EDITORIAL DEPARTMENT emption is not in truth and ought never to be considered the equivalent of an intention not to form the relation which the law regards as that of partnership. It is the failure to dis tinguish between these two intentions and con sequent confusion of thought that have led so many judges to hold that defectively incor porated associations are not partnerships." He finds that in almost all jurisdictions the exemption from partnership liability is lim ited to cases where incorporation has gone so far as to form what is called a de facto corpora tion. Massachusetts, however, seems to go even farther. CORPORATIONS (Stockholders). " The Issue of Corporate Stock for Property Purchasett — A New Phase," by Leonard M. Wallstein, in the January Yale Law Journal (V. xv, p. in), discusses the familiar rule of corpora tion law embodied in the New Jersey statute, that " in the absence of actual fraud in the transaction the judgment of the directors as to the value of the property purchased shall be conclusive." He explains that this was really only the statement of the common law of New Jersey as it existed prior to the statute, and that the doctrine was essential to relieve business men from the dangers incident to applying the stricter doctrine of some states allowing recovery of the difference between the price as paid in stock and the fair value of the property purchased. The more liberal rule has been availed of by promoters for the purpose of stock watering, since the question of value is entirely a matter of opinion, and most courts have regarded the mere fact of over valuation as no evidence of actual fraud except in the most extreme cases. The ques tion now arises whether the customary method of the corporation shops of having the prop erty valued by a board of dummy directors who know nothing about it except what they are told is a compliance with the statute. The author contends that while this of itself is not actual fraud within the meaning of the statute it is not a " judgment." "By ' judgment ' all who use the term mean the conclusion reached by one who takes the attitude of a judge, that attitude implying, first, knowledge of or acquaintance with the matter to be judged, and secondly, collation of and deliberation upon the various elements
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of fact upon which a conclusion must be based." He insists that the word " judgment " is important and should be given its proper meaning. "Accordingly, in the hypothetical case, evi dence tending to show that the directors were ' dummies ' is admissible, and on proof of that fact complainant should recover. But let this be clearly understood. The ground of complainant's recovery is not, that by fail ing to exercise their judgment the directors were ipso facto guilty of actual fraud. That is not the contention. The contention is, that in order to make the action of the directors in taking property for stock conclusive, two re quirements must under the statute have been fulfilled — namely, an exercise of judgment must have been present and actual fraud must have been absent; that failure to satisfy either of the requirements renders the stockholder liable, and that in the case under considera tion the stockholder is liable because the former was not satisfied. "In conclusion, it may be well to point out that, if the contention that the statute re quires the directors to act in a judicial capacity in order that their action in exchanging stock for property may be conclusive is sound, it follows, since no man may be the judge in his own cause, and since this maxim applies not only to judges eo nomine but also to all persons exercising judicial functions, that, even though the ' dummy directors ' did come to a judg ment, properly speaking, such judgment, if they were ' dummies ' in the true sense of the term, is not conclusive, because they were the creatures of one of the parties interested in the matter to be judged." CORPORATIONS (see Constitutional Law).
CRIMINAL LAW (Capital Punishment). In the December Virginia Law Register (V. xi, p. 625), William E. Ross discusses " The Death Penalty — Reasons for its Abolition," and forcefully states the familiar arguments that the death penalty not only does not attain the purposes of criminal punishment but actually prevents their attainment by serving as an incentive to the morbid vanity of criminals, and reducing the certainty of punishment, owing to the dislike of juries to convict where the punishment is death. Much
