Inconceivable

There is some confusion about whether this subsection begins, “A corporation shall have power to indemnify ...” or “A corporation may indemnify ...”. As originally enacted, § 145(a) contained the phrase “shall have power”. 56 Del. Laws 50, § 1 at 170 (1967). According to the annotations in the Delaware Code Annotated (and confirmed by a review of the legislative records since 1967), § 145(a) has never been amended. See 8 Del.Code Ann. tit. 8, § 145(a) (1991 & 1995 Supp.).

Nevertheless, the Delaware Code Annotated, a private compilation by the Michie Company of all Delaware legislative acts, at some point began using the phrase “may” in place of “shall have power”. See 8 Del.Code Ann. tit. 8, § 145(a) (1974). We have not been able to explain this non-legislative change in statutory language. The Delaware Corporation Law Annotated, published by the Corporation Trust Company, continues to use the phrase “shall have power”. Del. Corp. L. Ann. § 145(a) (20th ed. Corp.Trust.Co.1991).

One treatise uses the phrase “shall have power”, see Ernest L. Folk, III, et al., Folk on the Delaware General Corporation Law at 145:1 (3d ed.1994), while another uses “may”. See 5 R. Franklin Balotti & Jesse A. Finkelstein, The Delaware Law of Corporations and Business Organizations at 100 (1990 & 1993 Supp.) (“Balotti & Finkelstein”). The parties to this appeal perpetuate the confusion: their joint appendix contains a version of § 145(a) that says “shall have power”, but one of the briefs quotes a version that says “may”.

When there is a conflict between an original enactment of the Delaware Legislature and the codification of the law, the original enactment controls. Elliott v. Blue Cross & Blue Shield, 407 A.2d 524, 528 (Del.1979); Kimmey v. Farmers Bank, 373 A.2d 569, 570 (Del.1977). We therefore employ the Legislature's version of § 145(a), which says “shall have power”.

Waltuch v. Conticommodity Servs., Inc., 88 F.3d 87, 90 n.6 (2d Cir. 1996) (discussing what 8 Del.Code § 145(a) actually says).

"Bargain and Sell"

One invariably sees the phrase "A bargains and sells to B" in deeds. Equally invariably, nobody handling such a deed can explain why the deed says "bargain and sell." Because they do not understand the words, having never bothered to learn the nature, purpose, or origin of their presence, people simply assume they are superfluous. It is fashionable in many circles to deride such phrasings as merely an abundance of surplusage.

Au contraire. The Georgia Supreme Court explains:

Blackstone says of the deed of bargain and sale, that it “is a kind of real contract, whereby the bargainor, for some pecuniary consideration, bargains and sells, that is, contracts to convey, the land to the bargainee, and becomes by such a bargain, a trustee for, or seized to the use of, the bargainee: and then the statute of uses completes the purchase; or, as it hath been well expressed, the bargain first vests the use, and then the statute vests the possession.” (2 Black. Com. 338.) So, Cruise says; “The proper and technical words of this conveyance, are, “bargain and sell;” but any other words that would have been sufficient to raise a use upon a valuable consideration, before the statute, are now sufficient to constitute a good bargain and sale.”

Dudley’s Lessee v. Bradshaw, 29 Ga. 17, 22–23 (1859). 

Thus, the contract for the sale of land was the bargain, which created (as it still does) an equitable title in the purchasor. The sale was the legal result, created by the Statute of Uses (27 Hen. VIII c. 10), that followed, of the legal title vesting in the purchasor as a result of the bargain. So the words are not surplusage: they describe the conveyance of two different rights, distinguishing a deed from a trust instrument. Once again, our ancestors prove that they were more intelligent than we like to believe.

 

Stradivarius, Doyle, and the Restatement

Law school exams are notorious for predicating questions about the legal ramifications of certain acts on events from the news, films, or literature, not infrequently amplified to provide more shocking details. It appears that the editors of the Restatement (Second) of Torts were not above showing their professorial stripes.

6. A is a violin expert. He pays a casual visit to B's shop, where second-hand musical instruments are sold. He finds a violin which, by reason of his expert knowledge and experience, he immediately recognizes as a genuine Stradivarius, in good condition and worth at least $50,000. The violin is priced for sale at $100. Without disclosing his information or his identity, A buys the violin from B for $100. A is not liable to B.

Restatement (Second) of Torts § 551 cmt. k, illus. 6.

We had a pleasant little meal together, during which Holmes would talk about nothing but violins, narrating with great exultation how he had purchased his own Stradivarius, which was worth at least five hundred guineas, at a Jew broker's in Tottenham Court Road for fifty-five shillings. This led him to Paganini, and we sat for an hour over a bottle of claret while he told me anecdote after anecdote of that extraordinary man. The afternoon was far advanced and the hot glare had softened into a mellow glow before we found ourselves at the police-station. Lestrade was waiting for us at the door.

Sir Arthur Conan Doyle, "The Adventure of the Cardboard Box" in The Memoirs of Sherlock Holmes (1894).

To Save for Later

An interesting situation: A state probate court's final and unappealable ruling modifying a testamentary trust so as to qualify as a valid QTIP trust for marital deduction purposes does not preclude a federal court from making an independent determination of the state property laws, as the probate adjudication was not a decision by the state's highest court. Thus, the federal court can hold that the probate court's modification is not valid and that the trust is not a QTIP. Estate of Rapp v. Commissioner, 140 F.3d 1211 (9th Cir. 1998).

Quere: how does this holding mesh with Erie? Does the RDA require deference only to determinations by a state's highest court? Or perhaps more pointedly, do federal courts think they can run rampant when the IRS is a party?

Bovril

The notable law of agency case that appears in American business casebooks, Watteau v. Fenwick, 1 Q.B. 346 (1892), deals with a barkeeper who made purchases that had not been authorized by his employers. He purchased cigars, when he had in fact only been authorized to purchase Bovril. Completely unbeknownst to American law students, Bovril is the trade name of a condensed beef extract often dissolved in water and taken as a hot restorative on cold English days.
Developed by John Lawson Johnston as a bid for a contract solicited by Napoleon III during the Franco-Prussian War, the stuff was originally meant as a field ration (of which the French soldiers apparently had not enough, being akin in that regard to modern artillery; see also, Battle of Sedan). Like many British exports, see also, IPA, Bovril caught on at home well enough to be sold in pubs. The company still exists today, and Bovril is apparently widely popular at soccer matches throughout Britain.
Most interestingly, Bovril once ran an advertising campaign featuring Leo XIII: