(Jornpll ICaui ^rlynnl IGtbrata CORKILLUHITIllSnT ^. ,JUN25ll(ir ULW UBIAIT. Cornell University Library KF 801.A86 1887 Principles of tlie English law of contrac 3 1924 018 805 774 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018805774 PRINCIPLES OF THB ENGLISH LAW OF CONTRACT AND OF AGENCY IN ITS RELATION TO CONTRACT V SIE WILLIAM EfijsrSON, Baet., D.O.L. OF THE nniEB TEUFLB, B^kBBISTSR-AT-LAW WABDSN OF ALL SOULS COLLSOE, OXFOBD SECOND AMERICAN FROM FOURTH LONDON EDITION. EDITED AND ANNOTATED BY JEKOME C. KNOWLTON, A. B. ASSISTANT PkOFESSOB OF LAW IN THE UNIVEBSITV OF MICHIOAN CHICAGO CALLAGHAl^ AND COMPANY 1887 /31JI Entered according to the Act of Congress, in the year 1887, by cai-lagh!an Airo company, In the office of the Librarian of Congress, at Washington, D. tt STATE JOtlENAL PEINTINa COMPANY, PEINTBES and STERBOTyPEHS, UADISON, WIS. EDITOR'S PREFACE. Many attempts have been made to include a comprehen- sive review of the principles of the law of contract within the limits of a single volume. Each author has presented the subject under new conditions, and, consequently, has not duplicated the work of another to any considerable extent. The several treatises are views of the same field, taken from different points, so that an object stands out prominently in one, which is more or less obscure in an- other. All are serviceable in leading us to a complete understanding of the subject of contract in its entirety. Dr. Anson's treatise was written with special reference to the needs of the student and made its first appearance in 18Y9. The author's logical and analytical treatment of his subject and his clearness and accuracy of statement of principles secured for the work the favor of the profes- sion of both England and America. It has passed into its fourth London edition and is used in many of the lead- ing law schools of this country. No apologj"^ is offered for presenting a second American edition of so valuable a book. Two years' experience as a teacher, using this work as a text-book, has led the editor Iq believe that sub-headings, given due prominence in the text, are more convenient for the student and the practitioner than when placed in the margin. In all other respects the full text of the author is preserved. In the notes such citations of Ameri- Iv EDITOR'S PREFACE. can authorities are given, in support of the text, as the scope of the work will justify. Points of difference be- tween the English and American law are discussed, and the reader has placed before him the history of many impor- tant principles, traced through the courts of both countries. Topics of recent development in our jurisprudence are con- sidered and a large number of English cases, cited by the author, are designated as leading cases and reviewed to the extent of showing how far they have been followed or criticised by our courts. It is believed that by so doing the advantages of an elementary treatise may be combined with those derived from a study of the leading cases in the law of contracts. Ank Aeboe, Mich., November, 1887. JEROME 0. KNOWLTOK PREFACE TO THE FIRST EDITION. This book is an attempt to draw suoli an outline of the principles of the law of Contract as may be useful to stu- dents, ^nd, perhaps, convenient to those who are engaged in the teaching of law. To some of those who are so engaged it has seemed that there is need of an elementary treatise which should deal with the subject of Contract in its en- tirety ; and the existence of such a need is my excuse for the production of the present work. The main object with which I have set out has been to delineate the general principles which govern the contractual relation from its beginning to its end. I have tried to show how a contract is made, what is needed to make it binding, what its effect is, how its terms are interpreted, and how it is discharged and comes to an end. In thus sketching the history of a contract, I have striven to maintain a due proportion in my treatment of the vari- ous parts of the subject, and to avoid entering into the de- tail of the special kinds of contract. The history and antiquities of the subject have, of necessity, been dealt with only so far as was absolutely necessary to explain existing rules, and I have placed in Appendices what I have to say on two matters the treatment of which seemed to be un- avoidable and yet out of place in any part of a merely gen- eral outline. One of these is the " contract implied in law," or quasi- contract. The effect of this legal relation has been fully vi PREFACE explained by Mr. Leake (part i, c. 1, s. 2), and it seemed to be only necessary to point out the general character of the obligation which it, creates, and to sketch the history of the mode in which, for the convenience of pleading, it figured for a while in the outward form of contract. The other subject is the special contract of Agency : this too I regarded as a matter alien to a general discussion of the principles of contract, but the constant recurrence of the relation of Principal and Agent made it needful to give a brief outline of the chief rules regarding Agency. On one or two points, interesting in. themselves, or open to discussion, I have dwelt at a length disproportionate per- haps to my general plan. The somewhat slender authority for some of the often-quoted rules relating to past consider- ation, the various efifects of innocent misrepresentation, the questionable validity of a bare waiver of contractual rights, are points to which I have called the attention of the reader. The intricate subject of the discharge of contract by breach, and its effects, together with the kindred subject of conditional and independent promises, would seem to need a further analysis than it has yet received in the books on Contract. Conditions are usually dealt with in connec- tion with the promise when made, whereas their full effect can only be ascertained when they are regarded as affecting the promise when broken. Another object which I have striven to attain is that of inducing the student to refer to the oases cited in illustra- tion of the rules laid down, and to form for himself a clear notion of the law as it has been expounded from the Bench. The law of contract, so far as its general principles go, »has been happily free from legislative interference: it is the TO THE FIRST EDITION. vii product of the vigorous common sense of English Judges: and there can hardly be a healthier mental exercise than to watch the mode in which a judicial mind of a high order applies legal principles to complicated groups of fact. The student, to whom a text-book is not, as it is to the practising barrister, a repository of cases for reference, but a collection of rules and principles which he desires to learn, is too apt to take these upon trust unless the cases from which they are drawn are thrust upon his notice. For this reason I have avoided the citation of numerous cases, I have endeavoured to select such as form the most vivid illustra- tions of the rules which I have laid down, and I have placed the references to those which I have cited — where I thought they would be most conspicuous — in the margin. This is my excuse for a departure from the ordinary ar- rangement of references in foot-notes. To the able Treatise of Mr. Pollock and the exhaustive digest of Mr. Leake I have made frequent references, but these do not express the extent of my obligations to those learned authors. Their books must needs enter largely into the composition of such a work as mine professes to be. I have also occasionally referred the reader to works of a more special character, and in particular to the great work of Mr. Benjamin for all points connected with the contract of Sale of Personalty. But for the reason which I stated above I have avoided the accumulation of a mass of au- thority, and have often run the risk of seeming to dogmatise lest a numerous collection of references should disincline the student to the process of verification. W. E. A. 1 Beick Couet, The Temple, ' Feb. 1879. PREFACE TO THE SECOND EDITION. In the second edition of this book I have, besides some iiiinor additions and corrections, rewritten the chapter on Offer and AQceptance, and the part relating to Agency. The first of these changes was made necessary, partly be- cause I was dissatisfied with the arrangement of the chapter as it stood, partly because some important decisions in the last three years have settled the law on points where it-had been open to question. I have had the advantage of Mr. Pollock's comments on these decisions in the third edition of his work on Contract. In dealing with Agency I have thought it well to attempt a more thorough treatment of a matter on which, in my first edition, I had written briefly, and, I fear, in a some- what perfunctory way. I have now tried to give the student, in an elementary form, a coherent outline of the subject in its entirety. It is a difficult subject for various reasons. Our legal terminologj'' is so defective that there is no convenient phrase to indicate the man who contracts with the principal through the agent ; the words " third party " are elsewhere used for one who is outside the contract altogether, and the expression " other party " though correct is somewhat clumsy and unmanageable. Again, there is a reluctance among the authorities on the subject to recognise in Representation by means of agency a form of Employer's liability, combined with a disposition to use the word agency as signifying employment merely, and PREFACE TO THE THIRD EDITION. ix not employment for the special purpose of representation. The constant intervention of mercantile usage to modify the liability of an agent acting as such for an unnamed princi- pal, and the fineness of the distinctions drawn in some of the recent cases, add to the difficulties of the subject ; while on some points relating to the determination of the agent's authority the law is admitted to be unsettled. At any rate, I hope I may have done something to di- minish, for the student, the confusion which overhangs the subject ; and even the failure of good intentions may be not uninstructive in suggestion or warning. The history of the Law of Contract has acquired a new interest from its treatment in the lectures of Mr. O. W. Holmes on the Common Law ; but in a work which aims at being elementary and practical I have not ventured to do more than refer the reader to such portions of Mr. Holmes' work as bear directly on the matter with which I have to deal. In conclusion, I must thank the many legal friends who have helped me to correct the errors and improve the arrangement of my first edition, W. K. A. All Souls College, August, 1882. PREFACE TO THE THIRD EDITION. In preparing this book for a third edition I have found that some changes were rendered necessary by the legis- lation of the years 1882 and 1883, by the Married Women's Property Act, the Bills of Exchange Act, and the Bank- ruptcy Act. I have also dealt more fully with the topic of the com- X PREFACE TO THE FOURTH EDITION. munication of the terms of an Offer, the decisions on this point having been recently summarized in the case of Wat- Tcins V. Reymill. I have examined and re-stated the princi- ples which support the much abused rule that " the pay- ment of a smaller sum in satisfaction of a larger is not a good discharge of a debt;" and I have re-considered in the light of the recently reported cases of Britain v. Bossi- ter and Maddison v. Alderson, some effects of the Ith and 17th sections of the Statute of Frauds. Some other necessary changes and corrections have been made, and I have tried so to make them as to prevent an increase in the bulk of my book, or a departure from its character of an elementary text-book. "W. E. A. All Souls College, Feb. 1884. PKEFACE TO THE FOURTH EDITION. Theee is little that is new in the fourth edition of this book, except the references to cases decided in the last eighteen months. I have however tried to re-state the difficulties suggested by the case of BicTcinson v. Dodds, and have worked out at greater length the rules relating to the locus poenitentiae in the case of executory illegal contracts. I have also tried to reduce to some accord with the general rules of law concerning illegal contracts the cases of Head v. Anderson, Seymour v. Bridge and Bridger v. Savage, but can only come to the conclusion that the Courts are not very willing to support the Legislature in its endeavours to discourage wagering or speculative contracts. AC., W. R A. Att. Souls College, Dec. 1885. TABLE OF CONTENTS. PAOINQ nsFEBS TO STAB PAaES. PART I. PLACE OF CONTEAOT IN JUEISPETTDENOE. Outline of subject 1 Analysis of Agreement 2 Distinction of Contract from Agreement 8 I Analysis of Obligation . . . 6 Distinction of Duty from Obligation 6 Forms of Obligation 7 PART II. FORMATION OF CONTKAOT. CHAPTER I. Offer and Acceptance. Agreement traceable to Question and Answer .... 11 Forms in which Contract may originate 12 Communication required in all cases 14 " of offer 15 " of acceptance 15 Requirements in offer 18 Requirements in Acceptance 19 Offer inoperative till accepted 20 How offer may lapse otherwise than by revocation, ... 21 Effect of Acceptance 22 Under what circumstances may offer be revoked .... 25 Dickinson v. Dodds considered 28 Offer by Advertisement 81 Representation of Intention as distinct from Offer .... 88 xu CONTENTS. CHAPTER n. Form and Consideration. PAQE Form or Consideration necessary marks in a valid Contract . • 36 Historical outline of the subject 36 Classification of .English Contracts ...... 43 Formal Contracts. Contracts of Kecord 44 Conti'act under Seal 46 How made * 46 Its characteristics 47 When a Deed is essential to validity of a Contract . . 51 Simple Contract. Simple Contracts required to be in writing .... 58 The Statute of Frauds — Fourth Section .... 54 Its requirements as to form 55 Jlhe Contracts included under it .... 68 The effect of a breach of its provisions ... 63 Seventeenth Section ... 64 Its requirements as to form 65 Nature of Contract specified 65 Effect of a lireach of its provisions .... 67 Consideration, Definition of Consideration 68 Its necessity to the validity of every Simple Contract . . 69 It need not be adequate to the promise .... 70 In what it may consist 72 Mutual promises . 73 Contingent or conditional promises 73 Forbearance to sue, and Compromise of suit . . .74 Bailment 77 Consideration which has been held unreal .... 77 Motive . . . ' 77 Impossibility and Vagueness 80 Performance or promise to perform existing legal duty . 83 Apparent exceptions, composition with creditors . . 86 Promise to perform existing contract .... 87 Shadwell v. Shadwell discussed 88 Legality of Consideration . 89 Executory and executed Consideration .... 89 Past Consideration is no Consideration .... 93 First alleged exception to this rule. Consideration executed upon request 93 The rule in Lampleigh v. Braithwait discussed ... 93 CONTENTa xiii Consideration — continued. paok Second alleged exception, voluntary discharge of legal liabil- ity of another person 97 Third exception, revival of Promise 99 CHAPTER ni. Capacity of Parties. 1. Political or Professional Status 104 3. Infancy. Batification at Common Law 105 Under Lord Tenterden's Act 108 Infant's Relief Act 108 Effect of first section of Infant's Relief Act . . . .109 Of second section 110 Necessaries, what they are, and how ascertained . . . Ill Liability of Infant for wrong ai^ising from Contract . .113 Or apart from Contract 113 3. Corporations. Necessary limits to their capacity to Contract .... 113 Express' limitations 114 4. Lunatics and Drunken Persons. Their Contracts voidable, not void 115 5. Married Women. Their Contracts void as a general rule at Common Law . . 117 Exceptions 117 Married Women's Property Act, 1883 119 CHAPTER IV. Reality of Consent. Mistalce, Of intention as distinct from expression . As to nature of transaction .... As to persons with whom the contract is made As to subject-matter of Contract, generally inoperative As to existence of subject-matter . As to identity of subject-matter As to extent of promise as to subject-matter Effect of Mistake is to avoid Contract . . Misr^reaentation. Difficulty attending its discussion Misrepresentation as distinguished from Fraud Innocent Misrepresentation is inoperative . Unless it be a term in the contract . . . 133 133 135 126 138 ISO 130 135 136 137 139 145 xiv CONTENTS. PAOB Or occur in contracts uberrimae fidei 145 Equitable view of representation discussed .... 145 If a term in the contract, it is then a form of discbarge . . 147 Contracts Mbewi?reae.^dei 148 Marine and fire insurance 148 Sale of land 150 Prospectus inviting purchase of shares .... 151 How far suretyship is «6emmae^ei 153 Expressions of opinion or of commendation are not represen- tations 152 3. Fraud. It is a false representation 154 I It is a representation of fact 156 Intentionally false, or reckless ...... 157 Intended to be acted upon by the person injured . . . 160 It must actually deceive 161 Its effect, it gives rise to action ex delicto . . .' . 163 " it makes contract voidable, within limits ... 168 4. Duress. Its nature and effect 164 5. Undue influence. Hotv distinct from Fraud 165 Circumstances under which it is presumed .... 166 Suggested by personal influence 166 Or by the circumstances and relations of the parties . . 167 Its effect ; how different from that of Fraud .... 169 CHAPTER V. Legality of Object. 1. Nature of illegality Contracts in breach of Statute; effect of penalty Wagering contracts — A wager deflued and described History of legislation on the subject Contracts in breach of rules of Common Law, Agreements to commit a crime or wrong . . Contracts in breach of the policy of the law. Public policy ; its general application . . . Agreements tending to injure public service " tending to pervert the course of justice " tending to enpourage litigation . " contrary to good morals . . . " in restraint of marriage . . . " in restraint of trade .... 171 173 173 176 181 183 183 184 185 187 187 188 CONTENTS. XV PAOS 3. Effect of illegality 189 Where the contract is divisible 189 Where the contract is indivisible 190 Where direct object is unlawful but intention innocent . . 191 Where direct object is innocent but intention unlawful . . 193 Where the unlawful intention is on one side only . . . 195 Securities given for money due on illegal transactions . . 193 Distinction between illegal and void contracts .... 196 Effect of parties not being OTjpari delicto .... 199 Effect of loous poenitentiae while the contract is executory . 200 Reed v. Anderson and Seymour v. Bridge discussed . . . 203 On the meaning of the terms void, voidable, unenforceable , 204 PART III. THE OPERATION OF CONTEAOT. CHAPTER I. The Limits of the Contractual Obligation. A contract only affects the legal relations of the parties to it . 308 Trust no real exception to tliis rule 209 1. Contract cannot impose an obligation on a third party . . 209 But may impose a duty 210 2. Contract cannot confer rights on a third party .... 212 Though expressed so to do by the contracting parties . . 313 CHAPTER II. The Assignment of Contract. 1. Assignment by act of the parties 318 Liabilities cannnot be assigned 318 Rights may be assigned at Common Law only by substituted agreement in case of debt 320 Or by custom of merchants 321 Eights may be assigned in Equity 321 But notice must be given to persons liable 222 And the assignment " is subject to equities " . . . .223 Rights may be assigned by Statute in certain cases . . .224 Negotiability, its characteristics 225 Illustrated by bills of exchange and promissory notes . . 227 Illustrated by bills of lading . . • . • • .830 71 CONTENTS. PAGE Assignment by operation of law 231 Obligations assigned on transfer of interests in land . . . 233 In the case of leasehold interests 232 In thecase of freehold interests 233 Obligations how affected by marriage 235 Obligations assigned by death 235 Obligations assigned by bankruptcy or liquidation ... 236 PART lY. THE INTEEPEETATION OF CONTEAOT. CHAPTER I. Rules relating to Evidence. Provinces of Court and Jury 238 Difference in proof of formal and simple contract .... 239 1. Proof of document purporting to be a contract .... 240 2. Evidence as to fact of agreement 241 3. Evidence as to terms of contract 243 Of promise collateral or supplementary ..... 244 In explanation of terms , . 245 Of usage 248 Equitable rules as to rectification and avoidance . . . 250 CHAPTER n. Rules relating to Construction. General rules 252 Rules as to Time and Penalties 263 PART Y. DISOHAKGE OF CONTEAOT. Modes in which it may take place . ...... 257 CHAPTER I. Discharge of Contract by Agreement. 1. Waiver as a mode of discharge 258 Only applicable to executory contracts 259 And to bills of exchange and promiaaory notes .... 260 CONTENTa xvii 8. Substituted contract: '■«•<'" How diflferent from postponement of rights .... 261 Substituted terms 263 Substituted parties 263 3. Provisions for discharge 263 (1) Promise subject to right of rescission in a certain event . 264 (2) Conditions subsequent 265 Excepted risks 265 Act of God 266 (3) Provisions making contract determinable at option . . 267 Form needed for discharge by agreement 268 CHAPTER n. Discharge of Contract by Performance. Performance when a complete discharge 271 Payment as a discharge 272 Tender as a discharge 274 CHAPTER HI. Discharge of Contract by Breach. Breach of Contract always gives a right of action, not always a dis- charge 276 1. Position of party discharged by Breach 277 He is exonerated from further performance .... 277 May sue as upon a contract arising from conduct . . . 277 Even if his performance be only partial — a quantum meruit 278 2. Forms of 'Discharge by Breach : Renunciation before performance is due .... 280 Impossibility created by one party before performance is due 283 Renunciation in the course of performance .... 284 Impossibility created by one party in the course of perform- ance ^ 285 Failure of performance, when a discharge .... 286 Independent promises of three kinds 287 (1) Absolute promises 288 (3) Promises admitting of more or less complete performance 390 (3) Subsidiary promises 393 Conditional promises — nature of conditions .... 295 (1) Concurrent conditions 398 (3) Virtual failure of consideration 299 (3) Conditions precedent 303 How distinguished from Warranty 305 Acquiescence in breach of a condition turns it into a Warranty ex post facto 806 xviii CONTENTS. PASS But not if the breach be of an essential term .... 808 3. Eeroedies for Breach . 308 Damages, rules governing their application .... 309 Specific performance, when decreed 312 By what Courts administered 313 4. Discharge of Eight of Action arising from Breach . . . 314 By consent of parties. (1) Release 814 (2) Accord and Satisfaction . . . 315 By judgment . . . ^ 815 By lapse of time 316 CHAPTER rV. Discharge of Contract by Impossibility of Performance. Phases of Impossibility of Performance 320 Hills V. Sughrue and Clifford v. Watts 320 Subsequent Impossibility as a rule is no discharge .... 821 Unless it be created by law of England 823 Or by destruction of a thing the continued existence of which is contemplated 323 Or by incapacity for personal service 324 CHAPTER V, Discharge of Contract by Operation of Law. Merger 826 Alteration of a written instrument 327 Bankruptcy 328 PART VI. AGENCY. Its position in Roman Law • . 829 It now springs from contract of employment .... 830 Outline of subject , . 831 CHAPTER I. Mode in which the relation of Principal and Agent is Created. Capacity of Parties 332 How their agreement is expressed 832 Form of mandate . 333 Power of attorney ...•■•*••. 838 CONTENTS. XIX FAOB Parol authority 333 Authority from conduct 334 " of necessity 335 " of ratification 335 CHAPTER n. Effect of Relation of Principal and Agent. Their rights and liabilities inter se: Duties of Principal . . . . 339 " of Agent 339 Must use diligence 339 Must make no profit other than his commission . 340 Must not take up contract himse]| .... 341 Must not delegate his authority 343 Eelations of parties where agent contracts for a named principal : Agent acting within his powers incurs no liabihty . . 344 Kinds of agents and their authority 345 Cases where agent is personally liable 348 Effect of agent acting without authority .... 348 Remedies when the agent is not liable on the contract . 349 Relations of parties where principal is unnamed ; Extent of agent's liability 350 Relations of parties where existence of principal is undisclosed : Alternative liability of Principal and agent .... 353 Principal's right to intervene 353 Determination of alternative liability 353 Liability of Principal for fraud of agent .... 354 CHAPTER III. * Determination of agent's authority. By agreement 356 Limits of right to revoke 356 Read v. Anderson considered 358 By change of status 359 By death of principal 360 CONTRACT AND QUASI CONTRACT. Historical connection of the two legal relations .... 363 Legal relation arising from Judgment 365 " " " accounts stated 365 " " " money paid by plaintiff or defendant . 366 " '» " money received by defendant to plaint- iff's use 367 Index 369 c AUTHOR'S INDEX OF CASES. PAOIHO IlEPEKS TO STAR FAQES, Adams v. Lindsell, 23. Alderson v. Maddison, 64, 67. Allen V. Rescous. 181. AUsopp V. Wheatoroft, 188. Anderson v. Pacific Insurance Co., 153. Archer v. Hudson, 166. Arkwright v. Newbold. 161, Armstrong v. Stokes, 348, 851, 353. Arundel v. Trevilian, 188. Ashburv Carriage Co. v. Riche, 114, 190, 214. Asiatic Banking Corp., Ex parte, 834. Atherfold v. Beard, 198. Atkins v., Bauwell, 97. Atkinson v. Den by, 199. Atlee V. Backhouse, 164. Avery v. Bowden, 283. Ayerst v. Jenkins, 187, 1^7. Aylesford (Earl of) v. Morris, 165, 169. Azemar v. Casella, 300, 303, B. Babcock v. Lawson, 163, 305. Bailev v. de Crespigny, 333, 333. Bailey v. Sweeting, 67, 68. Beer v. Foakes, 85. Bainbridge v. Firmstone, 71. Bannerman v. White, 143, 144, Barnes v. Toye, 113. Barry v. Croskey, 160. Barwick v. English Joint Stock Bank, 354. Baxter v. Burfleld, 335, Bayley v, Homan, 315, Beauchamp (Earl) v. "Winn, 350. Beaumont v. Greathead, 309. Beaumont v. Reeve, 187, 197, Beckham y, Drake, 348, Begbie v. Phosphate Sewage Co., 183, 198. Behn v. Burness, 139, 147. 380, 395, 306, 307. Bettini v. Gye, 393, 306. Beverley v. Lincoln Gas & Coke Co., 378. Betnon v. Cook, 169. Biokerton v. Burrell, 348. Birkmyr v. Darnell, 59, Blachford v. Preston, 184. Blades v. Free, 361. Blair v. Bromley, 318. Bloomer v. Bernstein, 293. Bloxam v. Sanders, 396, 398. Boone v. Eyre, 299. Borries v. Imperial Ottoman Bank. 352. Bbulton V. Jones, 136. Bourne v. Mason, 313. Bowen v. Hall, 211. Bowman v. Tavlor, 47, Boyd V. Hind, 87. Boyd V. Mangles, 324. Boydell v. Drummond, 56, 241. Bradford v. Roulston, 95, 96. Bradlaugh v. Clarke, 186. Bradlaugh v. Newdegate, 186, Brandt v. Lawrence, 293. Brashford v. Buckingham and wife, 117. Brayshaw v. Eaton, 113. ' Bret V. J. S. and wife, 78, Brice v. Bannister, 225. Bridger v. Savage, 194. Britain v. Eossiter, 63, 67. British and American Telegraph Co. V. Colson, 33. British Waggon Co. v. Lea, 219. Brittain v. Lloyd, 91 . Brogden v. Metropolitan Railway, 2, 34. Brook v. Hook, 337. Brown v. Byirne, 348. Brown v. Duncan, 173. AUTHOR'S INDEX OF CASES. Bryant v. Herbert, 39. Surges V. Wickham, 344, 246, 347. Burgess v. Eve, 153. Burke v. S. E. By. Co., 18. Burnard v. Haggis, 113. Burrell's Case, 156. Butler and Baker's Case, 35. Buxton V. Rust, 57. Byrne v. Van Tienlioven, 26, 29. c. Cahill V. Cahill, 120. Callisher v. Bischoffsheim, 75. Cannan v. Bryce, 192, 193. Card V. Hope, 184. Cartwright v. Cartwright, 188. Cassaboglou v. Gibbs, 343. Chamberlain v. Williamson, 236. Chanter v. Hopkins, 302, 304. Charnley v. Winstanley, 359. Clay V. Yates, 181, 195. Clifford V. Watts, 81, 304, 331. Clough V. London & N. W. R. Co., 163. Coles V. Trecothick, 73, 166. Collen V. Wright, 304, 849j 360. Collins V. Blantern, 49. Conder v. Hall, 133, 188. Conflans Quarry Co. v. Parker, 338. Cooch V. Goodman, 46. Cook V. Oxley, 21, 27.- Cook V. Wright, 75. Cooper V. Pbibbs, 139, 157. Cope V. Ro-wlands. 173. Cornish v. Stubbs, 233. Cort V. Ambergate Railway Co., 280, 384, 385. Couturier v. Hastie, 139. Coverdale t. Eastwood, 146. Cowan V. Milbourn, 195, 196. Crouch V. Credit ^Foncier of Eng- land, 323, 329. Cumber v. Wane, 83. Gundy v. Lindsay, 135, 164, 205. Currie v. Misa, 68. Cutter V. -Powell, 392. Cuxon V. Chadley, 230. i). Dalby V. The Lond. Life Assur. Co., 181. Dalton V. Mid. Conn. Railway Co., 117. Darrell v. Tibbitta, 180. Bebenham v. Mellon, 384, 356. De Bussche v. Alt, 843. Denton v. G. N. R. Co., 34. Dickinson v. Dodds, 38, 30. Dickson v. Reuter's Telegraph Co., 157. Dimmock v. Hallett, 153. Dixon V. Clarke, 374. Dobson V. Espie, 359. Doe d. Garnons v. Knight, 35. Donellan v. Read, 63. Drake v. Beckham, 236. Drew V. Nunn, 360. Dunlop V. Higgins, 23. Durnford v. Messiter, 309. Dutton V. Poole, 78. E. Earle v. Oliver, 100. Eastland v. Burchell, 335. Eastwood V. Kenyon, 79, 99, 103. Edwards v. Aberayron Insur. Soc, 185, 341. Egertonv. Brownlow, 183. Eicholz v. Bannister, 304. Elderton v. Emmens, 94. Elevv. Positive Life Assur. Co., 3i4. Eliason v. Henshaw, 32. Ellen V. Topp, 308. Empress Engineering Co., In re, 215. England v. Davidson, 91. England v. Marsden, 367. Erskine v. Adeane, 245. Evans v. Collins, 158. ExaJl V. Partridge, 366. F. Fairlie v. Denton, 220. Fairlie v. Fenton, 347. Faulkner v. Lowe, 5. Featherstone v. Hutchinson, 191. Felthouse v. Bindley, 15. Ferguson v. Wilson, 113. Findon v. Parker, 186. Fishai- v. Bridges, 196. Fishmongers' Co. v. Robertson, 52. Fitch V. Jones, 178, 198. Fitch V. Sutton, 86. Flavell, In re, 215. Fleet V. Murton, 347, 851. Flight V. BoUand, 312. Flight V. Booth, 150. Flight V. Reed, 100. Ford V. Beech, 252. Foster v. Chai-lfes, 187. Foster v. Dawber, 18, 84, 360. AUTHOR'S INDEX OF CASES. Foster V. Jolly, 243. Foster v. Mackinnon, 134. Foster v. Wells, 184. Fowkes V. Manchester Assurj Assoc, 353. Fowler v. Fowler, 850. Frost V. Hnight, 381, 383. G. Oarnons Doe d. v. Knight, 35. ©arrard v. Frankel, 134, 135, 350. Geipel v. Smith, 365. G-ervas v. Edwards, 313. Gibbs V. Guild, 318. Gibson v. Carruthers, 330. Gilbert v. Sykes, 176, 183. Glaholm v. Hayes, 141. Glaze brook v. Woodrow, 389. Goddard v. O'Brien, 84, 315. Godsail V. Boldero, 181. Goman v. Salisbury, 369. Gompertz v. Bartlett, 133, 138. Good V. Cheesman, 86, 87. Goode V. Harrison, 107. Goodman v. Chase, 60. Goss V. Lord Nugent, 370. Graham v. Johnson, 334. Grant v. Johnson, 389. Graves v. Legg, 394, 307. Gray v. Mathias, 187. Gray v. Pearson, 316. Great Berlin Steamboat Co., 301, Grebert-Borgnis v. Nugent, 310. Great North. Rail, Co. v. Witham, 31, 73. Grisewood v. Blane, 179. Gurney v. Behrend, 331. Outhing V. Lynn, 19. H. Hadley v. Baxendale, 310, Haighv. Brooks, 7i, 353. Halifax v. Barker, 96. Hall V, Warren, 116. Hamilton v. Kendal, 353. Hamilton v. Watson; 153. Hamlin v. Great North. Rail. Co., 311. Hamden v, Walsh, 303. Hancock v. Ijablache, 118. Hansard v. Roljinson, 328. Harrington v. Vict. Graving Dock Co., 340, Harris's Case, 33. Harris v. G. W. Railway Co., 17. Harris v. Nickerson, 34. Harris v. Pepperell, 350. Harris v. Rickett, 241. Hart V. Alexander, 263. Hart V. Miles, 77. Hart V. Mills, 14, 90. Hartley v. Ponsonby, 83. Hartley v. Rice, 187. Harvey v. Gibbons, 81. Harvey v. Mount, 167. Harvey v. Young, 156. Hawken v. Bourne, 334. Hayes v. Warren, 364. Head v. Tattersall, 364, 365, 395. Henderson v. Stevenson, 17. Herman v. Jeuchner, 301. Hickman v. Haynes, 261. Higgen's Case, 336. Higgins V, Senior, 56, 347, 353. Hill V. Wilson, 3. Hills V. Evans, 349. Hills V. Sughrue, 330, 331. Hirschfield v. London, Brighton and South Coast Railway Co., 157. Hitchcock V. Coker, 188, Hoadley v. MoLaine, 65 90. Hochster v. Delatour. 383. Hoghton V. Hoghton, 166. Holmes v. Bell, 336. Honck V. MuUer, 393. Honeyman v. Marryat, 19. Hopkins V. Logan, 366. Home V. Midland Railway Co., 310. Horsfall v. Thomas, 161, Houldsworth v. City of Glasgow Bank, 163. Household Fire Ins. Co. v. Grant. 23, 24. Hudson V. Revett, 47. Huguenin y. Ba^iely, 167. HuUe V. Heightman, 379. Humble v. Hunter, 318, 350, 353. Hunt V. Bate, 93. Hunt V. Wimbledon Local Board, 53. Hunter v. Gibbons, 318. Hunter v. Walters, 134, 135. Huscombe v. Standing, 164. Hutton V. Warren, 348. Hyde v. Wrench, 30. I. lonides v. Pacific Insurance Co., 130. lonides v. Pender, 148. Ireland v, Livingston, 342, 347. AUTHOR'S INDEX OF CASES. Irvine v. Watson, 353. Irving V. Veitch, 365. Jackson v. Colegrave, 176. J&,ckson V. Union Marine Ins. Co., 803. Jakeman v. Cook, 100. Jenkins v. Betham, 340. Jennings v. Rundall, 113. Jervis V. Berridge, 344. Johnson v. Gallagher, 118. Johnson v. Royal Mail Steam Packet Co., 366. Johnstone v. Milling, 283. Jones V. Ashburnham, 74. Jones V. Edney, 150. Jones V. Just, 131, 300, 304. Josling V. Kingsford, 301. K. Kaye v. Button, 93, 94. / Keates v. Lord Cadogan, 155. Keir v. Leeman, 185. Kekewich v. Manning, 166, 313. Kelly V. Solari, 135. Kelner v. Baxter, 214, 336, 348, 361. Kemble v. Farren, 255, 356. Kemp V. Findon, 366. Kemp V. Pryor, 335. Kennedy v. Broun, 94, 105. Kennedy v. Panama Steam Co., 123 Kepp'el V. Baily, 234. Kibble's Case, 110. King V. Gillett, 259. Kirkham v. Marter, 60, Laing v. Fidgeon, 300. Lamare v. Dixon, 146. Lampleigh v. Braithwait, 93, 93, 94, 99. Langridge y. Levy, 160. Law V. London Indisputable Life Policy Co., 180. Leask v. Scott, 76. Le Blanche v. L. & N. W. R. Co., 305. Lee V. Grifian, 67. Leev. Jones, 152. Lee V. Muggeridge, 100, 101. Leeds Bank v. Walker, 337. Lennard v. Robinson, 348. Lennon v. Napper, 354. Leroux v. Brown, 63, 67. Lewis V. Nicholson, 348. Lickbarrow v. Mason, 330. Lindsay Petroleum Co. v. Hurd, 156. Littlefield v. Shee, 103. Liversidge v. Broadbent, 330, 231. Llanellv R. Co. v. L. & N. W. R. Co., 316, 817. London Assurance Co. v. Mansel, 149. Lovelock V. Franklyn, 384. Lowe V. Pears, 187. Lumley v. Gye, 310, 211. Lumley v. Wagner, 818. Lumsden's Case, 107. Lynn v. Bruce, 85. M. Macdonald v. Longbottom, 246. Mackenzie v. Coulson, 350. MoKinhell v. Robinson, 193. McManus v. Bark, 315. McPherson v. Watt, 343. Maddick v. Marshall, 345. Maddison v. Alderson, 64, 67. Makin v. Watkinson, 397. Mallalieu v. Hodgson, 181. . Mallan v. May, 49, 188, 353. Mangles v. Dixon, 238. Mansell v. London Assur. Co., 149. Marriott v. Hampton, 867. Martin v. FitzGibbon, 119. Martin v. Hewson, 203. Matthews v. Baxter, 116. Mattock v. Kinglake, 390. Mavor v. Pyne„14, 279. Mayor of Kidderminster v. Hard- wick, 53. Melhado v. Porto Alegre Rail. Co., 214. Meyer v. Drener, 249. Minett v. Forester, 359. Minshull v. Oakes, 233. Mody V. Gregson, 301. MoUett V. Robinson, 248, 348. Molton V. Camroux, 115. Morgan v. Birnie, 396. Morison v. Thompson, 341. Mortimore v. Wright, 80. Morton v. Lamb, 390, 298. Moses v. Macferlan, 364, 367. Mountstephen v. Lakeman, 60. Moxon V. Payne, 170. Murray v. Parker, 250. AUTHOR'S INDEX OF CASES. XXV K Nash V. Armstrong, 268. National Exchange Co. v. Drew, 355. New Brunswick Railway Co. v. Muggeridge, 151. New York Bowery Fire Ins. Co. v. New York Fire Ins. Co., 148, 149. New Zealand Co. v. Watson, 344. Nichol V. Godts, 300. Nicholson v. Bradfield Union, 52. Noble V. Ward, 269. Norden Steam Co. v. Dempsey, 249. North British Ins. Co. v. Lloyd, 152 N. W. Rail. Co. v. McMichael, 107. Nowlan v. Ablett, 267, Nugent V. Smith, 266, o. Ogle V. Earl Vane, 262. Oldershaw v. King, 76. O'Mealy v. Wilson, 104. Ormrod v. Huth, 158. O'Rorke v. Bolingbroke, 165, 169. Palmer v. Temple, 297, 316. Paradine v. Jane, 322. Parker v. Ibbetson, 267. Parker v. S. E. Railway Co., 17, Pattinson v. Luckley, 327. Payne v. Haine, 347. Payne v. Mayor of Brecon, 197. Paynter v. WilUams, 14, 98. Pearce v. Brooks, 187, 193. Peek V. Gurney, 151, 154, 159, 161. Peter V. Compton, 62. Phillips V. Foxall, 152. Picard v. Hine, 119. Pickering v. Busk, 384, 346. Pickering v. Ilfracombe Railway, 190. Pigot's Case, 189. Pilkington v. Scott, 70. Pillans V. Van Mierop, 41, 69. Pinnel's Case, 84. Planche v. Colburn, 280, 285. PolhiU V. Walter, 138, 159, 350. Potts V. Bell, 181. Poulton V. Lattimore, 301. Poussard v. Spiers, 302. Powles V. Innes, 330. Preston v. Luck, 20. Price v. Easton, 213. Priestley v. Fernie, 353. Printing Co. v. Sampson, 183. Prosser v. Edmonds, 187. Protector Loan Co. v. Grice, 255. Pust V. Dowie, 307. Pyke's Case, 194. Pym V. Campbell, 243, 343. E. Raffles V. Wichelhaus, 130. Ramsgate Hotel Co. v. Monteflore, 21. Rann v. Hughes, 43, 59, 69. Read v. Anderson, 203; 358, 359. Reader v. Kingham, 59. Redgrave v. Hurd, 146, 159. Reese Rivsr Mining Co. v. Smith, 138, 157. Reg. V. Downes, 80. Reg. V. Wilson, 110.- Reuss V. Picksley, 55, 56. Reuter v. Sala, 292. Reynell v. Sprye, 199. Richards v. London, Brighton & S. C. Railway, 305. Richardson v. Williamson, 349. Ritchie v. Atkinson, 291, 303. River Steamer Co., In re, 319. Roberts v. Hardy, 104. Robinson v. Davison, 324. Robinson v. Harman, 309, 311. Robinson v. Read, 374. Robson & Sharpe v. Drummond, 218. Roper V. Johnson, 312. Roscorla v. Thomas, 93. Rotherham Alum and Chemical Co., In re, 215. Rothschild v. Brookman, 342. Rousillon V. Rousillon, 188. Routledge v. Grant, 31. Rumball v. Metropolitan Bank, 226. Ryder v. Wombwell, 111. s. Sanderson v. Piper, 348. Sard V. Rhodes, 273. Sayerv. Wagstaffe, 273, 274. Schmaling v. Tomlinson, 210. Schmalz v. Avery, 351. Scotsonv. Pegg, 87, 88. Scott V. Avery, 185. Scott V. Littledale, 134. Seeger v. Duthie, 141. Semple v. Pink, 75. Seymour v. Bridge, 203. Shadwell v. Sliadwell, 88. Simpson vl Crippin, 291. AUTHOR'S INDEX OF CASES. Simpson v. L. & N. W. B. Co., 311. Skeet V. Lindsay, 319. Slade's Case, 364. Slater v. Jones, 87. Smart v. Sandai-s, 359. Smith V. Hughes, 127, 134, 163. Smith V. Kay, 167, 168. Smith V. Land & House 'Property Corporation. 153. Smith V. Mawhood, 173. Smith V. Wilson, 249. Smout V. Ilbery, 360. Snook V. Watts, 116. South of Ireland Colliery Co. v. Waddle, 53. Southwell V. Bowditch, 347, 351. Spencer's Case, 333. Spiller V. Paris Skating Rink, 214. Sprye v. Porter, 186. Stanley v. Jones, 186. Startup V. Macdonald, 374. Stavers v, Curling, 305. Stewart v. Eddowes, 55. Stilk V. Meyrick, 83. Stockport Waterworks Co. v. Pot- ter, 384. Stocks V. Dobson, 233. Street v. Blay, 304. Strickland v. Turner, 139, 330. Suffell V. Bank of England, 337. Sullivan v. Mitcalfe, 151. Tarrabochia v. Hiokie, 141. Tayloe v. Merchants' Fire Ins. Co., 36. Taylor v. Best, 104. Taylor v. Bowers, 200. Taylor v. Brewer, 19. Taylor v. Caldwell, 833. Taylor v. Laird, 15, 91. Thacker v. Hardy, 179. Thomas v. Cadwallader, 389. Thomas v. Hayward, 333. Thomas v. Thomas, 78, 80. Thomson v. Davenport, 350, 351. Thornett v. Haines, 34. Thbrnhill v. Neats, 363. Thornton x? Kempster, 131. Thoi'oughgood's Case, 124. Thorpe v. Thorpe, 389. Touche V. Metrop. Warehousing Co., 214. Townson v. Tickell, 13. Traill v. Baring, 146. Trueman v. Loder, 56, 353, Truman v. Fenton, 100, Tulk V. Moxhay, 335. Turner v. Owen, 83. Tweddle v. Atkinson, 78, 813. U. Udell V. Atherton, 354. Y. Varney v. Hickman, 303. Venezuela Railway Co. v. Kisch, 151. W. Wade V. Simeon, 75, 83. Wain V. Warlters, 57, 71. Wake V. Harrop, 239, 340, 245 Ward V. Hobbs, 154. Ware v. Chappell, 388. Warlow V. Harrison, 34. Waters v. Tompkins, 319. Watkins v. Eymill, 18. Watson V. Swann, 386. Watson V. Turner, 98, 99. Waugh V. Morris, 191. Webster v. Cecil, 131, 135, 349, 350. Week V. Tibold, 18. Weir V. Bell, 158. Wells V. Mayor of Kingston-upon- Hull, 53. Wheelton v. Hardisty, 149. White V. Bluett, 81. Whittaker, Ex parte, 156. Wigglesworth v. Dallison, 348. Wilkinson v. Byers, 85. Wilkinson v. Cpverdale, 333. Wilkinson v. Johnson, 337. Wilkinson v. Oliveira, 94, 95. Williams v. Bayley, 185. Williams v. Carwardine, 33. Williams v. Jones, 45, 365. Williams v. Lake, 56. Williams v. Moor, 100, 106. Williams v. Sorrell, 333. Wilson V. Finch-Hatton, 155. Wilson V. Strugnell, 301. Wilson V. Tumman, 336, 337. Wing V. Mill, 98. Withers v. Reynolds, 293. Wolverhampton Railway Oo. v, London and N. W. Rail. Co., 813. Wood V. Abrev, 166. Woolfe V. Home, 346. Xenos V. Wickham, 13, 25, 46. Y. Young V. Cole, 301. SOME ABBREVIATIONS USED IN EEFEEENCE. EEPORTS. A. &E Adolphus and Ellis. : Q. B. 1834^1841 B. & Ad Barnwall and Adolphus K. B. 1830-1S34 B. & Aid Barnwall and Alderson K. B. 1817-1823 B. & C Barnwall and Cresswell K. B. 1833-1830 B. & S Best and Smith Q. B. 1861-1865 Beav Beavan Rolls Court, 1838-1866 Bing Bingham ) p „ ■iaoAiQAn Bing. N. C Bingham's New Cases. \ ^- •'^- 1«"4^1»*" Burr Burrows K. B. 1756-1773 Camp Campbell K. B. & C. P. nisi prius, 1807-1818 C. B Common Bench ( n xt -{oak latm C. B., N. S Common Bench, Ivfew Series. \ ^- ^- i«*»--i»<'» CI. & F Clark and Pinelly House of Lords, 1831-1846 C. & M Crompton and Meeson ) -a,^ iSQ^LiaoR C. M. & R Crompton, Meeson, aUd Eoscoe \ ^^- ^»***-^»*'o Co. Rep Coke's Reports Eliz. and James Cowp Cowper K. B. 1774r-1778 Cro. Eliz. or 1 Cro. . Croke, of the reign of Elizabeth. Cro. Jac. or 3 Cro. . Croke, of the reign of James. D. & J De Gex and Jones Ch. App. 1857-1859 D. F. & J. . . ., De Gex, Fisher, and Jones " 1859-1863 D. M. & G. be Gex, Macnaghten, and Gordon " 1851-1857 Dr. & Sm Drewry and Smale V. C. Kindersley, 1859-1866 Dr. & War Drury and Warren Chancery, 1841-1843 E. & B Ellis and Blackburn Q. B. 1853-1858 E. &E Ellis and Ellis Q. B. 1859-1861 Esp Espinasse K. B. & C. P. nisi prius, 1793-1806 Exch Exchequer 1847-1856 F. & F Foster and Finlason . .Cases at Nisi Prius, 1856-1867 H. Bl Henry Blackstone C. P. 1786-1788 H. & C Hurlstone and Coltman Ex. 1863-1865 H. & N Hurlstone and Norman Ex. 1856-1863 H. L. C House of Lords Cases 1846-1866 Ir. C. L Irish Common Law Reports. J. & H Johnson and Hemining. .V. C. Page Wood, 1859-1863 K. & J Kay andilohnson V. C. Page Wood, 1854-1856 L. J. Exch Law Journal, Exchequer 1 L. J. Q. B Law Journal, Queen's Pench y 1838 L. J. Ch Law Journal, Chancery ) LAW REPORTS. L. R. Q. B .' Queen's Bench L. R. C. P Common Pleas l! R. Ex Exchequer Eq ^ Equity Ch Chancery Appeals L. E.'h.'l )„,„„,T,.,^=iEnglish&Irish Appeals House of Lords L. R. Sc. App. ...i ^""'^'^ "' ^"'"" \ Scotch Appeals li 1865-1875 xxviii SOME ABBREVIATIONS USED IN REFERENCE. Q. B. D Queen's Bench Division 1875 C. P. D Common Pleas Division ) iq~- ^^ai Ex. D Excliequer Division f 1»'0-1»»1 Ch. D Chancery Division ) wq»- App. Ca Houseof Lords and Privy Council Appeal Cases ) Lev Levinz K. B. & C. P. 1660-1696 Mad Maddock Vice-Chancellor's Court, 1817-1829 M. & G Manning and Granger'. C. P. 1840-1845 M. & S Maule and Selwyn K. B. 1813-1817 M. &W Meeson and Weisby Ex. 1836-1847 Bier Merivale., Chancery, 1818-1817 Mod. Rep. J ^""^Ch" nS""*^' ^°™°'°'' ^"^ ^""^ f 1660-1703 M. & K Mvlneand Keen!'.'.'.'.'.'.'.".".".'.! .Chancery, 1832-1837 Ph Phillips Chancery, 1841-1849 Q. B Queen's Bench 1841-1853 Rep. in Ch Reports in Chancery 1635-1688 Rolle Abr Rolle's Abridgment. Russ Russell , Chancery, 1826-1829 Sch. & L Schoales and Lefroy Irish Chancery, 1802-1806 Sm. L. C Smith's Leading Cases. Str Strange 1737-1784 m -p (Term Reports, or Durnf ord ) , tr n h-qk itoc ^•^ 1 and East's Reports [... -.K. B. 1,85-1796 Ventr Venti-is K. B. 1660-1685 Vern Vernon. : Chancery, 1680-1718 Y. & C Young and Collyer. . .V. C. Knight-Bruce, 1834-1843 Yelv Yelverton K. B. 1601-1613 TEXT-BOOKS. Sav. Syst Savigny, System des heutigen Romischen Eechts. Sav. Obi Savigny, Obligationenrecht. Pnilnflr i Pollock on the Principles of the English Law of •^°"°^'' 1 Contract, Fourth edition, 1881. Benjamin on Sale. Second edition, 1878. Leake 1 Leake's Elementary Digest of the Law of Contract, I 1878. T QTio-Haii i Selection of Cases on the Law of Contract, by O. C. L,angaeu -j Langdell. Holmes Com Law J Lectures on the Common Law, by Mr. O. "W. lloimes,t.om.l.aw^ Holmes (Boston, 1881). INDEX OF OASES OITED BY AMERICAN EDITOR. PAOIKO REFERS TO STAR PAGES, A. Abbott V. Shepard, 22. Abel V. Munsen, 269. Abercrombie v. Butts, 319. Adams v. Adams, 188. Adams v. Frye, 337. Adams v. McMillan, 56, 58. Adams v. Ryan, 46. Adams v. Nichols, 322. Adams v. O'Conner, 299. -ffitna Life Ins. Co. v. Noxen, 313. Ahearn v. AverSv3. Aiken v. BlaisdeU, 173. Akin V. Peters, 273. Albert v. Zieglei-. 