any loss sustained by reason of loans to the minor which he has verbally promised to see repaid, on the ground that he has been guilty of a breach of trust: Brown v. Farmers' & Merchants Natl. Bank of Cleburne, 31 S. W. Rep. 285.

Water Company, Breach of Contract,

Liability for

Loss by Fire

In House v. Houston Waterworks Co., 31 S. W. Rep. 179. the Supreme Court of Texas, affirming the decision of the Court of Civil Appeals, (22 S. W. Rep. 277.) has ruled: (1) That a water company which has made a contract with a city to furnish water to extinguish fires, is not liable to the owners of private property destroyed by fire through its failure to furnish water according to the contract; (2) That the breach of the contract to furnish water does not render the company liable in tort for the destruction of private property by fire; and (3) That when a water company contracts with a city to furnish water to extinguish fires, it does not undertake a public duty which will render it liable for the destruction of private property on breach of the contract by failure to furnish water.

The owner of property which has been destroyed by fire cannot maintain an action to recover damages from a water company, on the ground that the property was destroyed by the failure of the water company to furnish a supply of water as required by the terms of its contract with the town, since there is no priority of contract between the parties to the action : Nickerson v. Bridgeport Hydraulic Co., 46 Conn. 24; Fowler v. Athens City Waterworks Cò., 83 Ga. 219; S. C., 9 S. E. Rep. 673; Fitch v. Seymour Water Co., (Ind.) 37 N. E. Rep. 982; Davis v. Clinton Waterworks Co., 54 Iowa, 59; S. C., 6 N. W. Rep. 126; Eaton v. Fairbury Waterworks Co., 37 Neb. 546; S. C., 56 N. W. Rep. 201; Wainwright v. Queens Co. Waterworks Co., 28 N. Y. Suppl. 987; S. C., 78 Hun, (N. Y.) 146; Beck v. Kittanning Water Co., (Pa.) 11 Atl. Rep. 300; Foster v. Lookout Water Co., 3 Lea, (Tenn.) 42; Britton v. Green Bay & Ft. Howard Waterworks Co., 81 Wis. 48; S. C., 51 N. W. Rep. 84. Nor does the fact that the ordinance granting the franchise requires the company to supply the city and its inhabitants with sufficient water to put out fires, or to main

tain the water at a certain pressure, create the necessary priority of contract: Fowler v. Athens City Waterworks Co., 83 Ga. 219; S. C., 9 S. E. Rep. 673; Eaton v. Fairbury Waterworks Co., 37 Neb. 546; S. C., 56 N. W. Rep. 201; Britton v. Green Bay & Ft. Howard Waterworks Co., 81 Wis. 48; S. C., 51 N. W. Rep. 84. Not even a statute, requiring the pipes to be kept charged at a certain pressure, will give the right of action; Atchison v. Newcastle & Gateshead Waterworks Co., 2 Exch. Div. 441, reversing 6 L. R. Exch. 404.

The owner cannot maintain an action, even though the city has raised by taxation a special fund, to which the plaintiff contributed, to pay for a sufficient supply of water for use in case of fire: Becker v. Keokuk Waterworks, 79 Iowa, 419; S. C., 44 N. W. Rep. 694; or though the citizens pay a special tax to the company, under its contract with the city: Howsmon v. Trenton Water Co., 119 Mo. 304; S. C., 24 S. W. Rep. 784.

A municipality has no power to contract by ordinance or otherwise with an individual or company, to indemnify a citizen and taxpayer for damages which he may sustain by reason of a failure to furnish water as provided in the contract, so as to enable the citizen to maintain an action therefor in his own name; nor is such power conferred by a statute authorizing cities to contract for the building and operation of waterworks by individuals or companies: l'anhorn v. City of Des Moines, 63 Iowa, 447; S. C., 19 N. W. Rep. 293; Becker v. Keokuk Waterworks, 79 Iowa, 419; S. C., 44 N. W. Rep. 694; Mott v. Cherryvale Water & Mfg. Co., 48 Kans. 12; S. C., 28 Pac. Rep. 989; Phænix Ins. Co. v. Trenton Water Co., 42 Mo. App. 118.

Further, a municipality has no such interest in the property destroyed as to give it a right of action against the water company, and therefore the owner of the property destroyed cannot maintain an action against the company as assignee of the right of action of the municipality: Ferris v. Carson Water Co., 16 Nev. 44.

