only to deceive the particular individual, but was one against which common prudence and
care would be insufficient to guard. The People v. Ozboda (1903) N. Y. Law Jour. Jan. 15.
State v. Hood (1901) 53 Atl. 437. There are two constituent parts of the offence of cheating at common law; first, the act itself must affect the public; secondly, it must be one against which common prudence could not have guarded. Young v. Rex (1789) 3 T. R. 98; 1 Hawk. P. C. c. 71; Cross v. Peters (1821) 1 Greenl., 343. The close relation of these two elements of the offence appears clearly in the distinction between the offences indictable at common law and those not indictable, made by Justice Wilmot in Rex v. Wheatley (1761) 2 Burr. 1125. The requirement that the act by which the individual was imposed upon must be one which was or might be general in its operation naturally gave rise to the limitation contained in the common care and prudence branch of the rule. The individual who suffered through his own credulity or weakness was held remitted to his civil remedy. Commonwealth v. Warren (1809) 6 Mass. 72; Rex v. Wheatley, (supra). The difficulty of establishing a satisfactory standard of mental capacity, endowed with the requisite prudence and caution to shield against varying forms of fraud and the fact that it was oftenest the weak and credulous individual who was the victim of a pretence which in no way affected the public at large are assigned as the reasons which led, at an early date to legislation having in view the protection of the weaker and more credulous individual. Reg. v. Wickham (1839) 10 Ad. & E. 34; Young v. Rex (supra); Bowen v. State (1876) 9 Baxter (Tenn.) 45; The People v. Summers (1898) 115 Mich. 537; Commonwealth v. Wilgus (1826) 4 Pick., 177; The People v. Johnson (1815), 12 Johns., 292.
The statutes dispensed with the requirement that the act must affect the public and made all private frauds indictable. The first of these enactments was that of 33 Hen. VIII., c. 1, which made it an offence to cheat with privy tokens, but did not affect those cases against which common prudence would be a sufficient security. This was followed by the sweeping enactment of 30 Geo. II., c. 24, which added every kind of false pretence by which money, goods or chattels were obtained. Although the common-law rule was early recognized and applied in this country (The People v. Babcock (1810), 7 Johns., 200; Commonwealth v. Warren, supra), the statute of 30 Geo. II., c. 24 was enacted in New York in 1813 (2. R. S. 677, Sec. 53; People v. Stone (1832) 9 Wend. 182), in Massachusetts in 1815 (Comm. v. Wilgus, supra) and is the basis of such statutes in almost all the States of the Union. Under these statutes the courts have recognized the abolition of the second element of the commonlaw crime, together with the first, by laying down the rule that, in order to convict, it is only necessary to show such a fraudulent representation of fact, past or existing, by a person who knows it to be untrue, as is adapted to induce the person to whom it is made to part with something of value. State v. Lynn (Del. 1901), 51 Atl., 878. The Court says: “Such false pretences may consist of an act, word, symbol or token calculated to deceive another.” See State v. Bowen supra.
In People v. Oyer & Term. (1881) 83 N. Y. 436, at 449, it is laid down that the pretences need not be such as are calculated to mis
lead ordinary prudence and caution; that the statute is intended to protect the weak and credulous as well as the careful and intelligent, and since the materiality and influence of the pretence is for the jury to determine from the evidence (Thomas v. People (1866) 34 N. Y. 351) the pretences must be such only as are calculated to deceive, leaving that to be determined from the circumstances of each particular case. This is the established New York rule and has been questioned in but two cases (The People v. Williams (1842) 4 Hill, 9, and The People v. Stetson (1848) 4 Barb. 51), which held to the ordinary care and prudence rule where the fraud arose out of a transaction unlawful in itself and in which the complainant participated. These cases, so far as they are in conflict with the general rule, have been expressly overruled by those first above cited. The charge, therefore, to the jury in the first of the principal cases is correct under the New York statute, and is in accord with the interpretation put upon it by the courts.
Delaware has also enacted a statute against false pretences (Rev. Code, p. 967) modeled upon 30 Geo. II, C. 24, and were it not for the fact that the old common-law offence of cheating by false tokens, as defined in the statute of 33 Hen. VIII, c. 1, is retained in that State (Rev. Code, Del. (1874) C. 132, sec. 6), it seems that the instruction to the jury in the second of the principal cases must have been
This conclusion is fortified by the case of State v. Lynn, (Del. 1901) 51 Atl. 878, where the same judge, (LORE, Ch. J.), in the same court, one month later, lays down the broad general definition quoted from that case above, without any mention of the ordinary care and prudence rule, and the rule there laid down (q. v.) would seem to be broad enough to include such a case as the one under discussion, i, e., a cheat or fraud by privy token.
The charge to the jury in the Delaware case, stating the common law rule, may be accounted for by the fact that the statute created a new offence. It included the old, it is true, but the latter is saved by the statute providing that cheating shall be a misdemeanor.
LIABILITY OF Master FOR WILLFUL AND WANTON ACTS OF SERVANT. -The Supreme Court of Wisconsin, in the recent case of Euting v. Chicago & N. W. R'y. Co. (1902) 92 N. W. 358, has held that a railroad corporation must respond in damages for injuries inflicted upon a child as a result of an engineer's wantonly placing a torpedo upon the track and running over it with the object of frightening the child. The court places the master's liability on the ground that the scope of the servant's employment included the safe custody of the explosives.
The liability of a master for acts of his servant seems originally to have been limited strictly to acts in execution of the master's will : Southern v. How (1618) Cro. Jac. 468; Kingston v. Booth, (1685) Skinner, 228. The doctrine of implied authority makes its appearance in Turberville v. Stamp (1697) Ld. Raymond 264. The distinction between a master's liability for negligence and for willful or wanton acts of his servant seems to rest on slight authority. Middleton v. Fowler (1698) Salkeld 282, simply says that no master is