260. Aldrich v. Price, 269. Alexander v. Jones, 335. i Allis V. Billings, 204. Allis V. McLean, 312. Allison V. Chandler, 309. Allen V. Allen, 47. Allen V. Bryson, 80. Allen V. Hartfield, 156, 299. Allen V. Hammond, 129. Allen V. Hawks, 241. Allen V. Jacquish, 368. Allen V. Sohuhardt, 62. Allen V. Woodward, 93. AUer V. AUer, 49. Allshouse V. Ramsey, 62. Alms House Farm v. Smith, 319. Am. Ins. Co. v. Stratton, 353. Am. Lumber Co. v. Mulcrane, 220. Ames V. Union R. R. Co., 210. Amory v. Gilman, 176. Amot V. Pitson & Elmira Coal Co., 188. Anderson v. Walter, 243. Andrews v. Dietrich, 163. Andrews v. Hoxie, 178. Andrews v. Smith, 336. Angell V. McLellan, 111. y Anglo-California Bank v. Ames, 116. Annan v. Merritt, 68. Armltage v. Widoe, 337. Armstrong v. McGhee, 2. Armour v. Trans. Fire Ins. Co., 148. Arnold v. Kinitzger, 188. Atkinson v. Allen, 249. Atkinson v. Anderson, 316. Atlantic Bank v. Harris, 318. Atwood V. Fisk, 185. Aulger V. Clay, 275. Aurora v. West, 178. Austin V. Waoks, 254. Avery v. Dougherty, 348. Avery v. Wilson, 294. Averill v. Hedge, 21, 38, 31. Ayers v. Chicago, etc. R. R. Co.., 88. Ayera v. French, 156. B, B. & L. M. R. R. Co. V. Unity, 20. Babcock v. Hawkins, 85. Babcock v. Orbison. 340. Bacon v. Bonhara, 169. Bacon v. Cobb, 323. Bacon v. Lee, 173. Bailey v. Bailej', 59. Bailey v. Day, 83. Bailey v. Richardson, 283. Baker v. Corey, 279. Baker v. Holt, 19. Baker v. Johnson, 323. Baker v. Kennett, 108. Baker v. McCarthy, 246. Baldwin v. Barrows, 124 EDITOR'S INDEX OF CASES CITED, Baldwin v. Bricker, '134. Baldwin v. Hiers, 59. Baldwin v. Walker, 333. B?ildy V. Strattou, 187. Ballard v. Chenej', 354. Beltzen v. Nicolay, 349. Bangor Boom Co. v. Whiting, 115. Bangs V. Dunla, 184. Bank v. Green, 363. Bank of Columbia v. Hagner, 390. Bank of Columbia v. Patterson, 51. Bank of New Orleans v. Mathews, 104. Bank of N. Am. v. Embury, 334. Bank of Rochester v. Jones, 330. Bank of U. S. v. Danbridge, 51. Banorgee v. Hovey, 48, 333. Baptist Church v. Bigelow, 57. Barker v. Bucklin, 830. Barklev v. Tarrant, 345. Barlow v. Lambert, 349, 367. Barney v. Grover, 834. Barnes v. Ferine, 73. Barnard v. Lee, 354. Barry v. Rvan, 340. Barry v. Page, 348. Barrett v. Murphy, 346. Barren v. Vandevert, 83. Barr v. Schroeder, 357. Barsolew v. Newton, 354. Bartholemew v. Jackson, 80, 98. Bartlett v. Blaine, 161. Bartlett v. Raymond, 353. Bartlett v. Remington, 345. Bartlett v. Smith, 179. Bartlett v. Tucker, 138, 349. Bartlett v. Wheeler, 63. Bassett v. Bassett, 384. Bassett v. Monte Cristo Min. Co., 115. Batterman v. Morford, 31. Baudoine v. Grimes, 355. Bauget V. Monroe, 146. Baum V. Du Bois, 333. Beach v. Endress, 360. Beardsley v. Davis, 14. Beardsley v. Morgan, 334. Beal V. Chase, 188. Beal V. Hayes, 355. Beal V. McVicker, 184. Beal V. McKiernan, 343. Beals V. See, 116. Beaman v. Buck, 63. Bean v. Burbank, 38. Bean v. Pioneer Min. Co., 348. Bean v. Valle, 58. Beattie v. Hillyard, 340. Beauprev. P. & A. Tel. Co., 18. Beebe v. Johnson, 333. Beckwith v. Cheever, 15. Beckwith v. Talbott, 56, 57. Bedell v. Bissell, 8(5. Beers v. Aultman, Taylor & Co., 341. Beers v. Beers, 47. Behrens v. McKenzie, 116. Beidman v. Goodale, 333. Bel) V. Cunningham, 340. Bell V. Ellis, 156. Bell V. Hoffman, 303. Bell V. Hewitt, 63. Bell V. Quinn, 173. Bellows V. Souls, 75. Bellows V. Sowles, 58. Bennett v. Hill, 315. Bennett y. Judson, 159. Bent V. Manning, 103. Benton v. Holland, 319. Benton v. Pratt, 160, 310. Bentwick v. Franklin, 186. Bergen v. Udall, 170. Bergen v. WUliams, 341. Berry v. Bacon, 48. Berry v. Carter, 185. Berry v. Doremus, 63. Berry v. Wisdom, 355. Berthold v. Reyburn, 375. Berton v. Mather, 184. Best V. Bunder, 173. Best V. Flint, 131. Bethlehem v. Annis, 334. Beveridge v. Rawson, 386. Beymer v. Eonsall, 353, 353. Biddle v. Brizzolara, 319. Bierbauer v. Worth, 190. Bigelow T. Stephen, 337. Billings V. Vanderbeck, 85. Bills V. Porter, 336. Bingham v. Parley, 108. Binney v. Morrill, 345. Bird V. Monroe, 55. Bish V. Van Cannon, 161. Bishop V. Fletcher, 57. Bishop V. Small, 156. Bissell V. M. South. & N. Ind. E. R. Co., 115. Bixby V. Dunlap. 310. Black V. Cord, 50. Black V. Foljambre, 166. Blackburn v. Reilly, 393. Blackwell v. Willard, 104. Blair v. Snodgrass, 57. Blake v. Cole, 63. Blake v. Coleman, 341. Blakeney v. Goodale, 63. Blanchard v. Trim, 369. Blanev v. Hoke, 18. Blink V. Walker, 51. EDITOR'S INDEX OF CASES CITED. Bliss "7. Laurence, 184. Block V. Isham, 234. Blood V. Enos, 394. Blooi^ V. Goodrich, 369. Bloomer v. Henderson, 334. Blossom V. Champion, 330. Blunt V. Walker, 114. Board of Education v. Greenbaum, 51. Boardman v. Cutler, 65. Bocock V. Pavey, 343. Bogie V. Bogie, 46. Bohanan v. Pope, 213, Bollman V. Burt, 393. Bool V. Mix, 106. Boody V. McKinnev, 108. Booth V. Powers, 337. Booth V. Spuyten Duyvil Rolling Mill Co., 310. Booth V. Robinson, 115. Booth V. Fitzpatrick, 93. Boothby v. Scales, 300. Borland v. Guppy, 19. Boston & Maine R. R. v. Bartlett, 28. Boston Ice Co. v. Potter, 136. Boswell V. Bicknell, 364. Bourne v. Shapleigh, 18, Bowen v. Davis, 156. Bowen v. Kurtz, 330. Bowker v. Lowell, 164. Bowers v. Tipton, 75. Bower v. Blessing, 30. Bowers v. Thomas, 124. Bowers v. Whittle, 188. ' Bozeman v. Browning, 105, 3l8. Boyle V. Guysinger, 284. Brackett v. Hoyt, 173. Brackett v. People, 316. Bradshaw v. Davis, 85. Bradstreet v. Baker. 355, 348. Bradley v. King, 292. Braman v. Brigham, 47. Braner v. Wheaton, 19. Branham v. Record, 161, Bray v. Kettell, 348. Bream v. Dickerson, 233. Bredin's Appeal, 191. Breed v. Cent. City Bank, 335. Brenham v. Ostrander, 315. Brewster v. Baxter, 245. Brewster v. Edgerly, 355. Brewer v. Cheeseman, 334. Brewer v. Dyer, 313. Brewer v. Marshall, 334. Brick Pres. Church v. Mayor, 333. Brick V. Gamar, 61. Brick Co. V. Pond, 139. Bridge v. Hubbard, 178. Bridges v. Stickney, 310. Brigg V. Hilton, 301. Briggs V. Lizer, 14, 19. Brigham & Co. v. Carlisle, 813. Bristol V. Brainwood, 159. Bristow V. Lane, 313. Brittain v. Daniels, 47. Britton v. Ainger, 57. Britton v. Philips, 21. Britton v. Thornton, 316. Britton v. Turner, 294. Broadwell v. Gastraan, 63, Broch V. Barnes, 170. Bromley V. Goodrich, 304, Bronson v. Turner, 300. Brook V. Filer, 104. Brooks V. Hamilton, 187. Brooks V. Martin, 199. Brooks V. White, 83. Brown Chem. Co. v. Atkinson, 348. Brown V. Bennett, 100. Brown v. Brown, 204. Brown v. Everhardt, 269. Brown v. Foster, 349. Brown v. Kinsie, 187. Brown v. N. Y. C. R. R., 2, Brown V. Olmsted, 373. Brown v. Wiggins, 346. Brownwell v. Harsli, 74. Browning v. Home Ins. Co., 148. Browning v. Kranse, 315. Bruce v. Bishop, 19. Brumby v. Smith, 334. Brunswiok & Balke Co. v. Martin, 399. Brush V. Sweet, 334. Bryan v. Hunt, 369. Bryant v. Booze, 34. , Bryant v. Isburg, 300. Buckingham v. Ludlum, 73, Buckingham v. Osborn, 300, ' Buckley v. Beardsly, 57. Buckley v. Buckley, 309. Buckman v. Bergholz, 173. Buell V. Miller, 368. Buffalo Barb Wire Co. t. Phillip, 310. Buflendeen v. Brooks, 196, 341, Bugbee v. Kendricken, 59. Bull V. Bull, 85. Bull V. Harrigan, 173. Bullock V. Adams, 354. Bungee v. Koop, 381. Bunn V. Winthrop, 167. Burger v. Rice, 234. Purges V. Carpenter, 310. Burke v. Adams. 46. Burke v. Miller, 340. Burns v. Scott, 186, 243, xxxil EBITOR'S INDEX OF CASES CITED. Burnham v. Kidwell, 116. Burnett v. Burnett, 46. Burritt v. Saratoga Fire Ins. Co., 148. Burtis V. Thompson, 281. Burton v. Leroy, 46. Burton v. Marshall, 313. Burton v. Shannon, 44. Burton v. Shot well, 20. Bush V. Lathrop, 222, 224. Bush V. Linthicum, 107. Bush V. Byrne, 294. Butterfield v. Hartshorn, 220. Button V. Russell, 303. Butler's Appeal, 184. Butlor V. Duncan, 169. Byard v. McLean. 186. Byard v. Shink, 273. Byerlee v. Wendell, 294. Byers v. Chapin, 131, 300. Byrd v. Bertrand, 262. 0. Cabe V. Jamison, 268. Cabot V. Christie, 159. Cadens v. Teasdale, 220. Caesar v. Karutz, 155. Cagney v. Cuson, 156. Cahen v, Piatt, 292. Cahill V. Bigelow, 55. Caldwell v. Henry, 159. Caldwell v. Lawrence, 255. Caldwell v. Meek, 249. Calkins v. Fi-ey, 116. Callan v. McDaniel, 232. Callanan v, Edwards, 224. Canimeyer v. United German Churches, 19. Campbell v. Long, 318. Campbell v. New Eng. Ins. Co., 148. Campbell v. Perkins, 113. Campbell V. Stakes, 118. Cauda v. Wick, 281. Canal Co. v. Railroad Co., 9. Canal Co. v, Ray, 268. Cannon v. Kjieipe, 218. Carey v. Miller, 124, Carlisle v. Campbell, 58, 60. Carmen v. Pultz, 275. Carmet v. Kitchen, 172. Carnigie v. Morrison, 212. Carpenter v. Galloway, 269. Carr v. Daley, 245. Carr v. Duval, 20. Carrier v. Cameron, 229. Carson v. Clark, 93. Carter v. Dickson, 166. Carter v. Nichols, 224. Case V. Boughton, 49. Case V. Clough, 106. Case V. Sears, 273. Catchings v. Hacke; 300. Gates V. Bates, 71. Cathcart v. Robinson, 72. Catlin Y. Tobias, 292. Oaton V. Shaw, 15. Cecil "v. Spurger, 184. Central Ohio Salt Co. v. Guthrie, 188 Chamber of Com. v. Sollitt, 281. Chambers v. Seay, 358. Chamberlain v. Bellers, 339. Champlin v. Parish, 58. Champton v. Rowler, 294. Chaffee v. Thomas, 93. Chalfant v. Payton, 187. Challoner v. Bouok, 333. Chandler v. Sanger, 164. Chandler v. Sprague, 230. Chapin v. Longworth, 224. Chapman v. Deere, 90. Chapman v. McGraw, 268. Chapman v. Rose, 124. Chappell V. Brockway, 188. Charles v. Scott, 48. Chase v. Fitz, 236. Chase v. Paltlaerg, 344. Cliesapeake & Ohio Canal v. Knapp, 275. Chesterfield v. Sanson, 169. Chestnut Hill Turnpike v. Rutter, 51. Cheney v. Cook, 28. Chicago & A. R. R. Co. v. N. Y. L. E. & W. R. Co., 313. Chicago, etc. R. R. Co. v. Dane, 18, 21, 73. Chicago Dock Co. v. Kinzie, 55. Child V. Dobbins, 106. Christian College v. Hendley, 73. Christian Church v. Johnson, 114. Chrisman v, Hodges, 262. Christie v. Craig, 85, Chrysler v. Canady, 156. Church V, Florence, 262. Clark V. Baker, 294. Clark V. Bank of Wheeling, 340. Clark V. Carroll, 224. Clark V. Dales, 19. Clark V. Gilbert, 325. Clark V. Herring, 80. Clark V. Martin, 235. Clark V. Manuf. Ins. Co., 148. Clark V. Moody, 340. Clark V. Moray, 104. EDITOR'S INDEX OF CASES CITED. XXXIU Clark V. Pendleton, 63. Clark V. Ricker, 191. Clark V. Thayer, 339. Clark V. Turnbull, 75. Clay V. Recketts, 30. Clements' Appeal, 181. Clement v. Cash, 355. Clement v. Meserole, 385! Clem V. New Castle, etc., 157. Cleveland v. Burnham, 345. Cleveland & Mahoning R. R. Co. v. Hlmrod Furnace Co., 115. aeveland v. Sterrett, 374. Cline V. Guthrie, 134. Clodfelt V. Cox, 333. Cobb V. Cowdrey, 191. Cobb V. Knapp, 353, 553. Cochran v. Stewart, 163. Cocke V. Barker, 47. Cockrell v. Thompson, 179. Cofl^n V. Tallman, 333. Cohen v. N. Y. Mut. Life, 104. Coil V. Wallace, 311. Colby V. Dearborn, 341. Cole V. Cassidy, 159. Cole V. Hughes, 334. Cole V. Sackett, 363. Cole V. Singerly, 63. Cole V. Wells, 354. Coleman v. Eyer, 65. Coleman v. First Nat. Bank, 353. Coleman v. Hart. 48. Collins V. Delaporte, 385. Collins V. Rainey, 341. Collins V. Swan, 336. Collins V. Tilton, 340. Collins V. Westberry, 164. Combs V. Scott, 335. Commercial Bank v. Norton, 343. Commissioners v. Ehoades. 18. Com. of Knox Co. v. McComb, 181. Commissioners v. Smith, 318. Commonwealth v. Dupuy, 186. Commonwealth v. Hide & Leather Ins. Co., 148. Compton V. Marstin, 63. Comstock V. Adams, 188. Comstock V. 8mith, 93. Condict V. Flower, 337. Conduitt V. Ross, 334. Conley v. Windsor, 339. Connelly v. De Voe, 83. Conover v. Stillwell, 68. Conway v. Sweeney, 73. Conrad v. Schwaub, 73. Cook V. Bell, 334. Cook V. Bradley, 80, Cook V. Brown, 46. Cooke V. Millard, 65. Cook V. Murphy, 368. Cooper V. Levering, 156. Corby v. Weddle, 134. Cornell v. Cornell, 335. Corning v. Abbott, 173. Cornwells v. Kxengel, 30. Corwin v. Collett, 336. Corwin v. Patch, 349. Cosgrove v. Bennett, 300. Coster V. Mayor of Albany, 318. Cotheal v. Talmage, 355. Couch V. IngersoU, 390. Courtwright v. Barnes, 186. Coventry v. Barton, 339. Cowing V. Green, 840. Cox V. Davis, 340. Cox V. Higby, 159. Coynes v. Lynde, 83. Crabill v. Marsh, 64. Crabtree v.^Messersmith, 381, 384. Craft V. McConoughy, 188. Craig V. Harper, 73. Crans v. Hunter, 75, 101. Crawford v. Chapman,. 333. Crawford v. Russell, 188. Crawford v. Millspaugh, 360. Crayzer v. Taylor, 349. Crehore v. Crehore, 161. Crenshaw v. Slye, 301. Cresby v. Fitch, 367. Crist v. Armour, 381, 384. Critcher v. HoUoway, 193. Crockett v. Scribner. 65. Cromwell v. Tate, 46. Cronshore v. Knox, 319. Crook V. Cowan, 14. Croucher v. Clatman, 309. Cuff v. Penn, 269. Culler V. Welsch, 193. Culling V. Grand Trunk R. Co.. 310. Culver V. Bunning, 73. Cumberland R'y Co. v. Babb, 184. Cummings v. Arnold, 369. Cunningham v. Nat. Bk. of Au- gusta, 178, 179. Curnaham v. Bailey, 156. Curran v. Downs, 193. Curry v. Larer, 355. Curtis V. Leavitt, 199. Curtz V. Gokey, 18^. Cuthrell v. Cuthrell, 343. D. & H. Canal Co. v. Pa. Coal Co., 185. Dale v. Dale, 166. XXXIV EDITOR'S INDEX OF CASES CITED. Daly V. Smith, 313. Dana v. Coombs, 106. Dana v. Hancock, S69. Danforth V. Schoharie Turnp. Co., 51, 114. Danforth v. Stricter, 186. Daniel V. Brown, S55. Daniels v. HoUenbeck, 85. Daniels v. Newton, 281. Danolds v. State, 104. Danson v. Ford, 74. Darly v. Litchfield, 355. Darrow v. St. George, 355-. David V. EUice, 263. Davidson v. Nichols, 161. Davis V. Bartlett, 229. Davis V. Bauer, 327. Davis V. Dudley, 106, 108. Davis V. Higgins, 240. Davis V. Lane, 380. Davis V. Meeker, 156. Davis V. Shields, 58. Davis V. Williams, 46. Davis V. Windsor Bank, 360. Davison v. Von Lingen, 141, 305. Dawson v. Hall, 47. Day V. Pool, 301. * Dayton v. Fargo, 224. Dean v. Bassett, 335. Dean v. Emerson, 188, 190. Dean v. Yates, 161.. Dearborn v. Bowman, 92, 93. Dearborn v. Clark, 230. Dearborn v. Cross, 268. Dearborn v. Turner, 264. De Camp v. Hanna, 124. Decan v. Shipjier, 163. Decosta v. Davis, 62. De Groot v. Van Deuzen, 193. Dehan v. Fosdiok, 30. De Jarnett v. De Oivervilie, 104. Delacroix v. Buckley, 268. Delamater v. Miller, 284. Demarest v. Willard, 233. Dennis v. Maxfield, 313. Dennis v. Noble, 20. Denny v. Williams, 62. Dent V. Steamship Co., 14, Denton v. Atchison, 394. Denver & N. O. Const. Co. v. Stout, 185. Derby v. Johnson, 385. Derby v. Phelps, 61. Derlin v. Mayor, etc., 334. Dermot v. Jones, 90, 379, 303, 323. Derrick v. Mormette, 30. Detroit v. Mutual Gas Co., 115. Detwiller v. Bish, 124. Devhn v. Chamblin, 273. Devol V. Mcintosh, 213. Dewey v.' Young, 58. De Witt v. Eoot, 59. De Witt V. Walton, 353. Dexter v. Campbell, 338. Dexter v. Hall, 116. Dexter v. Norton, 324. Dey V. Dox, 288. Diamond Match Co. v. Eoeber, 188. Dickinson v. Gay, 249. Dillon V. Allen, 172. Dingley v. Oler, 281. Dobbin v. Cruger, 47. Dodge V. Council Bluffs, 115. Dodge V. Emerson, 273. Dodge V. Hopkins, 333. Dodger v. Nichols, 155. Doe V. Burnham, 172. Doe V. Thompson, 348. Donalds6n v. Farwell, ,156. Donaldson v. Polk, 233. Dorr V. School District, 240. Dorrill v. Eaton, 169. Dorsey v. Thompson, 104. Dorsey v. St. Louis, etc. E. E., 333, 234. Doty V. Martin, 326. Doty V. Wilson, 93, 99, 260. Douglass v. Malting, 124. Douglass V. Scott, 47. Dow V. aark, 212. Dow V. Sanborn, 156. Downer v. Cheeseborough, 63. Downing v. Dearborn, 131. Doyle V. Dixon, 62. Drake's Appeal, 167. Drake v. Leaman, 57. Draper v. Fletcher, 224. Dresser v. Dresser, 62. Dresel v. Jordan, 73. Drummond v. Humphreys, 339. Duble V. Batts, 14. Duche V. Wilson, 311. Dudley v. Briggs, 210. Durgen v. Dyer, 173. Dunbar v. Marden, 240. Duncan v. Baker, 294. Duncan v. Pope, 47. Dunham v. Pitkin, 46. Dunlop V. Gregory, 188. Dunlop V. Higgins, 31. Dunn V. Chambers, 170. Dunn V. Moore, 63. Dunning v. Funk, 75. Dunton v. Brown, 105. Dwight V. Wliitney, 346. Dwinnell v. Howard, 393. Dykes v. Townsfend, 56. EDITOR'S INDEX OF CASES CITED. XXXV E. Eads V. Carondelet, 18, 19. Eagle Manuf . Co. v. Jennings, 363. East Tenn. R. R. Co. v. Staub. 63. Easter v. White, 59. Eaton V. Eaton, 116. Eaton V. Hill, 113. Eaton V. Lincoln, 87. ^^' Eaton V. "Winnie, 159. Ecker v. McAllister, 75. Edson V. Gates, 334. Edwards v. Nelson, 101. Eggleston v. "Wagner, 30. Eiler v. CruU, 335. Elderkin v. Fellows, 375. Eldred v. MaUoy, 176. Eldridge v. Holway, 343. Elkhart Co. Lodge v. Crary, 184. Elhe V. Judson, 80. Eliason v. Henshaw, 19, 30. Ellison V. Jackson, 57. EUing V. Vandorlyn, 75. Elliot V. Bradley, 346. Elliot V. Dycke, 340. Elliot V. Stoeke, 333. Ellis V. Andrews, 156. Ellis V. Bitzer, 85. Ellis V. Bray, 58. Ellswoi-th V. Cordray, 541. Emerine v. O'Brien, 373. Emerson v. Miller, 335. Emerson v. Providence Manuf. Co., 343, 346. Emory v. Irving Nat. Bank, 331. Ennis v Gordop, 73. Epich V. CUfEord, 58. Erie Railway Co. v. Union, 190. Erwin v. Erwin, 3. Erwin v. Parham, 73. Eskridge v. Glosser, 38. Eureka Flour Mills v. Smith, 115. Everingham v. Lord, 348. Everingham v. Meighan, 74 Exchange Bank v. Rice, 213. F. Fairbanks v. Metcalf , 47. Fairchild v. Rogers, 313. Farer v. Philbrick, 173, 191. Fareira v. Gabel, 303. Farham v. O'Brien, 80. Farley's Appeal, 334 Farley v. Cleveland, 313, 230. Farmers' & Mechanics' Bank v. Colby, 348. FarweU t. Mather, 67. d Fay V. Burditt, 116. Feldman v. Bier, 373. Fellows v. Commissioners, 336. Felton v. Dickenson, 313. Felvin v. Wiseman, 105. Fenno v. Weston, 19. Fenton v. Clark, 335. Ferguson v. Neville, 104 Ferguson v. Hosier, 301. Ferguson v. Sutphen, 341. Ferren v. Moore, 335. Ferrier v. Storer, 31, 33. Ferris v. Spooner, 381. Ferry v. Moore, 353. Fessenden v. Mussey, 56. Field V. Crawford, 313. Filson V. Himes, 191. Files V. McLeod, 330. Finney v. Apgar, 65, 67. First N. Bank v. Crocker, 330. First Nat. Bk. v. Hendrio, 184. First Nat. Bank v. Leerman, 134 Fisher v. Bush, 188. Fisher v. Derring, 333. Fisher v. "Van Behren, 134 Fish V. Chapman. 367. Fish V. Clelland, 157. Fitch V. Snedaker, 33. Fitts V. Hall, 113. Fitzgerald v. Reed, 116. Flannagan v. Kilcome, 75. Flanders v. Fay, 369. Flemming v. Beck, 310. Flint v. Cadenasso, 313. Floyd Acceptances, 104. Fonda v. "Van Horn, 105. Forbes v. Haymann, 335. Force v. Dutcher, 333. Forcheimer v. Stuart, 300. Ford V. Mitchell, 373. Forsyth v. State, 187. Foster v. Paine, 330. Foster v. Robinson, 348. Fountain Coal Co. v. Phelps, 841. Fox V. Kitten, 381. Fox V. Turner, 14, 19. Franklin v. Long, 300. Fray v. Sterling, 63. Frazier v. Heniiren, 344. Freeman v. Rolland, 113. Freiberg v. Beach Hotel, etc. Co., 335. French v. New, 368. Frentress v. Markle, 363. Freyman v. Knecht, 300. Frian v. Baboock, 330. Friend y. Miller, 310. ^ Fried v. Royal Ins. Co., 33. Frith v. Lawrence, 33. EDITOR'S INDEX OF CASES CITED. Front St. E. R. Co. v. Butler, 290. Frost V. Belmont, 184. Frost V. Johnson, 85. Frv V. Franklin, 15. Fry V. Piatt, 57. Fuller V. Dane, 184. Fuller V. Ellis, 338. Fuller V. Green, 178, 3S7. Fuller V. Hasbrouck, 304. Fullerton v. Sturgis, 337. Furman v. Titus, 156. . G. Gage V. Ewing, 316. Gage V. Lewis, 156. Gale V. Tappan, 360. Galloway v. Barr, 73. Galpin v. Atwater, 336. Gait V. Galloway, 360. Garland v. Reynolds, 348. Garnett V. Kirkman, 75. Garner v. Cook, 105. Garrison v. Nute, 188. Gates V. Brown, 357. Gates V. Hughes, 363. Gates V. Nixon, 55. Gates V. Shultz, 75. Gault V. Stormount, 58. Gay V. Botts, 80. Gaylord v. Soragen, 193. Geer v. Council BlufEs, 185. George v. Bartlett, 349. George v. Skivington, 160. Gerry v. Stimpson, 47. Getchell y. Maney, 334. Geylin v. De Villeroy, 345. Gibbs V. Linaberrv, 134. Gibney v. Curtis, "249. Gibson v. Pelke, 139. Gilbert v. Baxter, 19. Gillam v. Looney, 193. Gillespie, In re, 333. Gillespie v. Edmunston, 38. Gill V. Beckwall, 57. Gillighan v. Boardman, 57. Gill V. Ferris, 188. Gilson V. Spear, 113. Gilmore v. Pope, 348. Given v. Lemoine, 346. Glasgow V. Hobb, 68. Glass V. Beach, 80. Glasscock v. Glasscock, 46. Gleason v. Dyke, 99. Glenn v. Farmers' Bank, 178. Glen V. Hope Mut. Ins. Co., 313. Goddard v. Binney, 65. Goebel v. Lynn, 83. Gonzales v. Cartin, 63. Goldsby v. Robertson, 93. Gooch V. Holmes, 65. Goodlete v. Kelly, 46. Goodale v. Thurman, 187. Goodrich v. Hubbard, 313. Goodspeed v. Wiard Plow Co., 14, 33. Goodnow V. Empire Lumber Co., 108. Goodwin v. FoUett, 83. Goodwin v. Merrill, 90. Gorden v. Butler, 156. Goi'den v. Gorden, 80. Gorden v. Moore, 49. Goss V. EUiason, 85. Goss V. Stevens, 335. Goucher v. N. W. Ins. Co., 149. Gould V. Banks, 288. Gould Y. Butler, 83. Gould V. Murch, 334. Gouvenor v. Fetch, 18. Gower v. Emery, 339. Grace v. Mitchell, 339. Grafton v. Cummings, 55, 58. Gragg V. Brown, 346. Grant v. Grant, 157. Grant v. Johnson, 394. Grant v. Ludlow, 334. Gray v. Hadkinson, 49. Gray v. Hook, 184. Gray v. McReynolds, 181. Greentree v. Rossenstock, 333. Green v. Brookins. 65. Green v. Clark, 47. Green v. Estes, 59. Green v. First Parish Maiden, 93. Green v. Gilbert, 325. Green v. Green, 108. Green v. Merchants' Ins. Co., 148. Green v. Probate Judge, 44. Green v. Wells, 268. Green v. Welding, 105, 108. Gregory v. Logan, 57. Gregory v. Wendell, 135, 179, 203. Gregory v. Wattowa, 179. Greenstine v. Burchard, 249. Gray v. Tubbs, 254. Gribben v. Maxwell, 116, Griffith V. Wells, 173. Gregg V. Landis, 254. Griffin v. Culver, 309, 313. Grinnell v. Buchanan, 343. Griswold v. Carthage, etc, E. E. Co., 334. Grubb V. SuU, 336. Guild V. Butler, 315. Guilick V. Grover, 357. Gunn V, Cautine, 348. EDITOR'S INDEX OF CASES CITED, xxxvii Gurchard v. Brand, 320. Guthman v. Kewin, 375. Guthrie V. Wabash R. R. Co., 357. H. Habrecht v. Alexander, 104. Hadley v. Clinton Impt. Co., 348. Haight V. Bacon, 131. Haines v. Tucker, 385, 393. Hall V. Garitt, 184. Hall V. Huntoon, 344. Hall Y. Junction R. R. Co., 340. Hall V. Lauderdale, 348. Hall V. Marston, 213. Hale Mfg. Co. v. Amer. Ry. Sup- ply Co., 71. Hale V. Rice, 101. Hallett V. Norion, 173. Hallock V. Commercial Ins. Co., 34. Holloday v. Patterson, 184. Halsa V. Halsa, 57. Hamet v. Letcher, 135. Hamblin v. Duneford, 313. Hamilton v. Hamilton, 188. Hamilton v. Lycoming Ins. Co., 23, 28. Hamilton v. Thrall, 390. Hammer v. Schoenfelder, 310, Hanauer v. Doane, 193. Hancock v. N. Y. Life Ins. Co., 381. Hancock v. Tunker, 348, Hanford v. McNair, 333. Hannah v, Richmond, etc, R. R., 224. Hannibal Bank v. North Mo. Coal Co., 114. Harder v, Marion Co. Com., 303. Hardy v. "Waters, 106. Hardman v. Wolfstein, 55. Hargrove v. Cook, 57. Harmony v. Bingham, 164, 333, Harriman v. Harriman, 83, . Harritnan, The, 323. Harris v. Roberts, 184. Harrington v, FaU River Iron Works, 335. Harnes v. Dipple, 105. Harper v. Graham, 83. Harper v. Harper. 63. Harper v. Little, 360. Harrison v. Missouri Pac. R. R. Co., 332. Harrison v. McHeniy, 837. Harrison v. Close, 83. Hartford, etc, R, R, Co, v, Jack- son, 133. Harting v. Witte, 234. Hasbrouck v. Tappen, 369. Haskell v. Wright, 385. Haskins v. Royster, 310. Haslock V. Meyers, 394, Hatch V. Douglass, 179. Hatch V. Mann, 181. Hansen v. Myer, 333. Hausen v, Lamount, 55. Hawks V. Naglee. 187. Hay v. Gronoble, 312. Haynes v. Bennett, 108. Hazlett V. Sinclair, 334. Hazard v. Loring, 275. Hazard v. N. E. Marine Ins. Cb., 130. Hearn v. Curran, 85. Heatwole v. Gorrell, 255. Heebstriet v. Beckwith, 234. Hecht V. Caughson, 313. Hedden v. Roberts, 249. Heeth v. Car Manuf. & Dock Co., 108. Heflin v. Milton, 63. Hegert v. Indiana Asbury Univ., 73. Hemingway v. Stansell, 315. Henderson v. Louck, 399. Henderson v. Railroad Co., 854. Hendriok v. Lindsay, 313. Hendricks v. Rasson, 46. Henry v. Bishop, 240. Hersey v. Verrill, 245. Herring v. Skaggs, 335. Hers V. Griggs, 240. Hey wood V. Tillson, 210. Hicks V. Burhans, 93. Hicks V. State, 45. Hill V. Baker, 104. Hillv. Balls, 155. Hill V. Blake, 369, 293. Hill V. Chipman, 393. Hill V. Frost, 60. Hill V, Jamison, 63. Hill V. Morse, 44. Hill T. Spear, 193. Himrod Furnace Co.v, Cleveland R. R. Co., 58. Hinkley v. Fowler, ?13. Hinkle v. Minneapolis, 85. Hines v. Barker, 336. i Hinton v. Locke, 349. Hoare v. Rennie, 393. Hodgson V. Barrett, 399, Hoffman v. Vallejo, 186. Hogan V. Kurtz, 318. Hogins V. Plympton, 300. Hogg V. Ashman, 318. Holbrook v. Armstrong, 68. XXXVUl EDITOR'S INDfiX OF CASES CITED. Holden St. Mill Co. r. Westerveth, 394. HoUister v. Abbott, 44. HoUis V. Chapman, 294. HoUoway v. Griffith, 281 Holmes v. Boyd, 83. Holmes v. Clark, 159. Holmes v. Eichett, 185. Holmes v. Kice, 105. Holt V. Gage, 319. Holtzer v. Schmidt, 134. Home V. Chatham, 246. Homer v. Thwing, 113. Hook V. Donaldson, 106. Hooven v. Sidener, 300. Horton v. Moffitt, 326. Horton v. McCarty, 57. Hosford V. Kanause, 213. Hosmer v. Wilson, 281, 285. Hotchkins v. Hodge, 187. Houghton V. Houghton, 63. Houghwout V. Boisaubien, 14, 35, 38. Houtaling v. Ball, 63. Hovey v. Brown, 335. Hovey V. Page, 236. Howard v. Daly, 14, 281. __ Howard v. Hoery, 131. Howard v. Massingale, 47. Howard v. Wilmington R. R., 263. Howe V. Buffalo, N. Y. & Erie R. R., 339. Howe V. Taggart, 75. Howe Machine Co. v. Bryson, 313, Howell V. Field, 60. Howell V. Stewart, 193. Howland t. Coffin, 184, 333. Howland v. Lounds, 33. Howley v. Farrar, 80. Howley v. Keeler, 286. Hoyt V. Casey, 111. Hoyt V. Thompson, 324. Hubbard v. Belden, 335. Hubbard v. Cummings, 106. Hubbard v. Russell, 313. Huckinsv. Hunt, 181. Huckley v. Headley, 164. Hudson V. McCartney, 185, Huff V. Walkins, 324. Humble v. Mitchell, 65. Hunt V. Douglass, 343. fluntv. Johnson, 74. Hunt V. Jones, 62. Hunt V. Litchfield, 185. Hunt V. Wyman, 264. Hunter v. Giddings, 56. Hurd V. Densmore, 310. Hussey v. Kirkman, 319. Hasted v. Craig, 303. Huston & T. C. R. E. Co. v. Hill, 310, 313. Hutchins v. Alcott, 273. Hutchins v. Hebbard, 336, 358. Hutchinson v. Bower, 346. Hutchinson v. Hutchinson,' 63. Hyderville Co. v. Eagle Slate Co., 268. Illinois, etc. E. R. Co. v. Banner, 105, 108. Illinois Cent. R. R. Co. v. Cobb, 310. Indiana v. Worman, 115. Ingraham v. Baldwin, 116. Innskeep v. Lecony, 204. International R. R. Co. v. Dawson, 184. Ireland v. Geharty, 35. Irwin V. Atkins, 330. Irwin V. Irwin, 108. Irwin V. Williar, 179, 308. Ives V. Carter, 156. James v. Adams, 381. James v. Fulcrod, 73. James v. fatten, 58. Jackson v. Johnson, 318. Jackson v. Sheldon, 340. Jacqueth v. Hudson, 255. Jaudon v. Randall, 320. Jefferson v. Heil, 46. Jeffreys v. Bigelow, 155, 354. Jefts V. York, 138. Jenks V. Robertson, 268. Jenkins v. French, 224. Jenkins v. Pye, 169. Jenness v. Lane, 83. Jenness v. Shaw, 293. Jenness v. Mt. Hope Iron Co., 20, 73. , Jennings v. Lyons, 335. Jewell V. Schoepple, 268. Jewett V. Petit, 319. Johnson v. Barber, 354. Johnson v. Bennett, 245. Johnson v. Berney, 159. Johnson v. Hubbell, 146. Johnson v. Hunt, 188, 315. Johnson v. McGruder, 333. Johnson v. Moore, 327. Johnson v. OUerwein Univ., 73. Johnson v. Stephenson, 20. Johnson v. Sellers, 87. Johnson v. Smith, 138. EDITOR'S INDEX OF CASES CITED. Johnson v. Travis, 311. Johnson v. "Whitman, 300. Johnson v. Wliittemore, 355. Jones V. Atkinson, 335. Jones V. Blpclier, 310. Jones V. Hardesty, 63. ' , 3 Jones V. Judd, 333. Jones V. Nathrop, 318. Jones V. Perkins, 85. Jones V. Pouch, 63. Jones V. Rittenhouse, 75. Jones V. Stanley, 310. Jones V. United States, 333. Jones V. Walker, 330. Jordan v. Davis, 46. Jordan v. Osgood, 156. Jordan v. Wilson, 79. Judson V. Corcoran, 333, 334, Justice V. Lang, 9, 58. K Kamena v. Huelbig, 333, 334. Kean v. Davis, 351. Kearney v. Vaugh, 304, Keeler v. Taylor, 188. Keen v. Sage, 313. Keep V. Goodrich, 73. Kein v. Tupper, 90. Kelly V. Bliss, 358. Keller v. Halderman, 3. Keller v. Ybarn, 18. Kellogg V. Richards, 83. Kellogg V. Robison, 333. Kemble v. Keen, 313. Kemp V. Humphrey, 354. Kemp V. Walker, 46. Kennedy v. Owen, 334. Kent V. Bernstein, 348. Kent V. Kent, 63. Kentucky Bank v. Combs, 338. Kiersted v. Orange & A. R. R. Co., 348. Kindig v. March, 357. Kingon v. Young, 64. Kirkpatrick v. Adams, 179, 303. Kirkpatrick v. Alexander, 303. Kirkpatrick v. Binsall, 179. Kirkpatrick v. Strainer, 348. Kimball, The, 373. Kimball v. Goodburn, 354. Kimball v. Noyes, 313. Kimball v. Vroman, 364. King V. Doolittle, 139. King V. Upton, 75. King V. Wood, 57. Kinsley v. Davis, 353. Kinsley v. Norris, 335. Kinsey v. Leggett, 163. Kitzinger v. Sanborn, 333. Kleokley v. Leyden, 173. Kleeman v. Frisbie, 334. Knapp V. Rock, 44. Knight V. Cooley, 18. Knowlton v. Congress, etc., 199. Kountz V. Kennedy, 337. Ki-app V. Eldredge, 316. Krebs v. Olmstead, 319. Krohn v. Bantz, 58. Kromer v. Heim, 315. Kramer v. Heines, 85. L. La Farge y. Herter, 363. La Grange v. Ward, 44. Laidlaw v. Organ, 134. Lakemanv. Pollard, 825, Lallimore v. Hansen, 83. Lampson v. Cummings, 300. Lamoreaux v. Gould, 73. Lancaster Bank V. Moore, 116. Landers v. Bolton, 340. Lane v. Shackiard, 63. Lane v. Smith, 334. Langdon v. Richardson, 59. Lankton v. Stewart, 83, 315. Lansden v. McCarthy, 334. Lansing v. Dodd, 355. Larkin v. Buck, 394. Larkin v. Harden, 360. Larkins v. Mitchell, 90. Larmon v. Jordan, 35, 38, Larned v. Andrew, 172. Larsen v. Jensen, 59. Lash v. Parlin, 344. Latham v. Udell, 166. Lathrop v. Knapp, 73. Lattimore v. Simmons, 334, 236. Lawrence v. Cook, 61. Lawrence v. Davey, 83. Lawrence v. Dole, 368. Lawrence v. Fox, 213. Lawrence v. Kiddie, 188. Lawrence v. McCalmot, 70. Lawrence v. Miller, 368. Lauber v. Bangs, 141. Layman v.. Conray, 166. Leach v. Nichols, 134. Ledbetter v. Walker, 333. Lee V. Ashbrook, 394. Le Fever v. Le Fever, 368. Lening v. Gould, 83. Leonard v. Duflan, 80. Leppla v. Mackey, 333. Lerch v. GaUup, 59. si EDITOR'S INDEX OF CASES CITED, Leslie v. Langham, 341. Levy V. Cohen, 23. Lewis V. Alexander, 193. Lewis V. Atlas Mut. Ins. Co., 313. Lewis V. Browning, 34. Lewis V. Kerr, 360. Lewis V. Sanger,' 313. Lewis V. Welch, 173. ■ Lexington Ins. Co. v. Parer, 148. Liebeka v. Methuda, 345. Lillie V. Hoyt, 340. Lincoln v. Buckmaster, 116. Linden v. Carpenter, 184. Lindeman v. Desborough, 149. Lincoln v. Erie Preserv. Co., 18. Litchfield v. Garrett, 363. Litchfield v. Hutchison, 159. Littlefield v. Albany Co. Bank, 334. Livingston v. Maryland Ins. Co., 143. Livingston v. Peru Iron Co., 150. Livingston v. Radclifl:, 363. Livingston v. Rogers, 72. Loach v. Farnum, 368. Lochenmeyer v. Fogarty, 378. Lodge V. Dicas, 263. Loeb V. Drakeford, 343. Logan V. Mathew, 75. London Assurance v. Mansel, 151. London v. Haggerstown, etc^Bank, 345. Long V. Hartwell, 369. Long V. Towl, 74. Longworth v. Mitchell, 31. Lonsdale v. Brown, 93. Lord v. Wheeler, 324. Lord V. Wilcox, 316. Loomis V. Newhall, 80, 190. Loomis V. Simpson, 343. Louisville, etc. R. R. Co. v. Sum- ner, 184. Louisville, etc. R. R. Co. v. Good- bar, 234. Love V. Harvey, 176. Lovey v. Burd, 106. Lovell V. St. Louis Mut. Life Ins. Co., 386. Lovering v. Lovering, 384. Low v. Andrews, 63. Low v. Leaman, 348. Lowry v. Dillman, 179. Lucas V. Caulter, 155. Luddington v. Bell, 368. Ludlow V. Hardy, 93. Lungstrauss v. German Ins. Co., 34. Lutz V. Linthicum, 348. Lutz V. Thompson, 390. Lyman v. Gedney, 346. Lyman v. Robinson, 18. Lynch v. Austin, 220. Lyon v. Culbertson, 179. Lyon v. Jerome, 343. Lyon V. Lenon, 344. Lyon V. Mitchell, 184. Lyon V. Phillips, 116. Lyon V. Respass, 193. Lyon V. Waldo, 196. M. Macdowell v. Laer, 313. Mackey v. Peterson, 134. Maclay v. Harvey, 31. Mactier v. Fi-ith, 15, 31, 22, 34. Macurdy v. Rogers, 138. Maii'er v. Canavau, 263. Maitland v. Martin, 339, Malle V. Willett. 185. Malloy V. Gillett, 59. Malone v. Morton, 352. Malstrom v. Hopkins, 263. Malt by v. Austin, 354. Mandelbaum v. Gregorich, 173. Mandelbaum v. McDonald, 187. Mandeville v. W^elsh, 324. Manning v. Gasharie, 385. Mansfield v. Inhabitants. 349. * Mai-ble Co. v. Ripley, 313. ' Marcy v. Marcy, 62. Marine Bank v. Ogden, 115. Marvin v. Treat, 33. Markel v. Mundy, 156. Marsh v. Fairbury, 184, Marsh v. Falker, 159. Marshall v. Hubbard, 161. Marston v. Knight, 300. Martin, In re, 166. Martin v. Adams, 264. Martin v. Black, 31. Martin v. Dryman, 334. Martin v. Hamlin, 326. Martin v. Tradesmen, 337, Marx V. McGlynn, 167. Mason v. Campbell, 101, 315. Masterton v. Mayor, 313. Masury v. South worth, 338. Materne v. Horwitz, 181. Materson v. Howard, 104. Mathieson, etc. Refining Co. v, McMahon, 360. Mathis v. Thomas, 275. Mathews v. Cowan, 113. Mathews v. Light, 341. Mathews v. Lindsley, 375. Mauler v. Churchill, 74. Maxwell v. Clark, 316, EDITOR'S INDEX OF CASES CITED, xU Maxwell v. Day, 263. Maxwell v. Graves, 263. May V. Ward, 57. Maynard v. Tabor, 19. Mayo V. Carrington, 169. McAndrews v. Stillwell, 240. McArthur v. Sears, 267. McBlair v. Gibbs, 199. McBraheyv. Chandler, 184. McCall V. Braham, 313. McCall V. Capehart, 181, 186. McCall V. Nave, 85. McCarty v. Beach, 49. McCartv v. Hampton Bid. Associa- tion, 82. McCan v. Atherton, 47. McClellan v. Sanford, 62. Mcaure v. Mo. Eiver R. E. Co., 184. McClure v. Wilson, 72. McCormick v. Basal, 281. McCormick v. Cheevers, 245. McConnel v. Pillhart, 55, 58. McCoy V. Bixby, 290. McCracken v. San Francisco, 837. McCullough -V. Day, 46. McCurdy v. Rogers, 21. McDonald v. Boering, 15. McDonald v. Fleming, 187. McDonald v. SneUing, 160. MoDonel v. State, 104. McEivin V. Sloan, 80. McEh-oy V. Buck, 58. McEh-oy V. Ludlum, 62. McGraw v. Sturgeon, 279. McGuire v. Bidwell, 273. McGuire v. Corrine, 191. Mclntyre v. Kennedy, 273. McKee v. Vincent, 279. McKenzie v. Nevine, 348. McKinney v. Andrews, 192. MoKinney v. Bradlee, 264. McKinley v. Watkins, 75. McKinnon v. McEwan, 310. McKisson v. Stanberry, 329. McKenzie v. Collins, 156. McLanahan v. Univ. Ins. Co., 148. McLaughlin v. McMangill, 46. McLellan v. Rope, 220. McMahon v. Smith, 185. McMillan v. Ames, 49. McMurphy v. Garland, 268. McNair v. Toller, 104. McNichols V. Reynolds, 269. McVeigh v. United States, 104 Meade v. Watson, 59. Meadows v. Meadows, 57. Medbury v. Watson, 156. Medlin v. Piatt, 827. Melcher v. Flanders, 240. Mellen v. Whipple, 212. Mentz V. American Fire Ins, Co., 185. Meriden V. Zingeen, 60. Merrick's Estate, 348. Merrill v. Nightingale, 131. Merrill v. Wilson, 353. Merritt v. Giddings, 87, 93, Mersey Co. v. Naylor, 292. Metherdy v. Ross, 18. Methiason v. McMahon, 116. Metropolis Bank v. Jersey City Bank, 212. Michael v. Bacon, 192. Michael v. Jones, 344, 348. Michigan College v. Charlesworth, 349. Michigan State Bank v. Hammond, 104. Migell V. Burnett, 21. Milbery v. Storer, 327. Milldam Foundry v. Henry, 268. Millard v. Baldwin, 212. Millard v. Thorne, 263. Miller v. Eno, 300. Miller v. Goddard, 267. Miller v. Finley, 116. Miller v. Jannett, 313. Miller v. Kendig, 81. Miller v. Newhall, 334 Mills V. Mills, 184 Mills V. State, 293. Mills V. Wyman. 80. Milroy v. Spur Mt. Iron Co., 224. Miner v. Lorman, 319. Miner v. Sharon, 155. Minnesota Oil Co. v. Collier Lead Co., 24 Mississippi, etc. R. R. Co. v. Green, 233. Missouri Bank v. Sabin, 73. Mitchell V. Ryan, 46. Mixer v. Sibley, 104. Mobberly v. Mobberly, 245. Mobile, etc. v. Gurney, 244. Mohawk & Hud. River R. R. Co. V. Costigan, 3;S9. Monroe v. Perkins, 83, 268. Montague v. Allen, 166. Montague v. Garnett, 62. Montgomery v. Edwards, 55. Montgomery v. Lampton, 101. Moote V. Scriven, 354. Moore v. Appleton, 339. Moore v. Detroit Locomotive Works, 82, 258. Moore v. Dunn, 316. Moore v. Fowler, 263. xlii EDITOR'S INDEX OF CASES CITED. Moore v. Giles, 46. Moore v. Ivers, 337. Moore v. Mandelbaum, 341. Moore v. Metropolitan Bank, 222. Moore v. Moore, 341. Moore v. Pierson, 28. Moore v. Walla Walla, 47. Mordecai v. Dawkins, 193. Moreland v. Atchison, 157. Morgan v. Bergen, 254. Morgan v. MoKee, 293. Morin v. Martz, 58. ^ Morrill v. Tehama, 18. " Morris v. Osterhouse, 59. Morris Run Coal Co. v. Barclay Coal Co., 188. Morris Coal Co. v. Everrett, 161. Morrison v. Davis & Co., 267. Morrison v. Garth, 327. Morrison v. Lynch, 322. Morrow v. Higgins, 333. Morse v. Burnett, 188, 190. Morse v. Eathbvirn, 255. Morse v. Ryan, 184. Morse v. Tappan, 44. Morton v. Dean, 56. Moss V. Averille, 114, 115. Mott V. Hicks, 51. Motley V. Head, 360. Moulton V. Am. Life Ins. Co., 149. Moulton V. Kershaw, 18. Mound City Land & W. Asso. v. Slauson, 71. Mountjoy v. Metzger, 281. Mt. Washington Hotel v. Marsh, 114. Much V. Stoner, 224. Muckenburg v. Holler, 188. Muir V. Sohenck, 222. Mulcrane v. Am. Lumb. Co., 60. MulhoUand v. Bartlett, 75. Mulhall V. Quinn, 224. Mumford v. Wilson, 262. Mundorf v. Howard, 146. Municke v. Falk, 65. I Murphy v. Hanrahan, 320. Murphy v. Helmrich, 851. Murphy v. St. Louis, 294. Murdock v. Dickson, 222. Murry v. Snow, 87. Mutual Ins. Co. v. Hilyard, 104. Mutual Life Ins. Co. v. Hunt, 116. Muselman v. StOner, 269. Musser v. Ferguson, 80. Myers v. Munson, 241. Myers v. Hart. 255. Myers v. Brighton, 260. Nash V. Lull, 70. Nashville R. R. Co. v. David, 367. National • Bank v. Hall, 20. National Bank v. Segur, 234 Neal V. Saunderson, 267. Needles v. ShafCer, 839. Negley v. Jeflfers, 269. Newberry v. Hill, 223. Newhall v. Clark, 303. Newsan v. Lustin, 240. Newton v. Bronson, 55. Newton v. Chicago, etc. R'y Co., 83. New York R. R. Co. v. Pixley, 14 Niagara Falls Ins. Co. v. Green, 63. Nichols V. Weaver, 61. Nicholson v. Combs, 337. Nickerson v. Swift, 337. Niver v. Rossman, 255. Noble V. Ames Manuf. Co., 309. Noel V. Murry, 273. Noeting v. Wright, 156. Noice v. Brown, 210. Norrington v. Wright, 141, 293, 305. North V. Wendell, 66. Northwestern Mutual Ins. Co. v. Blankenship, 116. Northwestern Iron Co. v. Meade, 19, 20. Norton v. Brown, 262. Noyes v. Lormg, 138, 849. Nugent V. Wolf, 59. Nutt V. Humphrey, 245. O- Oakland Savings Bank v. Apple- garth, 275. Oatfield V. Warring, 93. O'Brien v. Briettenbach, 195. O'Conner v. Arnold, 337, 343. O'Conner v. Beckwith, 93. O'Donnell v. Leman, 56, 57. Oelrich v. Ford, 348. O'Fallin v. Kennedy, 254 Ogden V. Raymond, 344. Ogleby V. Helen, 315. Ohio Wesleyan Female College v. Love, 72. Oliver v. Hendlet, 105. O'Rourk V. Percival, 150. Oregon Steam Nav. Co. v. Winsor, 188. Oregonian R'y Co. v, Oregon E'y Co., 44. EDITOR'S INDEX OF CASES CITED. xliii Organ v. Stewart, 267. Ort V. Fo-wler, 134. i Ormerod v. Dearman, 185. Ortrecan v. Dickson, 49.' Osborn'v. Hoffman, 85. Osborne v. Poket, 310. Oscanyan v. Arms Co., 184. Osier v. Hoffs, 80, 93. Otis V. Spencer, 46. Owen V. Lang, 105. Owens V. Stevens, 83. Oxford Nat. Bank v. Kirk, 185. Packard v. Richardson, 57. Packer v. Stewart, 269. Pacific R. R. Co. v. Seeley, 184. Paddock v. Strobridge, 155. Paget V. Oakes, 316. Pagborn v. Westlake, 173. Paine v. Tillinghast, 335. Palmer v. Palmer, 46. Palmer v. Phoenix Life Ins. Co., 21. ParceU v. McComber, 294. Paret v. City of Bayonne, 114. Paris V. Whitney, 234. Parker v. Butterworth, 318. Parker v. Enslow, 75. Parker v. Pettit, 81, 375. Parker v. Shefford, 319. ^ Parlts V. McKaney, 196. Parsons v. Keyes, 113. Parsons v. Loucks, 65. Parsons v. Tellman, 230. Partridge v. Hood, 185. Palo Pinto Co. v. Gano, 234 Patchin t. Swift, 57. Paton V. Coit, 178, 239. Patten v. Deshon, 332. Patterson v. Kirkland, 134. Pattison v. Shaw, 104. Payne v. Dwinell, 273. Peal V. McDowell, 116. Pearce v. Willson, 185. Pease v. Sabin, 131. Peck V. Vandemark, 57. Peck V. Briggs, 193. Peckham Iron Co. v. Harper, 341. Peckham V. Winter, 64. Peelman v. Peelman, 87. Peigne v. Sutcliff, 113. Peltz V. Eichele, 190. Pendergrass v. N. Y. Manuf. Co., 316. Penn. Coal Co. v. Sanderson, 249. Pennsylvania R. R. Co. v. Atha, 335. Pennybacker v. Jones, 355. Penniman v. Hartshorn, 58. ' Pennywit v. Foote, 44. Penrose v. Curren, 113. People V. Graham, 45. People V. Insurance Co., 333. People V. Talmage, 104. People's Bank v. City of New York, 184. Perkins v. Eaton, 176. Perkins v. Hudsell, 58. Perkins v. Lockwood, 87. Perkins v. Lyman, 355. Perrin v. Cheeseman, 43, 46. Perrin v. Dunn, 186. Perrin v. Lipper, 383, Perrin v. Noyes, 329. Perrin v. Wilson, 111. Perry v. Chessly, 819. Perry v. Whitnej', 157. Pettis V. Ray, 85, 315. Phelps V. Hubbard, 274. Phelps V. Stillings,,58. Phelps V. Zucklay, 164. Philadelphia Appeal, 234. Phillips V. Adams, 58. Phillips V. Hatch, 104. Phillips V. Thorp, 188. Philpott V. Brown, 316. Philpottv. Gruninger, 80. Phoenix Ins. Co. v. Badger, 185, Phoenix Ins. Co. v. Rink, 83. Pickard V. McCormick, 156. Pickles V. State, 355. Pierce v. Cooley, 399. Pierce v. Indreth, 46. Pierce v. Johnson, 353. Pierce v. Jung, 255. Pierce V. Paine, 63. Pierpont v. Wilson, 335. Piersol v. Grimes, 337. Pierson v. Ballard, 57. Pifler V. Smith, 134. Pike V. Brown, 330. Pillows V. Roberts, 46. Pinkham v. Crocker, 346. Pinkham v. Gieer, l57. Pinney v. Ferguson, 375. Pipp V. Reynolds, 312. Pixler V. Nichols, 294. Pixley V. Boynton, 179, 195. Placer County v. Astin, 840. Piatt V. Brand, 281. Poland V. Miller, 131. Polaski V. Mut. Life Ins. Co., 336. Pool V. Horner, 93. Porter v. Dunlap, 334. Porter v. Viete, 341. Post Clinton R. Co. v. Cleveland, 313. xliv EDITOR'S INDEX OF CASES CITED. Post V. Kearney, 233. Post V. Mason, 166. Potter V. Douglass, 85. Potter V. Moi-eland, 248. Potts V. Plaisted, 275. Potts V. Whitehead, 19, 31. Powell V. Charles, 263. Powell V. D. S. & a. E. E. Co., 824. Prater v. Miller, 74. Pratt V. Langdon, 241. Pray v. Burbank, 173. Price V. MoAuley, 150. Price V. Supreme Lodge K. of H., 180. Pritchard v. Norton, 63. Propeller Niagara v. Cordez, 367. Prop, of Canal Bridge v. Gordon, 114. Protection Ins. Co. v. Harmer, 143. Prout V. Wiley, 108. Providence Gas Burner Co. v. Bar- ney, 355. Pryor v. Cain, 72. Putnam v. Woodbury, 87. Q. Quick V. Wheeler. 20. Quigley v. De Haas. 390. Quincy Bank v. Hail, 20. Quinn v. Eoath, 254. Quirk V. Thomas, 195. E. Railroad Co. v. Ralston, 184. Railroad Co. v. Reeves, 267. Racine Bank v. Case, 273. Radich v. Hutchins, 164. Rae V. Hulbert, 44. Raisin v. Clark, 249. Randall v. Randall, 188. Randall v. Reynolds, 224. Rankin v. Darnell, 286. Ranwells v. Garner, 116. Rathbon v. Budlong, 344. Rather v. First Nat. Bank, 172. Rauget V. Roll, 191. Eay V. Thompson, 264. Ray V. Tubbs, 113. Raymond v. Leavitt, 188, 193. Ready v. Noakes, 73. Redfield v. Davis, .840. Reed v. Braden, 254. Reed v. Evans, 57. Reed v. McGraw, 263. Reed v. McKee, 185. Eeed v. Wash. Ins. Co., 185. Reeder v. May, 273. Eeese River Mining Co., In re, 151, Regents v. Detroit. 114. Reynolds v. Hassam, 244. Reynolds v. Nugent, 83. Rhodes v. Gartner, 56, 58. Rice V. Candle, 312. Rice V. Carter, 230. Rice V. Gost, 176. Rice V. Manly, 160, 210. Rich V. Austin, 340. Richards v. Griggs, 234. Richards v. Shaw, 90, 394. Ricliards v. Skiff, 240. Richardson v. Cooper, 269. Richardson v. Crandal, 199. Richardson v. Grundy, 301. Richardson v. HockenhuU, 326. Richardson v. Noble, 156. Richardson v. Pate, 108. Richardson v. Pierce, 63. Richardson v. Rawlind, 186. Richmond v. Robinson, 354. Ricketts v. Harvey, 185. Rickett V. Sheets, 193. Riley v. Albany Savings Bank, 116. Rippy V. Grant, 170. Robbins v. Ayers, 330. Roberts v. Barnum, 87. Roberts V. Rockton Co., 62. Roberts y. Rumley, 335. Robeson v. Bohn, 393. Robinson v. Douthiti 346. Robinson Machine Works v. Chan- dler, 131. Robinson v. Weeks, 105. Robinson v. Bullock, 368. Roby v. Cossett, 336. Rogers V. Blackwell, 116. Rogers v. Hanson, 300. Rogers v. March, 348. Rogers v. Rogers, 362. Rogers V. Sheerer, 303. Rogers v. Union Stair Co., 310. Roll V. Raguet, 185. Roper V. Johnson, 381. Roquemore v. Alioway, 193. Rood V. Jones, 75. Rollins V. Marsh, 83. Root V. Merriani, 178. Rose Clair Lead Co. v. Madden. Rose V. Mitchell, 193. Ross V. Doland, 134. Rowe V. Whittier, 330. Royce v. Allen, 353. Ruohizky v. De Haven, 105. Ruckman v. Bryan, 193. EDITOR'S INDEX OF OASES CITED. adv Ruckman v. Ruckman, 46. Ruddell V. Dillman, 124. RufE V. Jai-rett, 300. Raflferty v. Largee, 57. Ramsey v. Berry, 179. Euple V. Bindley, 169. Rupley V. Daggart, 133. Ruppe V. Edwards, 345. Russel V. Bimrtie. 