But, under the Civil Code of Kentucky, § 18, which requires that every action must be prosecuted in the name of the real

party in interest, it has been held that when the contract of a water company with a city declares that it is made for the benefit of the inhabitants, and, inter alia, for the protection of private property against destruction by fire, the owner of property which is taxed for water-rent, and is destroyed by fire through the failure of the company to supply a sufficient quantity of water to extinguish the same, may, in his own name, sue the company on its contract with the city: Paducah Lumber Co. v. Paducah Water Supply Co., 89 Ky. 340; S. C., 12 S. W. Rep. 554: Duncan v. Owensboro Water Co., (Ky.) 12 S. W. Rep. 557.

The omission to furnish water to extinguish fires does not authorize the owner of property destroyed thereby to maintain an action of tort, since a mere breach, by omission only, of a contract entered into with the public, is not a tort, either direct or indirect, to the private property of an individual: Fowler v. Athens City Waterworks Co., 83 Ga. 219; S. C., 9 S. E. Rep. 673.

Wills,

Legacy Payable in futuro, Accumula

tions

The House of Lords has recently elaborated the principles laid down in Saunders v. Vautier, 4 Beav. 115; S. C., Cr. & P. 240, to the effect that (1) When in a will there is an absolute vested gift made payable at a future event, with directions to accumulate the income in the meantime and pay it with the principal, the courts will not enforce the trust for accumulation in which no person has any interest but the legatee, i. c., that a legatee may put an end to an accumulation which is exclusively for his benefit; (2) This rule is as applicable when the legatee is a charity, corporate or unincorporate, as when he is an individual; and (3) When such an accumulation is directed for more than twenty-one years from the death of the testator, and is not effective, for the reason given above, the Thelluson Act, (39 & 40 Geo. 3, c. 98,) prohibiting indefinite trusts for accumulation, does not apply: Wharton v. Masterman, [1895] A. C. 186, affirming [1894] 2 Ch. 184.

When a testator devises and bequeathes his entire estate to

Trust,

trustees, to collect the income therefrom, and divide the net income in specified proportions among his children Construction for their respective lives, and, at the death of each child, gives and devises a specified portion of the corpus of the estate to the child or children of that deceased child, or, and in event of there being none, then to others, the implied intention is that, upon the death of each child, the estate which the trustees formerly had in that portion of the corpus which was given to the child or children of the deceased child, or to others in case there should be no child, should cease and determine, and that that portion of the corpus should vest in the parties entitled thereto, free from the trust: Roarty v. Smith, (Court of Chancery of New Jersey,) 31 Atl. Rep. 1031.

BY THE SUPREME COURT OF THE

UNITED STATES.

By GEORGE WHARTON PEPPER, Esq.

II. RIGHTS OF STOCKHOLDERS AND CREDitors in the PropERTY OF THE CORPORATION.

2

In the May Number of the AMERICAN LAW Register and REVIEW an attempt was made by the writer to state the result of recent decisions by the Supreme Court of the United States upon the subject of Corporate Power. The decision in Central Transportation Company v. Pullman's Palace Car Company was examined, and attention was called to certain difficulties in the way of harmonizing some of the views expressed in that case with other decisions by the same Court. It is now proposed to give some consideration to the problems which, in constantly increasing numbers, are being presented to the Court for solution in cases concerning the rights of stockholders and creditors of insolvent corporations.

The ears of the American lawyer have grown accustomed to the assertion that the capital stock of a corporation is a trust fund for the payment of debts. He has heard this trust fund doctrine referred to with pride as an American doctrine and there are not wanting those who find in this circumstance a stimulus to patriotic sentiment and a reason for self-congratulation.3 There seems to be something in the thought of a trust fund for the benefit of creditors which arouses within the lawyer's breast a feeling of legal chivalry; and more than one distinguished judge has become a knight-errant in the service 1 34 AM. L. REG., page 296.

1 139 U. S. 24.

'E. g., Judge SEYMOUR D. THOMPSON: 27 Am. Law. Rev. 846. Judge THOMPSON to some extent modifies his expressions upon this subject in ¿2953 el. seq. of his recently published Commentaries on Corporation Law.