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Correspondence. To the Editor:

The successful public accountant, in the practice of his profession, is not and can not be confined to a limited area or a certain State. He has clients in all of the States and must serve them wherever they are.

Members of the profession have banded themselves together in their respective States and by hard work, perseverance, the loss of their own valuable time, not to speak of the necessary expenses incurred, have succeeded in a number of States in having C. P. A. laws passed. These laws, while aiming for the same result, differ in some respects as to certain details. There seems to be a tendency to bar out Certified Public accountants of one State who wish to practice as such in another State, and for that reason I pointed out years ago the advisability of having a reciprocity clause inserted, or amendments to existing laws passed in the different States.

At the time I was roundly scored by those who either were not broadminded enough or who seemingly suffered from a case of exaggerated ego. Since then, I am glad to note, several States have embodied this clause in their C. P. A. laws, New Jersey having been the first one. This is a distinct step forward in the right direction.

A number of attempts have been made to obtain federal recognition and, some years ago, that recognition would have come to the members of the accounting profession had they themselves given the necessary support. Conditions have changed somewhat since then and there appears to be now another way open for federal recognition under the present interpretation by Congress or the Federal Government of the Interstate Commerce clause in the constitution. The words, the right to “regulate commerce among the States” have probably given rise to more doubt among statesmen, and to more construction by the courts, than any other phrase in the constitution. As to what the framers of this phrase meant by it, opinions differ greatly and we need not concern ourselves with that.

Under the present broad construction, Congress would have “power to regulate, forbid or tax interstate commerce,

* that the word commerce' includes not only goods in transit but all articles, crops, or manufactures which may ultimately become the subject of such commerce, and all instrumentalities of such commerce, physical or documentary,

* * * * * that the right to regulate further includes not only the regulation of the goods or articles, but of the persons who conduct the commerce and hence of their charges or even their profits.”

Under this broad construction of the power the control of nearly all the commercial affairs will be put into the hands of Congress or the Federal Government and if the case of the professional accountant is properly presented and supported, he too is bound to receive Federal recognition.

Yours very truly,


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Conducted by ALEXANDER MCCLINCHIE, of the Now York Bar. The purpose of this department is to present from month to month short, critical summaries of recent decisions, which affect accountants, and to furnish accurato information on legal questions. Inquiries from our readers will be welcome and will receive prompt attention.

Notes of Recent Cases.

MYERS vs. STURGES, 123 N. Y. App. Div., 470.—Although it is undoubted law that in the absence of special provisions a corporation cannot recover the full amount on subscriptions to its stock unless the entire capital has been subscribed, a different rule obtains where the assessment is levied to cover the cost of organization. The rule as stated is unfounded in principle, however, and the court seems to have been influenced by an older case, which can be easily distinguished from the present case. In the earlier case special provisions in the charter were noticed by the court to justify their decision. In that case payment of the assessments before all the stock was subscribed for was enforced because of a special contract contained in the charter and not because of any principle of law.

Insurance: In the case of HIPP vs. FIDELITY Mut. L. Ins. Co., Georgia, it was held that the fact that at the time when a provision note fell due the insured was sick and unable to attend to business, and so remained until he died, is no defense against a forfeiture of the policy for non-payment in accordance with the express terms contained in the policy and in the premium note.

In GERMANIA FIRE INs. Co. vs. WERNER (12 L. B. A., 456) the court held that the right to recover on a fire insurance policy for loss which occurred while the building was vacant, of which fact the insurance company had no knowledge is denied when the policy provides that, if the building shall become vacant, unoccupied or uninhabited without the consent of the insurer, the policy shall be void.

Chattel Mortgage.-In NATIONAL BANK OF COMMERCE VS. Jones (12 L. R. A., 310) it was held that the lien of a prior valid recorded chattel mortgage takes precedence over the subsequently acquired lien of a liverystable keeper upon animals placed in his charge, unless the animals were delivered to the livery-stable keeper to be kept and cared for by him with the consent of the mortgagee of record.

Brokers' Fees: Bowe vs. GAGE (12 L. R. A., 265).-An owner of certain property agreed to pay a broker a certain fee if he would sell some property at a certain price. The broker obtained for him an offer at a slightly lower figure. The owner informed him that he would keep the property himself and settle with the broker for a nominal consideration. After this he negotiated a sale of the property with the same customer for a sum, greater than the amount stipulated. The court held that in this case the owner is liable for the sum promised the broker.

Carriers-Marks on goods.-HANNA vs. Pitt & Scott (121 App. Div., 420). The Steamship Line were deceived by the marking on certain goods, which were by mistake or through intention marked 9,000 lbs. instead of 19,000 lbs., the true weight, and the planks prepared for the landing of the goods gave way, injuring one of the crew. The Steamship Company was compelled to pay damages and brought suit against the owner of the goods. Judge Hooker held that “no duty rested upon the defendant to declare the weight, inasmuch as the carrier might readily have determined it."

The rule appears to be that the consignor is only liable for statements concerning the nature and character of the goods shipped, such as a statement that they are or are not explosives.

Rights to Corporate Name. The value of no kind of property has in recent years increased in value more rapidly than the names of corporations. A corporation spends enormous sums in advertising a certain product and familiarizing the public with illustrations on which are stamped the trade name. The result is that these names often become household words and are more valuable to the corporation than any other asset.