18. Russel V. Kirkbride, 224. , Russel V. Little, 85. Russel V. Minor, 299. Ryan v. Dayton, 294. Ryan v. Uliaer, 300. s. Sage V. Jones, 47. Sage V. Wiloox, 57. Salmon Falls Manuf. Co. v. God- dard, 56. Sampson v. Shaw, 179, 188. Sanborn V. Sanborn, 57. .,, Sangborn v. Flagler, 56. San ford v. Handy, 345. Sauer v. Brinker, 245. Sanquirico v. Benedette, 313. Saratoga County Bank v. King, 191. Savage v. Davis, 357. Savercool v. Farwell, 326. Saville V. Welch, 335. Sawyer v. Pressart, 19. Sawyer v. Concord R. R. Co., 224. Sawyer v. Cutting, 357. Sawyer v. Mayhew, 340. Saxonia M. & R. Co. v. Cook, 267. Scanlon v. Cobb, 116. Scharmer v. Farwell, 185. Scheland v. Espelding, 290. Schemp v. Schent, 186. Schenectady Stove Co. v. Hol- brook, 25. Schepflin v. Dessar, 358, Sohitz V. Meyer, 85, 315. Schnell v. Nell, 70. Schofleld V. Walker, 164. Scholy V. Mumford, 164. Schoiberg v. Cheney, 14. School District No. 1 v. Dauchy, 334. School Directors v. Trefethren, 28. School District v. Wood, 51, 114. School Trustees v. Bennett, 333. Schreiner v. Cummings, 83. Schroeder v. Fink, 80. Schultz V. Culbertson, 185. Schweider v. Lang, 85. Schwarzbach v. Pro. Union, 143, 149. Scott V. Fields, 254. Scott V. Killaning Coal Co., 292. Scott V. McMillan, 234. Scott V. Middleton, etc. R. R. Co., 335. Scott V. Raymond, 301. Scranton v. Stewart, 105, 108. Scrudder v. Union Nat. Bk., 63. Sea V. Carpenter, 338. Seaman v. O'Hara, 269. Sears v. Brink, 57. Sears v. Shaffer, 170. Seavprs V. Phelps, 116. Seawright v. Payne, 115. Sedgwick v. Stanton, 184. Seery v. Socks, 344. Seidenbinder v. Charles, 198. Semmes v. Insurance Co., 323. Severance v. Kimball, 164. Seymour v. Menham, 260. Seymour v. Malboro, 93. Shackford v. Newington, 241. Shadman v. Guthrie, 57. Shaddle v. Disborough, 73. Sharp V. Jones, 348. Sharp V. Rogers, 74. Shaw V. Clark, 179. Shaw V. Nudd, 334. Shaw V. Rep. life Ins. Co., 281. Sheehy v. Adarne, 63. Sheldon H. B. Co. v. Eikemeyer, 335 Shelters v. Allen, 116. Shenk v. Mingle, 187. Sherley v. Riggs, 186. Sherwood v. Walker, 123. Shepard v. Milwaukee, etc., 310. Shepard v. Rhoades, 101. Shepherd v. Young, 93. Shiber v. Shack, 83. Shiel v. McVitt, 355. Shipman v. Horton, 106. Shipman v. Seymour, 156. Shirer v. Keller, 273. Shirley v. Black, 57. Sliirley v. Shirley, 58. Shirwin v. Rut. & Bur. R. R., 868. Shouse v. Neiswaanger, 310. Shropshire v. Burns, 104. Shrive v. Bereton, 255. Shultz V. Bailey, 333. Shultz V. Bradley, 269. Sibley v. County of Pine, 218. Sieboid v. Davis, 19. Silvernale v. Cole, 129. Simar v. Canady, 156. Simms v. City Insurance, 104. xlvi EDITOR'S INDEX OF CASES CITED. Simms v. Everhart, 108. Simms v. Ferrel, 157. Simmons v. Hamilton, 315. Simmonds v. Green, 374, 399. Simonds v., Heard, 348. Simpson v. Carson, 355, 358. Simpson V. Garland, 348. Singleton v. Thomas, 83. Sinclair v. Learned, 375. Sloan V. Union Bank Co., 339. Sloan V. Wilson, 57. Slagg V Compton, 19. Smalley v. Green, 63. Smith V. Arnold, 58. Smith V. Bartholomew, 360. Smith V. Bittger, 373. Smith V. Brotherline, 341. Smith V. Boston & M. R. E., 185. Smith V. Dunham, 337. Smith V. Easton, 74. Smith V. Harrison, 333. Smith V. Jordan, 284. Smith V. Kidd, 335. " Smith V. Lewis, 368, 285, 293. Smith V. Livingston, 339. Smithiv. Perry, 333. Smith V. Richards, 187. Smith V. Rowe, 286. Smith V. Sherman, 224, 236. Smith V. Smith, 156. Smith V. Sublett, 343. Smith V. Tracy, 854. Smith V. "Weaver, 18, 73. Smith V. Wood, 50. Smoot V. Case, 281. Snell V. Cottingham, 310. Snow V. Judson, 160. Snow V. Schumacher Manuf. Co., 131. Snyder v. Guthrie, 80. SoflEe V. Gallagher, 373. Solomon v. Kimmel, 49. Somers v. Pumphrey, 116. Soper v. Peck, 134. Southai-d V. Boyd, 184. Soutier v. Kellerraan, 349. Spades v. Barrett, 164. Spaulding v. Rosa, 325. Spencer v. Towles, 313. Spicer v. Binker, 49. Spinney v. Sullivan, 324. St. Joseph & Denver City R. R. Co. V. Ryan, 184. St. Leger's Appeal, 167. St. Louis, etc. R'y Co. v. Davis, 83. St. Louis, Jacksonville, etc. R'y Co. V. Mathers, 191. Stackpole v. Arnold, 334. State v. Corlies, 319. State V. Findley, 190. State V. Mathis, 337. State V. Rice, 115. State V. Richmond, 204. State V. Thatcher, 47. State V. Watts, 333. State V. Winona R. R. Co., 390. State Bank v. Hastings, 184. Stafford v. Bacon, 101. Stafford v. Roof, 106. Stafford v. Welch, 375.' Stampers v. Temple, 33. Stanton v. Embrey, 184. Starr Glass Co. v. Morey, 90- Steamboat Albatross v. Wayne, 248. Steamboat Co. v. Atkins, 348. Stebbins v. Bruce, 224. Stebbins v. Crawford Co., 80. Steele v. Lowry, 46. Stees V. Leonard, 323. Stellins v. Palmer, 336. Stephenson v. Cady, 393. Stephenson v. Robinson, 318. Sterling Organ Co. v. House, 312. Sterling v. Sinnickson, 188. Stevens v. Coon, 81. Stevens v. Warren, 180. Stevenson v. Crapnell, 47. Stewart v. Emerson, 156. Stewart v. Houston & Texas R. B. Co., 234. Stewart v. Keteltas, 363. Stewart v. Lehigh Valley, 190. Stewart v. Loring, 325. Stewart v. Rogers, 338. Stewart v. Hamilton College, 79. Stines v. Dorman, 235. Stockham v. Stockham, 23, 34. Stoddard v. Ham, 126. Stoddard v. Mix, 186. Stone V. Chamberlain, 263. Stone V. Covel, 159. Stone V. Dennison, 113. Stone V. Harman, 31. Stone V. Perry, 399. Story V. Solomon, 179. Stoutenberg v. Lybrand, 183. Strasser v. Conklin, 833. Strauss v. Wessel, 231. Stroher v. Elting, 854. Strong V. Foote, 112. Strong V. Grand Tr. R. R. Co., 249. Strong V. Grannis, 164. Strong V. Lawrence, 44. Stroud V. Smith, 184. Studley v. Barth, 59. Sullivan v. Rudisill, 327. Summers v. Hamilton, 85. EDITOR'S INDEX OF CASES CITED. xlvii Summers v. Huston, 228. Summers v. Richards, 156. Sumner v. Summers, 191. Sumner v. Waugh, 234. Suydam v. Jones, 233. Swain v. Seamans, 361, 269. Swartout V. Mich. Air Line R. R., 184. Swearingen v. Robertson, 818. Sweet V. Jenkins, 267. Sweeney v. Svyeeney, 46. Sweeney v. Thomason, 249. ' Swift Iron & Steel Co. v. Dewey, 248. Taintor v. Pendergast, 348. Talcott V. Brackett, 188. Talcott V. Henderson, 156. Talmage v. Bierhause, y one.— To hold that any contractual obligation exists [*32] before the *services are rendered would amount to saying that a man may be bound hy contract to an indefinite and unascertained body of persons, or, as it has been expressed, that a man may have a contract with the whole world. This would be contrary to the notions both of Agreement and Obligation, which we have ascertained to co-exist in Contract. Agreement is the expression of a common intention, and there can be none while intention is expressed on one side only ; nor can we say that Obligation in the sense of a vinculum Juris exists between a definite proposer, and the indefinite mass of persons to whom it is open to accept his proposal." The matter would have seemed beyond doubt if it were not that Savigny considered that an obligation of this indefinite character was created by such a proposal as we have described. Erom the diffi- culties which would arise, owing to the obligation being incurred to unascertained persons, he would allow no right of action to accrue, but, upon the performance of the con- dition, he put the promisor in the position of a man who owes a debt of honor which is not recoverable in a Court of Law.* This view has never been seriously entertained in English law ; the promise is regarded as being made, not to the many who might accept the offer, but to the person or persons by whom it is accepted. One may think, with sub- mission to the great authority of Savigny, that his mode of dealing with this subject arises from a disregard or forget- fulness of the principle that the pre-eminent feature of Obligation is the binding together of definite persons by a vinculum juris; that until the parties have emerged from the mass of mankind the bond cannot attach to them. Difficulties in English law. — The difficulties which have arisen in English law are of a somewhat different character, but are capable, it should seem, of a satisfactory solution. a. Savigny's view. b. Sav. Obl. 8, sec. 61. Chap. I. § 7. OFFER AND ACCEPTANCE. 41 They spring from two sources. (1) The acceptor may not, at the time of his doing what amounts to an acceptance, realize all the terms of the offer. Can he afterwards take advantage of them? *(2) It is sometimes diffl- [*33] cult to distinguish representations of intention to act in a particular way from invitations which, if accepted, become binding promises. (1) Motive of acceptance.— The first difficulty is well il- lustrated by the case of Williams v. Garwardine." Eeward was offered by the defendant for information which the plaintiff supplied, though not with a view to the reward. It was held that the defendant was liable as upon a con- tract concluded by the supply of the information asked for. If it appeared clearly from the facts of this case as re- ported that the plaintiff was unaware of the defendant's offer, it might be asked, whether that could be an agreement in which one of the parties knew nothing of the intention of the other.' But the only point urged in the argument for the defendant was that the reward was not the motive which induced the plaintiff to supply the information, and the Court held that the motive was immaterial, and that " there was a contract with the person who performed the condition mentioned in the advertisement." (2) Intimation of course of conduct as distinct from in- vitation. — The second difficulty arises where we have to distinguish statements of intention which can result in no liabilitj' ex contractu from general offers the acceptance of a. 4 B. & Ad. 621. 1 The case of Fitch v. Snedaker, 38 N. Y. 350, answers the author's question in the negative. Plaintiff sought to recover for services ren- dered before he knevp of any reward having been offered. The court said : " To the existence of a contract there must be mutual assent, or in an- other form, offer and consent to the offer. The motive inducing consent may be immaterial, but the consent is vital. Without that there is no contract. How then can there be consent or assent to that of which the party hasnever heard? " Stampers v. Temple, 6 Humph. 113; 8. C. 44 Am. Deo. 396 ; Marvin v. Treat, 37 Conn. 96 ; Howland v. Lounda, 51 N. Y. 604. 42 FORMATION OF CONTRACT. Part n. which by individuals constitutes a contract. It has been asked, in substance, whether an acceptance of the general offer in such a case binds the proposer to fulfill all its terms." For instance, does the existence of its published time-table bind a railway company to carry passengers according to its terms? The real difiBculty in such cases is to ascertain, among ^ the various surroundings of the contract, which of these amount to terms, and which are merely matters of induce- ment. Everything which can be regarded as a term in the offer becomes a promise on the acceptance of the offer. "Whether the promise is absolute or qualified is important, but not here.* In some cases the distinction above mentioned is not easy to draw. [*34:] Of a sale by auction. — *Thus in Harris v. JVicker- son" an advertisement by an auctioneer, that a sale of certain articles would take place on a certain day, was held not to bind the auctioneer to sell the goods, nor to make him liable upon a contract to indemnify persons who were put to expense in order to attend the sale. Blackburn, J., said: " Unless every declaration of intention to do a thing creates a binding contract with those who act upon it, and in all cases after advertising a sale the auctioneer must give notice of any articles that are withdrawn, we cannot hold, the de- fendant liable." On the other hand, the advertisement of a sale without reserve was held, in Warlow v. Harrison,^ to create a bind- ing contract between the auctioneer and the highest bidder that the goods should be knocked down to him. " The sale," said Martin, B., " was announced by them (the auc- tioneers) to be " without reserve." This, according to all the cases both at law and in equity, means that neither the vendor nor any person in his behalf shall bid at the auction, a. Pollock on Cont. 17. 6. Part V, oh. 3, § 3. c. L. E. 8 Q. B. 286. (2. 1 E. & E. sgs. Chap. I. § 7. OFFER AND ACCEPTANCE. 43 and that the property shall be sold to the highest bidder, whether the sum bid be equivalent to the real value or not." "We cannot distinguish the case of an auctioneer putting up property for sale upon such a condition from the' case of the loser of property offering a reward," or that of a railway company publishing a time-table stating the times when, and the places to which, the trains run. It has been decided that the person giving the information advertised for, or a passenger taking a ticket, may sue as upon a contract with him. Upon the same principle,* it seems to us that the highest hona fide bidder at an auction , may sue the auc- tioneer as upon a contract that the sale shall be without reserve." Such was the opinion of the majority of the Court of Exchequer Chamber.'' The substantial difference between the cases seems to lie in this : that not merely the number, but the intentions, of the persons who might attend the sale must be unascertain- able, nor could it be certain that their legal relations would *be eventually altered by the fact of their [*35] attendance. A might come intending to buy, but might be out-bid ; B might come with a half-formed inten- tion of buying if the goods went cheaply; might come merely for his amusement. It would be impossible to hold that an obligation could be established between the" auc- tioneer and this indefinite body of persons, or that their losses could be ascertained so as to make it reasonable to hold him liable in damages. The highest bidder, on the other hand, is an ascertained person, fulfilling the terras of a definite offer. The distinction therefore bears out the proposition laid down at the commencement of this discus- sion. a. Thomett v. Haines, 16 M. St. W. 307. 6. Denton v. G. N. EaUway Co. 5 E. & B. 860. t. Warlow V. Harrison, 1 E. & E. 31U. CHAPTEE II. Form and Consideration, Necessity for one of these marks in English law. — We have now dealt with the mode in which the common inten- tion of the parties should be communicated by the one to the other so as to form the basis of a contract. But it is not enough that such communication should be made as we have described, or even that the parties should intend it to refer to legal consequences. Most systems of law require some further evidence of the intention of the parties, and in default of such evidence mere intention will not avail to create an obligation. In English law this evidence is sup- plied by Eorm and Consideration; sometimes one, some- times the other, sometimes both are required to be present in a contract to make it enforceable. By Form we may be taken to mean some peculiar solemnity attaching to the expression of Agreement which of itself gives efficacy to the contract ; by Consideration some gain to the party mak- ing the promise, arising from the act or forbearance, given or promised, of the promisee. History of the matter. — Alike in English and Eoman law. Form, during the infancy of the system, is the most im- portant ingredient in Contract. The Courts look to the formalities of a transaction as supplying the most obvious and conclusive evidence of the intention of the parties, and Consideration is an idea which, if not unknown, is at any rate imperfectly developed. It would not be desirable here to enter upon an antiquarian discussion, which is neverthe- less of considerable interest. It is enough to say that English law, and probably also Eoman law, starts [*37] *with two distinct conceptions of Contract. One, that any promise is binding if expressed in Form of Chap. II. FORM AND CONSIDERATION. 45 a certain kind : the other that the acceptance of benefits of a certain kind implies an enforceable promise to repay them. The theory that the Eoman Contracts developed out of Conveyance in an order of moral progression seems to rest on no sure evidence ; and there is reason to believe that the earliest of them were those with which we are fa- miliar as the contracts Verbis and ^e^ The solemnities of a promise by formal question and answer bound the prom- isor to fulfill an intention thus expressed, and the re-adjust- ment of proprietary right, where money or goods had been lent for consumption or use, led to the enforcement of the engagements known as Mutuum and Gommodatum. In English law we fiiid that before the end of the thir- teenth century two analogous contracts were enforceable : one Formal, the contract under seal ; one informal, arising from sale and delivery of goods, or loan of money, in which the consideration had been executed upon one side, and an implied or express promise to repay would support an action of Debt. Beyond this, the idea of enforcing an in- formal promise, simply because a benefit was accruing or was about to accrue to the promisor by the act or forbear- ance of the promisee, does not appear to have been enter- tained before the middle or end of the fifteenth century. The Formal Contract of English law is the Gontraat lori- der Seal. In no other way than by the use of this Form could validity be given to executory contracts, until the doctrine of consideration began to make way. We have to bear in mind that it is to the Form only that the Courts look in upholding this contract; the consensus of the par- ties has not emerged from the ceremonies which surround its expression. Courts of Law will not trouble themselves with the intentions of parties who have not couched their agreement in the solemn Form to which the law attaches legal consequences. ISTor, on the other hand, where Form is present *will they ask for further evidence [*38] as to intention. Later on, owing in great measure we may suspect to the influence of the Court of Chancery, 48 FORMATION OF CONTRACT, Part II. the Courts begin to take account of the intention of the parties, and the idea of the importance of Form undergoes a curious change. "When a contract comes before the Courts^ evidence is required that it expresses the genuine intention of the parties; and this evidence is found either in the solemnities of the Contract under SeaJ, or in the presence of Consideration, that is to say, in some benefit to the promisor or loss to the promisee, granted or incurred by the latter in return for the promise of the former. Grad- ually Consideration comes to be regarded as the important ingredient in Contract, and then the solemnity of a deed is said to make a contract binding because it " imports con- sideration," though in truth it is the Form which, apart from any question of consideration, carries with it legal consequences. Before considering in detail the classes of contract which English law recognizes, it is well to conclude the historical outline of the subject of Form and Consideration. "We hare stated that the only contracts which English law originally recognized were the Formal contract under Seal, and the informal contract in which Consideration was executed upon one side. How then do we arrive at the modern breadth of doctrine that any promise based upon Consideration is binding upon the promisor? This question resolves itself into two others. How did informal execu- tory contracts become a,ctionable at all? How did Consid- eration become the universal test of their actionability? Remedies for breach of promise in Br acton. — To an- swer the first question we must look to the remedies which, in the early history of our law, were open to persons com- plaining of the breach of a promise, express or implied^ The only actions of this nature, during the thirteenth and fourteenth centuries, were the actions of Covenant, of Debt, and of Detinue. Covenant lay for breach of promises made under Seal: Debt for liquidated or ascertained claims, arising either from breach of covenant, or from [*39] non-payment *of a certain due for goods supplied, Chap. II. FORM AND CONSIDERATIOIS". 47 work done, or money lent : Detinue " lay for tlie recavery of specific chattels kept back by the defendant from the plaintiff. These were the only remedies based upon con- tract. An executory agreement, therefore, unless made un- der seal, was remediless. The remedy by which such promises were eventually enforced is a curious instance of the shifts and turns by which practical convenience evades technical rules. The breach of an executory contract, until quite recent times, gave rise to a form of the action of Trespass on the case. This was a development of the action of Trespass : * Tres- pass lay for injuries resulting from immediate violence; Trespass on the case lay for the consequences of a wrongful act, and proved a remedy of a very extensive and flexible character. Origin af action of assumpsit — Reasons for its exten- sion. — This action came to be applied to contract in the following way. It lay originally for a malfeasance, or the doing an act which was wrongful ah initio: it next was ap- plied to a misfeasance, or improper conduct in doing what it was not otherwise wrongful to do, and in this form it ap- plied to promises part-performed and then abandoned or negligently executed to the detriment of the promisee:? finally, and not without some resistance on the part of the Courts, it came to be applied to a non-feasance, or neglect to do what one was bound to do. In this form it adapted itself to executory contracts. The first reported attempt ■* so to apply it was in the reign of Henry IV., when a car- penter was sued for a non-feasance because he had under- taken, quare assum-psisset, to build a house, and had made default. The judges in that case held that the action, if a. The Court of Appeal has decided that the action of Detinue is founded in iort^ But though the wrongful detention of goods is the cause of action, the remedy may ap- ply to cases in which the possession of the goods originated in the contract of Bail- ment.* [See judgment of Brett, L. J., at p. 893.] 6. Spence, Chanc. Jurisdiction, I, 241. c. Beeves, ed. Finlason, ii, 395, 396. d. Pollock, 143, ed. 4. * Bryant v. Herbert, 3 C. P. D. 389. 48 FORMATION OF CONTRACT. Part II. any, must be in covenant, and it did not appear that the promise was under seal. But in course of time the desire of the King's Bench to extend its jurisdiction, the [*4:0] *fear that the Common Pleas might develop the ac- tion of Debt to meet the case of executory promises, or that the Court of Chancery might extend its extraor- dinary powers, and by means of the doctrine of considera- tion, which it had already applied to the transfer of interests in land, enlarge its jurisdiction over contract, operated to produce a change in the attitude of the Common Law Courts. Before the end of the reign of Henry YII. it was settled that the form of Trespass on the case known hence- forth as the action of Assumpsit would lie for the non-feas- ance or non-performance of an executory contract; and the form of writ by which this action was commenced continued to perpetuate this peculiar aspect of a breach of a promise until recent enactments for the simplification of procedure. It is not at all improbable that the very difficulty of ob- taining a remedy for breach of an executory contract led in the end to the breadth and simplicity of the law as it stands at present. If the special actions ex contraatu had been developed to meet purely executory informal engagements, they would probably have been applied only to engagements of a particular sort, and a class of contracts similar to the consensual contracts of Eoman law, privileged to be in- formal, might have been protected by the Courts, as excep- tions to the general rule that Form or executed Consideration was needed to support a promise. But the conception that the breach of promise was some- thing akin to a wrong, the fact that it could be remedied only by a form of action which was originally applicable to wrongs, had a somewhat peculiar result. The cause of ac- tion was the non-feasance of that which one had undertaken to do, not the breach of a particular kind of contract ; it was therefore of universal application. Thus all promises would become binding, and English law was saved the tech- Oiap. n. FORM AND CONSIDERATION. 49 nicalities which must needs arise from a classification of contracts. Wha-e all promises may be actionable it follows that there must be some universal test of actionability, *and this test was supplied by the doctrine of Consid- [*41] eration. Origin of consideration as a test of actionability is nn- certain. — It is a hard matter to say how Consideration came to form the basis upon which the validity of informal promises might rest. Perhaps it may suflBce for our pres- ent purposes to say that the " quid pro quo," as it is styled in some of the early reports, was probably borrowed by the Common Law Courts from the Chancery." For the Chancellor was in the habit of inquiring into the intentions of the parties beyond the Form, or even in the absence of the Form in which, by the rules of Common Law, that intention should be displayed, and he would find evidence of the meaning of men in the practical results to them of their acts or promises. It was thus that in the region of conveyance, the Covenant to stand seized and the Bargain and sale of Lands came to be enforced in the Chan- cery before the Statute of Uses; and the doctrine once ap- plied to simple contract was found to be of great practical convenience. When a promise came before the Courts they asked no more than this: "Was the party making the promise to gain anything from the promisee, or was the promisee to sustain any detriment in return for the prom- ise?" If so, there was a ''quid pro quo " for the promise, and an action might be maintained for the breach of it. Gradual growth of doctrine.— So silent was the develop- ment of the doctrine that Consideration was the universal requisite of contracts not under seal, and so marked was the absence of any express authority for the rule in its broad and simple application, that Lord Mansfield was able in the middle of the last century to raise the question whether, in the case of pommercial contracts made in writing, there a. But see Holmes, Common Law, 353-272. 4 50 FORMATION OF CONTRACT. Part U. was any necessity for Consideration to support the promise. In the case of Pillans v. Van Mierop " he held, and the rest of the Court of King's Bench concurred with him, that the custom of merchants would give efficacy to a writ- ten promise for which no consideration could be [*42] shown. The case was decided on anothei* *point, and the doctrine was emphatically disclaimed in the opin- ion of the judges delivered not long afterwards in the House of Lords, in Sann v. Hughes^ * but the question raised serves to show that the breadth of the law upon this subject was, until comparatively recent times, hardly real- ized by those who had to administer it. [*43] *CLASSIFICATION OF CONTRACTS. Contracts are Formal, or Simple. — There is but one Formal Contract in English law, the Deed or Contract un- der seal ; all others are simple contracts depending for their validity upon the presence' of Consideration.* The Legisla- ture has, however, imposed upon some of these simple con- tracts the necessity of some kind of Form, and these stand in an intermediate position between the Deed to which its Form alone gives legal force, and the Simple Contract which rests upon Consideration and is free from the imposition of any Statutory Form. In addition to these a certain class of Obligation has been imported into the Law of Contract under the title of Contracts of Eecord, and though these obligations are wanting in the principal features of Con- tract, it is necessary, in deference to established authority, to treat of them here. o. 3 Burr. 1672. b. T. E. 350. 1 Contracts are specialties or parol contracts ; there is no such middle class as contracts in writing. Contracts in writing but not under seal are parol contracts. Whitehill v. Wilson, 3 P. & W. (Penn.) 405 ; Per- rine v. Cheeseman, 6 Halsted (N. J.), 174. Chap. n. § 1 CLASSIFICATION OF CONTRACTS. Bl Classification of contracts. — The Contracts known to English law may then be divided thus : — A. Formal. i.e. dependent for their validity upon their Form. B. Simple. i.e. dependent for their validity upon the pres- ence of Con- sideration. Contracts of Eecord. Contract under Seal. Contracts required by law to be in some form other than un- der Seal. 4. Contracts for which no form is required. It will be best to deal first with the essentially formal con- tracts, then with those forms which are super-imposed upon simple contracts, and then with Consideration, the requisite common to all simple contracts. *F0EMAL CONTEAOT. [*44] § 1. Contracts of Record. Contracts of Record. — The obligations which are styled Contracts of Eecord are Judgment, Eecognizance, Statutes Merchant and Staple, and Eecognizances in the nature of Statute Staple. (1) Judgment — How it originates. — And first as to Judgment.^ The proceedings of Courts of Eecord are en- tered upon parchment rolls, and upon these an entry is made of the judgment in an action when, that judgment is final.^ 1 A judgmeBt is the final consideration and determination of a court of competent jurisdiction upon the matters submitted to it, and it is only- evidenced by a record or that which is by law substituted in its stead. Whitewell v. Emory, 3 Mich. 84. In Eae v. Hulbert, 17 111. 573, it is said: " A judgment is no more a contract than is a tort." The opposite view is expressed in Morse v. Tappan, 3 Gray, 411. See Freeman on Judgments, sec. 4. 2 A judgment does not exist until rendered in due form and entered on the record. Green v. Probate Judge, 40 Mich. 344; Knapp v. Boch, 83 N. Y. 866. 62 FORMATION OF CONTRACT. Part H. A judgment awarding a sum of money to one of two liti- gants, either by way of damages or for costs, lays an obliga- tion upon the other to pay the sum awarded. This obligation may come into existence as the final result of litigation when the Court pronounces judgment, or it may be created by agreement between the parties before litigation has commenced, or during its continuance. "Where it is so cre- ated the obligation results from a contract for the making of which certain formalities are required ; this contract is either a warrant of attorney, by which one party gives au- thority to the other to enter judgment upon terms settled, or a cognovit actionem, by which the one party acknowledges the right of the other in respect of the pending dispute and then gives a similar authority. Its characteristics. — The characteristics of an obliga- tion of this nature may be shortly stated as follows: — 1. Its terms admit of no dispute, but are conclusively^ proved by production of the record.' 2. So soon as it is created the previously existing rights with which it deals merge, or are extinguished in it : for in- stance, A sues X for breach of contract or for civil injury : judgment is entered in favor of A either by consent or after trial : A has no further rights in respect of his cause of action, he only becomes creditor of ^for the sum awarded. 3. The creditor, as we may conveniently call the party in whose favor judgment is given, has certain advan- [*45] tages * which an ordinary creditor does not possess. 1 The judgment of a court of record, after a trial on the merits, having jurisdiction of the cause arid of the parties, is binding and conclusive upon the parties and privies, upon the same subject matter, in any court, until it is regularly vacated or reversed by some court in a proceeding for that purpose. La Grange v. "Ward, 11 Ohio, 257; Pennywit v. Foote, 27 Ohio St. 600; Strong v. Lawrence, 58 la. 55; The Rio Grande, 23 Wall. 458; HoUister v. Abbott, 31 N. H. 442. A judgment rendered on an issue at law is conclusive as to all matters well pleaded. Oregon- ian R'y Co. v. Oregon E'y, 27 Fed. Rep. 277. Upon an issue of fact it is conclusive only as to facts without the existence and proof or admission of which it could not have been rendered. Hill v. Morse, 61 Me. 543; Bur- ton V. Shannon, 99 Mass, 300. Chap. n. § 1. FOEM. CONTRACTS OF EECORD. 53 He has a double remedy for his debt; he can take out execution upon the judgment and so obtain directly the sum awarded, and he can also bring an action for the non- fulfillment of the obligation. For this purpose the judgment not only of a Court of Kecord, but of any Court of com- petent jurisdiction, British or foreign, is treated as creating an obligation upon which an action may be brought for money due." He had also before 2Y and 28 Yict. c. 112, a charge upon the lands of the judgment debtor during his life-time ; but since the passing of that statute lands are not affected by a judgment until they have been formally taken into exe- cution. (2) Becognizance. — Eecognizances have been aptly de- scribed as " contracts made with the Crown in its judicial capacity." ' A recognizance is a writing acknowledged by the party to it before a judge or officer having authority for the purpose, and enrolled in a Court of Kecord. It may be a promise, with penalties for the breach of it, to keep the peace, or to appear at the assizes. (3) Statutes Merchant and Staple. — Statutes Merchant and Staple and Eecognizances in the nature of a Statute Staple are chiefly of interest to the student of the history of Keal Property Law. They have long since become ob- solete, but they were once important, inasmuch as they were acknowledgments of debt which, when made in ao- o. Williams v. Jones, 13 M. & W. 628. 1 Technically a recognizance is an obligation entered of record defeas- ible on condition that the recognizor do some act required of him and specified in the record, as to appear in answer to charges made against him, to keep the peace, to pay a debt, or the like. An ordinary bond ■with conditions is not a common law recognizance. Hicks v. State, 3 Ark. 318; People v. Graham, 1 Park. (N. Y.) Cr. 141. In American practice, however, recognizances are generally an ordinary bond signed and sealed by the recognizor with sureties, and containing penalty and conditions as requu'ed by law. 54 FOEMATION OF CONTRACT. Part U, cordanoe with Statutory provisions and enrolled of Record, created a charge upon the lands of the debtor. It will easily be seen how little there is of the true nature of a contract in the so-called Contracts of Eecord. Judg- ments are obligations dependent for their binding force, not on the consent of the parties, but upon their direct pro- mulgation by the sovereign authority acting in its judicial capacity. Recognizances are promises made to the sovereign with whom, both by the technical rules of Enghsh [*46] *Law and upon the theories of Jurisprudence, the sub- ject cannot contract. Statutes Merchant and Staple share the characteristics of judgments. "We may therefore dismiss these obligations altogether.from our consideration. § 2. Contract imder Seal. The only true Formal Contract of English law is the Contract under Seal, sometimes also called a Deed and sometimes a Specialty, It is the only true Formal Con- tract, because it derives its validity from its Form alone, and not from the fact of agreement," nor from the consid- eration which may exist for the promise of either party. It will be convenient in dealing with the Contract under Seal to consider (1) how it is made ; (2) what are its chief characteristics as distinguished from simple contracts; (3) under what circumstances it is necessary to contract under seal. (1) How a Contract under Seal is made. Signed, sealed and delivered. — A deed must be in writ- ing or printed on paper or parchment.* It is often said to be executed, or made conclusive as between the parties, by being " signed, sealed and delivered." Of these three the signature is a matter as to the necessity of which there is some doubt, though no one," unless ambitious of giving his o. Ante, p. 25. 6. Sheppard, Touchstone, 53. c. Coooh V. Goodman, 8 Q. B. 597. Ch. II. § 3. FORM. CONTEACT UNDER SEAL. 55 name to a leading case, would omit to sign a deed. But that which identifies a party to a deed with the execution of it is the presence of his seal; ' that which makes the deed operative, so far as he is concerned, is the fact of its de- livery by him. Delivery is effected either by actually hand- ing the deed to the other party to it, or to a stranger for his benefit, or by words indicating an intention that the deed should become operative though it is retained in the* possession of the party executing."^ In the execution of a a. Zenos v. Wickham, L. E. 8 H. L. 296. 1 At common law a seal was an impression upon wax or wafer affixed to an instrument, but a wax or wafer is no longer essential, and an im- pression upon paper, so that the court can recognize the seal, is suflS.- cient. Pillow v. Roberts, 13 How. 472: Pierce v. Indreth, 106 U. S. 548. But a scroll with a pen is not a common law seal and deserves no notice. Warren v. Lynch, 5 Johns. Rep. 245 ; Perrine v. Cheeseman, 6 Halst. {N. J.) 175. The statutes of many states authorize the use of a scroll as a seal, and whUe the affixing of a common law seal, though it be not mentioned in the instrument, constitutes a deed, it has been held that where a scroll is used under the statute there must be some recog- nition of it as a seal in the body of tho instrument. Wing v. Chase, 35 Me. 260 ; Cromwell v. Tate, 7 Leigh (Va.), 801 ; Glasscock v. Glasscock, 8 Mo. 577 ; Martindale, Convey, sec. 180. The authorities are not in ac- cord upon this question, and while much may depend on the woi-ding of the statute allowing the scroll, still it is believed that if the device adopted is intended to be a seal, it is to be regarded as such, though the intention be not expressly declared. The presumption is that the par- ties undertook to execute such an instrument as would be effectual for the purpose intended. Burton v. Leroy, 5 Sawyer, 0. C. R. 510. 2 Steele v. Lowry, 4 Ohio, 72; Kemp v. Walker, 16 Ohio, 118; Otis v. Spencer, 102 111. 284; Ruckman v. Euckman, 33 N. J. Eq. 259; McCul- lough V. Day, 45 Mich. 558 ; Bogie v. Bogie, 35 Wis. 659 ; Otis v. Spencer, 102 111. 628; Dunham v. Pitkin, 53 Mich. 504. The question of delivery is a question of intent. A delivery without the intent to deliver is not a delivery. Jordan v. Davis, 108 111. 336 ; Adams v. Ryan, 61 la. 733. Acceptance by the grantee is necessary in order to constitute a good de-i- livery, but where a grant is plainly beneficial to the grantee its accept- ance is presumed. Mitchell v. Ryan, 3 Ohio St. 377. And the simple recording of the deed by the grantor may, under the circumstances of the case, be prima facie evidence of delivery and acceptance. Tobin v. Bass, 86 Mo. 654; Vaughn v. Goodman, 103 Ind. 499; Sweeney v. Sweeney, 14 Lea (Tenn.), 316; Burke v. Adams, 80 Mo. 504; Walker 56 FORMATION OF CONTRACT. Part II, deed under ordinary circumstances, seals are affixed before- hand, and the party executing the deed signs his name, places his finger on the seal intended for him, and [*47] *utters the words "I deliver this as my act and deed." Thus he at once identifies himself with the seal, and indicates his intention to deliver, that is, to give operation to the deed. Escrow. — A deed may be delivered subject to a condition ; it then does not take effect until the condition is performed : during this period it is termed an escrow, but immediately upon the fulfillment of the condition it becomes operative and acquires the character of a deed. There is an old rule that a deed, thus conditionally delivered," must not be de- livered to one who is a party to it, else it takes effect at once, on the ground that a delivery in fact outweighs verbal conditions. But the modern cases * appear to show that this technical rule will not be adhered to, if the inten- tion of the parties is clear that the deed should be delivered conditionally.' Indenture and deed poll. — The distincti9Q between a Deed Poll and an Indenture is no longer important since 8 o. Shepp. Touch. 59. 6. Hudson v. Eevett, 5 Bing. 387. V. Burke, 107111. 54; Palmer v. Palmer, 63 la. 204; Moore v. Giles, 49 Conn. 570; but not conclusive. Jefferson v. Heil, 81 Ky. 516 ; Hendricks v. Rasson, 53 Mich. 575. There may be a good delivery though, actual possession of deed remain in the grantor ; but if he retains possession of the deed as evidence of his dominion over the title, there is no delivery. Williams v. Schurtz, 43 Ohio St. 47; Goodlete v. Kelley, 74 Ala. 213; McLaughlin v. MoMangill, 63 Tex. 553 ; Ireland v. Gerharty, 15 Fed. Rep. 35 ; Davis v. WiUiams, 57 Miss. 848 ; Burnett v. Burnett, 40 Mich. 863 ; Cook V. Brown, 34 N. H. 476. 1 The " old rule " is pretty generally followed in this country. A deed delivered to the grantee therein named will not be an escrow but a deed absolute as to delivery. Stevenson v. Crapnell, 114 111. 19 ; McCan v. Atherton, 106 111. 31 ; Williams v. Higgins, 69 Ala. 517 ; Wendlinger v. Smith, 75 Va. 309; Dawson v. Hall, 3 Mich. 390; Cocke v. Barker, 49 N. Y. 110 ; Worrall v. Munn, 5 N, Y. 339 ; Braman v. Bingham, 26 N. Y. 483 ; Fairbanks v. Metoalf , 8 Mass. 330 ; State of New Jersey v. Thatcher, 41 N. J. L. 403; Duncan v. Pope, 47 Ga. 445. Chap. n. § 2. FORM. CONTRACT UNDER SEAL. 57 and 9 Yict. o. 106, s. 5. Formerly a deed made by one party had a polled or smooth-cut edge, a deed made be- tween two or more parties was copied for each on the same parchment, and the copies cut apart with indented edges, so as to enable them to be identified by fitting the parts together. Such deeds were called Indentures. The statute above mentioned provides that an indented edge shall not be necessary to give the effect of an Indenture to a deed purporting to be such. (2) Characteristics of Oontraot imder Seal. (a) Estoppel. — Statements made in a simple contract, though strong evidence against the parties to the contract, are not absolutely conclusive against them. Statements made in a deed are absolutely conclusive against the parties to the deed in any legal proceedings between them taken upon the deed. " The principle " is that where a man has entered into a solemn engagement by and under his hand 9,nd seal as to. certain facts, he shall not be permitted to deny any matter he has so asserted." Such a prohibition to deny facts is termed an estoppel} *(5) Merger. — Where two parties have made a sim- [*48] pie contract for any purpose, and afterwards have entered into an identical engagement by deed, the simple contract is merged in the deed and becomes extinct. This a. Per Taunton, J., in Bowman v. Taylor, 2 A. & E. 278. 1 Van Rensselaer v. Kearney, 11 How. 333; Moore v. Walla Walla, 3 Wash. 184; Gerry v. Stimpson, 60 Me. 186; Beers v. Beers, 33 Mich. 42; Sage V. Jones, 47 Ind. 133 ; Howard v. Massengale, 13 Lea (Tenn.), 577 ; Dobbin v. Cruger, 108 111. 188; Douglass v. Scott, 5 Ohio, 199; Green v. Clark, 18 Vt. 158. Statements of irnmaterial matters or of matters by way of general recital in a deed are not conclusive, audit has long been held that an acknowledgment of the receipt of consideration expressed in the deed might be contradicted. Bigelow on Estoppel, p. 266. As between a stranger to a deed and a party to it, recitals therein do. not work an estoppel. Thomason v. Dayton, 40 Ohio St. 63; Brittainv. Daniels, 94 N. C. 781 ; Allen v. Allen, 45 Pa. St. 473. 58 FORMATION OF CONTRACT. Part H. extinction of a lesser in a higher security, like the extinction of a lesser in a greater interest in lands, is called merger} (c) Limitation of actions. — A right of action arising out of simple contract is barred if not exercised within six years. A right of action arising out of a contract under seal is barred if not exercised within twenty years. These general statements must be taken with some quali- fications to be discussed hereafter." ' {d) Remedies against debtor's estate. — Kemedies have been and are possessed by the creditor by deed against the estate of the debtor,^ which are not possessed by the cred- itor of a simple contract debt, and which mark the im- portance attached to the Formal contract. In administering the personal estate of a testator or intestate person, cred- itors by specialty were entitled to a priority over creditors by simple contract. Their privilege in this respect is taken away by 32 & 33 Yict. c. 46. As regards the real estate of a debtor, the creditor by specialty was also preferred. If the debtor bound himself and his heirs by deed, the Common Law gave to the cred- itor a right to have his debt satisfied by the heir out of the lands of his ancestor ; the liability thus imposed on the heir was extended to the devisee by 3 & 4 Will. & Mary, c. 14, s. 2. This statute was repealed by 11 Geo. IV. & 1 Will. IV. c. 47, only for the purpose of extending the creditor's remedy to some cases not provided for by the previous Act. During the present century, however, creditors by simple contract have also acquired a right to have their debts a. See Part V, ch. lii, 4. 1 Banorgee v. Hovey, 5 Mass. 11 ; Coleman v. Hart, 25 Ind. 256 ; Burnes V. Allen, 9 Ired. (N. C.) L. 370; Berry v. Bacon, 38 Miss. Zl^; post, p. 326. "The manifest intention of the parties must control, and a parol agree- ment will not merge in a contract under seal, which was expressly re- ceived as collateral security. Charles v. Scott, 1 Serg. & R. (Pa.) 294. 2 In most of the American states creditors by deed have no greater remedies against the estate of deceased debtors than simple contract creditors. Chap. n. § 3. FORM. CONTRACT UNDER SEAL. 59 satisfied oat of the lands of the debtor; but it should be rioted that the creditor by specialty can claim against heir or devisee of real estate without the intervention of the Court of Chancery, the creditor by simple contract must get the estate administered in Chancery in order to make *goodhis claim. "When the estate is so admin- [*49] istered the creditor by specialty has, since 32 & 33 Vict. c. 46, no priority over the simple contract creditor, whether it be realty or whether it be personalty that is ad- ■ ministered by the Court. (e) Gratuitous promise under seal is binding. — A gra- tuitous promise, or promise for which the promisor obtains no consideration present or future, is binding if made under seal, is absolutely void if made verbally, or in writing not under seal.^ It has already been mentioned that this char- iln the states generally a seal imports consideration, but in most states want of consideration may be shown in defense to an action on a sealed instrument. Wing v. Chase, 35 Me. 360; Case v. Boughton, 11 Wend. 106; Gray v. Hadkinson, 1 Bay, 378; Solomon v. Kimmel, 5 Binn. 333 ; McCarty v. Beach, 10 Cal. 461. This is generally regulated by statute. By the California Code " a written instrument is presumptive evidence of consideration,'' and "all distinctions between sealed and unsealed instruments are abolished." Civil Code 1874, §§ 1614, 1639 ; Ortucan v. Dickson, 13 Cal. 83. Similar provisions are found in the Codes of Iowa, Kentucky, Kansas and Indiana. In Aller v. AUer, 40 N. J. L. 446, a statute providing that, in an ac- tion on a sealed instrument, " the seal thereof shall be only presumptive evidence of a sufficient consideration, which may be rebutted," came before the court for construction. Plaintiff had received from her father as a present a note, under seal, containing a promise to pay her a certain sum of money. In an action on the note want of considera- tion was relied on as a defense. The important principle was announced, that the statute permitting the defense of want of consideration does not apply to contracts under seal, wherein it is manifest that the parties intended and understood that there should be no consideration ; that the mischief which the above quoted statute was designed to remedy was, that where the parties intended there should be a consideration, they were prevented by the common law from showing none if the con- tract was under seal; and that the statute was not intended to abolish all distinction between specialties and simple contracts, and to deprive 60 FORMATION OF CONTRACT. Part U. aoteristio of contracts under seal is often accounted for on the ground that their solemnity imports consideration, and that this supposition is historically untrue, inasmuch as it is the Form alone which gives effect to the deed; The doc- trine of Consideration is, as we have seen, of a much later date than that at which the Contract under Seal was in full eflBcacy, an efficacy which it owed entirely to its Form. And the doctrine of Consideration, as it has developed, has steadily tended to limit the peculiarity of the Contract un- der Seal with which we are now dealing, and to introduce exceptions to the general rule that a gratuitous promise made by deed is binding. Even at Common Law," in the case of contracts made in restraint of trade, consideration is necessary, though the contract be under seal. This instance is exceptional, though the rule is general that if there be a consideration for a deed, it is open to the party sued upon such a contract to show that the consideration was illegal, or immoral, in which case the deed will be void.* Equitalttle view of absence of consideration. — But it is in tho Court of Chancery that we find this privilege most en- croached upon. The idea of Consideration as a necessary a. Mallan v. May, 11 M. & W. 665. 6. Collins V. Blantern, 1 Sm. L. C. p. 389. one of the right to make a binding voluntary promise, if he so desired, provided he used such solemnities in form as had been long recognized as sufficient to express such desire and intention. Scudder, J., who rendered the opinion, said: " The significance of writings under seal, and their importance in our common law system, seem in danger of being overlooked in some of our later legislation." In Candor's Appeal, 27 Pa. St. 119, in a case somewhat similar, the court said: "To say that the 'want of consideration' is a defense against a bond is to express, in language not remarkable for precision, nothing more than the familiar principle that where the obligor fails to receive the consideration contracted for, and on the faith of which he entered into the contract, he is not bound to pay his bond. This prin- ciple has no application whatever to the case before us, because no con- sideration was contracted for or expected." See McMillan v. Ames, 33 Minn. 260; Yard v. Patton, 13 Pa. St. 285; Spicer v. Binker, 45 .Mich. 630 ; Gordon v. Moore, 44 Ark. 349. Chap. II. § 3. FORM. CONTRACT UNDER SEAL. 61 element of Contract as well as of Conveyance, if it did not actually originate in the Chancery, has always met with peculiar favor there. It was by the weight given to the presence of Consideration, or by inferences drawn from its absence, that the Covenant to stand seized, the Bargain and Sale of lands, and the Resulting Use first acquired *validity. And in the department of Contract, Equity [*50] has developed similar principles. It would not extend its peculiar remedy of specific per- formance to gratuitous promises," even though they were under seal. It was prepared to exercise its peculiar power of declaring a contract void if absence of Consideration combined with other evidence amounted to proof that Fraud or Undue Influence had been brought to bear upon the promisor. Specific performance of a gratuitous promise, where that remedy is applicable, is not granted, whether the promise is or is not made by deed.' And absence of Consideration is corroborative evidence of the presence of Fraud or Undue Influence, sufficient proof of which will avoid the deed. Bonds. — The best illustration of a gratuitous promise under seal is supplied by a Bond. A Bond may be technically de- scribed as a promise defeasible upon condition subsequent ; that is to say, it is a promise by A to pay a sum of money, which promise is liable to be defeated by a performance by ^ of a condition stated in the bond. The promise, in fact, imposes a penalty for the non-performance of the condition which is the real object of the bond. The condition desired to be secured may be the payment of a sum of money or the doing or forbearing from some act. In the first case the instrument is called a common money bond : in the sec- ond a bond with special conditions. \ A promises JTthat on the ensuing Christmas Day he will o. See Part V, oh. iii, § 3. 1 Black V. Cord, 3 H. & G. 100; Smith v. Wood, 13 Wis. 435. 63 FORMATION OF CONTRACT. Part H. pay to X £500 ; with a condition that if before that day he has paid to X £250 the bond is to be void. A promises Xthat on the ensuing Christmas Day he will pay to X£500; with a condition that if before that day M has faithfully performed certain duties the bond is to be void. Legal aspect of a bond. — Common law has differed from Equity in its treatment of bonds much as it did in its treat- ment of mortgages. Equitable aspect. — Common law took the Contract [*51] in its literal sense and *enforced the fulfillment of the entire promise upon breach of the Condition. Equity looked to the object which the bond was intended to secure, and would restrain the promisee from obtaining more than the amount of money due under the condition or the damages which accrued to him by its breach. The rights of the promisee are now limited by Statute to the amount of loss actually sustained by breach of the con- dition, and the rules of Common law as regards penalties have been assimilated to the practice of Equity." (3) When it is essential to employ the Contract under seal. Though usually a matter of choice, it is in some cases necessary by Statute or at Common Law to employ the form of a deed. Statutory requirements. — Thus a deed is necessary by 8 & 9 Yiot. 0. 106, for making such leases as the Statute of Frauds requires to be in writing: by 54 Geo. III. c. 56, for an agreement for the sale of sculpture with copyright : by the Companies Clauses Act, 8 & 9 Vict. c. 16, for the trans- fer of shares in companies governed by that Act : by the Merchant Shipping Act, 1854:,' for the transfer of a British Ship. o. 8&9Wm. ra. 0. 11; 4:& 5 Anne, 0.16; 23 & 34 Viot. 0. 126. See Part IV, oh. B, §2. b. 17 & 18 Vict. c. 104, § 55. I Chap. II. § 3. FORM. CONTRACT UNDER SEAL. 6S Common law requirements. — There are two cases in which Common Law demands that a contract should be made under seal. {a) Grratuitous promises. — A gratuitous promise or con- tract for which there is no consideration must be made by deed, otherwise it will be void. This has already been shown to furnish a distinguishing characteristic of Formal as opposed to simple Contracts. (&) Contract with corporation. — The general rule as to contracts made with corporations is that a corporation ag- gregate can only he hound hy contracts under the seal of the corporation} A corporation is a fictitious, not a natural person ; and some evidence is required that the aggregate of individuals composing it is really bound to that which the contract purports to promise. This evidence is supplied by the use of the seal common to the corporation. *There are, however, numerous exceptions to the [*52] general rule; exceptions which may be classified under two heads, as (1) cases in which the rule would defeat the objects for which the corporation was created, and (2) cases in which the operation of the rule would occasion great and constant inconvenience. The first head applies more particularly to trading corpo- rations," which as the law now stands may through their agents enter into simple contracts relating to the objects a. South Ireland Colliery Co. v. Waddle, L. E. 3 C. P. 469. 1 The doctrine that a corporation can contract only under its corpo- rate seal is repudiated in this country. The use of a seal in the various obligations undertaken by corporations at the present time would be impractical, and it is well settled that the contracts which a corporation has the power to make may be made in the same manner that a nat- ural person would make them, in the absence of any special restriction in the charter. Bank of Columbia v. Patterson, 7 Cranch, 299; Bank of U. S. V. Danbridge, 13 Wheat. 64; Blunt v. Walker, 11 Wis. 334; Board of Education v. Greenebaun, 39 111. 609 ; Chestnut Hill Turnpike V. Rutter, 4 Serg. & R. 16 ; School District v. Wood, 13 Mass. 199 ; Mott V. Hicks, 1 Cow. (N. Y.) 513; Danforth v. Schoharie, 13 Johns. 337. 64 FORMATION OF CONTRACT. Part II. and purposes for which the body was incorporated ; and if these objects make it expressly necessary, may even issue negotiable instruments. The second head applies more particularly to non-trading cases, and may be taken to include : — Matters of trifling importance or daily necessary occur- rence; as the hire of an inferior servant," or the supply of coals to a workhouse. Matters of urgent necessity, admitting of no delay; as where a municipal corporation possessed a dock and made agreements from time to time for the admission of ships, it was held that such agreements need not be under seal.* In addition to these exceptions at Common Law, the Leg- islature has in some cases freed corporations from the neces- sity of contracting under seal, and provided special forms in which they may express their common assent. It has been questioned whether, when a corporation enters into a contract not under seal, and the contract has been executed in part, such execution gives rights to the parties which they would not have possessed if the contract had re- mained executory. Where a corporation " has done all that it was bound to do under a simple contract it may sue the other party for a non-performance of his part. But there is no doubt that a part-performance of a contract by a cor- poration " wiU not take the case out of the general rule, and entitle it to sue. [*53] *Nor can a corporation be sued on contracts not un- der seal of which it has enjoyed a partial benefit; indeed it would seem that entire performance by the plaint- iff will only give him a remedy where the amount is small and the work necessary.* a. Nicholson v. Bradfleld Union, L. E. 1 Q. B. 630. 6. Wells V. The Mayor of Kingston upon Hull, L. R. 10 0. P. 402. a. Fishmongers' Company v. Robertson, B M. & Or. 192. d. Mayor of Kidderminster v. Hardwiok, L. R. 9 Ex. 24. e. Per Bramwell, L. J., Hunt T. Wimbledon Local Boaid, 4 0. F. D. E8, Chap. 11. § 3. SIMPLE CONTRACTS IN WRITING. 65 Simple Conteaot. § 3. Simple Contracts required to he in writing. All require consideration. — We have now dealt with the contract which acquires validity by reason of its Form alone, and we pass to the Contract which depends for its validity upon the presence of Consideration. In other words, we pass from the Formal to the Simple Contract^ or from the Contract under seal to the parol Contract, so called be- cause, with certain exceptions to which reference will now be made, it can be entered into by word of mouth. Some are required in addition to be expressed in cer- tain form. — There are certain simple contracts which the law will not enforce unless written evidence of the terms of the agreement and of the parties to it is produced ; but Form, is here needed, not as giving eiHcaoy to the contract, but as evidence of its existence. Consideration is as necessary as in those cases in which no writing is required: "if contracts be merely written and not specialties, they are parol and consideration must be proved." " These are therefore none the less Simple Contracts, be- cause written evidence of a certain kind is required concern- ing them. Common law requirements. — The only requirement of form in simple contract which can be said to exist at Com- mon Law is in the case of Bills of Exchange, which by the custom of merchants, adopted into the Common Law, must be in writing. Statutory requirements. — The statutory requirements of form in simple contract are mainly to be found in the 29 Car. II. c. 3, the famous Statute of Frauds. There are some others, however, and we may deal with them shortly. 1. The acceptance of a bill of exchange must be in writ- ing ; 19 & 20 Yict. c. 97, § 6 ; 45 & 46 Yict. c. 61, § 17. *2. Assignments of copyright must be in writing. [*54] This subject is dealt with by numerous statutes. a. See post, p. 70. 5 66 FORMATION OF CONTRACT, Part II. 3. Contracts of Marine Insurance must be naade in the form of a policy ; 30 Vict. c. 23. 4. The transfer of shares in a company is usually required to be in a certain form by the Acts of Parliament which govern companies generally or refer to particular compa- nies." 6. An acknowledgment of a debt barred by the Statute of Limitation must be in writing signed by the debtor, 9 Geo. lY. c. 14, § 1 (Lord Tenterden's Act), or by his agent duly authorized, 19 and 20 Yict. o. 97, § 13 (Mercantile Law- Amendment Act). 6. The Statute of Frauds, 29 Oar. II. o. 3, contains two sections, the ith and the ITth, which aflfect the form of cer- tain simple contracts and which require careful considera- tion. The Ith section enacts, " That no action shall le Irought whereby to charge any executor or administrator upon any special promise to answer damages out of his own estate; or whereby to charge the defendant upon any special promise to answer for the debt, default or miscarriage of another person ; or to charge any person upon any agreement made in consideration of marriage ; or upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them ; or upon any agreement that is not to be performed within the space of one year from the making thereof ; unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged there- with or some other person thereunto by him lawfully au- thorized." The discussion of these sections falls naturally into three heads. (1) The form required by the section. (2) The nature of the contracts specified in it. (3) The effect upon such contracts of a non-compliance with its provisions. o. Lindley on Partnership, 1, 703. Chap. n. § 3. SIMPLE CONTRACTS, 29 CAE. II. C. 3, § 4. 67 *(1) [*55] The form required by the terms of the section is the first point to be considered. "What is meant by the requirement that " the agreement or some memorandum or note thereof shall be in writing and signed by the party to be charged therewith or by some other person thereunto by him law- fully authorized?" We may, with regard to this part of the subject, lay down the following rules." (a) The form is merely CTidentiary.— The Form re- quired does not go to the existence of the Contract.^ The Contract exists though it may not be clothed with the nec- essary form, and the effect of a non-compliance with the provisions of the statute is simply that no action can be brought until the omission is made good. Thus the memorandum or note in writing may be made, so as to satisfy the statute, at any time between the forma- tion of the contract and the commencement of an action. So too a party to the contract may sign a rough draft of its terms, and acknowledge his signature Avhen the draft has been corrected and the contract is actually concluded.* Or again, a proposal containing the names of the parties, and the terms of the suggested contract, and signed by the proposer, will bind him though the contract is concluded by a subsequent parol acceptance." In tiae former of these two cases the signature of the party charged — in the latter not the signature only but the entire memorandum -^ was made a. With the exception of rule (d), what is said under this head may be taken to ap- ply to the 17th as well as to the 4th section. b. Stewart v. Eddowes, L. H. 9 C. P. 314. c. Eeuss V. Picksley, L. E. 1 Exch. 312. 1 Newton v. Bronson, 13 N. Y. '587; Gales v. Nixon, 6 Cow. (N. Y.) 445 ; Hardman v. Wolf stein, 12 Mo. App. 366 ; Bird v. Munroe, 66 Me. 337; Webster v. Zielly, 53 Barb. 483. The benefits of the statute of frauds are pei;sonal and can be relied on only by the parties or their privies. Chicago Dock Co. v. Kinzie, 49 111. 389 ; Heuser v. Lamont, 55 Pa. St. 311 ; Cahill v. Bigelow, 18 Pick. (Mass.) 369; and may be waived by the party charged. Montgomery v. Edwards, 46 Vt. 151 ; post, p. 62. 68 FORMATION OF CONTRACT. Part II. before the contract was concluded. This is perhaps suffi- cient to show that the Form is an evidentiary matter only, and is not, as in the case of a deed, an integral part of the contract itself. (b) The parties must appear. — The memorandum of the contract must show who are the parties to it.^ For instance, A promised X that he would answer for the debt, or [*56] default of M: the memorandum of the *promise, though signed by A, did not contain the name of X: it was held to be insufficient. " No document," it was said in that case, " can be an agreement or a memorandum of one, which does not show on its face who the parties mak- ing the agreement are." " It is settled, however, that a description of one of the con- tracting parties, though he be not named, will let in parol evidence otherwise inadmissible to show his identity.^ This may occur where A as agent for M enters into a contract with X in his own name : * X may prove that he has really contracted with M, who has been described in the memorandum in the character of A. On the other hand, A is not permitted to prove that he is not the real party to the contract." (c) The memorandum may consist in various letters or papers, but they must be connected, consistent, and com- plete. The only signature required is that of the party to be charged : it is not therefore the fact of agreement, but the terms, and all the terms, of the agreement that the statute requires to be expressed in writing. o. Williams v. Lake, 8 E. & E. 349. 6. Trueman v. Loder, 11 A. & E. 589. V. Higgins V. Senior, 8 M. & W. 834. iMcConnell v. PiUhart, 17 111. 354; Grafton v. Cummings, 99 U. S. 100. 2Fesenden v. Mussey, 11 Cush. (Mass.) 127; Dykes v. Townsend, 34 N. Y. 57. A signature by initials is valid and parol evidence is admissible to apply them. Sangborn v. Flagler, 9 Allen (Mass.), 474; Salmon Falls Manuf . Co. v. Gloddard, 14 How. 447 ; Hunter v. Giddings, 97 Mass. 41. Oiap. II. § 3. SIMPLE CONTRACTS, 29 CAR. U. C. 3, § 4. 69 The terms need not all be expressed in the same docu- ment," and it is permissible to prove a memorandum from several papers, or from a correspondence, but the connec- tion of the various terms must be made out from the papers themselves, and may not be shown by parol evidence.^ A issued a prospectus of illustrations of Shakespeare, to be published on terms of subscription there'in set out. X entered his name in a book entitled " Shakespeare Subscrib- ers, their signatures," in ^'s shop. X afterwards refused to subscribe. He was sued upon his promise to do so, and it was held that there was no documentary evidence to con- nect the subscription book with the prospectus, so as to make a suificient memorandum of the contract, and that the deficiency might not; be made good by parol evidence.* Must be consistent. — To say that the terms of the con- tract must be consistent with one another is merely to reiterate what has been said *ander the head of offer [*5YJ and acceptance. But although the various documents in which the terms of a contract are found must be perfectly consistent with one another, yet if the contract is fully set out in writing it will not be affected by a repudiation of it, contained in the same writing by one of the parties. They have agreed, the statutory evidence is supplied, a repudia- tion is not within the power of either to make, and its ex- pression is wholly nugatory." Must be complete. — Again, the terms must be complete in the writing. Where a contract does not fall within the statute, the parties may either (1) put their contract into writing, (2) contract only by parol, or (3) put some of the terms in writing and arrange others by parol. In the latter a Eeuss v.'Picksley, L. E. 1 Bxch. 342. 6 Boydell v. Drummond, 11 East, 143. c. Buxton V. Eust, L. E. 7 Exoh. 279. -1 Adams v. McMillan, 7 Port. (Ala.) 73; O'Donnell v. Leman, 43 Me. 158 ; Rhodes v. Gartner, 13 Allen, 130 ; Tallman v. Franklin, 14 N. Y. 584 ; North v. Mendel, 73 Ga. 400 ; Wall v. Wisconsin Cranberry Co. 63 la. 730; Morton v. Dean, 13 Met. (Mass.) 388. But see Beckwith v. Tal- bot, 95 U. S. 389, cited post, p. 57. 70 FORMATION OF CONTRACT. Part H. case, although that which is written may not be varied by parol evidence, yet the terms arranged by parol are proved by parol, and they then supplement the writing, and so form one entire contract. But where a contract falls within the statute, all its terms must be in writing, and parol evidence of terms not appearing in the writing would altogether invarlidate the contract, as showing that it was something other than that which appeared in the written memorandum.^ (d) Consideration must appear in writing. — The con- sideration must appear in writing as well as the terms of the promise sued upon.^ This rule does not extend to the 1 Tice V. Freeman, 30 Minn. 389 ; Bishop v. Fletcher, 48 Mich. 555 ; May V. Ward, 134 Mass. 137 ; Pierson v. Ballard, 33 Minn. 263; Fry v. Piatt, 32 Kan. 63 ; Peck v. Vandemark, 99 N. Y. 29 ; Drake v. Seaman, 97 N. Y. 230 ; Willy v. Roberts, 27 Mo. 388 ; Blair v. Snodgrass, 1 Sneed (Tenn.), 1 ; King v. Wood, 7 Mo. 389; Farwell v. Mather, 10 Allen (Mass.), 333; Wright v. Weeks, 35 N. Y. 158; O'Donnell v. Leman, 43 Me. 158. It is held bj the United States supreme court that this rule excluding parol proof is subject to exception. Parol proof, if clear and satisfac- tory, may be received to identify the agreement referred to in the col- lateral papers constituting the memorandum. Beckwith v. Talbot, 95 U. S. 289. 2 Wain T. Warlters. — Our decisions are in hopeless confusion upon this question. Many courts follow the case of Wain v. Warlters : Sears V. Brink, 8 Johns. 310 : Taylor v. Pratt, 3 Wis. 674 ; Gregory v. Logaii, 7 Blackf. 112; Underwood v. Campbell, 14 N. H. 393 (overruled in Brit- ton V. Ainger, 48 N. H. 422) ; Buckley v. Beardsley, 2 South. (N. J.) 572; Sloan V. Wilson, 4 Harr. & J. (Md.) 322; Hargrove v. Cook, 15 Ga. 331; Thompson v. Blanchard, 8 Comst. (N. Y.) 335, drawing a distinction be- tween " agreement " and " undertaking." , Other courts repudiate the doctrine of Wain v. Warlters, and many hold that when the " agreement " is i-equired to be in wx-iting the con- sideration must be expressed ; but where only the " promise " is required to be in writing the consideration need not be expressed. Gillighan v. Boardman, 39 Me. 81 ; Sage v. Wilcox, 6 Conn. 81 ; Packard v. Richard- son, 17 Mass. 122 ; Patchin v. Swift, 21 Vt. 297 ; Reeds v. Evans, 17 Ohio, 128; Halsa v. Halsa, 8 Mo. 305; Ashford v. Robison, 8 Ind. 305; Violette v. Patten, 5 Cranch, 151 ; Taylor v. Ross, 3 Yerg. 330 ; Ellison v. Jackson, 13 Cal. 543; Shadman v. Guthrie, 4 Met. (Ky.) 147; Shirley v. Black, 45 Pa. St. 345; Britton v. Ainger, 48 N. H. 432. Many of the states have settled the question by statutes, expressly Chap. II.- § 3. SIMPLE CONTRACTS, S9 CAR. II. C. 3, § 4. 71 17th section, but it has been settled with regard to the 4th since the year 1804." But an exception has been made in the case of the " prom- ise to answer for the debt, default or miscarriage of another," which by 19 & 20 Yict. o. 9Y, § 3 (Mercantile Law Amend- ment Act), shall not be " deemed invalid to support an action, suit, or other proceeding to charge the person by whom such promise- shall have been made by reason only that the con- sideration for such promise does not appear in writing, or by necessary inference from a written document." (e) Signature of party or agent. — The memorandum must be signed by the party charged or his agent.^ *The contract therefore need not be enforceable at [*58] the suit of both parties ; " it.may be optional to the party who has not signed to enforce it against the party who has.* a. Wain v. Warlters, 5 East, p. 10. b. See Benjamin on Sales, pp. 188-196. providing that the consideration shall be stated in the memorandum ; such is the statutory provision in Minnesota, Oregon, Nevada and Ala- bama ; but in Massachusetts, Maine, New Jersey, Indiana, Illinois, Mich- igan, Nebraska, Virginia and Kentucky the statutory provision is that the consideration need not be so expressed. iRaflferty v. Largee, 63 N. H. 54; MoElroy v. Seerey, 61 Md. 389; Sanborn v. Sanborn, 7 Gray, 143. Auctioneer's memorandura, — An auctioneer is the agent of both par- ties, and as such may bind them by a memorandum in writing under the statute. Baptist Church v. Bigelow, 16 Wend. (N. T.) 28; Morton V. Dean, 13 Met. (Mass.) 385; Meadows v. Meadows, 3 McCord (S. C), Ch. 156. But an auctioneer's memorandum, in order to bind the pur- chaser, must be made at the time of the purchase. GUI v. Becknall, 3 Cush. 3155; Horton v. McCarty, 53 Me. 394. 2 Anderson v. Harrold, 10 Ohio, 399; Davis v. Shilds, 36 Wend. 341; Shirley v. Shirley, 7 Blackf. 453 ; Morin v. Martz, 13 Minn. 191 ; Justice V. Lang, 43 N. Y. 493. But where mutual promises are the considera- tion for a contract, the conflict of authority upon the question whether the memorandum should be signed by both parties is " truly bewilder- ing." Wilkinson v. Heavenrich, 58 Mich. 576 ; some courts holding that unless the memorandum be signed by both parties, the contract is void for want of mutuality. Id. ; Krohn v. Bantz, 68 Ind. 377. Others hold that want of mutuaUty is no objection, and that the statute is complied 72 FORMATION OF CONTRACT. Part Ix. The signature need not be an actual subscription of the party's name, it may be a mark; nor need it be in writing, it may be printed or stamped ; ' nor need it be placed at the end of the document, it may be at the beginning or in the middle. ^ But it must be intended to be a signature, and as such to be a recognition of the contract, and it must govern the entire contract. These rules are established by a number of cases turning upon difficult questions of evidence and construction. The principal cases are elaborately set forth in Benjamin on Sales, pp. 188-196, but a further discussion of them would here be out of place.' with when the memorandum is signed by the party to be charged. Smith's Appeal, 69 Pa. St. 480; Perkins v. HudseU, 50 111. 317. 1 A signature by a promisor, by his mark, his name being written by the promisee, is not a valid execution of a contract. Carlisle v. Camp- beU, 76 Ala. 247. See Dewey v. Young, 58 Md. 546. i! The i weight of American authority is with the text, except where the technical term "subscribed" instead of "signed" is found in the statute. Browne, Stat, of Frauds, sec. 356 ; Wise v. Ray, 3 la. 430 ; Penni- man v. Hartshorn, 13 Mass. 87. For the meaning of the term "sub- scribed" see Champlin v. Parish, 11 Paige (N. Y.), 405; James v. Patten, 3 Seld. (N. Y.) 9 ; Davis v. Shilds, 36 "Wend. 351. Proof of the sending a telegram completing a contract is suflScient evidence of subscription to take the case out of the statute of frauds. Trevor v. Wood, 36 N. Y. 307; Whaley v. Hinchman, 23 Mo. App. 483. But the telegram must show the terms of the contract. McEhroy v. Buck, 35 Mich. 434. 9 A memorandum is incomplete that does not evidence: 1st, a con- tract concluded; so far, at least, as the party to be charged is concerned, for it seems that an acceptance by the other party of the proposal made may be established by parol evidence. Watts v. Ainsworth, 6 L. T. N. S. 353; Himrod Furnace Co. v. Cleveland R. R. Co. 33 Ohio St. 451 ; 3d, the names of both contracting parties ; 3d, the subject-matter of the con- tract so described that it may be identified ; 4th, in contracts of sale the term of credit and the price agreed upon, where a definite price and . term of credit were contracted for ; 5th, and in many states the con- sideration for the undertaking. Adams v. McMillan, 7 Port. (Ala.) 73 ; McConnell v. Brillhart, 17 111. 854; Rhodes v. Castner, 13 Allen. 130; Epich V. CliflEord, 6 Col. 493; Wood v. Davis, 83 111. 311. That in the memorandum of the sale of lands the price must be mentioned. See Chap. II. § 3. SIMPLE CONTRACTS, 29 CAR. II. C. 3, § 4. 73 (3) Thus mucli for the form required under the 4th section for all the contracts included therein. We will now note the characteristics of the five sorts of contracts specified in the section. Special promise iy an exeoutor or administrator to answer damages out of his own estate} The liabilities of an executor or administrator m respect of the estate of a deceased person are of two kinds. At Com- mon Law he may sue and be sued upon obligations devolv- mg upon him as representative of the deceased. In Equity he may be compelled to carry out the directions of the de- ceased in respect of legacies, or to give effect to the rules of law relating to the division of the estate of an intestate. In neither case is he bound to pay anything out of his own pocket: his liabilities are limited by the assets of the de- ceased. But if, in order to save the credit of the deceased, or for any other reason, he choose to promise to answer damages out of his *own estate, that promise must be [*59] in writing together with the consideration for it, and must be signed by him or his agent. It is almost needless to add that in this, as in all other contracts under the sec- tion, the presence of writing will not atone for the absence of consideration." Any prom,ise to answer for the debt, default, or m,%sGarr%ag& of another person. "We should note these features of the contract of surety- ship in its relation to the Statute. a. Eann v. Hughes, 7 T. E. 350. Phelps V. StUlingg, 60 N. H. 505; Adams v. Porter, 7 Porter (Ala.), 73; Smith V. Arnold, 5 Mass. 414 ; Phillips v. Adams, 70 Ala. 373 ; and term of credit. Gault v. Stormount, 51 Mich. 636 ; Grafton v. Cummings, 99 U. S. 100, Contra, Ellis v. Bray, 79 Mo. 327. 1 The promise of an executor to pay an heii'-at-law money if he would desist from opposition to the will is not within the statute. Bellows t, Sowles, 57 Vt. 164. 74 FORMATION OF CONTEACT, Part II. (a) The promise differs from indemnity. — It must be distinguished from an indemnity, or promise to save an-, other harmless from the results of a transaction into which he enters at the instance of the promisor.' In other words, there must be three parties in contem- plation ; M, who is actually or prospectively liable to X, and A, who in consideration of some act or forbearance on the part of X promises to answer for the debt, default, or miscarriage of M. X, a bailiff, was about to arrest If." A promised to pay a sum of £17 on a given day to X if he would forbear to arrest M. This was held an independent promise of in- demnity from A to X which need not be in writing. (5) Necessitates primary liability of third party. There must be a liability actual or prospective of a third party for whom the promisor undertakes to answer. If the prom- isor makes himself primarily liable the promise is not within the statute, and need not be in writing.^ " If two come to a shop and one buys, and the other, to gain him credit, promises the seller ' If he does not pay you, I will,' this is a collateral undertaking and void without writing by the Statute of Frauds.' But if he says, 'Let a. Reader v. Kingham, 13 C. B. N. S. 344. 1 No Stress should be laid on the word " indemnity." When the prom- ise to indemnify is, in fact, a promise to pay the debt of another, it is clearly -within the statute. Nugent v. Wolfe, 111 Pa. St. 471 ; Mallory V. Gillett, 21 N. Y. 413;. Easter v. White, 12 Ohio St. 219; Clements' Appeal, 53 Conn. 464. A promise under the statute distinguished from indemnity in Leroh v. Gallup, 67 Cal. 595. That the promisor may come within the statute the debt must be the debt of another and not simply the debt of the promisee. Wendell v. Hudson, 103 Ind. 531 ; or the debt of the promisor. Brandt on Suretyship, sec. 53 ; Green v. Estes, 83 Mo. 387 ; Bailey v. Bailey, 56 Vt. 398. 2 Baldwin v. Hiers, 73 Ga. 739; De Witt v. Root, 18 Neb. 567; Morris V. Osterhouse, 55 Mich. 163. The inquiry is, to whom was credit given. If any credit was given to the party receiving the benefit, then the other party is not holden on a verbal promise. Welsh v. Marvin, 36 Mich. 59 ; Langdon v. Richardson, 58 la. 610 ; Bugbee v. Kendricken, 130 Mass. 437. 3 Studly V. Barth, 54 Mich. 6 ; Meade v. Watson, 57 Vt, 426. Chap. II. § 3. SIMPLE CONTRACTS, 29 CAR. II. C. 3, § 4. 75 him have the goods, I will le your paymaster,'' " or ' / will see you paid,' this is an undertaking as for himself, and he shall be intended to be the very buyer and the other to act as but his servant." ^ (o) And a real liability. — The liability may be prospect- ive at the time the promise is made, as a promise by A to Xthat if M employs Xhe {A) will go surety for pay- ment of the services rendered. Yet *it must come [*60] into existence at some time: else there is no surety- ship, and the promise, though not in writing, will neverthe- less be actionable. Thus if Xsays to J. "If I am to do certain work for M I must be «;SSured of payment by some one," and A says " do it and I will see you paid," there is no suretyship.* {d) And continuous. — If there be an existing debt for which a third party is liable to the promisee, and if the. promisor undertake to be answerable for it, still the con- tract need not be in writing if its terms are such that it effects an extinguishment of the original liability.^ In other words, the liability of the third party must be a con- tinuing liability in order to bring the promise within the statilte. A promise to a creditor to pay a debt in consid- eration of hi^ doing that which would extinguish his claims against the original debtor, would, for this reason, be un- affected by the Statute." (e) May arise from wrong. — The debt, default, or miscar- riage spoken of in the statute will include liabilities arising a. Per curiam in Birkmyr v. Darnell, 1 Sm. L. C. 310. 6. Mountstephen y. Lakeman, L. K. 7 H. L. 17; and see Judgment in Exch. Cham. L. R. 7 Q. B. 202. 0. Goodman v. Chase, 1 B. & Aid. 297. 1 Larsen v. Jenson, 53 Mich. 427. 2 Trustees v. Lambern, 43 Ohio St. 144; Mulorone v. American Lum- ber Co. 55 Mich. 622; Whittemore v. Wentworth, 76 Me. 70; Carlisle v. CampbeU, 76 Ala. 247; Howell v. Field, 70 Ga. 592; Thornton v. Guice, 73 Ala. 331; Meriden v. Zingsen, 48 N. Y. 247. But the creditor must absolutely release the principal debtor, and under no circumstances can hei hold each liable severally, at his option. Welch V. Marvin, 36 Mich. 59; HiU v. Frost, 59 Tex. 25. 76 FORMATION OF CONTRACT. Part II. out of wrong as well as out of contract. So in Kirhhaw, V. Marter^ M wrongfully rode the horse of X without his leave, and killed it. A promised to pay X a certain sum in consideration of his forbearing to sue J/, and this was held a promise to answer for the miscarriage of another within the meaning of the statute. (/) Consideration need not toe expressed. — This con- tract is an exception to the general rule that " the agree- ment or some memorandum or note thereof," which the statute requires to be in writing, must contain the consid- eration as well as the promise : 19 & 29 Vict. c. 97, s. 3.* Agreement made in consideration of Marriage. Not a promise to marry. — It is sufficient to note that the agreement here meant is not the promise to vaaxvj (the consideration for this is the promise of the other party), but the promise to make a payment of money or a settlement of property in consideration of, or conditional upon a marriage actually taking place. [*61] *Gontraot or sale of lands or hereditaments or any in- terest in or concerning them. What is an interest in land. — It is not always easy to say what is an interest in land within the meaning of this sec- tion, but it is perhaps safe to say that the contract must be for a substantial interest in land, and not for arrangements preliminary to the acquisition of an interest, or for a remote and inappreciable interest. An agreement to pay costs of an investigation of title would not be within the operation of the section ; nor would an agreement to transfer shares in a railway company which, though it possesses land, does not give any appreci- able interest in that land to its individual shareholders. The whole subject is one which belongs to the sale and purchase of Eeal Property rather than to the law of Contract. a. 3 B. & Aid. 613. h. See p. 57. Chap. II. § 3. SIMPLE CONTRACTS, 39 CAR. II. C. 3, § 4. 77 Fructus industriales et naturales. — The principal ques- tion of interest with special. reference to the subject relates to the sale of crops. A distinction has been drawn as to these between what are called emblements or fructus in- dustriales, and growing grass, timber, or fruit upon trees, which are called /"/"Mciws naturales. Fructus industriales do not under any circumstances con- stitute an interest in land. Fructus naturales are considered to do so if the sale contemplates the passing of the property in them before they are severed from the soil. Where prop- erty is to pass after severance both classes of crops are goods, wares and merchandise within the meaning of sec- tion IT of the Statute of Frauds, but where property in fructus industriales is intended to pass before severance," it is doubtful whether they fall within the meaning of sec- tion 17, though it is certain that the sale is not governed by section 4.^ Agreement not to he performed within the space of one year from the mgJcing thereof? Two points should be noted with regard to this form of agreement. (ffl) It must contemplate non-performance within the year. — In order to fall within the section the parties must *contemplate that it should not be performed [*62] a. See Benjamin on Sales, p. 100, Zi ed. 1 Schouler in his work on Personal Property, vol. 3, p. 475, comes to substantially the same conclusion regarding the American decisions, and in them is found the same element of uncertainty ;' the distinctions made by the court are too refined for an elementary treatise. 2 This subdivision of the statute applies to agreements to marry. Derby V. Phelps, 3 N. H. 515; Nichols v. Weaver, 7 Kans. 377; Laurence v. Cook, 56 Me. 193. A contrary opinion, however, is expressed in Brick V. Gamar, 48 Hun, 53. It has been held that this subdivision does not apply to agreements regarding interests in lands. Young v. Dake, 5 N. Y. 467 ; Whiting v, Ohlert, 53 Mich. 463. 78 P'OEMATION OF CONTRACT. Part III within the year.' The fact that it may not be, or is not performed within the year does not bring it within the opera- tion of the statute unless " it appears by the whole tenour of the agreement that it is to be performed after the year." " (5) And by lioth parties. — The agreement does not fall within the section if that which one of the parties is to do, a. Peter v. Compton, 1 Sm. L. C. 335. 1 By a process of judicial legislation over the term " to be performed," this provision of the statute has been restricted to a very insignificant service. The rule is announced that although the agreement is not likely to be performed and not expected to be performed within one year from the making thereof, still it does not come within the statute, unless it cannot by any possibility, vpithin the terms of the contract, be ful- filled or completed within the space of a year. On this principle the fol- lowing classes of verbal contracts have been sustained, though the parties evidently contemplated that they would not be performed within a year : (a) Contracts wherein performance is to be rendered on the happening of some contingency, such as marriage or death of a person, which may or may not arise within a year. Houghton v. Houghton, 14 Ind. 505 ; Blakeney v. Goodale, 30 Ohio St. 350; Gonzales v. Cartier, 63 Tex. 36; Jones v. Pouch, 41 Ohio St. 146; Cole v. Singerley, 60 Md. 348; Heflin V. Milton, 69 Ala. 354; Niagara Fire Ins. Co. v. Green, 77 Ind. 590; Trustees of F. Baptist Church v. Brooklyn Fire Ins. Co. 19 N. Y. 305 ; Roberts v. Rockton Co. 7 Met. (Mass.) 46 ; Updike v. Tehbrook, 33 N. J. L. 105 ; Clark v. Pendleton, 30 Conn. 495. (b) Contracts to pay money from time to time, or to render some service until a specified contin- gency arises, as, for instance, to support a person during life, or to ed- ucate a child ; for such person may die within the year, on which event the contract would be performed. East Tenn. E. E. Co. v. Staub, 7 Lea (Tenn.), 397, in which the defendant promised verbally to retain the plaintifE in its employ so long as he should remain disabled from an in- jury received ; and inasmuch as recovery might happen within a year it was held that the promise was not within the statute. Bell v. Hewitt, 34 Ind. 380; Harper v. Harper, 57 Ind. 548; Kent v. Kent, 63 N. T. 560; Hutchinson v. Hutchinson, 46 Me. 154; Dresser v. Dresser, 35 Barb. 578; Blake v. Cole, 23 Pick. (Mass.) 97. (c) Contracts to refrain altogether from certain acts, as, for instance, contracts in restraint of trade for an indefinite period or for any number of years. HiU v. Jamieson, 16 Ind. 135 ; Richardson v. Pierce, 7 R. I. 330 ; Doyle v. Dixon, 97 Mass. 308. Such a contract, being only a personal engagement to forbear doing cer- tain acts, not stipulating for apything beyond the promisor's life, and imposing no duties upon his legal representatives, would be fuUy per- formed if the promisor died within the year. Chap. II. § 3. SIMPLE CONTRACTS, 39 CAR. 11. C. 3, § 4. 