The exclusive right of a corporation to its name has been the subject of much litigation in recent years.

Blackwell's Durham Tobacco Co. attempted to restrain by injunction the American Tobacco Co. from using its corporate name. The court refused to grant the injunction on the grounds that a domestic corporation does not acquire by the adoption of a corporate name the exclusive right to use the same and it has no property right in the name such as will be protected by injunction.

Courts in settling the question of the right to a corporate name have reasoned from the analogous case of trade-marks, and have uniformly decided that usage only is to be considered in determining the rights to a corporate name. This brings up the ever recurring question, what is a sufficient user, over which courts and juries have wrangled for years. Although usage is considered chiefly in determining the ownership of corporate names, yet the courts have recognized that priority in the name of the corporation gives some advantage.

Where one litigant is a foreign and the other a domestic corporation the public policy of the states dictates that the domestic corporation is to be protected as far as possible. The principle of public policy is carried so far in some states that a foreign corporation has no standing in domestic courts. If the court feels itself bound by the rigid rule of law, perhaps the best way to further the public policy of the state would be to pass a statute prohibiting a foreign corporation from doing business in a state under a name the same as or similar to one by which a domestic corporation has been chartered and giving to the domestic corporation a right to injunction in accordance with the statute.


C. P. A. Question Department.

CONDUCTED BY LEO GREENDLINGER, B. C. S. Criticism and exchange of ideas will clear many a doubt and at the same time improve shortcomings. To solve, compare, and criticise C. P. A. problems, and thereby to aid in bringing about a uniform American standard for C. P. A. examinations, is the object of this department. With the aid of suggestions and criticism from the professional brethren, it can undoubtedly be achieved. Inquiries will be cheerfully answered.

Following are the third problems in Practical Accounting, set by the State Boards of Accountancy of the States of New York and Illinois, respectively, in the 1903 examinations, with solutions :

NEW YORK, JUNE 23, 1903. John Doe died January 15, 1901, leaving a small estate, and in his will made Richard Roe his executor. The will provided that a legacy of $5,000 should be paid to Mary Doe, sister of the testator, and that the residuary estate should go to the testator's wife and two daughters, share and share alike. The estate consisted of the following: Cash in the Dime Savings Bank....

One month's salary (due the testator from his

10 Union Pacific R. R. Co's. first mortgage 5 per cent.
gold bonds of $1,000 each..

One first income bond, Central R. R. of Georgia. 1,000.00
Demand note of John Smith...

At his death the testator owed two months'

$50.00 Acker, Merrall & Condit, household supplies.. 81.50 The appraiser appointed by the Surrogate inventoried all securities and accounts due the estate at their face value.

The executor received $348.50 from the Dime Savings Bank, with $14.25 interest. He sold the Union Pacific bonds at 102 and two months' interest, the Central of Georgia income bond for $875 flat, and paid M. J. Senior, undertaker, $541 for funeral expenses; Arnold, Constable & Co., $185 for mourning apparel of widow and children. He also paid for legal and other expenses incidental to the probating of the will, $125. John Smith was bankrupt, and his note proved to be worthless. The executor deducted his commission and distributed the funds of the estate according to the terms of the will.

From the above statement of facts prepare (a) the executor's inventory of the estate, (b) the executor's summary statement and schedule for presentation to the surrogate's court in final accounting, (c) a statement of the account of commissions to which the executor was entitled, (d) a statement of the amounts paid to each beneficiary.

ILLINOIS, NOVEMBER 2 AND 3, 1903. Brown and Jones begin a partnership business January 1, 1902. At the time of closing the books, December 31, 1902, an examination of the account revealed the following:


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paid in.

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January 1, Brown paid in.

May 1,

June 1,
drew out.

September 1,

2,000.00 October 1, paid in.

January 1, Jones paid in..

March 1,
drew out.

May 1,

1,200.00 June 1,

1,500.00 October 1,

3,000.00 Their Merchandise Account was Dr. $32,000, Cr. $27,000. Balance of Merchandise on hand per inventory, $10,500. Cash on hand, $4,900. Bills Receivable, $12,400. Chas. Green owes on account $250; F. Draper owes $700; Wm. Clark owes $650; F. Hart owes $850. They owe on their notes $1,890. They owe A. Reed on account $240; owe C. Smith $500; owe A. Clark $100. Their Profit and Loss Account shows before closing, entries, Dr. $866; Cr. $1,520; Expense Account is debited $2,520. Commission Account is Cr. $2,760; Interest is debited $480; Cr. $950. The gain or loss is to be divided in proportion to each partner's capital, and in proportion to the time it was invested.

Prepare (1) Asset and Liability Statement; (2) Merchandise Account closed; (3) Profit and Loss Account closed; (4) each partner's account closed; (5) Balance Sheet.

SOLUTION. Statement of the Inventory of the executor of the estate of John Doe, who died January 15, 1901. Cash in Dime Savings Bank....

Salary due testator....

10 shares Union Pacific R. R. first 5 per cent Gold
Bonds at $1,000...

i Income Bond Central R. R. of Ga.

1,000.00 Notes Receivable (John Smith)..


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