79 is all to be done within the year.^ So Avhere A being tenant to JT under a lease of 20 years promised verbally to pay an additional £5 a-year during the remainder of the term in consideration that X laid out £50 in alterations, 'A was held liable upon his promise, the consideration for it having been executed within the year." (3) The contract, if not in writing, is not void. — It remains to consider what is the position of parties who have entered into a contract specified in section 4, but have not complied with its provisions.^ The terms of the section do not render a. Donellan v. Read, 3 B. & Ad. 899. 1 Donelian r. Head has been followed in most of the courts of our country. "Wood, Frauds, 494 ; Winters v. Cherry, 18 Mo. 350 ; Smalley V. Green, 53 la. 341 ; McClellan v. Sanford, 26 Wis. 595 ; Volke v. Flem- ing, 103 Ind. 110; Jones V. Hardesty, 10 Gill & J. (Md.) 404; Berry v. Doremus, 80 N. J. L. 399 ; Holbrook v. Armstrong, 10 Me. 31 ; Compton V. Martin, 5 Rich. 14. The courts of several states, however, have de- clined to follow this doctrine and hold that, although that which one of'the parties to the agreement is to do is all to be done within the year, still* if the other party's promise is not to be performed within a year, it is within the letter and spirit of the statute. Whipple v. Parker, 39 Mich. C75 ; Sheehy v. Adarene, 41 Vt. 541 ; Montague v. Garrett, 3 Bush (Ky.), 397; Marcy v. Maroy, 9 Allen (Mass.), 8; Emery v. Smith, 46 N. H. 151; Lane v. Shackford, 5 N. H. 130; Pierce v. Paine, 38 Vt. 34; Broadwell v. Gestman, 3 Denlo, 87 ; Bartlett v. Wheeler, 44 Barb. 163 ; Fray v. Sterling, 99 Mass. 461 ; Wilson v. Ray, 13 Ind. 1 ; McEiroy v. Ludlum, 33 N. J. Eq. 831; 1 Smith, Lead. Cas. H. & W. Notes, 436; Browne on Stat, of Frauds, 389. These authorities, while declining to permit the party who has per- formed his part of the agreement to enforce the verbal promise of the other party, give him a remedy upon the implied assumpsit arising from the benefits received by the defendant. The action should be based not upon the contract but upon the quantum meruit or quantum valebat. Whipple V. Parker, 39 Mich. 375. ^Leronx v. Browti. — In Alabama, California, Michigan, Nevada, New York, Oregon and Wisconsin, the statutes expressly provide that certain contracts " shall be void " unless expressed in writing, and in these states the rule stated in the text is not, on principle, in force. The objection that the contract wm not reduced to writing would go to the exist- 80 FORMATION OF CONTRACT. Part 11. such a contract void, but they prevent it being enforced by action. The contract, therefore, though it cannot be sued upon, is yet available for some purposes. Two illustrations will suflBce to explain this. But cannot be proved. — In the case of Leroux v. Brown,"' the plaintiff sued upon a contract not to be performed o. 12 C. B. 801. ence of the contract. The statutes of some states, however, are in the words of the Enghsh statute in this particular. The case of Leroux v. Brown, 12 C. B. 801, has been followed in Donner v. Cheeseborough, 36 Conn. 39, and quoted approvingly in Pritchard v. Norton, 106 U. S. 134. In this case Miller, J., said : " A contract valid by the laws of the place where it is made, although not in writing, will not be enforced in the courts of a country where the statute of frauds prevails, unless it is put in writing. Leroux v. Brown, 13 0. B. 801. But where the law of the forum and that of the place of the execution of the contract coincide it wiQ be enforced, although required to b6 in writing by the law of the place of performance, as was the case of Scudder v. Union Nat. Bank, 91 U. S. 406, because the form of the contract is i-egulated by the law of the place of its ceiebration, and the evidence of it by that of the forum." See, also, Hunt v. Jones, 12 R. I. 265 ; Browne on Stat, of Frauds, sees. 135, 136 ; Wharton on Conflict of Laws, sec. 690 ; Brandt on Suretyship, sec. 38. There is, however, much American authority to the contrary.' Story 6a Conf . of Laws, sec. 262 (but see Bennett's note to 7th ed.) ; AUshouse v. Ramsey, 6 Whart. (Pa.); Decosta v. Davis, 24 N. J. L. 331 ; Houtaling v. Ball, 20 Mo. 568; Denny v. Williams, 5 Allen, 1; Allen v. Sohuchardt, 10 Am. Law Reg. 13 ; Low v. Andrews, 1 Story, 38. In none of these cases is the proposition, announced in Leroux v. Brown, considered. They are decided on the assumption that the note or memorandum re- quired afiEeet the validity of the contract. While many of the cases involve contracts for the sale of chattels, still the decisions are not based on any distinction between the seventeenth and fourth sections, except Houtaling v. Ball, 20 Mo. 563, which holds that the words of the seven- teenth section, unlike the fourth, relate to the existence of the contract. Wharton, in his Conflict of Laws, states in substance that while a ver- bal contract, valid and enforceable under the lex loci contractus, is not enforceable in another jurisdiction, where the statute of frauds pre- vails, still the converse of this proposition is not true, and that a con- tract which, according to the law of the place where it is made, should be reduced to writing, cannot be enforced in another jurisdiction where no such requirement exists. The case of Donner v. Cheeseborough, 36 Conn. 39, is directly to the contrary, holding that the converse of the proposition, announced in Leroux v. Brown, is true. Chap. II. § 3. SIMPLE CONTRACTS, 39 CAR. 11. C. 3, § 4. 81 within the year, made in France and not reduced to writing. French law does not require writing in such a case, and by the rules of private international law the validity of a con- tract, so far as regards its formation, is determined by the lex looi contractus. The procedure, however, in trying the rights of parties under a contract, is governed by the lex fori, and the mode of proof would thus depend on the law of the country where action was brought. If, therefore, the 4th section avoided contracts made in breach of it, the plaintiff could have recovered, for his contract was good in France where it was made, and the lex loci contractus would have been applicable. If, on the other hand, the 4th section affected *procedure only, the contract, though [*63] not void, was incapable of proof. The plaintiff tried to show that his contract was void by English law, in which case he would have been successful, for there would have then been nothing to hinder his prov- ing first the contract, and then the French law which made it valid. But the Court of Common Pleas held that the fourth section dealt with procedure only, that the existence of the contract was not affected by it, but that it was ren- dered incapable of pr.oof, and the plaintiff therefore could not recover. The second illustration of the rule that a contract which does not fulfill the requirements of the statute is not void, but merely unenforceable, is to be found in the mode in which Courts of Equity have dealt with such contracts. They were accustomed to dispense with the evidence re- quired by the statute when one of the parties had, under certain conditions, performed his part of the contract.' 1 When a party obtains title to land in consideration of an agreement on his part, which was to be reduced to writing, but which rests in parol through some deception practiced on his grantor, and then, when sued upon his agreement, pleads the statute of frauds, this amounts to a fraud against which the court of equity will give relief by compelling him to perform. When the statute has been used as a cover to a fraud, equity will relieve against the fraud, notwithstanding its provisions. Browne on Statute of Frauds, sec. 441. 6 82 FORMATION OF CONTRACT. Part II. Yerj recent decisions have narrowed these conditions, and laid down in very explicit terms the limits within which part performance takes a contract out of the operation of the statute.^ It may now be considered settled, that proof of such a contract will only be admitted where the contract, is for an interest in land. In Britain v. Eossiterf' a contract of service, not to be performed within the year, was broken by the employer, who discharged the plaintiff after some months of service. An action was brought for wrongful dismissal; and the Court of Appeal held that the equitable doctrine of part performance was inapplicable. " The true ground of the doctrine," said Cotton, L. J., " is, that if the Court found a man in occupation of land, or doing such acts with regard to it as woVi\A. prima facie make him liable to an action of trespass, the Court would hold that there was strong evi- dence from the nature of ^ the user of the land that a con- tract existed, and would therefore allow verbal evidence to be given to show the real circumstances under which pos- session was taken." [*64] *Hence the provisions of the Judicature Act,* which enable all the Divisions of tlie High Court to rec- ognize and administer equitable rights and remedies, would not make this remedy generally applicable to contracts falling under 29 Car. II. c. 3, s. a. And even in the case of contracts relating to land, it is not enough that services should have been rendered in con- /Sideration of a promise to grant lands, or even that the a. 11 Q. B. D. 123. 6. S. S4, subs. 4, 7. 1 The doctrine that part performance takes the contract out of the op- eration of the statute, subject to various qualifications, has been quite generally followed in the American states, though it has been repudi- ated in North Carolina, Dunn v. Moore, 3 Ired. Eq. 364 ; Tennessee, Eidly V. McNairy, 3 Humph. 174; Mississippi, Braman v. Buck, 9 S. & M. 210. But the authorities in support of the doctrine are said to be too numerous and too overpowering to admit of its being treated as an open question. Annan v. Merrit, 13 Conn, 478, Chap. II. § 3. SIMPLE CONTRACTS, 39 CAR. II. C. 3, § 17. 83 price should have been paid -wholly or in part. " The acts relied on as part performance must be unequivocally and in their own nature referable to some such agreement as is alleged." « i So in Maddison v. Alderson * the House of Lords, affirm- ing the judgment of the Court of Appeal, held that where a promise of a gift of land was made to the plaintiff in con- sideration of her remaining in the service of the promisor during his life-time, the continuance of service for the re- quired period could not be regarded as exclusively referable to the promised gift. It might have rested on other consid- erations, and so the Statute excluded the admission of parol evidence of the promise. Contracts within the seventeenth section. The seventeenth, section enacts " that no contract for the sale of any goods, wares, and merchandises for the price of £10 sterling or upwards shall he allowed to he good, except the buyer shall accept part of the goods so sold and actually receive the same ; or give something in earnest to bind the bargain, or in part of payment ; or that some note or mem- orandum in writing of the said bargain be made and signed by the parties to be charged by such contract, or their agents thereunto authorized." The same questions present themselves here as presented themselves under the fourth section. (1) The form required, (2) the nature of the contract specified, (3) the effects of a non-compliance with the statutory requirements. *(1) [*65] Difference as to form from sec. 4. — "With regard to the form required, where, in absence of a part acceptance and a. Per Lord Selbome, C, in Maddison v. Alderson. 6. 8App. Ca. 479; 7Q. B. D. 174. iCrabill v. Marsh, 38 Ohio St. 331; Webster v. Gray, 37 Mich. 87; Kinyon v. Young, 44 Mich. 339 ; Peckham v. Winter, 49 Mich. 179. 84 FORMATION OF CONTRACT, Part H. receipt, or payment, a note or memorandum in writing is re- sorted to, it is sufficient to say that the rules applicable to contracts under section 4 apply to contracts under section 17, with one exception. It is not necessary under section 17 that the consideration for the sale should appear in writing. Since the 17th sec- tion only applies to contracts for the sale of goods, it will be presumed, in the absence of a specified consideration for the sale, that there is a promise or undertaking to pay a reasonable price, provided always that there has been no express verbal agreement as to price which would rebut such a presumption." (2) Nature of Contract of Sale. — "We must not enter here into a discussion on the nature of a contract for the sale of goods, wares and merchandise in English law, b,ut these points may be borne in mind.' o. Hoadley v. McLaine, 10 Bing. 482. 1 Lee T. Griifln. — What are goods, wares and merchandise under this section is a question of much difficulty. (a) Stocks. — Under the English decisions it is settled that stocks, in that they are choses in action and incapable of delivery and acceptance, are not within the statute. Humble v. Mitchell, 11 Adol. & Ell. 205. But in this country it has been repeatedly held that bonds, stocks and promissory notes were within the statute. Tisdale v. Hai'ris, 30 Pick. (Mass.) 13; Gooch v. Holmes, 41 Me. 523; Boardmann v. Cutter, 128 Mass. 388. An agreement to take shares in a trading adventure, being merely executory, is not required by the statute of frauds to be in writing. Coleman v. Eyer, 45 N. T. 38 ; Green v. Brookins, 23 Mich. 48. (b) Wort and labor. — A contract for work and labor is not within the statute ; but where one agrees to manufacture an article for another it is often difficult to determine whether the contract is for work, labor and material, or for goods, wares and merchandise. The early English rule is " that when the work and labor is the sub- stantial object contracted for, although such work and labor is to be ex- pended on the materials of the party who is to furnish the article at a given price, such contract is not for a sale, and consequently is not within the statute," and that doctrine is said to be incorporated in the jurisprudence of this country. The case of Lee v, GriflSn, 1 B. & S. 272, Chap. II, § 3. SIMPLE CONTRACTS, 29 CAR. H. C. 3, § 17. 85 Bargain and Sale.— The Contract of Sale in English law has the effect of a conveyance, it passes the property in the thing sold; but in order to have this effect, the chattel agreed to be sold must be ascertained and specific, and noth- ing must remain to be done by the vendor to complete the chattel, or to ascertain its price by weighing, measuring, or testing. Such a contract is called an executed contract of sale. Executory agreement to sell. — It is quite possible, how- ever, that a contract may be made for the sale of goods which are not specific — A agrees to buy any 10 sheep out of ^'s flock : or which are not complete — A orders a table which he sees making in -Z''s shop: or of goods to which something remains to be done by way of ascertainment of price — A buys X's stack of hay, the price to be determined as the hay is taken down and weighed. In these cases the property does not pass, the buyer does not acquire a right in rem to the thing agreed to be sold, *but only a right in personam against the seller. [*66] In like manner, the seller holds at his own risk the chattels sold ; he is not divested of his property. This is called an executory contract of sale. When it becomes executed. — But such a contract may become executed and the property pass, and with the prop- erty the risk, to the purchaser, when the chattel is completed or its price ascertained, or when specific goods are appro- priated to the contract by the vendor. So where an order is given for a quantity of goods, and the vendor has to appropriate the goods to the contract, the monient of appropriation becomes as important to determine is a departure and cannot be regarded as law in this country. Finney V. Apgar, 31 N. J. L. 270; Meinicke v. Falk, 55 Wis. 437; Parsons v. Loiicks, 48 N. Y. 17; Cooks v. Millard, 65 N. Y. 360; Goddard v. Binney, 115 Mass. 454 ; Crockett v. Scribner, 64 Me. 447. Under the New York rule the distinction is between the sale of goods in existence, at the time of making the contract, and an agreement to manufacture goods. The former is within the prohibition of the stat- ute. The latter is not. Parsons v. Loucks, 48 N. Y. 17 ; Deal v: Max- well, 51 N. Y. 653. See Edwards v. Grand Trunk R. R. 48 Me. 379 86 FORMATION OF CONTRACT. Part 11. as the moment of acceptance in a contract made by corre- spondence. The appropriation passes the property just as the acceptance concludes the contract. And the diflBculty is to ascertain in each case " whether the selection made by the vendor is a mere manifestation of his intention which may be .changed at his pleasure, or a determination of his right, conclusive on him and no longer revocable." " But the question is not one which we can profitably discuss further here. Does § 1 7 apply to executory contracts of sale ? — It was long questioned whether the ITth section applied to the executory contract of sale, and the matter was not set at rest till more than 150 years after the passing of the Statute of Frauds. Lord Tenterden's Act, 9 Geo. lY. c. 14, § 7, recites, " That it has been held that the said recited enactments '' do not extend to certain executory contracts for the sale of goods, which nevertheless are within the mischief intended to be remedied ; " and then enacts that the provisions of § 17 " shall extend to all contracts for the sale of goods of the value of ten pounds sterling and upwards, notwithstanding the goods may be intended to be delivered at some, future time, or may not at the time of such contract be actually made, procured, or provided, or fit, or ready for delivery, or some act may be requisite for the making or completing thereof, or rendering the same fit for delivery." The effect of this clause is to bring executory contracts for the sale of goods within the 17th section of the Statute of Frauds.^ [*67] *Difference between contracts of sale and for work and labour. — A further question has arisen, in cases where skilled labour has to be expended upon the thing sold before the contract is executed and the property trans- o. Benjamin on Sales, 264, 2d ed. 6. These are 29 Car. H. o. 3, § 17, and an act of 7 Will, m., which applied to Ireland tiie provisions of the English Statute of Frauds. 1 Bennett v. Hull, 10 Johns. 364; Edwai-ds v. Grand Ti-unk R. R. 43 Me. 379. Chap. II. § 3. SIMPLE CONTRACTS, 29 CAR. II. C. 3, § 17. 87 ferred, whether the contract is one for work and labour, which would not fall under the 17th section; or for goods, wares, and merchandise within the meaning of the section. After some conflict of judical opinion it has been laid down in " Lee v. Qriffin. ' that the contract is for a sale of goods if it contemplates the ultimate delivery of a chattel. And Blackburn, J., said, " I do not think that the relative value of the labour and of the materials on which it is be- stowed can in any case be the test of what is the cause of action; and that if Benvenuto Cellini had contracted to execute a work of art for another, much as the value of the skill might exceed that of the materials, the contract would have been none the less for the sale of a chattel." (3) Does § 17 differ in Effect from § 4? — It remains to note that if there be no acceptance and receipt, no part payment, and no memorandum or note in writing, the section declares that the contract shall not " be allowed to be good." As to the meaning of these words there are conflicting dicta but no direct decision. In Bailey v. Sweetmg * a letter admitting a purchase of goods was held to be a sufficient memorandum to satisfy the statute. This points to the conclusion that the require- ments of the statute do not affect the validity of the con- tract but only the proof of it: for if the statute avoided a contract 'which did not satisfy its terms, a subsequent note of a void transaction must needs be of none effect. Yet the Court in Leroux v. Brown" assumes that the words of s. 17, unlike those of s. 4, go to the existence of the contract, and judges and text-book writers have ac- cepted this distinction. Against this we may set a clear expression of opinion by a. 1. B. & S. 272. / 6. 9 C. B. N. S. 843. c. 12 C. B., 809. 1 Disapproved in Finney v. Apgar, 31 N. J. L. 270, and other cases cited in note 1, p. 65. 88 FORMATION OF GONTEACT. Part II. Brett, L. J., in Britain v. Bossiter," and by Lord Blackburn in the very recent case of Maddison v. Alderson^ that [*68] there *is no difference in the effect of the two sections. And so it may not be rash to say, having regard to the decision in Bailey v. Sweeting " and to the dicta just referred to, that the words of the 17th section do not, any more than the words of the 4th, relate to the existence of the contract, but solely to the evidence of its existence which the Courts are bidden to require." § 4. Consideration. Consideration has already been touched upon so far as regards the history of the doctrine in English law, and I have stated that it is the universal requisite of contracts not under seal. What has now to be said must therefore be understood to extend to those contracts the discussion of which has just been concluded, those contracts which, though not under seal, are required by law to be expressed in cer- tain forms, or at any rate in writing. Definition of consideration. — It will be well perhaps to take some general definition of consideration which may serve to explain in outline what it is which we are now pro- posing to discuss, and then to lay down certain principles upon which the doctrine has been dealt with in English law. The fullest definition of consideration is that given by the Court of Exchequer Chamber in Gurrie v. Misa." " A valuable consideration in the sense of the law may con- sist either in some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or re- sponsibility given, suffered, or undertaken by the other." ^ o. 11 Q. B. D. 123. 6. 8 App. Ca. 479. c. 9 C. B. N. S. 843. d. IVTr. Pollock (Principles of Contract, ed. 4, p. 605) takes this view, saying that " the ■weight of recent opinion is in favor of holding that notwithstanding the difference of language the 17th section, like the 4th, is only a law of procedure." e. L. R. 10 Exoh. 163. iConover v. Stillwell, 34 N. J. L. 54; Glasgow v. Hobbs, 83 Ind. 440. Chap. n. § 4. SIMPLE CONTRACT. CONSIDERATION. & Such being the definition of consideration, we may pro- ceed to state — General rules as to consideration.— ]. That considera- tion is necessary to the validity of every promise not under seal. "2. That Courts of law will not inquire whether the [*69] consideration is adequate to the promise, but will in- sist that it should be something of some value in the eye of the law. 3. That consideration must be legal. 4. That consideration may be present or future, executed or executory, but must not be past. 1. Consideration is necessary to the validity of everv sim- ple contract. Doubt as to the doctrine — Settled in Rann v. Hughes, 7 T. R. 350. — The peculiar case of PiUans v. Van Mie- rop'^ has already been noticed, and it will be remembered that Lord Mansfield, 0. J., and Wilmot, J., there expressed an opinion that, among merchants, a promise put into writ- ing was binding without consideration. That case was de- cided in 1765; and not many years afterwards, in 17Y8, a somewhat similar point arose in the case of Rann v. Hiighes. There the defendant, as administratrix of the estate of one J. Hughes, promised in writing " to answer damages out of her own estate." There was no consideration for the prom- ise, and it was contended that the writing required by 29 Car. II. c. 3, § 4, rendered consideration unnecessary.' The view encouraged by Lord Manfield in Pillans v. Van Mierop appears to have been, that the presence of consideration was one mode among others for supplyipg evidence of the in- tention of the parties to form a contract ; and that, if the terms of the contract were reduced to writing either by a. 3 Burr. 1663. 1 By the statutes of Missouri, California, Iowa, Indiana, Kentucky and Kansas, a written instrument is presumptive evidence of consideration. All written instruments are, so far, placed on a level with negotiable paper. 90 FORMATION OF CONTRACT. Part n. reason of commercial custom or of statutory enactment, such evidence was sufficient without consideration. But this view of the law was, once for all, declared to be incor- rect by Skynner, 0. B., delivering the opinions of the judges in the House of Lords in Rann v. JIughes." " It is undoubtedly true that every man is, by the law of nature, bound to fulfill his engagements. It is equally true that the law of this country/ supjplies no Tneans nor affords any remedy to compel the performance of an agreement [*70] made ^without sufficient consideration. Such agree- ment is " nudum pactum ex quo non oritur actio ; " and whatever may be the sense of this maxim in the civil law, it is in the last sense only that it is to be understood in our law AU contracts are by the laws of England distinguished into agreements by specialty and agreements by parol ; nor is there any such third class as some of the counsel have endeavoured to maintain, as contracts in writ- ing. If they he merely written and not specialties, they are parol and a consideration must he proved." Bills of exchange and promissory notes no real excep- tion. — Bills of exchange and promissory notes are an ap- parent but not a real exception to the universality of this rule. In contracts of this nature consideration is presumed to exist and need not be proved by the plaintiff. The bur- den of proof rests on the party disputing the validity of the contract. If, however, he can show that, as between him- self and the party suing, no consideration was given for the making or indorsement of the bill or note, the promise fails, as it would do in any other case of simple contract under like circumstances. 2. Courts of la/m will not inquire whether or no the con- sideration he adequate to the promise, hut they will insist that it he something of some value in tJie eye of the law. Adequacy of consideration. — In other words, consider- ation need not be adequate, but must be real. So long as a o. 7 T. E. 350. Chap. II. § 4. SIMPLE CONTRACT. CONSIDERATION. 91 man gets what he has bargained for, Courts of law will not ask what its value may be to him, or whether its value is in any way proportionate to his act or promise given in re- turn. This would be " the law making the bargain, instead of leaving the parties to make it." " Further than this, they will not ask whether the thing which forms the considera- tion does in fact benefit the promisor, or a third party, or is of any substantial value to any one. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made, as consideration for the promise made to him.^ *Tbe following cases will illustrate this principle. ['^Tl] A gave permission to Xto weigh two boilers, the property of A, and JT in consideration of this permission promised A to return them in as good condition as he re- ceived thera.* A sued Xfor non-fulfillment of this prom- ise ; X had in fact taken the boilers to pieces in order to weigh them, and had returned them in this condition. It was argued that the permission to weigh the boilers was neither detriment to the plaintiff nor benefit to the de- fendant, and so was no consideration which would support Xs promise. But Lord Denman, 0. J., said " the defendant had some reason for wishing to weigh the boilers; and he could only do so by obtaining permission from the plaintiff, which permission he did obtain by promising to return them in good condition. We need not inquire what henefit he eaypeoted to derive. The plaintiff might have given or re- fused permission." ^ a. Alderson, B., Pilkington v. Scott, 15 M. & W. 660. 6. Bainbridge v. Firmstoue, 8 A. & E. 743. 1 Lawrence v. MoCalmot, 2 How. 436 ; Worth v. Case, 43 N. Y. 363 ; Nash V. Lull, 103 Mass. 60. But it has been held that the doctrine that inadequacy of consideration will not vitiate an agreement does not ap- ply to a mere exchange of sums of money, where value is exactly fixed, but to the exchange of something, in itself, of indeterminate value. Schnell v. Nell, 17 Ind. 39, where it is said that the consideration of one cent will not support a promise to pay $600. 2 After a party has received the full benefit he contracted for, which but for the contract he would not have received or been entitled to de- 03 FOBMATION OF CONTRACT. Part H. A like authority is Haigh v. Broolcs.'^ The defendant in that case promised payment of certain bills accepted by M in consideration that the plaintiff would return to the de- fendant a guarantee which he had given for the payment of £10,000 by M to the plaintiff. The guarantee was re- turned: it then turned out to be unenforceable under 29 Oar. II. c. 3, § 4, and the defendant argued that it was there- fore no consideration for his promise. Lord Denman, how- ever, in giving judgment for the plaintiff, said, " "Whether or no the guarantee could have been available within the doctrine of Wain v. Warlters,'' the plaintiffs were induced by the defendant's promise to part with something which they might have kept, and the defendant obtained what he desired by means of that promise. Both being free and able to judge for themselves, how can the defendant be justified in breaking this promise, by discovering afterwards that the thing in consideration of which he gave it did not possess' that value which he supposed to belong to it? It cannot be ascertained that that value was what he most re- garded : he may have had other motives and objects, and of their weight he was the only judge." [*72] *Inade consti- tute a consideration.^ It has even been held that a promise of forbearance for an unspecified time was no considera- tion. But it may now be regarded as settled " that a prom- ise of forbearance, in order to form a consideration, need not be a promise of absolute forbearance, nor even of [*76] forbearance for *a definite time; where no time is mentioned, a reasonable time will be implied, and where no express promise is made, an actual " staying of the hand of the creditor " is consideration for the transfer of documents of title.* The most recent authority for this proposition is the case of Leash v. Scott." Extent of forbearance needed. — The defendants were vendors of a cargo of nuts. X, the purchaser of the cargo, was indebted in large sums to the plaintiffs, and, on ap- plying for a further advance, he was told that it could only be made if he would promise to give cover, i. e., security. Xproraised cover, received an advance, and some days after deposited with the plaintiff, among other securities, the bill of lading for the cargo of nuts. X became insolvent, and the defendants sought to stop the nuts in transitu. The right of stoppage in tra/nsitu cannot be exercised against the transferee of a bill of lading for consideration. It was o. Semple v. Knk, \ Exoh. 74. 6. Oldershaw v. King, 8 H. & N. 517. u. 2 Q. B. D. 376. Mulholland v! Bartlett, 74 111. 62 ; Ware v. Morgan, 67 Ala. 461 ; Ecker V. McAllister, 54 Md. 373; Logan v. Mathews, 6 Pa. St. 417; Gates v. Shults, 7 Mich. 136. This test is not usually insisted upon, especially in cases of compromise after suit brought. _ A discontinuance of the suit, commenced in good faith, is a sufficient consideration without regard to the validity of the claim in suit. Jones v. Rittenhaur, 87 Ind. 848; Flannagan v. Kilcome {swproi). 1 The promise to forbear need not be a promise to forbear for a definite time, if followed by actual forbearance for a reasonable time. Howe v. Taggart, 133 Mass. 384; Bowen v. Tipton, 64 Md. 375; Dunning v. Funk, 5 Rawle (Pa.), 69 ; EUing v. Vanderlyn, 4 Johns. 287 ; King v. Upton, 4 Me. 387 ; Rood v. Jones, 1 Doug. (Mich.) 188. Contra, Garnett v. Kirk- man, 33 Miss. 389. Chap. II. § 4. UNREAL CONSIDERATION. 99 urged for the defendants that the consideration iu this case was past, being the advance made some daj^^s previous to the assignment of the bill of lading: but the Court of Ap- peal held that there was a present consideration for the assignment. " An action would lie for not covering. There- fore the assignor for such a consideration as this always gets the benefit of performing his contract and so saving himself from the cause of action. The consideration for the assignment of the bill of lading was in effect a forbear- ance to sue for an. indefinite and unspecified time: the assignment being part performance of a contract on which action might be brought at any time, it stayed the hand of the creditor." " *Bailraeiit. — Among cases where an act is the [*YY] consideration for a promise, it is worth while to no- tice the kind of contract which arises upon the mere plac- ing or leaving of property in the hands of a bailee or depositary. This will create an implied promise to use rea- sonable care in the safe custody of the property and will support an express promise to undertake certain services in respect of it. Thus, where A allowed two bills of exchange to remain in the hands of X, and X promised to get the bills discounted and to pay the money to J.'s account, ttlis promise was held to be made upon good consideration, namely the permission given to the defendant to retain the bills.* Unreal considerations. — To discuss further the forms which consideration may assume would be to enter upon o. The case cited, though a good illustration of forbearance as a consideration, is by no means free from difficulty. If " the creditor " was entitled to an immediate per- formance of the promise to give cover, the debtor, in indorsing to^him the bill of lad- ing, did no more than he was legally bound to do. If this be so, there was no consid- eration for the forbearance, and the whole of the contract, in which the forbearance is the consideration for the assignment of the bill of lading, seems to fall to pieces It might have seemed a more simple solution of the difficulty to have regarded the performance of the promise to give cover as a part of the consideration for the ad- vance, for although it took place as a matter of fact on a later day, it was substan- tially part of the same transaction. &. Hart V. Miles, 4 C. B. N. S. 371. 100 FORMATION OF CONTRACT. Part IX. an analysis of the possible subjects of contract. It remains to point out Certain semblances of consideration which the Courts have refused to aWoMr to support a promise. They may be said to fail, roughly' speaking, under three heads. (a) Motive. — Oases in which motive has been confounded with consideration, that is to say, cases where a man has promised to do a thing, not for any benefit to himself, but because he wished it to be done or thought that it ought to be done. (h) Impossibility and Tagueness. — Oases in which the alleged consideration has been a promise to do a thing ob- viously impossible in fact or in law ; or a promise the per- formance of which, from its vague and illusory character, it is impossible to secure. (c) Offering a man what he can already legally de- mand. — Cases in which the alleged consideration has been the doing or promising to do what a man was already bound to do, so that the promisor got nothing but what he was already entitled to get before the consideration was offered. (a) Motive. — Cases have arisen which make it necessary. to distinguish motive from consideration. " Motive is not the same thing with consideration, consideration [*T8] means something *which is of value in the eye of the law, moving from the plaintiff;" " The confusion be- tween motive and consideration has taken two forms ; the distinction which once existed between good and valuable consideration ; and the view once maintained that a moral obligation was sufficient to support a promise. Oood consideration. — The first of these probably origi- nated in the Chancery, where a covenant to stand seised was held (before the Statute of Uses)* to raise a use, if the person in whose favour the covenant was made stood within a certain degree of consanguinity to the covenantor. Such relationship was of itself a consideration for the covenant, a. Patterson, J., in Thomas v, Thomiks, S Q. B. 851. 6. 87 Hen. Vm. o. 10. Chap. II. § 4. UNREAL CONSIDERATION. 101 and blood or good consideration came to be distinguished from money or valuable consideration which supported the use arising from Bargain and Sale. At the present day, although a covenant to stand seised would, by virtue of the Statute of Uses, create a legal estate, an estate cognizable by the Common Law Division of the High Court, the con- sideration of Hlood, or good consideration is still required to support the covenant." As applied to contract. — In some early cases it wa^ at- tempted to extend this principle to the law of contract. The mere existence of natural affection as a motive for a promise was never held to amount to a consideration", "natural affection is not sufficient to raise an assumpsit without a guid pro guoP * But it was at one time laid down that where A made a binding promise to X to do something for the benefit of X's son or daughter, the near- ness of relationship would entitle the person in whose favour the contract was made to sue upon it." This, however, is no longer law. Nearness of relation- ship to one of two contracting parties, and the fact that the contract was made for the benefit of the plaintiff, give no cause of action if the plaintiff was no party to the contract. The point is connected rather with the effect of a con- tract," than with the nature of consideration, but it serves to illustrate the form which the doctrine of good considera- tion took in the Common Law Courts, and to explain the saying quoted *above, that consideration inust [*79] move from, the plaintiff} The phrase means no more than this, that when a man sues upon a promise he must show that the consideration for which the promise was made was some benefit conferred or detriment sustained by a. Hayes on Conveyancing, 1, 89, n. h. Bret v. J. S. and wife, 1 Cro. 755. c. Button V. Poole, 3 Lev. 210. d. Tweddle v. Atkinson, 1 B. & S. 338. See Part Ht, ch. i 1 Stewart v. Trustees of Hamilton College, 3 Denio, 403 ; Tobey v, Warehan Bank, 13 Met. (Mass.) 440; Jordan v. Wilson, 6 Ired. (N. C.) 430. 103 FORMATION OF CONTEACT. Part IL himself; in other words, that strangers to a contract do not acquire a right to sue upon it because they happen to be interested in its performance. (2) Moral obligation, under certain aspects, was once re- garded as a consideration for a promise. A man may believe himself to be under a moral obligation either be- cause he has received actual benefits in the past, or from motives of piety, delicacy, or friendship. Now a past con- sideration is in truth no consideration at all, inasmuch as the promisor does not receive a benefit, nor the promisee incur a detriment, in return for the promise. There are certain cases, however, in which an advantage derived in the past will support a subsequent promise. These shall be dealt with when we come to draw the distinction between executed and past consideration." Arising from past benefits.— It is sufficient to say here that the validity of such promises will be found to rest upon another basis than that of moral obligation, and that the phrase, which was of common use in the Common Law Courts at the end of the last and beginning of the present century, has had an unhappy and obscuring influence upon this branch of the law of contract. The question was set- tled once for all in the case of Eastwood v. Kenyan^ and a final blow given to the doctrine that past benefits would support a subsequent promise on the ground of the moral obligation which rested on the promisor. " The doctrine," said Lord Denman, " would annihilate the necessity for any consideration at all, inasmuch as the mere fact of giving a promise creates a moral obligation to perform it." Arising from honourable or conscientious scruples. — If the actual receipt of a benefit in the past does not consti- tute consideration for a consequent promise, still less will such duties of honour, conscience, or friendship as a man may conceive to be incumbent on him. A man may [*80] be said *to be morally bound to support his children in a manner suited to his own condition and expendi- a. See p. 89. \>. 11 A. & E. 433. Chap. n. § 4. UNREAL CONSIDEEATION. 103 ture, but the law creates no sach obligation, and it is con- ceived that a promise by' a father to his son to pay the son's debts would not be binding."' A man is bound in honour to pay money lost in a wager, but inasmuch as the law has declared wagers to be void,* a promise to pay such a debt would be unenforceable for want of consideration : and in like manner a pious wish on the part of executors to carry out what they know to be the intentions of the testator" affords no consideration for a promise :.iade by them for such an object.' Indian. Contract Act, § 35. — It is worth nothing that the Indian Contract Act, in dealing with this subject, differs from the rule of English law in two particulars. It up- holds promises made in consideration of natural love and affection where the parties are nearly related and the prom- ise written and registered. It also upholds informal prom- ises to make compensation to persons who have already conferred some benefit upon the promisor, or voluntarily o. Mortimore v. Wright, 6 M. & W. 483; E. v. Downs, 1 Q. B. D. 25. 6. 8&9Vict. c. 109, §18. e. Patterson, J., in Thomas v. Thomas, 2 Q. B. 851. 1 A moral obligation is insufficient to support a promise unless there was a pre-existing obligation which has become inoperative by positive law. Mais V. Wyman, 3 Pick. 307; Cook v. Bradley, 7 Conn. 57; Loomis V. Newhall, 15 Pick. 159; Updyke v. True, 13 N. J. Eq. 151; Ehle V. Judson, SJ4 Wend. 97 ; Schroeder v. Fink, 60 Md. 436 ; Murphy Estate, 11 Phila. (Pa.) 3 ; Snyder v. Guthrie, 31 Hun, 341 ; Osier v. Hobbs, 33 Ark. 315 ; Turlington v. Slaughter, 54 Ala. 195 ; Gay v. Botts, 13 Bush (Ky.), 399; McElven v. Sloan, 56 Ga. 308; Gordon v. Gordon, 56 N. H. 170 ; Philpot v. Gruninger, 14 Wall. 570, in which the distinction be- tween motive and consideration is considered ; Farnham v. O'Brien, 33 Me. 475. There are a few old cases in accordance with the early Eng- lish rule, that a moral obligation is sufficient to support a promise. Howley v. Farrar, 1 Vt. 173 ; Glass v. Beach, 5 Vt. 173 ; Clark v. Her- ring, 5 Binn. (Pa.) 33 ; but see Musser v. Ferguson, 55 Pa. St. 475 ; Leon- ard V. Duffln, 94 Pa. St. 218; Stebbins v. Crawford Co. 93 Pa. St. 389. Gratuitous services. — Services rendered without the privity or re- quest of the party benefited, or without any expectation of receiving compensation therefor, are not sufficient consideration for a subsequent promise to pay for them. Bartholomew v. Jackson, 20 Johns. 38 ; Allen V. Bryson, 67 la. 591 ; Osier t. Hobba, 33 Ark. 315. 104 FORMATION OF CONTRACT. Part H. done something which the promisor was legally compella- ble to do. It thus recognizes the motives of natural affec- tion (subject to certain forms) and gratitude as forming consideration for a promise. In French law, cause the equivalent for consideration has a yet wider meaning;" it includes not merely motives of gratitude, but sentiments of honour and scruples of con- science. It may, however, be regarded as certain that, in English law, motive, whether it take the form of natural affection, gratitude for past services, feelings of honour or of piety, is in no case such consideration as will support a simple contract. (5) Impossibility and vagueness. — Courts of law will also hold a consideration to be unreal if it be impossible upon the face of it or so vague in its terms as to be prac- tically impossible to enforce. In dealing with impossibility regarded from this point of view, we must guard against being understood to [*81] mean anything *more than a, prima facie legal impos- sibility, or a thing physically impossible " according to the state of knowledge of the day." * Practical impossibil- ity unknown to the parties when they entered into their contract may avoid it on the ground of Mistake. Impossi- bility of performance arising subsequent to the making of the contract may under certain circumstances operate as a Discharge. But we are here concerned with promises to do a thing so obviously impossible that the promise can form no real consideration. For a legal impossibility we may take the case of Hartey V. Gibbons." There the plaintiff was bailiff to J. S. and the defendant was debtor to J. S. to the amount of £20. The defendant in consideration that the plaintiff would discharge him the £20 due to J. S. promised to lay out £40 on a barge of the plaintiff. The Court held that the consideration was a. DaUoz, Repertoire, vol. 33, p. 152. 6. Per Brett, J., in Clifford v. Watts, L. E. B C.P. 588. t. 2 Lev. 161. Chap. n. § 4 UNREAL CONSIDERATION. 105 " illegal," for the servant cannot discharge a debt due to his master. By illegal we must understand legally impossible, for illegality, in the strict sense of the term, there was none.^ Of contracts void because the consideration for the prom- ise involves a physical impossibility we can furnish no de- cided case. "We may take an illustration from Gaius : — " Si quis rem quae in rerum natura non est aut esse non potest velut hippocentaurum stipuletur, inutilis est stipula- tio." » Or from the Indian Contract Act : — * A agrees with X to discover treasure by magic. The agreement is void. Tagueness. — Again, a consideration may be unreal on the ground of impossibility where it is a promise so vague as to be virtually unenforceable.^ The case of WMte v. Bluett " exemplifies this rule. This was an action brought by executors upon a promissory note made payable to the testator by his son, the defendant in the action. The son pleaded a promise made by his father to discharge him from all liability in respect of the note in considera- ' tion of his ceasing to make certain *complaints [*82] which he had been in the habit of making, to the ef- o. Gauis, 3, 97. &. Ind. Cont. Act, §. 56. c. 23 L. J. Exch. 36; 2 C. L. H. 301. 1 It is said that the following is an example of a consideration involv- ing a legal impossibility; an underfcaiing "that plaintiff's tract of land shall sell for a certain sum by a given day." Certainly no man can in legal contemplation force the sale of another's property by a given day, or by any day, as of his own act. Stevens v. Coon, 1 Pinney (Wis.), 357. 2 Tolmie v. Dean, 1 "Wash. T. 57 ; Wall's Appeal, 111 Pa. St. 460. The principle, id cerium est quod cerium reddi potest, is generally applied in clearing up any uncertainty there may be in the promise which favors the consideration ; as, for instance, a contract to sell all the straw one has to spare, not exceeding three tons, is not void for uncertainty in not expressing the quantity of straw contracted to be sold; the quantity agreed to be sold can be ascertained by extrinsic evidence. Parker v. 106 FORMATION OF CONTEACT. Part IL feet that he had not enjoyed as many advantages as the other children. It was said by the Court that the promise given by the son was no more than a promise " not to bore his father," " and was too vague to support the father's prom- ise to discharge the son from liability on the note. " A man might complain that another person used the highway more than he ought to do, and that other might say "do not complain and I will give you £5." * It is ridiculous to sup- pose that such prqmises could be binding. (c) Promise to do what a man is bound to do. — Another form of unreality of consideration has arisen where the al- leged consideration is a promise to do, or actually doing what a man is already bound by law to do for the prom- isor.^ The promisor gets nothing more than he is already entitled to. Thus where in the course of a voyage from London to the Baltic and back two seamen deserted," and the captain, being unable to supply their place, promised the rest of the crew that if they would wOrk the vessel home the wages of the two deserters should be divided among them, this promise was held not to be binding. "The agreement," said Lord Ellenborough, " is void for want of consideration. There was no consideration for the ulterior pay promised to the mariners who remained with the ship. Before they sailed from London they had undertaken to do all they could under all the emergencies of the voyage. . . The desertion of a part of the crew is to be considered an emergency of the voyage as much as their death ; and those who remain are bound by the terms of their original con- tract to bring the ship in safety to her destined port." Here then the sailors promised no more than their con- o. Per Parke, B. 6. Per Pollock, 0. B. c. Stilok V. Meyrick, 2 Camp. 317. Pettit, 43 N. J. L. 512; Miller v. Kendig, 55 la. 174; Thompson v. Stev- ens, 71 Pa. St. 161. 1 Warren v. Hodge, 121 Mass. 126 : Shiber v. Shack, 83 111. 191 ; Ayers V. Chicago, etc. R'y Co. 53 Iowa, 478 ; Holmes v. Boyd, 90 Ind. 383 ; Uhap. II. § 4. UNREAL CONSIDERATION. 107 tract already bound them to do. It would have been other- wise if risks had arisen which were not contemplated in the contract." For instance, such a contract as that which the seamen had entered into in the case just cited contains an implied condition that the ship shall be seaworthy. So where a seaman* had signed articles of agreement [*83] to help navigate a vessel home from the Falkland IsleSj and the vessel proved to be unseaworthy, a promise of extra reward to induce him to abide by his contract was held t6 be biridiug.* Promise not to do what a man legally cannot do. — We have spoken hitherto of cases in which a man has promised a. Hartley v. Ponsonby, 7 E. cfe B. 872. 6. Turner v. Owen, 3 F. & F. 177. Phoenix Ins. Co. v. Ruiok, 110 111. 538; Tucker v. Bartlett, 85 Mo. 114; Jenness v. Lane, 36 Me. 475; Watts v. French, 19 N, J. Eq. 407. A dis- charge of a statutory obligation is no consideration for a contract, New- ton V. Chicago, etc. R'y Co. 66 Iowa, 433 ; but the doing what one is only morally bound to do, as paying a debt barred by the statute of limita- tions, is a good consideration for a promise. Schreiner v. Cummings, 63 Pa. St. 374. Substituted agreement. — It often happens that a party to an agree- ment refuses to perform, on finding the contract more onerous than was expected, unless the other party wiU agree to make further compensa- tion. The extra compensation is promised in order to secure perform- ance of the contract. An action on such promise is generally success- fully defended on the ground that the only consideration for the prom- ise was the plaintiff's agreement to do what he was already under legal obligation to do, viz., perform^ his contract. Ayers v. Chicago, etc. R'y Co. 53 Iowa, 478 ; Reynolds v. Nugent, 25 Ind. 338 ; Owen v. Stevens, 78 111. 473; McCarty v. Hampton Building Ass'n, 61 Iowa, 387. There is another class of cases which at first sight seem to be in con- flict with the above ; they are, however decided upon another principle. Where parties in the execution of a contract become involved in di£B- culty thereunder, they may relinquish their rights under the old con- tract and make a new agreement. They have simply exercised the well recognized right of discharging their contract by a substituted agree- ment (see p. 361) which is binding on the parties to it. Munroe v. Per- kins, 9 Pick. 805 ; Rollins v. Marsh, 138 Mass. 116 ; Moore v. Detroit Loco- motive Works, 14 Mich. 373; Goebel v. Lynn, 47 Mich. 489; Lallimore v. Hansen, 14 Johns. 330 ; Coynes v. Lynde, 10 Ind. 383 ; Lawrence v. Davey, 38 Vt. 364; Connelly v. DeVoe, 87 Conn. 570. 108 FORMATION OF CONTRACT.. Part H. to do that which he is already, under contract or otherwise, legally bound to do ; it must be borne in mind that a prom- ise not to do what a man legally cannot do is an equally bad consideration for a promise. The case of Wade v. /Simeon,"' cited in discussing forbearance as a consideration, is a sufficient illustration of this point.* Doing that which a man is hound to do. — The actual performance of that which a man is legally bound to do, stands on the same footing as his promise to do that which he is legally compellable to do. The rule seems an obvious result of the doctrine of consideration^ but some applica- tions of it have met with severe criticism. That which is done must he different. — The payment of a smaller sum in satisfaction of a larger" is not a good dis- charge of a debt} It is in fact doing no more than a man is already bound to do, and it is no consideration for a promise, express or implied, to forego the residue of the debt. There must be something different to that which the recipient is entitled to demand, in the thing done or given, in order to support his promise. The difference o. 3C. B. 548. &. Ante, p. 75. c. It is strange that this rule should still be spoken of as the rule in Cumber v. Wane, In that case it was held that a promissory note for £5 was no satisfaction for a debt of £15, not because there was ?io consideration (for a negotiable instrument was given for a debt) but because the satisfaction was inadequate. Such a decision would hardly be supported now (see editor's note to the case at p. 350). 1 Sm. L. C. 341. 1 Goodwin v. FoUett, 35 Vt. 386; BaiTon v. Vandevert, 13 Ala. 332^ Bailey v. Day, 36 Me. 88 ; Harrison v. Close, 3 Johns. 450 ; Harriman v. Harriman, 12 Gray, 341; Lening v. Gould, 13 Cal. 598; Singleton v. Thomas, 73 Ala. 305; St. Louis, etc. R'y Co. v. Davis, 35 Kans. 464; Lankton v. Stewart, 37 Minn. 346 ; Gould v. Buller, 137 Mass. 386. But it is said that this rule is exceedingly technical, and to some extent against good faith, and one not to be extended beyond its precise im- port. It does not apply when the payment of a less sum is made before the debt falls due, or at another place than that stipulated in the con- tract ; and any collateral benefit received by the creditor, wliich would raise a technical legal consideration, however small, is sufficient to sup- port the agreement. Harper v. Graham, 30 Ohio, 105 ; Varney v. Con- roy, 77 Me. 537; Kellogg v. Richards, 14 Wend. 116; Brooks v. White, 2 Met. 385. Chap. n. § 4. UNREAL CONSIDERATION. 109 must be real, but the fact that it is slight will not destroy its efficacy in making the consideration good, for if the Courts were to say that the thing done in return for a prom- ise was not sufficiently unlike that to which the promisor was already bound, they would in fact be determining the adequacy of the consideration. Thus, the giving a negoti able instrument for a money debt, or " the gift of a horse, a hawk or a robe, in satisfaction, is good. For it shall be intended that a horse, a hawk or a *robe [*84:]. might be more beneficial to the plaintiff than money," in respect of some circumstance, or otherwise the plaint- iff would not have accepted it in satisfaction." Else where is the consideration for the promise to forego? — -It would seem plain that if a man wishes to make a binding promise, otherwise than under seal, to forego legal rights, such a promise must needs depend for its va- lidity upon the rules common to all promises. But it is well to look at a promise of this sort when it is made before, or again when it is made after, the contract is broken : for different rules are applicable to the two cases. Contract executory. — If a contract is wholly executory, if the liabilities of both parties are as yet unfulfilled, it can be discharged by mutual consent, the acquittance of each from the other's claims being the consideration for the promise of each to waive his own. Contract executed. — A contract in which A, one of the parties, has done his part, and X, the other, remains liable, cannot (except in the case of bills of exchange or promis- sory notes) be discharged by mere consent,* but it may be discharged by the substitution of a new agreement. A has supplied ^ with goods according to a contract. JTowes A the price of the goods. If A waives his claim for the money, where is the consideration for his promise to waive it ? If A and ^ substitute a new agreement, to the effect that X on paying half the price shall be exonerated from OS. Pinners Case, 5 Co. Eep. 117. b. Foster v. Dawber, 6 Kz. 836. See Fart V, cb. L 110 FORMATION OF CONTRACT. Part H. paying the remainder, where is the consideration for ^'s promise to forego the payment of half the sum due to him? The new agreement needs consideration: there must be some benefit to A or detriment to X in-return for A's promise. Detriment to J^ there can be none in paying half of a sum the whole of which he may at any time be compelled to pay ; and benefit to' A there can be none in receiving a portion of a sum the payment of which he can at any time compel." Unless A receives something differ- ent in kind, a chattel, or a negotiable instrument, or a fixed for an uncertain sum, his promise is gratuitous and must be made under seal. [*8o] *Contract broken. — We now come to cases where the contract is broken and a promise made to forego the riffht arising from the breach. Eight in dispute. — "Where the right itself is in dispute the suit may be compromised as described on p. 75. Right admitted. — Where the right is undisputed, the amount due may be uncertain or certain. And damages uncertain. — -If it is uncertain, the payment of a liquidated or certain sura would be consideration for foregoing a claim for a larger though uncertain * amount.^ Riglit admitted and damages certain. — If it is certain, the promise to forego the claim or any portion can only be supported by the giving of something difi'erent in kind, or by a payment at an earlier date. And whether the sum due is of certain or uncertain amount the consideration for the promise to forego must be executed. It is not enough that the parties are agreed, their agreement must be carried out if it is to be ananswer to the original cause of action. Where it has been carried out it is o. Goddard v. O'Brien, 9 Q. B. D. 37. 6. Wilkinson v. Byers, 1 A. & E. 106. 1 Goss v. EUiason, 136 Meuss. 503 ; Henkle v. Minneapolis, etc. R'y Co. 31 Minn. 434; Bedell v. BisseU, 6 Col. 162; Osborn v. Hoffman, 53 Ind. 439; McCall v. Nave, 53 Miss. 494; Potter v. Douglass, 44 Conn. 541; Bull V. Bull, 43 Conn. 455. Chap. n. § 4. . UNREAL CONSIDERATION. Ill an accord and satisfaction, where it has not been carried out it is an accord executory. As is said in an old case, " accord executed is satisfaction : " accord executory is only substituting one cause of action for another which might go on to any extent." It is strange that while the somewhat arbitrary rule that an accord, to be a good defense, must be executed, has passed witj^out criticism, judges and text-book writers have commented with marked severity on the rule that the payment of a smaller sum in satisfaction of a larger is not ' a good discharge of a debt.^ a. LynnT. Bruce, 3 H. Bl. 319. 6. WatMn Williams, J., in Bear v. Foakes, 11 Q. B. D. 223, reversed on Appeal, at p. 224. 1 Accord and satisfaction. — The American authorities are with the text. An accord must be executed and received in satisfaction, or it is no defense to an action on tlie original undertaking. Russell v. Lytle, 6 Wend. 390; Daniels v. Hollenbeck, 19 Wend. 408; Frost v. Johnson, 8 Ohio, 393; EUis v. Betzer, 3 Ohio, 89; Sohitz v. Meyer, 61 Wis. 418; Troutmann v. Lucas, 63 Ga. 466 ; Pettis v, Ray, 13 R. I. 344 ; Kramer v. Heines, 75 N. Y. 574; Summers v. Hamilton, 56 Gal. 593. But this ar- bitrary rule has not passed -without criticism. In Whitsett v. Clayton, 5 Col. 476, it was held that where an agreement is entered into between a creditor and his debtor, the terms of which are that the debtor is to execute a new promise with a surety, in a smaller sum, payable at a future day, the creditor agreeing to accept the new promise in satis- faction of the old one, the surety to be sufficient, and the new promiso being executed and tendered and the tender kept good, such performance and tender constitute a bar to the action on the original demand. The accord was sustained as one of mutual promises, differing in terms from the original agreement, and as a substituted agreement operating as a satisfaction of original demand. The opinion reviews the American au- thorities at length and criticises the rule that an accord to be a defense must be accepted, and applies the maxim, Cessante ratione legis, eessat ipsa lex. See Babcock v. Hawkins, 33 Vt. 561 ; Christie v. Craig, 30 Pa. St. 430 ; Bradshaw v. Davis, 13 Tex. 336 ; Hearn v. Curran, 11 S. & M. 361' ; Jones V. Perkins, 29 Miss. 143. An executory accord consisting of mutual promises, varying in their legal effect from those contained in' the origi- nal agreement, and thus having a new consideration, is binding on the parties, and an action will lie for a breach of it. Billings v. Vanderbeck, 33 Barb. 546; Schweider v. Lang, 39 Minn. 354. And if the rule of Whitsett V. Clayton (supra) were adopted in such cases, it would pre- vent circuity of action, at the expense, however, of "overthrowing all the books." See^JOS*, 315, 112 FORMATION OF CONTRACT. Part II. There seems no difference between a promise by J. to X to give bim £45 on demand/ and a promise by ^ to Xto excuse him £45 out of £50 then due. If consideration is needed in the one case, it is needed in the other, and there can be no reason why the law should favour a man who is excused money which he ought to pay, more than a man who is promised money which he has not earned. Apparent exceptions. — There are some apparent [*86] exceptions to this rule which it *may be well to dis- cuss, if for no other reason, on the ground that they illustrate the rule itself. Composition with creditors. — A composition with cred- itors appears at first sight to be an infraction of the rule, inasmuch as each creditor undertakes to accept a less sum than is due to him in satisfaction of a greater. But the promise to pay, or the payment of a portion of a debt, is not the consideration upon which the creditor renounces the residue. That this is so is apparent from the case of Fitch V. Sutton." There the defendant, a debtor, compounded ■with his creditors and paid them Is. in the pound; he promised the plaintiff, who was one of the creditors, that he would pay him the residue when he could ; but the plaint- iff nevertheless gave him a receipt of all claims which he might have against him " from the beginning of the world to that day." The plaintiff subsequently brought an action for the residue of his claim; the defendant pleaded the ac- ceptance of 7s. in the pound in full of all demands : but this was held to be no answer to the plaintiff's claim. "It is impossible," said Lord EUenborough, " to contend that ac- ceptance of £17 10s. is an extinguishment of a debt of £50. There must be some consideration for a relinquishment of the residue ; something collateral, to show a possibility of benefit to the party relinquishing his further claim, otherwise the agreement is nudum jpactumP Consideration for composition is an agreement between different parties. — The consideration in a composition with a. 6 East, 'SH. CJhap. II. § 4. UNREAL CONSIDERATION. 113 creditors must therefore be something other than the mere acceptance of a smaller sum in satisfaction of a larger: it is the substitution of a new agreement with new parties and a new consideration. The Common Law on this point (apart from the various Bankruptcy Acts) was settled in the case of Oood v. Chees- man.'* There the defendant, a debtor who had compounded with his creditors, set up as against an individual creditor suing for the whole of his debt, not a separate promise by that creditor to forego the residue, but a composition made with all the creditors. The composition was held to be a good defense to the action, and the consideration which *supported each creditor's promise to accept a [*87] lesser sum in satisfaction of a greater was thus stated by Parke, J. : — " Here each creditor entered into a new agreement with the defendant (the debtor), the considera- tion of which, to the creditor, was a forbearance by all the other creditors, who were parties, to insist upon their claims." * It is not the payment of a portion of the debt, which forms the consideration in the case of a composition with creditors, but the substitution of a new agreement with dififerent parties for a previous debt.' The composition with creditors is therefore no exception to the general rule, inasmuch as the debtor not only pays the creditor a portion of the sum due, but procures a prom- ise by each of his other creditors, or by a certain number of them, that each will be content with a similar propor- tionate payment if the others will forbear to ask for more. And creditor X not merely gets payment of 10s. in the pound from his debtor A, but gets a promise from creditors Y and Z that they too will be content with a payment of 10s. in the pound. o. 2 B. & Ad. 338. 6. Good v. Chessman, 2 B. & A. 335; Boyd v. Hinde, 1 H. & N. 938; Slater v. Jones, L. R. 8 Ex. 193. 1 Perkins v. Lockwood, 100 Mass. 250; Eaton v. Lincoln, 11 Mass. 424; Murry v. Snow, 37 la, 410; Robert v. Bamum, 80 Ky. 28. 8 114 FORMATION OF CONTEAOT. Part n. Promise to perforin existing contract. — It is a far more difficult task to reconcile with the general rule those cases in which it has been held that a contract is binding which is made in consideration of a performance or promise of performance by one of the parties, of a contract already subsisting between himself and a third party. The circum- stances under which such a case may arise may be stated thus: — "A man may be bound by his contract to do a par- ticular thing; but w^hile it is doubtful whether or no he will do it, if a third person steps in and says ' I will pay you if you will do it,' " the performance is a valid consideration for the payment." ^ The matter is not very easy to understand upon principle ; it has been said that the promise is, based on the creation " of a new and distinct right " * for the promisor, in the per- formance of the contract between his promisee and the third party. But this is in fact to assume that a right is created, which would not be the case if the consideration for the promise were bad. [*88] *In Shadwell v. Shadwell " the question arose thus : — The plaintiff had been under promise of marriage to X: his uncle promised in writing that if he would perform his engagement he should receive during his (the uncle's) life-time £150 a year. The plaintiff married X; the annuity fell into arrear ; the uncle died, and the plaintiff sued his executors. The Court differed as to the existence of the consideration for the uncle's promise. Erie, 0. J., and Keat- ing, J., thought that the marriage would support the prom- o. Per Wilde, B., in Scotson v. Pegg, 6 H. & N. 295. 6. Pollock, 178, ed. 4. c. 9 C. B. N. S. 159. 1 Shadwell t. Shadwell. — In the following cases it is said that a promise made under the circumstances stated in the text is not binding, there being no consideration for the promise: Johnson v. Sellers, 33 Ala. 265; Peelman v. Peelman, 4 Ind. 613; Merritt v. Giddings, 1 Mackey (D- C), 394; Putnam v. Woodbury, 68 Me. 58. In , Johnson v. Sellers the facts were substantially the same as in Shadwell v. Shadwell, but the English cases were not called to the attention of the court. CJhap. n. § 4. CONSIDEEATION EXECUTED. 115 ise, which was in fact an offer capable of becoming a binding contract when the marriage took place. Byles, J., held that the plaintiff had only done what' he was legally bound to do, in performing his promise to marry ; that this was no consideration for the uncle's promise; and he dis- sented from the majority of the Court. "Whether the promise is conditional on the performance of the contract, or whether it is given in return for a prom- ise to perform, does not seem to make any difference in principle. If we say that the consideration for it is the detriment to the promisee in exposing himself to two suits instead of one for the breach of his contract, we beg the question, for we assume that an action would lie on such a promise. If we say that the consideration is the fulfillment of the promisor's desire to see the contract carried out, we run the risk of confounding motive and consideration. The judgment of "Wilde, B., in Scotson v. Pegg,"' seems to leave no doubt that in the opinion of the learned Baron a promise is binding which is made on such a consideration ; the dif- ficulty is to reconcile these decisions with the general prin- ciple laid down above and constantly affirmed by the Courts. Possible explanation of Shadwell v. Shadwell. — The case may however be put in this waj' : that an executory contract may always be discharged by agreement between the parties ; that A and M, parties to such an agreement, may thus put an end to it at any time by mutual consent; that if Xsays to A, "do not exercise this power; insist on the performance by M of his agreement with you, *ahd I will give you so and so," the carrying out by [*89] A of his agreement, or his promise to do so, would be a consideration for a promise by X. A in fact agrees to abandon a right which he might have exercised in con- currence with M, and this, as we have seen, has always been held to be consideration for a promise.* a. 6 H. & N. 295. 6. Ante, p. 75. 116 FORMATION OF CONTRACT. Part 11. 3. Consideration must he legal. legality of consideration. — It is well to state this rule, as indicating a necessary element in consideration, but in- asmuch as the consideration for a promise is the object for which one of the parties makes the contract, the legality of consideration must form a part of a subsequent discussion; it will be treated when we come to consider, as an element in the Formation of Contract, the legality of the objects for which the parties to a contract enter into it. 4. Consideration may he executory or executed, it must not he past. We now come to deal with the relation of the considera- tion to the promise in respect of time. The consideration for a promise may be executory, and then it is a promise given for a promise ; or it may be executed, and then it is an act or forbearance given for a promise, the act or for- bearance constituting at once the proposal or acceptance and the consideration for the promise given in respect of it; or it may be past, and then it is a mere sentiment of grati- tude or honour prompting a return for benefits received; in other words, it is no consideration at all.^ Executory consideration. — As to executory considera- tions, nothing remains to be added to what has been said with regard to the nature of considerations in general." It has been shown that a promise on one side is good consid- eration for a promise on the other. Executed consideration. — A contract arises upon ex- ecuted consideration when one of the two parties has [*90] either in the act which amounts to *a proposal or the act which amounts to an acceptance done &ii that he a. Ante, p. 73, iMany authorities use the terms executed consideration and past consideration in the same sense, without distinguishing between them. Metcalf on Contr. p. 193; Bishop on Contr. sec. 440; 1 Parsons, 468, The disagreement is only in the terms used to express the same p^in ci^de. Chap. n. § 4. eONSIDEEATION EXECUTED. 117 is bound to do under the contract, learning an outstanding liability on one side only. The two forms of consideration thus suggested are described by Mr. Leake as " acceptance of an executed consideration," and " consideration executed upon request." " They arise when, as described above, the proposal is an ofifer of an act for a promise, or an offer of a promise for an act. (a) Offer of an act for a promise. — In the first case a man offers his labour or goods under such circumstances that he obviously expects to be paid for them, the contract arises when the labor or goods are accepted by the person to whom they are offered, and he by his acceptance becomes bound to pay a reasonable price for them. " If I take up wares from a tradesman without any agreement of price, the law concludes that I contracted to paj^ their real value." ' So in Hart v. Mills" the defendant had ordered four dozen of wine and the plaintiff sent eight, the defendant retained thirteen bottles and sent back the rest, and the plaintiff sued him on the original contract for the purchase of four dozen. It was held that the retention of thirteen bottles was not an acquiescence in the misperfdrmance of the orig- inal contract, but a new contract arising upon the accept- ance of goods tendered, and that the plaintiff could only recover for thirteen bottles. " The defendant orders two dozen of each wine and you send four : then he had a right to send back all; he sends back part. What is it but a new contract as to the part Tie heepsf " ^ a. Leake ou Contracts, p. S3. See on Offer and Acceptance, ante, p. 12. 5. Per Tindal, C. J., in Hoadley t. McLaine, 10 Bing. 482. c. 15 M. & W. 87. 1 Larkin v. Mitchell. 43 Mich. 296. "When goods are delivered and accepted in pursuance of an express contract, but not in complete per. formance thereof, a recovery on the quantum valebat is allowed, based not on the contract, but on an implied assumpsit arising from the bene- fit which defendant has received from the appropriation of the property of the plaintiff. The limit of recovery in such case is the true value of the property not exceeding the contract price. Chapman v. Dease, ftl Mich. 375; Starr Glass Co. v. Morey, 108 Mass. 574; Goodwin v. MerriU, 13 Wis. 658 ; Dermott v. Jones, 33 How. 330 ; Eichards v, Shaw, 67 HI. 118 FORMATION OF CONTRACT. Part n. It must, however, be borne in mind that where the per- son to whom such an offer is made has no opportunity of accepting or rejecting the things offered, an acceptance which he cannot help will not bind him.^ For instance, A agreed with X to command his ship during a voyage ; in the course of the voyage he threw up his command but helped to work the vessel home. Afterwards he sued X, among other things, for service thus rendered in bringing back the ship. But the Court would not admit a claim [*91j for such services; evid!ence *of " a recognition or ac- ceptance of services may be sufficient to show an im- plied contract to pay for them if at the time the defendant had power to accept or refuse the services. But in this case it "was not so. The defendant did not know of the services until the return of the vessel, and it was then something past which would not imply — perhaps would not sup- port — a promise to pay for it." " And the difficult}^ which would arise, should such an enforced acceptance create a promise, is forcibly stated by Pollock, C. B. : — " Suppose I clean your property without your knowledge, have I then a claim on you for payment ? One cleans another's shoes ; what can the other do but put them on? Is that evidence of a contract to pay for the cleaning? " (5) Offer of a promise for an act. — The " consideration executed upon request," or the contract which arises on the acceptance by act of the offer of a promise, is best illus- u. Taylor v. Laird, 25 L. J. Exoh. p. 339. 233. In Kein v. Tupper, 53 N. Y. 550, it is said " The English rule that a recovery may be had for the portion delivered, if retained until after tlie time for full performance (as held in 9 B. & O. 387, and other cases), has never been adopted, but expressly repudiated by the courts of the state. See p. 394. 1 In Thornton v. Sturgis, 38 Mich. 638, a village newspaper had pub- lished the local ordinances without authority, and in an action against the village the publisher sought to recover, on the ground that legitimate service had been rendered, which had been accepted and appropriated by the village. Held, that he could not recover; that contracts, ex- press or implied, are not to be made by action of one party alone, when the other party has no control, and no authority to interfere. Chap. U. § 4 CONSIDERATION EXECUTED, 119 trated by the case of an advertisement of a reward for services which makes a binding promise to give the reward when the service is rendered. Under these circumstances it is not the offerer, but the acceptor, who has done his part as soon as he becomes' a party to the contract. Thus if A makes a general offer of reward for information and X sup- plies the information, J.'s offer is turned into a binding promise by the act of JT, and X at once concludes the con- tract and does all that he is bound to do under it." And this form of consideration will support an implied as well as an express promise where a man is asked to do some service which will entail certain " liabilities and ex- penses. In such a case the request for such services implies a promise, which becomes binding when the liabilities or expenses are incurred, to make good his loss to the prom- isee. Thus where the defendant employed an auctioneer to sell her estate, and the auctioneer was compelled in the course of the proceedings to pay certain duties to the Crown, it was held that the fact of employment implied a promise by the defendant to repay the amount of the duties, and entitled the auctioneer to recover them.* " Whether the request be direct, *as where the party is expressly [*92] desired by the defendant to pay; or indirect, as where he is placed by him under a liability to pay, and does pay, makes no difference." It is probably on this principle, the implication of a prom- ise in a request, that the case of Lampleigh v. Braithwait" is capable of explanation. If so, we do not need the theory that a subsequent promise to make a return for things done on request relates back to the request and is embodied in it. But of this we shall speak shortly. Present distinguished from past consideration. — Hav- ing explained the nature of an executed consideration, it re- mains to distinguish present from past consideration. a. England v. Davidson, 11 A. & E. 858. b. Brittain v. Lloyd,-14 M. & W. 782. c. 1 Sm. L. C. 141. 120 FORMATION OF CONTRACT. Part II A past consideration is, in effect, no consideration at all ; that is to say, it confers no benefit on the promisor, and in. volves no detriment to the promisee in respect of his prom- ise.' A past consideration is some act or forbearance in time past by which a man has benefited without thereby incurring any legal liability.^ If afterwards, whether from good feeling or interested motives it matter not, he makes a promise to the person by whose act or forbearance he has benefited, and that promise is made upon no other consid- eration than the past benefit, it is gratuitous and cannot be enforced ; it is based upon motive and not upon consid- eration. Exceptions. — The rule that a past consideration will not support a subsequent promise is only another mode of say- ing that every promise, whether express or implied, must, in order to be binding, be made in contemplation of a present or future benefit to the promisor. A purchased a horse from X, who afterwards, in consid- eration of the previous sale, promised that the horse was sound and free from vice! It was in fact a vicious horse. It was held that the sale created no implied warranty or promise that the horse was not vicious ; that the promise must therefore be regarded as independent of the sale, and as an express promise based upon a previous transaction. It fell therefore " within the general rule that a consid- 1 Bartholemew v. Jackson, 30 Johns. 38 ; Wilson v. Edmonds, 24 N. H. 517; Dearborn v. Bowman, 3 Met. 155; Green v. First Parish in Maiden, 10 Pick. 500; Shepherd v. Young, 8 Gray, 152; Williams v. Hathaway, 19 Pick. 387; Osier v. Hobbs, 33 Ark. 215. 2 As an illustration of a past consideration as distinguished from a present or executed consideration, the case of Ludlow v. Hardy, 38 Mich. 690, might be cited. In 1874 L. sold H. a quantity of liquors i];i viola- tion of the statute against the manufacture and sale of liquors as a bev- erage. After a repeal of the statute, H., in consideration of the sale and of an extension of time of payment, made a new promise to pay for the liquors purchased, and in fact paid $33. Action was brought on this promise. Graves, J., said, in rendering the opinion of the court: " The original transaction was within the operation of the statute, and was condenmed by it. As a sale it was forbidden and illegal, and it was also Chap. II. § 4. CONSIDERATION EXECUTED. 181 eration passed and executed *will support no other [*93] promise than such as would be implied by law." « To the general rule thus laid down certain exceptions are said to exist ; and it is proposed to endeavour to ascertain the nature and limits of these exceptions, which are perhaps fewer and less important than is sometimes supposed. (a) Consideration moved by previous request.— A past consideration will, it is said, support a subsequent promise, if the consideration was given at the request of the promisor.^ In Zampleigh v. Braiihwait^ which is regarded as the leading case upon this subject, the plaintiff sued the defend- ant for £120 which the defendant had promised to pay to o. Eoscorla v. Thomas, 3 Q. B. 234. 6. 1 Smith's L. 0. 67; Hobart, 105. forbidden and illegal as a gift : and although like transactions subse- quent to the repeal of the statute referred to would not stand forbidden and illegal, the act in question, which occurred during the existence of the statute, has never become lawful. It had no legal vitality origi- nally, and nothing has occurred since to breathe life into it. It has never been transformed into a valid act. Hence it has never been sufficient to afford any consideration for a promise." 1 Lampleigh t. Braithwait. — This rule is unquestioned law in this country and the difficulty suggested by tlie author has not often troubled our courts. ■Chaffee-vr-Tbomas, T.Cffiwr 358; Lonsdale v. Brown, -4- ■V^a§lLJ4& Geldsbyv. Robertson, IBlackf. (Ind.),247; Carson v. Clark, Y 3111. 113; Cgmstock v. Smith, 7 Johns^ST; Dearborn v. Bowman, 3 Met. ' 155 ; Allen v. "Woodward, 32 N. *H7k4 ; #ool v. Homer, S4 Md. 133. But y in Merrick v. Griddings, 1 Mackey (D. C), 394, it is said that when services are performed at request, a subsequent promise different from that which the law implies from the request is nudum pactum. A request, in order to support a promise, may be inferred from the beneficial nature of the consideration and the circumstances of the transaction. Oatfield v, "Waring, 14 Johns. 188 ; Hicks v. Burhans, 10 Johns. 243 ; "Wilson v. Ed- munds, 24 N. H. 517; O'Connor v. Beckwithj^iLMighUSOT^ In Booth v. Fitzpatrick, 36 "Verm. 68Xit is Jiefd that " if the consideration, even I without request, move directly from the plaintiff to the defendant, and inures directly to defendant's benefit, the promise is binding though made upon a past consideration." See, also, Seymour v. Marlboro, 40 "Vt. 171; Doty V. "Wilson, 14 Johns. 378. i These cases, although the state- ments therein seem at variance with authority, may be sustained on the principle that a voluntary retention of the benefit received or tho adoption of an unauthorized act may be equivalent to a request. 123 FORMATION OF CONTEAOT. Part H. him in consideration of services rendered at his request. The Court here agreed " that a mere voluntary courtesy will not have consideration to uphold an assumpsit. But if that courtesy were moved by a suit or request of the party that gives the assumpsit it will bind ; for the promise, though it follows, yet it is not naked, but couples itself with the suit before, and the merits of the party procured by that suit." The case of Lampleighv. Braithwait was decided in the year 1615, and for some time before and after that decision, cases are to be found which go to show, more or less def- initely, that a past consideration if moved by a previous re- quest will support a promise." But from the middle of the seventeenth century until the present time no direct author- ity for the rule can be discovered, with the exception of the case of Bradford v. Rovlston^ decided in the Irish Court of Exchequer in 1858. The rule is frequently mentioned as existing, but in the few modern cases which have incident- ally dealt with it, it appears to be regarded as open to ques- tion, or to be susceptible of a diiferent interpretation to that which is placed upon it in text-books. Thus in Kaye v. Button," Tindal, C. J., first lays down the rule that where a consideration executed implies a promise of a particular sort, a subsequent promise based on the same consideration is not binding. By this he means that [*94] *when from the acceptance of consideration exe- cuted, the law implies a promise by the acceptor to make a return, the consideration is exhausted upon that promise. There is nothing further to support a subsequent and independent promise. Modern interpretations of the rule. — He then goes on to say, " The case may perhaps be different where there is a consideration from which no promise would be implied by law: that is, where the party suing has sustained a detri- ment to himself or conferred a benefit on the defendant at o. See cases collected in the note to Hunt v. Bate, Dyer, 272 a. 6. 8 Ir. C. L. 468; Langdell, 450. V. 7 M. & G. 807. CJhap. n. §4. CONSIDERATION EXECUTED. 123 his request under circumstances which, would not raise any implied promise. In such cases it appears to have been held in some instances that the act done at the request of the party charged is a sufficient consideration to render binding a promise afterwards made by him in respect of the act so done. . . . But it is not necessary to pronounce any opinion on that point." " The interpretation of the rule which Tindal, C. J., re- garded as open to question is further narrowed by Maule, J., in Elderton v. Mnmens.^ " An executed consideration will sustain only such a promise as the law will imply." And again in Kennedy v. Broun," Erie, 0. J., puts the case of Lampleigh v. Braithwait from a modern point of view. " It was assumed," he says, " that the journeys which the plaintiff performed at the request of the defendant and the other services he rendered would have been sufficient to make any promise binding if it had been connected there- with in one contract : the peculiarity of the decision lies in connecting a subsequent promise with a prior consideration after it had been executed. Probably at the present day^ such service on such a request would have raised a promise by implication to pay what it was worth ; and the subsequent promise of a sum certain would have heen emdencefor the jury to fix the amountP This would seem to be \}a.% ratio decidendi mWilMnsonv. OLiveira,^ where the plaintiff at the defendant's request gave him a letter for the purposes of a lawsuit. The letter proved the defendant's case, by which means he obtained a large sum of money, and he subsequently promised the plaintiff £1,000. *IIere the plaintiff evidently ex- [*95] pected something inreturn forgiving up the letter, and the defendant's request for it amounted in effect to an offer that if the plaintiff would give him the letter he would pay a sum to be hereafter fixed. a. Kaye v. Dutton, 7 M. & G. 807. 6. 4 C. B. 493. c. 13 C. B. N. S. 677. d. IBing.N. C. 490. 134 FORMATION OF CONTRACT. Part U. Hegarded from this point of view the rale which we are discussing amounts to this : where a request is made which is in substance an offer of a promise upon terms to be after- wards ascertained, and services are rendered in pursuance of that request, a subsequent promise to pay a fixed sum is either to be regarded as a part of the same transaction, or as evidence to assist the jury in determining what would be a reasonable sum. In opposition to this view stands the case of Bradford v. Soulston" the only case in modern times in which the rule in Lanvpleigh v. Braiihwait has come before the Courts for express decision. In that case Bradford, who had a ship to sell, was introduced by Koulston to two persons who were willing to purchase it. At the time of executing the bill of sale of the ship the purchasers were £55 short of the money agreed to be paid. Bradford nevertheless executed the bill of sale at the request of Eoulston, and in consideration of this, Koulston upon a subsequent day guaranteed the pay- ment of the balance of £55 still due. There seems to have been some evidence that the guarantee was given at the time of the sale and was subsequently put into waiting, but the Court felt it necessary to give an express decision, on the supposition that the consideration was wholly past, to the effect that the execution of the bill of sale to third parties upon the request of the defendant was consideration for a subsequent promise by him to answer for their de- fault. The authorities were elaborately reviewed and the rule in Lampleigh v. Braithwait was adhered to in its literal i sense. It is submitted, however, that this decision must be re- ceived with some hesitation. The dictum of Erie, C. J., in Kennedy v. Brcmn was not adverted to ; the case of Wilkin- son V. OUveira was regarded as a direct authority for [*96] the rule in *its most extended sense, a view which, upon the facts of that case, is certainly open to question ; o. 8 It. 0. L. 468; Langdell, Contr. 450. Chap. n. § 4. c6nSIDERATI0N executed. 125 and the great gap in the chain of express decisions on the point does not appear to have impressed the Court. Practical difficulties presented l)y the rule. — The prac- tical difficulties to which such an interpretation of the rule would give rise are obvious. Is any limit to be assigned to the time which may elapse between the act done upon re- quest and the promise made in consideration of it? This difficulty pressed upon the Court in one of the oldest cases upon this subject, Halifax v. Barker," where a promise was held not to be binding which was given upon consideration of a payment made upon request a year before. This sug- gests that the true solution is to be found in the supposition that the subsequent promise is only binding when the re- quest, the consideration, and the promise form substantially one transaction. Another difficulty would arise as to the definition of " a request." Let us suppose that a man dangerously ill is in- formed by his' physician that his state is so critical as to justify desperate remedies; the physician advises him to try a remedy which he believes may possibly restore him to health, but, if it does not do so, will probably kill him in a few hours ; the remedy is of the physician's own invention, and he asks the patient in view of his desperate condition to allow him to make the experiment. The patient takes it and is cured ; the fame of the cure makes the fortune of the physician, and a few years afterwards, finding himself in good circumstances, he promises to his former patient a sum of money in consideration of the acceptance of his remedy at his request. It is hardly possible to suppose that an action would lie upon such a promise. Yet it is a log- ical deduction from the decision of the Court in Bradford v. Houlston, and from that statement therein contained " that where there is a past consideration, consisting of a previous act done at the request of the defendant, it will support a subsequent promise." *And so we are driven to the conclusion that, un- [*9T] o. 3 Dyer, p. 273 a, note; but see Cro. Eliz. 741. 126 FORMATION OF CONTRACT. Part II. less the request is virtually an offer of a promise the precise extent of which is hereafter to be ascertained, or is so clearly- made in contemplation of a promise to be given by the maker of the request that a subsequent promise may be re- garded as a part of the same transaction, the rule in Larwp- leigh v. Braithwait has no application." And it may not be presumptuous to say that in spite of the case decided between 1568 and 1635, of the continuous stream of dicta in text-books, and of the decision in Bradford v. Boulston, the rule cannot be received in such a sense as to form a real ex- ception to the principle that a promise, to be binding, must be made in contemplation of a present or f utute benefit to the promisor. (5) Yoluntarily doing what another was legally hound to do. — There is equal doubt as to the reality of another so-called exception. We find it laid down that " where the plaintiff voluntarily does that whereunto the defendant was legally compellable, and the defendant afterwards, in con- sideration thereof, expressly promises," he will be bound by such a promise.* It is submitted that the authority for this rule fails alto- gether so far as it rests on the cases which are are habitu- ally cited in support of it. Curiously enough, all tut-n upon the liability of parish authorities for medical attendance upon paupers who are settled in one parish, but resident in another. Watson V. Turner " (1767) was decided on the ground that the moral obligation resting upon overseers of a parish to provide for the poor would support a promise made by them to pay for services previously rendered to a pauper by a medical man. In Atkins v. Banwell * (1802) it was held that the moral obligation resting upon the parish in which a pauper is set- a. See Holmes' Common Law, pp. 295, 6. 6. Smith, L. 0. 1, 148. c. Buller, Nisi Prius, 147; but see Selwyn's Nisi Prius, p. 61, n. 11. d. 2 East, 505. Chap. II. § 4. CONSIDERATION EXECUTED. 137 tied, to reimburse another parish, in which the pauper hap- pened to be taken ill, for expenses incurred in medical attendance, is not sufficient to create a legal liability with- out an express promise. *In Wing v. Mill" (1817), the pauper was also resid- [*98] ing out of his parish of settlement; but that parish acknowledged its liability for his maintenance by making him a weekly allowance. The pauper fell ill and died : during his illness he was attended by the plaintiff, an apothe- cary, who, after the pauper's death, was promised payment of his bill by the defendant, overseer of the parish of settle- ment. The Court held the defendant liable. It is not easy to collect from the judgments of Lord EUenborough, 0. J., and Bayley, J., what were the grounds of their decision. Some sentences suggest that they held, on the authority of Watson v. T%i,rner^ that a moral obliga- tion will support a promise ; others suggest that they held that there was a legal obligation cast on the parish of resi- dence to do that which the parish of settlement might legally have been compelled to do, and that a quasi-con- tractual relation thus arose -between the parties; others again suggest that the allowance made to the pauper by the parish of settlement showed a knowledge that the pauper was being maintained at their risk, and amounted to an im- plied authority for bestowing the necessary medical attend- ance. This last is the view entertained as to the ratio deci- dendi in Wing v. Mill by the Court of Exchequer in the only case remaining for examination. In Paynter v. Williams" (1833) the facts were similar to those in Wing v. Mill, with this very important exception, that there was no subsequent promise to pay the apothe- cary's bill. The defendant parish, the parish of settlement,' was nevertheless held liable to pay for medical attendance supplied by the parish of residence. The payment of an a. 1 B. & A. 105. b. See chapter on Quasl-Contract. C.10.& M. 810. 138 FORMATION OF CONTRACT, Part H. allowance by the parish of settlement was held by Lord Lyndhurst,, C. B., to amount "to a request on the part of the oflBoers that the pauper shall not be removed, and to a promise that they will allow what was requisite." It would seem, then, that in the cases which are said to furnish this supposed rule the promise was either [*99] based upon *a moral obligation, which, since the de- cision in Eastwood V. Kenyon," would no longer be suf- ficient to support it, or was merely an acknowledgment of an existing liability arising from a contract which might be implied by the acts of the parties, — a liability which, on the authority of Paynter v. Williams, existed apart from the fact of a subsequent promise. And this is stated to be the true ground upon which the decision in Watson v. Turner may be supported, in the note to SelwyrHs Nisi Prius" above referred to. " The defend- ants, being bound by law to provide for the poor of the parish, derived a benefit from the act of the plaintiff, who afforded that assistance to, the pauper which it was the duty of the defendants to have provided : this was the consider- ation, and the subsequent promise by the defendants to pay for such assistance was evidence from, which it might he in- ferred that the consideration was performed hy the plaintiff with the consent of the defendants, and consequently suffi- cient to support a general indebitatus assumpsit for work and labour performed by the plaintiff for the defendants, at their request." It may not be safe to say that the rule as habitually laid down is non-existent, but the cases cited in support of it seem to fail, on examination, to bear it out. It seems strange that it should have been so often reiterated upon such scanty and unsatisfactory authority.^ a. 11 A. & E. 446. 6. See p. 51, n. 11. 1 In Gleason v. Dyke, 23 Pick. 393, the plaintifl had voluntarily paid money which the defendant was legally bound to pay, and an action was brought on defendant's subsequent promise to reimburse the plaint- Chap. II. § 4 CONSIDERATION EXECUTED, 129 It has however been adopted in the Indian Contract Act," which also, in its definition of consideration, includes the "consideration executed upon request" of Lampleigh v. Braithwait. It is perhaps unfortunate that the framers of that Act should have so readily abandoned so satisfactory a test of the validity of simple contracts as the English doctrine of Consideration has proved itself to be. (c) Real exception to general rnle. — A more substantial exception to the general rule is to be found in the cases in which a person has been held capable of reviving an agree- ment by which he has benefited, but which by rules of law since repealed, incapacity to contract *no [*lbo] longer existing, or mere lapse of time, is not en- forceable against him. The principle upon which these cases rest is, " that where the consideration was originally beneficial to the party promising, yet if he be protected from liability by some provision of the statute or common law, meant for his advantage, he may renounce the benefit of that law ; and if he promises to pay the debt, which is only what an honest man ought to do, he is then bound by the law to perform it." * The following illustrations of the principle are to be found in the Eeports. Illustrative cases. — A promise by a person of full age to satisfy debts contracted during infancy was binding upon him before 37 and 38 Yict. c. 62." A promise made by a bankrupt,'* discharged from debts by a certificate of bankruptcy, to satisfy the whole or part a. § 25, subs. 2; % 3, subs. (d). 6. Parke, B., in Earle v. Oliver, 3 Exch. 71. c. Williams v. Moor, 11 M. & W. 263. d. Trueman v. Fenton, Cowp. 544. / iff. The court held : " This promise, we think, is equivalent to a previous request. It comes within the well established principle that the sub- sequent ratification of an act done by a voluntary agent of another, without authority from him, is equivalent to a previous authority." Doty V. Wilson, 14 Johns. 383. 130 FORMATION OF CONTRACT. Part IL of debts due to a creditor was binding before 12 and 13 Vict. c. 102, § 204." A debt barred by the Statute of Limitations is consider- ation for a subsequent promise to pay it. In Lee v. Muggeridge * a married woman gave a bond for money advanced at her request to her son by a former hus- ' band. Afterwards, when a widow, she promised that her executors should pay the principal and interest secured by the bond, and it was held that this promise was binding.' In Flight v. Heed" bills of exchange were given by the defendant to the plaintiff to secure the repayment of money lent at usurious interest while the usury laws were in force. The bills were therefore void as between the plaintiff and defendant. After the repeal of the usury laws by 17 and 18 Vict. 0. 90, the defendant renewed the bills, the consid- eration for renewal being the past loan, and it was held that he was liable upon them. [*101] Common elements in all the cases. — *There are certain features common to all these cases. Each in its origin presents the essential elements of agreement, and in each of them one of the parties has got aU that he bargained for. The other party cannot obtain what he was promised, either because he made an agreement with one who was incapable of contracting, or because a tech- nical rule of law forbids the agreement to be enforced. If the party who has received the benefit which he expected from the agreement afterwards acquires capacity to con- tract, or if the rule of law is repealed, as in the case of the Usury Acts, or, as in the case of the Statute of Limitations, admits of a waiver by the person whom it protects, then a a. By 6 Geo. IV. o. 16, § 131, this promise had to be in writing. At the present day such a promise is only binding if there be new consideration. For the history and present state of law on this point see Jalceman v. Cools, 5 Ex. D. 25. 6. 5 Taunt. 86. 0. 1 H. & 0. V03. 1 Brown v. Bennett, 75 Pa. St. 422. Contra, Waters v. Bean, 15 Ga, 358, expressly disapproving of Lee v. Muggeridge. Chap. n. § 4. CONSIDERATION EXECUTED. 131 new promise based upon the consideration already received is binding.' They do not rest upon moral obligation. — The rule thus regarded seems a plain and reasonable exception to the gen- eral doctrine that a past consideration will not support a promise. Unfortunately, while the rule was in the course of establishment it rested for a time upon the support of the moral obligation which was supposed to bind the person benefited and to give efficacy to his promise. It would have seemed enough to have said that when two persons havj made an agreement, and one has got all the benefit which he expected from it, and is protected by tech- nical rules of law from doing what he had promised to do in return, he will be bound if, when those rules have ceased to operate, he renews his original promise. But when once the law of contract was brought into the cloudland of moral obligation, it became extremely hard to say what promises might or might not be enforced. The phrase was far larger than the circumstances needed, and the language used in some of the cases cited above was calculated to make the va- lidity of contracts turn upon a series of ethical problems. In Lee V. Muggeridge," Mansfield, 0. J., says, " It has long been established, that where a person is morally and conscien- tiously bound to pay a debt, though not legall}'^ bound, a sub- a. 5 Taunt. 36. 1 Where the debtor is released from his debt by provisions of positive law, his subsequent express promise to pay the debt vrill be enforced ; but where the debt has been discharged by the free and voluntary act of the creditor, a subsequent promise to pay will not be enforced. Montgom- ery V. Lanpton, 3 Met. (Ky.) 519; Shepard v. Rhoades, 7 R. I. 470; Hale V. Rice, 124 Mass. 293; Mason v. Campbell, 37 Minn. 54; Crans v. Hunter, 28 N. Y. 394; Edwards v. Nelson, 51 Mich. 121. See note, p. 80. There are authorities to the effect that a promise to pay the balance, after part of a debt has been paid and the creditor has executed a release, will be sustained by the moral obligation to pay in full, Willing V. Peters, 13 Serg. & Rawle, 177 ; Stafford v. Bacon, 35 Wend. 384 ; but these cases are no longer authority, since the doctrine of moral obliga- tion has been abandoned. Bishop on Contracts, § 100. 133 FORMATION OF CONTRACT. Part 11. sequent promise to pay will give a right of action. [*102] The onl}'- question *therefore is whether upon this declaration there appears a good moral obligation." This case affords perhaps the strongest example of the mode in which the phrase was employed." Its eifect, after it had undergone some criticism from Lord Tenterden, was finally limited by the decision in EasPwood v. Kenyon}" The doctrine of the suflBciency of moral obligation to support a promise was there definitely called in question. The plaint- iff, as guardian and agent of the defendant's wife, had, while she was a minor, laid out money upon the improvement of her property ; he did this voluntarily, and in order to do so was compelled to borrow money, for which he gave a prom- issory note. "When the minor came of age she assented to the transaction, and after her marriage her husband prom- ised to pay the note. Upon this promise she was sued. The moral duty to fulfill such a promise was insisted on by the plaintiff's counsel, but was held by the Court to be in- sufficient where the consideration was wholly past. " In- deed," said Lord Denman in delivering judgment, "the doctrine would annihilate the necessity for any considera- tion at all, inasmuch as the mere fact of giving a promise creates a moral obligation to perform it." a. Xilttlefleld t. Shoe, 3 B. & Ad. 811. ft UA.&E. MS. CHAPTEE III. ~^^, Capacity of Parties. We have hitherto dealt with the Contract itself and those elements in its structure which are essential to give it even a prima faaie validity. Communication by offer and Ac- ceptance, and Form, or Consideration are necessary to an agreement the effect of which is to be entertained by courts of law; but when we have constructed an apparently bind- ing contract, it is necessary, before we can pronounce finally upon its validity, that we should look to the parties to it, and ask who made it, under what circumstances, and with what object. In other words, we have to inquire whether the parties were capable of contracting, whether their ap- parent consent was genuine, and whether the objects were such as the law will admit. And, first, as to the capacity of parties. How it may be affected. — There are certain persons whom the law regards as incapable, wholly or in part, of binding themselves by a promise, or of enforcing a promise made to them. And this incapacity may arise from the following causes: — (1) Political or professional status. (2) Youth which, until the age of 21 years, is supposed to imply an immaturity of judgment which the law will pro- tect. (3) Ai'tificiality of construction, such as that of corpora- tions, which being given a personality by law, take it upon such terms as the law imposes. *(4) The permanent or temporary mental aberra- [*104:] tion of lunacy or drunkenness. (6) Until the 1st of January, 1883, marriage effected a 134 FORMATION OF CONTRACT. Part H. merger of the contractual capacity of the wife in that of her husband, subject to certain exceptions. The Married "Woman's Property Act of 1882 is still so recent that it may be well to state briefly the old law and to note the extent to which it is changed. § 1. Political or Professional Status} An alien has all power of contracting which a natural- born British subject has, except that he cannot acquire prop- erty in a British ship.^ 'Power to contract iucideiit to sovereignty.^- The power of the United States government and the government of the several states to contract is recognized as " an incident to the general right of sover- eignty," subject, however, to constitutional limitations, and exercisable only in furtherance of the object for which government was established. United States v. Tingey, 5 Pet. 114; United States v. Lane, 3 McLean, 365 ; Danolds v. State, 89 N. Yi 36 ; The Floyd Acceptances, 7 Wall. 666. Remedy. — The English rule that a sovereign power cannot be sued without its consent is common law in this country. No action can be maintained against one of our states except by virtue of some constitu- tional or statutory provision granting permission. A remedy against the United States has been given by the establishment of the courtof claims. United States v. Clark, 8 Pet. 436; Michigan State Bank v. Hammond, 1 Doug. (Mich.) 537 ; Troy, etc. R. R. Co. v. Commonwealth, 137 Mass. 48; People v. Talmage, 6 Cal. 256; Pattison v. Shaw, 6 Ind. 377. And in most states provision is made whereby the state is amenable to some judicial tribunal at the instance of its citizens. 2 While the term " alien " quite uniformly applies to one born beyond the jurisdiction of the United States, still the term is sometimes applied, in statutes imposing personal disabilities, to one who is not a citizen of the state. One may be a citizen of the state and yet not a citizen of the United States. McDopel v. State, 90 Ind. 323 ; Ferguson v, Neville, 61 Cal. 356. The rights of aliens in real property are generally regulated by the states. In respect to personalty and the obligations arising out of contracts and the remedies for breach of them, they have, during the existence of peace, substantially the privileges of natural-born subjects. Many interesting questions grew out of contracts entered into between the citizens of the contending powers in the late war, but their consid- eration here would be inappropriate. The principles stated in the text were recognized. The inhabitants of the federal states and the United States occupied the respective positions of enemies, and as a conse- quence thereof all intercourse between them was interdicted, and con- Chap. m. § 1. INFANTS. 135 An alien enemy, or British subject adhering to the king's enemies," cannot, without license from the Grown, make any fresh contract * ^ or enforce any existing contract during the continuance of hostilities ; ^ but his rights as to outstand- ing contracts made before the commencement of war are suspended, not annulled, and can be enforced upon the con- clusion of peace. Foreign sovereigns and their representatives. — Foreign States and sovereigns and their representatives, and the officials and household of their representatives, are not sub- ject to the jurisdiction of the Courts of this country unless they submit themselves to it." A contract entered into with such persons cannot therefore be enforced against them un- less they so choose, although they are capable of enforcing it. o. It does not seem to be clearly settled that anything short of residence in a hostile country for trading purposes constitutes adherence to the king's enemies. The case of Boberts v. Hardy, 3 M. & S. 533, ezhibits the reluctance of the Courts to draw con- clusions from the mere fact that a man was resident in a hostile oountiy when it was possible for him to have removed. b. O'Meally v. Wilson, 1 Camp. 483. c. Taylor v. Best, 14 C. B. p. 487. tracts between them made during the existence of hostilities were void. Materson v. Howard, 18 Wall. 99; De Jarnett v. De Giverville, 56 Mo. 446 ; Habrecht v. Alexander, 1 Wood, 413 : Mutual Ins. Co. v. Hil- yard, 37 N. J. L. 444. The disposition .was to preserve contracts existing before the war, only suspending the remedy ; but if the contract was of a continuing nature, as in the case of a partnership, and its performance would violate the laws governing a state of war, the parties wei'e relieved from further obligations thereunder. Mutual Ins. Co. v. Hilyard, 37 N. J. li. 444; University v. Finch, 18 Wall. 106; Bank of New Orleans V. Mathews, 49 N. Y. 13; Cohen v. N. Y. Mutual Life, 50 N. Y. 610. 1 PhiUips V. Hatch, 1 Dill. 571; HUl v. Baker, 32 la. 303; Wright v. Graham, 4 W.Va. 430. 2 Brook V. Filer, 35 Ind, 403; Simms v. City Ins. etc. 36 Conn. 543; BlackweU v. Willard, 65 N. C. 555. An alien enemy may be sued, and when sued is permitted to make full defense. McVeigh v. United States, 11 Wall. 256; M'Nair v. ToUar, 21 Minn. 175; Dorsey v. Thomp- son, 37 Md. 25 ; Mixer v. Sibley, 53 111. 61. And it is said that a resi- dent alien may sue though hostilities be pending between his country and the United States. License to remain and protection will be inl- plied from his being suflEered to remain, without being ordered out of the country by the executive. Clark v. Morey, 10 Johns. 68. See Zacharie V. Godfrey, 50 III. 193. 136 FORMATION OF CONTRACT. Part II. Felon undergoing sentence. — A person convicted of treason or felony cannot, during the continuance of his con- viction, make a valid contract; nor can he enforce [*105] contracts made previous to conviction : but *these may be enforced by an administrator appointed for the purpose by the Crown." A barrister cannot sue for fees due to him for services rendered in the ordinary course of his professional duties, whether the action be framed as arising upon an implied contract to pay for services rendered on request, or upon an express contract to pay a certain sum for the conduct of a particular business.* A physician, until the year 1858, was so far in the posi- tion of a barrister that the rendering of services on request raised no implied promise to pay for them, though the pa- tient might bind himself by express contract: but now, by 21 & 22 Yict. c. 90, every physician may sue on such an implied contract, subject to the right of the 'College of Phy- sicians to regulate this privilege by by-law.' § 2. Infomts? The rules of law relating to the rights an^ liabilities of infants upon contracts entered into by them during infancy have been considerably modified by recent legislation. It will therefore be well to state the rules of Common Law o. 33 & 34 Vict. c. S3, §§ 8, 9, 10. b. Kennedy v. Broun, 13 0. B. N. S. 677. 1 The disabilities arising from professional status are not known to our law. 'Barristers and physicians, with regard to contracts, have the same privileges that non-professional men have, and conviction of treason and excommunication produce no legal disability in this country. Wilson v. Burr, 25 Wend. 386; Vilas v. Downer, 31 Vt. 419. The common law rule prevailed in New Jersey. Vanatta v. McKinley, 1 Harr. L. 235. 2 When the statutes are silent, a person, male or female, is of age on the beginning of the day before his or her twenty-first birthday ; but by the statutes of many states a woman is of age at eighteen, a man at twenty-one. Chap. m. § 2. INFANTS. 187 upon the subject, and then to consider the modifications in historical order. Infant's contract Toidable. — The general rule of Com- mon Law is, that an infant's contract is voidable at his op- tion,^ either before or after he has attained his majority. But the rule is thus limited: — (1) The contract ceases to be voidable if it be ratified upon the attainment of 21 years of age. (2) Tlie contract cannot be avoided if it be for necessaries. We will deal with these two exceptions in order. (1> Ratification. Itr. Pollock," in an exhaustive and convincing argument, shows clearly that the better opinion has always been that the contract of an infant is not void but voidable at his op- tion. Being so voidable, the infant may (apart from , *statutory restrictions) ratify his contract when he [*106] attains his majority, and assume the rights and lia- bilities arising from it. " The general doctrine is," said the a. Pollock on Contr. pp. 43 59, 4th ed. 1 Under the early English and. American decisions contracts of infants ■were divided into three classes: First. Binding, if for necessaries at fair and jtist rates. Second. Void, if manifestly prejudicial to the in- fant. Third. Voidable at the election of the minor, if the contracts be to his benefit or to his disadvantage accoi'ding to circumstances, Vent V. Osgood, 19 Pick. 573; Tucker v. Moreland, 10 Pet. 58; and this rule is still adhered to in many recent decisions. Robertson v. Weeks, 56 Me. 103; Green v. Wilding, 59 Iowa, 679; Euchizky v. De Haven, 97 Pa. St. 203 ; Dunton v. Brown, 31 Mich. 183. But by the weight of author- ity the classification is unsatisfactory, and all contracts of infants, ex- cept for necessaries, are treated as voidable only ; at least none of his contracts are so far void as to be incapable of ratification on his reach- ing majority. Harnes v. Dipple, 31 Ohio St. 73 ; Holmes v. Rice, 45 Mich. 143 ; Scranton v. Stewart, 53 Ind. 68 ; Bozeman v. Browning, 31 Ark. 364; Illinois, etc. v. Bunner, 75 111. 315; Owen v. Long, 113 Mass. 403; Felvin v. Wiseman, 40 Ind. 148; Shropshire v. Burns, 46 Ala. 108; Fonda v. Van Horn, 15 Wend. 631. Infancy as a defense is a personal privilege. The contract, though voidable at the option of tlie infant, is valid as to third parties who are strangers to both parties to the contract. Holmes v. Rice, 45 Mich. 143 ; Garner v. Cook, 80 Ind. 831 ; Oliver v. Hurdlet, 13 Mass. 237; Van Bramer v. Cooper, 2 Johns. 279. 138 FORMATION OF CONTRACT. Part n. Court in Williams v. Moor," " that a party may, after he attains the age of 21 years, ratify and so make himself liable on contracts entered into during infancy." It may be well to remind the reader that such a ratification is, or was, an illustration of the limited class of cases in which a past con- sideration has been allowed to support a subsequent prom- ise.' But it would seem that ratification is of two kinds. — And it may perhaps be said that, before the Infant's Relief Act," the ratification required to make the infant liable upon contracts entered into b^^ him during infancy differed, in correspondence with a certain difference in kind in the con- tracts to which he became a party. Some of these are valid unless rescinded, others invalid until ratified. It would seem that where an infant acquires an interest in permanent property to which obligations attach', or enters into a contract which involves continuous rights and duties, benefits and liabilities, and has taken benefits under the contract, he would be bound unless he expressly- disclaimed the contract. On the other hand, a promise to perform some isolated act, or a contract wholly executory, would not be binding upon the infant unless he expressly ratified it upon coming of age. Contracts valid until rescinded. — Illustrations of con- tracts which required a special disclaimer to avoid them — which were valid unless rescinded — may be f oimd in the following cases.^ o. 11 M. & W. 2S6. 6. Ante, p. 100. c. 37 & 38 Vict. c. 62. 1 Avoidance. — First. Executory contracts of an infant may be avoided before or after bis reaching majority, by his declining perform- ance and pleading infancy in defense to an action for breach of the ex- ecutory contract. Second. Executed contracts, relating to personalty, may be rescinded by an infant, both before and after full age. Third. His executed contracts relating to realty, such as his conveyances of landj cannot, as a rule, be rescinded until he arrives at majority. Fourth. Where, by contract, an infant acquires an interest in property of a fixed Caiap. m. § 3. INFANTS. 139 Interests in realty and corporate property.— Au infant lessee who occupies until majority is liable for arrears of rent which accrued during his minority." Shareholders who became possessed of their shares during infancy are liable for calls which accrued while they were infants. " They have been treated therefore as persons in a different situation from mere contractors, for then they would have been exempt: but in truth, they are purchasers who have acquired an interest', not in a mere ' chattel, hut in a suhjeot of a permanent nature, either by contract with the company, *or purchase or devolution from those [*107] who have contracted, and with certain obligations attached to it which they were bound to discharge, and have thereby been placed' in a situation analogous to an in- fant purchaser of real estate who has taken possession, and thereby becomes liable to all the obligations attached to the estate ; for instance,* to pay rent in the case of a lease rendering rent, and to pay a fine due on the admission in the case of a copyhold to which an infant has been admit- ted, unless they have elected to waive or disagree the pur- chase altogether, either during infancy or at full age, at either of which times it is competent for an infant to do so." " In partnership. — Similarly an infant may become a partner, and at Common Law may be entitled to benefits, o. RoUe, Abr. 731. 6. 3 Burr. 1717. c. N. W. R. Co. V. McMichael, 5 Ex. 114. and permanent nature, his interest may, by his declining to discharge the obligations resting on the property, be suspended during his minor- ity, but cannot be wholly avoided tmtil he becomes of full age ; and his retaining land, purchased during minority, and receiving benefits from it after reaching his majority, amounts to a confirmation of the pur- chase. Hubbard v. Cummings, 1 Me. 11 : Dana v. Coombs, 6 Me. 89 ; Davis V. Dudley, 70 Me. 236; Hook v. Donaldson, 9 Lea (Tenn.), 56; Bool V. Mix, 19 Wend. 119 ; Lovey v. Burd, 94 Ind. 67 ; Welch v. Bunch, 83 Ind. 383 ; Stafford v. Roof, 9 Cow. 626 ; Towle v. Dresser, 78 Me. 257 ; Hardy v. Water, 38 Me. 450; Shipman v. Horton, 17 Conn. 483; Case v. Clough, 26 N. H. 280; Childs v. Dobbins, 55 Iowa, 205; Tyler on Infancy and Coverture, 69. 140 FORMATION OF CONTRACT. Part H. though not liable for debts, arising from the partnership during his infancy.^ Equity however would not allow an infant, in taking the partnership accounts, to claim to be credited with profits and not debited with losses. But what is important " for our present purpose to note is, that unless on the attainment of majority there be an express rescission and disclaimer of the partnership, the partner will be liable for losses accruing after he came of age. Where an infant held himself out as in partnership with X, and continued to act as a partner till shortly before he came of age, and then, though ceasing to act as a partner, did nothing to disaffirm the partnership, he was held liable on debts which accrued, after he came of age, to persons who supplied X with goods. " Here," said Best., J., * " the infant, by holding himself out as a partner, contracted a continual obligation, and that ob- ligation remains till he thinks proper to put an end to it. . . . If he wished to be ui^derstood as no longer contin- uing a partner, he ought to have notified it to the world." And so where shares were assigned to an infant " who at- tained his majority some months before an order was made for windiug up the company, it was held that in the ab- sence of any disclaimer of the shares the holder was liable as a contributory. [*108] Contracts mvalid until ratified. — * Although the liabilities incurred by the infant are somewhat dif- ferent in these different cases, yet there is this feature com- mon to all of them, that nothing short of express disclaimer will entitle a man, on attaining his majority, to be free of obligations such as we have described. It is otherwise in contracts which are not thus continuous in their operation. The infant is not bound unless he expressly ratify them. a. Lindley, 1, 81. 6. Goode V. Harrison, 5 B. & Aid. 159. c. Lumsden's Case, 4 Ch. 31. 1 Bush V. Linthicum, 59 Md. 344; Toby v. Wood, 133 Mass. 88; Todd V. Clapp, 118 Mass. 495. Chap. III. § 3. INFANTS. ~ .141 Such being the rules of Cominon Law upon the subject, let us consider how they have been aifected by legislation.1 Lord Tenterden's Act requires that ratification, upon the attainment of majority, of contracts entered into during infancy should be in the form prescribed by the Act, en- acting, " " That no action shall be maintained whereby to charge any person upon any promise made after full age to pay any debt contracted during infancy, or upon any ratification after full age of any promise or simple contract made dur- ing infancy, unless such promise or ratification shall be made by some writing signed by the party to be charged therewith." The Infant's Relief Act of 18Y4 went much further in the attempt to protect infants from the consequences of their attempts to bind themselves by contract. It appears to have been designed to guard not merely against the re- sults of youthful inexperience, but against the consequences a. 9 Geo. IV. c. 14, § 5. 1 The more common illustration of contracts which, in this country, re- quire a special rescission to avoid them is an infant's deed of lands. A party holding lands under an infant's deed has a good title, subject to be defeated only by the infant's disaffirmance of the deed. Haynes v. Ben- nett, 53 Mich. 15 ; Green v. Green, 69 N. Y. 553 ; Irvine v. Irvine, 9 Wall. 617 ; Scranton v. Stewart, 52 Ind. 68 ; Goodnow v. Empire Lumber Co. 31 Minn. 468; Veal v. Fortson, 57 Tex. 483; Illinois, etc. v. Bonner, 75 lU. 515. Disaffirmance of the deed must be within a reasonable time after the infant reaches his majority; but what is a reasonable time, and wrhether there is any limit other than the statute of limitations, is a ques- tion upon which the authorities are in conflict. Of the decided cases the majority are to the effect that the infant is not barred by mere acquiescence for a shorter period than that prescribed by the statute of limitations. Boody v. McKenney, 33 Me. 517 ; Dais v. Dudly, 70 Me. 336 ; Prout V. Wiley, 38 Mich. 164 ; Baker v. Kennett, 54 Mo. 83 ; Heeth v. Car. Mar. and Dock Co. 56 Md. 307. The authorities are collated in Good- now V. Empire Lumb. Co. 31 Minn. 468 ; 47 Am. R. 798. See also, Rich- ardson v. Pate, 93 Ind. 433; Wells v. Seixas, 34 Fed. Rep. 82; Green v. Wilding, 58 Iowa, 679; Bingham f. Parley, 55 Tex. 381; Sims v. Ever- hardt, 103 U. S. 300. 143 FORMATION OF CONTRACT. Part H. of honourable scruples as to the disclaimer of contracts ~ upon the attainment of majority. " 1. "All contracts whether by specialty or by simple con- tract henceforth entered into by infants for the repayment of money lent or to be lent, or for goods supplied or to be supplied (other than contracts for necessaries), and all accounts stated with infants, shall be absolutely void: pro- vided always that this enactment shall not invalidate any contract into which an infant may by any existing or future statute, or b}^ the rules of Common Law or Equity enter, except such as now by law are voidable. " 2. No action shall be brought whereby to charge any person upon any promise made after full age to pay any debt contracted during infancy, or upon any ratifi- [*109] cation made after full age of any *promise or con- tract made during infancj?^, whether there shall or shall not be any new consideration for such promise or rat- ification after full age." Effect of Infant's Relief Act. — The effect of this enact- ment is — (a) To make certain sorts of contract absolutely void if entered into with infants. (I) To prevent any contract with an infant from becom- ing actionable as against him, by subsequent ratification. And the second section must be taken to override the ef- fect of 9 Geo. IV. c. 14, § 5. Of Sect. 1 . — It has been pointed out before now that the first section of this somewhat off-hand piece of legislation is not very clear. If a contract for goods supplied or to be supplied is void, the consequence would be that no property in the goods would pass, at any rate under the contract. If an infant pays for goods which have not been delivered, he can probably * recover his money back, and so he could have done previous to the Act by avoiding the contract. a. 37 & 38 Vict. c. 63. 6. It is difficult to suppose that no remedy would be available to the infant under Buoh circumstances, but it is hard to see how any remedy is available ex contractu. Chap. m. § 3. INFANTS. 143 But if the infant receives the goods and pays the price, can the tradesman recover the goods, and the infant his money, on the ground that the contract v^as void? We must take it that delivery of the goods with intention to pass the property -would pass it, and that money paid for the goods (although, the contract being void, the payment is necessarily made without consideration) could not be re- covered back because paid with full knowledge of facts. Hence it may be said that the transaction would stand, though it must be regarded as a gratuitous delivery of goods on the one side, and a voluntary payment of money on the other. *A curious illustration of the effect of the Act is [*110] afforded by the case of Reg. v. Wilson." An infant who had contracted trading debts was convicted on an in- dictment charging him with having defrauded his creditors within the meaning of the Debtor's Act, 1809.* But the conviction was quashed on the ground that the transactions which resulted in debts were void under the Infant's Relief Act. There were consequently no creditors to defraud. Of Sect. 2. — The second section requires also to be con- sidered with reference to the class af contracts which have been described as " valid unless rescinded. " It can hardly be supposed that such an implied ratification as continuance in a partnership, or retention of shares, would be affected by the provisions of the section ; but the question must be regarded as open until it receives a judicial interpretation. That the section is strong against ratification, such as makes the infant hable, appears from the decision in Xib- lie's case." There an infant drew a bill of exchange in favour of one of his creditors, and was sued upon it after he had attained his majority. He allowed judgment to go by de- If a contract had ever been in existence the infant could avoid itwhile still executory, and recover back money which he had paid under it; or he might recover the money as paid on a consideration which had wholly failed. But, since the Act, the contract is void; it never had an existence; and it would seem as though money paid under it was paid voluntarily. a. 5 Q. b; D. (C. C. E.) 38. 6. 32 & 33 Vict. c. 62. V-. L. R. 10 Ch. 873. 144 FOEJIATION OF CONTRACT. Part II. fault, and thus created a debt in the form which we have described as a Contract of Eecord, as solemn a form of rat- ification as well could be. The bill had been drawn before the Infant's Eelief Act came into operation, the judgment was obtained after. The case came before the Court of Appeal in Bankruptcy, the question bein^ whether the judg- ment debt so created was one upon which a man could be made a bankrupt. The Court held, 1st, that sitting in Bankruptcy it could look behind the judgment and inquire into the consideration for the debt; and 2ndly, that the consideration being a contract entered into during infancy, and the judgment being in effect a ratification of the con- tract, the Infant's Relief Act" prevented ratification, al:- though the contract was entered into before the Act was passed. " The effect of the 2nd section," said Mellish, L. J., " was to prevent any action being brought on the [*111] bill, although it might have been ratified *after the infant came of age. For I am of opinion that that section applies to all contracts made by any infants, pro- vided the ratification is made after the passing of the Act, and that it is to be understood as saying that a debt con- tracted in infancy shalLnot in future in any case form a valid consideration upon which an action can be brought." The infant may enforce the contract. — It must be borne in mind that the section does not prevent an infant from enforcing a contract (other than those included under sec. 1) ; the contract is not void but voidable at his option. His ratifi- cation does not give any right to the party who has con- tracted with him, but his power of benefiting by the contract, if he choose, is not taken away. Equity however will not grant specific performance of a contract in which only one side is bound. (2) Necessaries ■—what are they. — We must now con- sider the liability of an infant for necessaries.^ a. 3r&38Viot. 0. 63. 1 An infant when residing at home and under the care of his father, and supported by him, is not liable even for necessaries. Hoyt v. Casey, Chap. m. § 2. INFANTS. 145 And we jnust first ascertain what are " necessaries." It has always been held that an infant may bind himself by contract for the supply to him not merely of the neces- saries of life, but of such things as are suitable to his sta- tion in life and to his particular circumstances at the time. The best discussion of the subject of necessaries is to be found in the judgment of Bramwell, B., in Ryder v. Womb- well," — a judgment the conclusions of which were adopted by the Exchequer Chamber.* The difficulty which has arisen in respect of them consists mainly in determining the provinces of the Court and the Jury in ascertaijiing them, and the rules applicable to the matter may pet-haps be stated thus : — (a) Evidence being given of the things supplied and the circumstances of the infant, the Court determines whether the things supplied can reasonably be considered necessaries at all ; and if it comes to the conclusion that they cannot, the case may not even be submitted to the jury. Things may obviously be incapable of being neoessaries. A wild animal, or a steam roller, could hardly, under any circumstances, be considered to be such. *Things may be of a useful character, but the [*112] quality or quantity supplied may take them out of the character of necessaries. Elementary text-books might be a necessary to a student of law, but not a rare edition of "Littleton's Tenures," or eight or ten copies of "Stephen's Commentaries." Things necessary to a person in one station of life would not be necessary to a person in a different station ; or, again, things not usually necessary may become so from the circumstances of the infant. Medical attendance and expensive articles of food may ordinarily be dispensed with, but may become necessary in case of ill-health. a. L. R. 3 Exch. 90. 6. L. E. 4Exch.32. 114 Mass. 399; Wailing v. Toll, 9 Johns. 141; Perrin v. Wilson, 10 Mo. 451; Angell v. McLellan, 16 Mass. 28. 10 146 FORMATION OF CONTRACT. Part II. " It does not follow therefore that, because a thing is of a useful class, a judge is bound to allow a jury to say whether or no it is a necessary under all the circumstances of the case.^ (b) Provinces of judge and jury. — If the judge conclude that the question is an open one, and that the things sup- plied are such as may reasonably be considered to be neces- saries, he leaves it to the jury to say whether, under the circumstances of the case, the things supplied were neces- saries as a fact. And the jury determines this point, taking into consideration the character of the things supplied, the extent to which the infant was already supplied with them, and the actual circumstances of the infant. We say " actual circumstances," because a false impression which the infant may have conveyed to the tradesman as to his station and circumstances will not affect his liability." If a tradesman supplies expensive goods to an infant because he thinks that the infant's circumstances are better than in fact they are, or if he supplies goods of a useful class not knowing that the infant is already sufficiently supplied,* he does so at his peril. ' (c) Of Court in banc and of Appeal. — The ruling of the Court and the finding of the jury are both alike subject to review by a Divisional Court sitting in banc and by succes- sive Courts of Appeal. Infant may not be charged upon contract framed [*113] as a tort. — *An infant is liable for wrong, but a a. Brayshaw v. Eaton, 7 Scott, at p. 187. 6. Barnes v. Toye, 13 Q. B. D . 419. 1 The question as to what are necessaries in a given case is a mixed question of law and fact. The rule by which we determine when it is to be answered by the court, and when by the jury, is sometimes stated as follows : Whether the articles furnished are of a name and quality coming within the denomination of necessaries is exclusively a question' of law for the court, but the quantity, that is to say, to what extent the articles are necessary in the given case, is a question of fact for the jury. Bent v. Manning, 10 Verm. 330; Strong v. Foote, 43 Conn. 303; Par- sons V. Keyes, 48 Tex. 557 ; Stone v, Dennison, 13 Pick. 7 ; 1 Pars. Cont. •396. Chap. III. §3. CORPORATIONS. 147 breach of contract may not be treated as a wrong so as to make the infant liable ; the wrong must be more than a mis- feasance in the performance of the contract, and must be sep- arate from and independent of it.^ Thus where an infant hire4 a mare and injured her by over-riding, it was held that he could not be made liable upon the contract by fram- ing the action in tort for negligence. Nor can an infant be made liable for goods sold and delivered by charging him in trover and conversion, a rule which it is not unimportant to bear in mind, inasmuch as the Infant's Eelief Act makes a sale of goods to an infant absolutely void, and so would appear to prevent any property from passing to him. But may for actual tort, though originating in con- tract. — But when an infant hired a horse, expressly for rid- ing and not for jumping, and then lent it to a friend who jumped the horse and killed it, he was held liable ; for " " what was done by the defendant was not an abuse of the contract, but was the doing of an act which he was expressly forbidden by the owner to do with the animal." ^ § 3. Corporations. 1. Necessary limits to its contractual capacity. — A corporation is an artificial person created by law. Hence the limitations to the capacity of a corporation for entering into a contract may be divided into necessary and express. The very nature of a corporation imposes some necessary a. Jennings v. Eundall, 8 T. E. 335. 1 Gibson V. Spear, 88 Vt. 311 ; Homer v. Thwing, 3 Pick. 493 ; Eaton v. Hill, 50 N. H. 235; Freeman v. Roland, 14 R. I. 39; Ray v. Tubbs, 50 Vt. 688 ; Penrose v. Curren, 2 Rawle, 351 ; Mathews v. Cowan, 59 111. 341 ; West V. Moore, 14 Vt. 447; Campbell v. Perkins, 8 N. Y. 440. There are decisions to the contrary, "Ward v. Vance, 1 Nott & McCord (S. C), 197; Peigne v. SutclifEe, 4 McCord (S. C), 387; Felts v. Hall, 9 N; H!. 441 ; but they are not in accord with the weight of authority. Bigelow on Fraud, 356. See E well's Leading Cases, 306, where the American au- thorities on the liabilities of infants for their torts are very fully collated; 2 Homer v. Thwing, 3 Pick. 493; Campbell v. Stakes, 3 "Wend. 137 ,• Freeman v. Roland, 14 E. I. 39; Roy v. Tubbs, 50 Vt. 688. 148 FORMATION OF CONTRACT. Part H. restrictions upon its contractual power, and the terms of its incorporation may impose others. Must contract through an agent. — A corporation is an artificial entity, apart from the persons who compose it; their corporate rights and liabilities are something distinct from their individual rights and liabilities, and they do not of themselves constitute the corporation, but are only its members for the time beirig. Since then a corporation has this ideal existence apart from its members, it follows that it cannot personally enter into contracts, it must contract by means of an agent. It " cannot act in its own person, for it has no person." " [*114] Cannot make negotiable instruments. — *And the Common Law rule that a corporation can only con- tract under seal puts this further limit upon its contractual powers, that it cannot as a rule make negotiable instru- ments. For by the law merchant an instrument under seal is not negotiable, and therefore, unless the bills of exchange and promissory notes be part of the ordinary business of a trading corporation, they cannot be made by these artificial persons.' 3. Express limitations. — The express limitations upon the capacity of corporate bodies must vary in every case by the terms of their incorporation. Much has been said and still may be said as to the effect of these terms in limiting a. Per Lord Cairns in Ferguson v. Wilson, 2 Ch. 99. 1 The rule that corporations can only contract under seal is abrogated in this country. They can be bound, without note or deed, by implicar tion from corporate acts. Like natural persons they .may ratify any act which they can perform, and contract by parol as well as under seal. Proprietors of Canal Bridge v. Gordon, 1 Pick. 297 ; Bank of Columbia V. Patterson, 7 Cranch, 299 ; School District v. Wood, 13 Mass. 199 ; Dan- forth V. Schoharie Turnp. Co. 13 Johns. 237 ; Hannibal Bank v. North Mo. Coal Co. 86 Mo. 135; Mt. Washington Hotel Co. v. Marsh, 63 N. H. 330 ; Regents v. Detroit, 12 Mich. 188 ; Bank of United States v. Dandridga, 12 Wheat. 64; Town of Athens V. Thomas, 83 111. 259 ; Christian Church V. Johnson, 53 Ind. 378; Paret v. City of Bayonne, 39 N. J. L. 559; Moss V. Averell, 10 N. Y. 454; Blunt v. Walker, 11 Wis. 834. See ante, 61, n. Chap. m. § 3. CORPORATIONS. 149 the contractual powers of corporations, but it is not a part of the objects of this book to discuss the doctrine of " Ultra vires." " The question whether the terms of incorporation are the measure of the contracting powers of the corpora- tion, or whether they are merely prohibitory of contracts which are inconsistent with them, was discussed in the much litigated case of The Ashlury Ga/rriage Company v. Biche,'- and the question was thus stated and answered by Black- burn, J.: — " I take it that the true rule of law is, that a corporation at Common Law has, as an incident given by law, the same power to contract, and subject to the same restrictions, that a natural person has. And this is important when we come to construe the statutes creating a corporation. For if it were true that a corporation at Common Law has a capacity to contract to the extent given it hy the instrument creating it and no further, the question would be. Does the statute creating the corporation by express provision or necessary implication show an intention in the legislature to confer upon this corporation capacity to make the contract? But if a body corporate has, as incident to it, a general capacity to contract, the question is. Does the statute creating the corporation by express provision or necessary implication show an intention in the legislature to prohibit, and so avoid the making of a contract of this particular kind ? " *The House of Lords appear not to have dissented [*115] from the view of the general powers of corpora- tions expressed by Blackburn, J., but they differed from him and overruled his judgment upon the interpretation of the statute under consideration ; holding that a company incorporated under the Companies Act of 1862 is so far bound by the terms of its memorandum of association that it may make no contracts which are either inconsistent with, or foreign to, the objects expressed in that memorandum.' a. L. H.7H. L. 653. 6. In Ezch. Ch. L. E. 9 Bxch. 224. 1 The rule in this country is that a corporation has the power to make any such contracts as further the purpose of incorporation and are not 150 FOEMATION OF CONTRACT. . Part U.' Contracts ultra Tires not void for illegality, but for incapacity. — A contract made ultra vires is void; it is sometimes said to be void on the ground of illegality, but Lord Cairns in the case above cited takes exception to this use of the term "illegality," pointing out that it is not the object of the contracting parties, but the incapacity of one of them, that avoids the contract.^ § 4. Lunatic and drunken persons. The contract voidable. — The law with regard to con- tracts made with lunatics and persons in a state of intoxi- cation may be said to be now settled as follows. The contract of a lunatic or drunken person is voidable at his option if it can be shown that at the time of making the con- tract he was absolutely incapable of understanding what he was doing, and that the other party knew of his condition. It seems doubtful, even in the case of executory contracts, whether the transaction can be avoided on the ground of lunacy or drunkenness as against a contracting party who had no reason to suppose that he was dealing with an in- prohibited by its charter or some statute binding upon it. In general, an express authority to make a given kind of contracts is not indispensa- ble, provided they are not foreign to the corporate purpose. Booth v. Robinson, 55 Md. 419 ; Wayland University v. Boorman, 56 "Wis. 657 ; State V. Rice, 65 Ala. 83 ; Searight v. Payne, 6 Lea (Tenn.), 283 ; Cleve- land & Mahoning E. R. Co. v. Himrod Furnace Co. 87 Ohio St. 331 ; Dodge V. Council Bluffs, 57 Iowa, 560 ; Bassett v. Monte Christo Mining Go. 15 Nev. 293; Detroit v. Mutual Gas Co. 43 Mich. 594; Indiana v. Worman, 6 Hill, 33; Bangor Boom Co. v. Whiting, 29 Me. 123; Marine Bank v. Ogden, 39 111. 248; Eureka Flour Mills v. Smith, 6 Cal. 1; Moss V. Averell, 10 N. Y. 457. ' 1 In Bissell v. The Michigan Southern & Northern Indiana R. E. Co. 32 N. Y. 369, Comstock, C. J., said : ;' The words ultra vires and illegal- ity represent totally different and distinct ideas. It is true that a con- tract may have both these defects, but it may also have one without the other." Allen, J., said in Whitney Arms Co. v. Barlqw, 63 N. Y. 68: " When acts of corporations are spoken of as ultra vires it is not intended that they are unlawful, or even such as the corporation cannot perform, but merely those which are not within the powers conferred upon the corporation by the act of its creation." Chap. m. § 4. LUNATIC AND DRUNKEN PERSONS. 151 capable person. But it is safe to say that where a contract has been executed in part, so that the parties cannot be restored to their former positions, proof of the actual in- sanity of one of the parties at the time of making the con- tract, unaccompanied by any proof that the other knew of his condition, will not suffice to avoid the contract. Of Lunatic. — Thus, in Molton v. Carnroux,"' a lunatic purchased annuities of a society, paid the money, and died. His administratrix *sued the society to re- [*116] cover back the money on the ground that the con- tract was void. The Jury found that at the time of the purchase the vendee was insane and incompetent to man- age his affairs, but that there was nothing to indicate this to the company, and that the transaction was honafide. It was held that the money could not be recovered. " The modern cases show," * said Patteson, J., " that when that state of mind was unknown to the other contracting party, and no advantage was taken of the lunatic, the defense can- not prevail, especially where the contract is not merely executory, but executed in the whole or in part, and the par- ties cannot be restored to their original p6sition." ' o. 2 Exch. 489; 4 Exoh. 17. 6. 4 Exch. 19. 1 Molton T. Camroux. — In Seavera v. Phelps, 11 Pick. 304, it was held that it is not a legal defense that the defendant, at the time of his deal- ings with plaintiff, was not apprised of his being insane, and had no reason to suspect it, and did not overreach him, nor practice any fraud or unfairness. "The fairness of defendant's conduct cannot supply the plaintiflE's want of capacity." Fitzgerald v. Reed, 9 Sm. & Marshall ; Pearl v. McDowell, Z 3. J. Marshall, 658 ; Anglo-Californian Bank v. Ames, 37 Fed. Rep. 727. Many courts follow Seavers v. Phelps {suxyra) to the extent of holding that where the insane person received no ben- efit under the contract, the contract cannot be enforced against him, and if executed he may recover whatever of value he parted with, not- withstanding the other party to the contract may have acted in good faith, without knowledge of the infirmity. Van Patton v. Beals, 46 Iowa, 63; Northwestern Mutual Ins. Co. v. Blankenship, 94 Ind. 535: Lincoln v. Buokmaster, 32 Vt. 658. Some courts hold that the deed of an insane person, who never recovers his reason, is void, and that in an action to recover the land by his heirs it is no defense to show that his 153 FOEMATION OF CONTRACT. Part II. A lunatic, so found by commission," is not therefore ab- solutely incapable of contracting,' but the presumption is verj'^ strong in such a case that the contract was not made during a lucid interval, and that the other contracting party was aware of the mental condition of the lunatic.^ Or drunken person. — A contract made by a person in a state of intoxication may be subsequently avoided by him, but if confirmed is binding on him. In the case of Mat- thews V. Baxter," a man, while drunk, agreed at an auction to make a purchase of houses and land. Afterwards, when sober, he affirmed the contract, and then repented of his a. CoTnmissions de lunatico inquirendo are no longer issued specially in each case of alleged insanity. A general commission is now, by 16 and 17 Vict. c. 70, issued from time to time, under the Great Seal, to Masters in Lunacy appointed by that Act, who conduct an inquiry in each case in a manner prescribed by the Act. 6. Per Lord Langdale, M. E., Snook v. Watts, 11 Beav. at p. 107; Hall v. Warren, 9 Ves. 605. V. L. R. 8 Exch. 132. grantee purchased in good faith. Rogers v. Blackwell, 49 Mich. 192; Vandusen v. Sweet, 51 N. Y. 378; Dexter v. Hall, 15 Wall. 9; Somers v. Pumphrey, 34 Ind. 231. The rule, however, announced in Seavers v. Phelps is not, by weight of authority, law in this country. The case of Molton v. Camroux, cited by the author, has been ex- pressly followed and applied in Eaton v. Eaton, 37 N. J. L. 118; Riley V. Albany Savings Bank, 36 Hun (N. Y.), 519; Mutual Life Ins. Co. v. Hunt, 79 N. Y. 541; Behrens v. McKenzie, 33 Iowa, 333; Young v. Stevens, 48 N. H. 136; Fay v. Burditt, 81 Ind. 433; Scanlon v. Cobb, 85 ni. 396; Maihieson v. McMahon, 38 N. J. L. 537. And to the same effect are Gribben v. Maxwell, 34 Kans. 8; Burnham v. Kid well, 113 111. 435 ; Beals v. See, 10 Pa. St. 56 ; Lancaster Bank v. Moore, 78 Pa. St. 407; Shelters v. Ailen, 51 Mich. 531; Wilder v. Weakly, 34 Ind. 181. The cases will disclose that one dealing with an insane person, and not knowing his condition or any facts to put him on his guard, will be pro- tected by the courts of law and equity against such person's repudiating his contract on the ground of his mental incapacity ; but the rule is not a technical one to be relied on at all times and under all circumstances. It is applied in each case only to prevent a wrong being done, and is based on the principle that "the law will not permit the lunatic's in- firmity to be made an instrument of fraud." 1 Lunatics under gnardianship. — The deed of a non-sane person, after being placed under guardianship, is absolutely void. Wait v. Max- well, 5 Pick. 317; Ingraham v. Baldwin, 9 N. Y. 45; Runnells v, Gerner, 80 Mo. 477. Chap. m. § 5. MARRIED WOMEN. 153 bargain, and when sued on the contract pleaded that he was drunk at the time he made it. But the Court held that although he had once had an option in the matter and might have avoided the contract, he was now bound by his affirmation of it. "I think," said Martin, B., "that a drunken man, when he recovers his senses, might insist on the fulfillment of his bargain, and therefore that he can ratify it so as to bind himself to a performance of it." ' The rules of equity are in accordance with those of common '"law in this respect. Under such cir- [*117] cumstances as we have described, Courts of Equity will decree specific performance against a lunatic or a person who entered into a contract when intoxicated, and will on similar grounds refuse to set aside their contracts. § 5. Married Women. At common law. — Until the 1st of January, 1883, it was true to state that, as a general rule, the contract of a mar- ried woman was void. Yet there were exceptions to this rule: in some cases a married woman could make a valid contract, but could not sue or be sued apart from her husband; in others she could sue but could not be sued alone ; in others she could both sue and be sued alone.^ 1 In order to avoid the deed or contract there must be that state of excessive drunkenness which deprives the person of the consciousness of what he is doing. Bwell's Leading Cases, 738; Miller v. Finly, 36 Mich. 254 ; Oaulkins v. Fry, 35 Conn. 170. That the contracts made by a person in a state of intoxication may be ratified, Lyon v. Phillips, 106 Pa. St. 57. 2 The common law rules stated by the author regarding the disabili- ties of a married woman to contract are recognized in the states gener- ally as remaining except so far as removed by statute. In some states she may contract as a feme sole unqualifiedly, but in others only as to her separate property. Modern legislation has made such sweeping changes in her rights and power to contract, and the statutes of the several states upon the subject are so different, that a review of thenj here would be out of place. See Bishop on Law of Married Women. 354 FORMATION OF CONTBACT. Part II. (i) A married woman might acquire contractual rights by reason of personal services rendered by her, or of the assignment to her of a cImsb in aotion.'^ In such cases the husband might " reduce into possession " rights of this nat- ure accruing to his wife, but unless he did this by some act indicating an intention to deal with them as his, they did not pass, like other personalty of the wife, into the estate of the husband. They survived to the wife if she outlived her husband, or passed to her representatives if she died in his life-time. (2) The wife of the king of England " is of capacity to grant and to take, sue and be sued as &feme sole, at the com- mon law." * .(3) The wife of a man oiviliter mortuus" had similar rights. (4) The custom of the City of London enabled a married woman to trade, and for that purpose to make valid con- tracts. She could not bring or defend an action upon these unless her husband was joined with her as a party, but she did not thereby involve him in her trading liabilities. [*118] *(5) A group of exceptions to the general rule was created by the Divorce and Matrimonial Causes Act." ' A woman divorced from her husband is restored to the position of 2, feme sole. Judicial separation, while it lasts, causes the wife " to be considered as a feme sole for the purpose of contract, and wrongs and injuries, and suing and being sued in any judi- cial proceeding." § 26. And a wife deserted by her husband, and having obtained a protection order from a Magistrate or from the Court, is " in the like position with regard to property and contracts, and suing and being sued, as she would be under this Act if she had obtained a judicial separation." § 21. a. Brashford v. BuoMngham, Cro. Jao. 77; Dal ton v. Mid. Conn. E. Co. 13 C. B. 478. 6. Co. Litt. 133a. e. Civil death arises from outlawry, or from being under conviction for felony, and formerly from being " professed in religion." A 80 & 31 Vict. 0. 85. . ■ > Ghap. ni. § 5. MARRIED WOMEN. 165' (6) The Married Woman's Property Act (1870) « speci- fied various forms of property as the separate estate of married women. And by § 11 of the Act, a married woman could maintain an action in her own name " for the recov- ery of any wages, earnings, money and property by that Act declared to be her separate property," and she was given all remedies, civil and criminal, for its protection, which an unmarried woman would have had under the cir- cumstances. A married woman might therefore make a contract for the exercise of her pergonal labour or skill, and maintain an action upon it alone. The Act thus constituted a separate estate and gave power to contract in respect of it, and this separate estate became liable for the engagements entered into with a married woman on the faith of it. But, though the wife could sue alone for her separate property, she could not, with some minor exceptions, defend alone any action brought in respect of it, or on engagements entered into with her upon the faith of it.* Her husband must be joined as a party to the suit. (7) EquitaWe separate estate. — The nature of the equi- table separate estate of married women is set forth in the judgment of Turner, L. J., in Johnson v. OaUagher." " Courts of Equity," he says, " have through the medium of trusts created for married women rights and interests in property, both real and personal, * separate from and [*119] independent of their husbands. To the extent of the rights and interests thus created a married woman has, in Courts of Equity, power to alienate, to contract, to enjoy. She is considered a feme sole in respect of property thus settled or secured to her separate use." Bat the limitations on this power should be noticed. The wife could not sue or be sued alone in respect of the sepa- rate estate. a. 33&34Viot. 0.93. 6. Hancock v. Lablache, 3 0. P. D. 197. c. 8D. F. & J. 494. ' • 156 FORMATION OF CONTRACT. Part II. She did not acquire "a sort of equitable status of ca- pacity to contract debts " " in respect of any separate estate whensoever acquired. She could. only bind such separate estate as was in her possession or control at the time the liabilities accrued. The presumption was extremely strong that every engagement entered into by a married woman was entered into on the faith of her separate estate, but she could not bind herself, nor could she create liabilities in excess of her estate, her creditor's remedy lay not against her but against her property. " When she by entering into an agreement allows the supposition to be made that she intends to perform the agreement out of her property, she creates a debt which may be recovered, not iy reaching her, hut iy reaching her property y " The Married Women's Property Act 1882 affects :■- (1) Every woman married after 1882. (2) Every woman married before 1883 as respects prop- erty and choses in action acquired after 1882. It repeals the Married "Women's Property Act ISTO,"* and the amending Act of 1874; and its effect, so far as relates to our present subject, may be summarized as follows : AH property, real or personal, possessed bj'- a woman be- fore, or acquired after marriage, is her separate property. She can acquire, hold, and dispose of it by will or other- wise, " as her separate property in the same manner as if she were a feme sole without the intervention of any trustee." But property may still be settled upon her in trust, and she may be restrained from anticipating property so set- tled. [*120] * " In respect of and to the extent of her separate property," a married woman may enter into con- tracts and render herself liable thereupon as though she a. Martin v. Fitz-Gibbon, 17 Cb. D. 459. 6. Per. Lord Hatberly, Hoard v. Hine, B CSi. 277. c. 45 & 76 Vict. c. 75. See Davidson v. Nichols, 11 Allen, 514. 14 310 FOEMATION OF CONTRACT. Part H. "In an action of deceit" the plaintiff cannot establish a title to relief simply by showing that the defentants have made a fraudulent statement : he must also show that he was deceived by the statement * and acted upon it to his prejudice." Deceit which does not deceive is not fraud. — In Rors- fall V. Thomas,'' the defendant had bought a cannon of the plaintiff. The cannon had a defect which made it worth- less, and the plaintiff had endeavoured to conceal, this defect by the insertion of a metal plug into the weak spot in the gun. The defendant never inspected the gun; he accepted it, and upon using it for the purpose for which he bought it the gun burst. It was held that the attempted fraud hav- ing had no operation upon the mind of the defendant did not exonerate him from paying for the gun. " If the plug, which it was said was put in to conceal the defect, had never been there^ his position would have been the same ; * for, as he did not examine the gun or form any opinion as to whether it was sound, its condition did not affect [*162] him." This judgment *has been severely criticised by high authority, but it is submitted that it is founded in reason. Deceit which does not affect conduct can hardly create liabilities ; " and it would seem as reason- able to defend an action brought for the price of goods on the ground that the seller was a man of immoral character, as to maintain that a contract was voidable by reason of a deceit practiced by one party which in no way affected the judgment of the other. o. Cotton, L. J., Arkwright v. Newbold, 17 Ch. D. 824. 6: 1 H. & C. 90. c. Per Bramwell, B., 1 H. & 0. 99. d. See dicta of Cocktum, C. J., in Smith v. Hughes, L. E. 6 Q. B. at p. 605." 1 Ming V. Wolf oik, 116 U. S. 599; Marshall v. Hubbard, 117 U. S. 415 Bish V. Van Cannon, 94 Ind. 263 ; Crehore v. Crehore, 97 Mass. 330 Wells V. Waterhouse; 23 Me. 131 ; Branham v. Record, 42 Ind. 181 Taylor v. Guest, 58 N. Y. 363; Bartlett v. Blaine, 88 HI. 35; Morrison Canal Co. v. Everett, 9 Paige, 168. Chap, rv, § 3. FRAUD. 211 Eflfects of fraud. — "We are now in a position to considi?^ ■what is tlie effect of Fraud, such as we have described it f^ be, upon rights ex contractu. '°® jm. "We must remember that, apart from Contract, the per&tP® injured by Fraud, such as we have described, has the action at Common Law for deceit, and may recover by that means such damage as he has sustained; and Courts of Equity will in like manner grant relief from misrepresentation or fraud by compelling the defendant to make good the loss sustained by the plaintiff. " These reniedies are not confined to cases of Fraud by one of two contracting parties upon the other, but to any fraudulent statement which leads the person to whom it is made to alter his position for the worse. But we are concerned with rights arising ex contractu, and have to consider the particular remedies in respect of af- firmation or avoidance of the contract which are open to the injured person when he discovers the fraud ; and the rules with regard to these matters may be shortly stated thus : — (1) Eight to afflrm.— He may affirm the contract and sue for such damages as the fraud has occasioned. " There is no doubt," said Lord Cairns in Houldsworth v. City of Glasgow Bank^ " that according to the law of England a person purchasing a chattel or goods, concerning which the vendor makes a fraudulent representation, may, on finding out the fraud, retain the chattel or the goods, and have his action to recover any damages he has *sustained [*163] by reason of the fraud." But the existence of this twofold right must depend on the nature of the contract, A holder of shares which he has been induced to purchase by the fraud of the directors cannot retain his shares and sue the company in which he is a partner. o. Peek V. Gumey, L. E. 6 H. L. at p. 390. b. 5 App. Ca. at p. 333. 213 FORMATION OF CONTRACT. Part II. ^^(2) Right to rescind. — He may avoid the contract, and (a) resist an action brought upon it at Common "^^^ Law; ^^^ (j8) resist specific performance when sought in Equity; (j-) obtain a judicial avoidance of the contract in Equity. (3) Limits of right to rescind.— His right to avoid the contract is hmited in certain ways. It is true that a man may keep the contract open till he is sued upon it, and that a plea of fraud then set up is a sufficient rescission of the contract; but so long as he keeps it open he does so at his own risk." His right to avoid it may be determined either by his accepting some benefit under the contract, or other- wise acting upon it after he has become aware of the fraud ; or by the subject-matter of the contract being so dealt with that the parties cannot be reinstated in their former posi-' tion; or by innocent third parties acquiring an interest for value under the contract.* And lapse of time, although it does not otherwise affect his right to rescind, is evidence to show that he intended to affirm, increasing in strength as the recission is delayed. It must be borne in mind that the contract, until the de- frauded party has made his election, is voidable, and not a. aough V. London & N. W. R. Co. L. E. 7 Ex. 35. ; 1 If the intention of tlie vendor was simply to part with the possession of the goods and not with the title, then there was no sale, and his pur- chaser conld not transfer any title in the goods to a third person. Pos- session without title gives no authority to sell. In a sale of goods, where the parties intend that it sl^all be a cash sale, the purchaser by securing possession of the goods cannot transfer any property in them, until they are paid for. Kinsey v. Leggett, 71 N. Y. 887 ; Dean v. Yates, 23 Ohio St. 388 ; Decan v. Shipper, 35 Pa. St. 239. In Andrew v. Dieterich, 14 Wend. 31, it is said that no title can pass when the fraud of the pur- chaser amounts to a felony ; but see to the contrary, Cochran v, Stew- art, 31 Minn. 485, where numerous decisions are considered. C!hap. rv. § 4. DURESS. 213 void." And where fraud is used to induce the owner of goods to part with the property in them an innocent third party may acquire rights of which no subsequent avoidance of the contract by the defrauded party can divest him. Tor instance, a sale of goods procured by fraud cannot be rescinded so as to revest the property in the vendor, if in the mean time the goods have been sold to a lona fide pur- chaser. The right of avoidance being lost, the person upon whom the fraud has been practiced must resort to his action em delicto. *An exception to this rule occurs when the fraud [*164:] goes not to the quality of goods, or oircumstanpes of the sale, but to the identity of the person contracted with. The case of Gundy v. Lindsay^ cited above, shows that where A is induced to send goods to B under the impres- sion that he is contracting with X the transaction is abso- lutely void, and a 'bona' fide purchaser from B acquires no property in the goods. § 4. Duress. A contract is voidable at the option of one of the parties if he have entered into it mider Duress.^ In what it consists. — Duress consists in actual or threat- ened violence or imprisonment ; the subject of it must be o. Babcock v. Lawson, 4 Q. B. D. 394. 6. See ante, p. 134. 1 Duress. — Duress of the person is of two kinds : Duress of imprison- ment, which is compulsion through illegal restraint of one's personal liberty, and duress per minas, which is compulsion through rational fear of loss of life, of mayhem, or of imprisonment. In many states of the Union it has been contended that although the imprisonment be legal, if the process was sued out maliciously and without probable cause, or with probable cause but for an unlawful purpose, the party imprisoned was under duress. Severance v. Kimball, 8 N. -H. 386 ; Wat- kins V. Baird, 6 Mass. 506; Strong v, Grannis,' 36 Barb. 132; Bowker v. Lowell, 49 Me. 439; Work's Appeal, 59 Pa. St, 444; Taylor v. Cottrell, 16 ni. 93. In Phelps v. Zuchlag, 34 Tex. 371, it is said that the common law rule has been modified to that extent by the weight of authority. See Cooley on Torts, 506. 214 FORMATION OF CONTRACT. Part H. the contracting party himself, or his wife, parent, or child ; and it must be iniiicted or threatened by the other party to the contract, or else by one acting with his knowledge and for his advantage." Must affect promisor. — A contract entered into in order to relieve a third person from duress is not voidable on that ground ; * though a simple contract, the consideration for which was the discharge of a third party by the promisee from an illegal imprisonment, would be void for unreality of consideration. And must be personal. — Nor is a promise voidable for duress which is made in consideration of the release of goods from detention." If the detention is obviously wrong- ful the promise would be void for want of consideration ; if the legahty of the detention was doubtful the promise might be supported by a compromise. But money paid for the release of goods from wrongful detention may be recovered back in virtue of the quasi-contractual relation created by the receipt of money by one person which rightfully be- longs to another.^ § 5. Undue Influence. We have described the kind of Fraud which gives rise to the action of deceit, and the efifect of Fraud of that descrip- tion upon the validity of a contract. But it may [*165] *well be that persons are induced to enter into con- tracts not by any specific statement of a fraudulent character, but by reason of circumstances placing it in the a. 1 EoUe, Abr. 688. 6. Husoombe t. Standing, Cro. Jac. 187; see ante, p. 82. c. Atlee V. Bacldiouse, 3 M. & W. 633; see post, Quasi-Contract. 1 Duress of goods exists when one is compelled to submit to an illegal exaction in order to obtain them from one who has them, but refuses to surrender them unless the exaction is endured. Cooley, J., in Hackly V. Headley,45 Mich. 570; Scholey v. Mumford, 60 N. Y. 498; Chandler V. Sanger, 114 Mass. 364; Spaids v. Barrett, 57 111. 289; Radich v. Hutch- ins, 95 U. S. 213; Collins v. Westberry, 2 Bay, 211; Harmony v. Bing- ham, 12 N. Y. 99. . Chap. IV. § 5. UNDUE INFLUENCE. 815 power of others to engage them in disadvantageous bargains or promises. Equity has always given a wider interpretation to the term Fraud than that which the Common Law adopted. Looking beyond definite false and fraudulent statements, they have inferred from a long course of conduct, from the peculiar relations of the parties, or from the circumstances of one of them, that an unfair advantage has been taken of the promisor, and that his promise ought not in equity to bind him. The taking of such an unfair advantage is some- times called Fraud ; but it is more convenient, for the pur- pose of distinguishing it from the kind of Fraud with which we have already dealt, to call it the exercise of " Undue Influence." The subject is one which can only be dealt with in the most general way ; it depends upon the view taken by the Court of the general tendency of transactions, often extend- ing over some time, and consisting of many details, whether or no relief is granted. It is significant of the nicety of the questions of fact involved in cases of this description, that in a recent judgment of the House of Lords on appeal from the Irish Court of Chancery," Lord Hatherley differed from Lords Blackburn and Gordon as to the propriety of grant- ing relief, and the whole court differed from Lord Justice Christian as to the moral character of the acts complained of. Definition of nndne influence. — It is well to try to ob- tain some sort of definition of Undue Influence before en- deavouring to classify the sets of circumstances which have been held to suggest its existence. The best is to be found in the judgment of Lord Selborne in The Earl of Aylesford V. Morris? In speaking of the sort of cases " which, accord- ing to the language of Lord Hardwicke, raise from tJie cir- cumstances and conditions of the parties contracting * a presumption of Fraud,^' he says, " Fraud does not [*166] here mean deceit or circumvention ; it means an uncon- a. O'Eorke v. Bolingbroke, 2 App. Ca. 814. 2>. 8 Cb. 490. 216 FORMATION OP CONTEACT. Part II. soientious use of the power arising out of these eiroumstanoes and conditions; and when the relative position of the parties is such as prima facie to raise this presumption, the trans- action cannot stand unless the person claiming the benefit of it is able to repel the presumption by contrary evidence, proving it to have been, in point of fact, fair, just, and rea- sonable." ^ Presumption from circumstances. — In • attempting to ascertain the principles upon which this presumption is raised, we may note at starting — {a) that equity will not enforce a gratuitous promise even though it be under seal ; " (/9) that the acceptance of a voluntary donation throws upon the person who accepts it the necessity of proving '■ that the transaction is righteous ; " * (y) that inadequacy of consideration is regarded as an element in raising the presumption of Undue Influence or Fraud ; " {3} but that mere inadequacy of consideration will not (according to the strong tendency of judicial opinion) amount to proof " of either.^ a. Kekewich v. Manning, 1 D. M. G. 188. b. Hoghton v. Hoghton, 15 Beav. 899. c. Wood V. Abrey, 3 Maddook, 423. d. Coles V. Treoothick, 9 Ves. 246. 1 " The line between due and undue influence, when drawn, must be with full recognition of the liberty due every true owner to obey the voice of justice, the dictates of friendship, of gratitude and Of benevo- lence, as well as the claims of kindred, and, when not hindered by per- sonal incapacity or particular regulations, to dispose of his own property according to his own free choice." Graves, Oh. J., in "Wallace v. Harris, 33 Mich. 397. Influence which will avoid a will or deed must be exerted to such a degree as to amount to force or coercion in destroying free agency. Layman v. Conroy, 60 Md. 286 ; Latham v. Udell, 38 Mich. 238. Modest persuasion and arguments and appeals to the affections are not improper. Schofleld v. Walker, 58 Mich. 96; Wise v. Foote, 81 Ky. 10; Black V. Foljambre, 39 N. J. Eq. 234. 2 While mere inadequacy of consideration is insufficient evidence of fraud or undue influence, still where the inadequacy ia so gross as to Chap. IV. § 5. UNDUE INFLUENCE. 217 We may therefore frame the question which, we have to discuss somewhat in this way:— When a man demands equitable remedies, either as plaintiff or defendant, seeking to escape the effects of a grant which he has made gratu- itously or a promise which he has given upon a very in- adequate consideration, what must he show in addition to this in order to raise the presumption that Undue Influence has been at work? Or from relations of parties; parental.— One class of circumstances calculated to raise this presumption appears to be that the party benefited stood in some such relation to him as to render him peculiarly subject to influence. Parental or qziasi -parental relations subsisting between promisor and promisee will raise this presumption. In Archer v. Hudson,'' a young lady who had just attained *her [*167] majority became security for her uncle to enable him to overdraw his account at his banker's. She was an orphan, and had resided with her uncle for seven years pre- vious to the transaction. The Master of the Eolls, advert- ing to the fact that the security was obtained through the influence of a person standing in loco parentis, from the object of his protection and care, said, " This is a transaction which under ordinary circumstances this Court will not allow. . . . This Court does not interfere to prevent an act even of bounty between parent and child, but it will take care (under the circumstances in which the parent and child are placed before the emancipation of the child) that such child is placed in such a position as will enable him to form an entirely free and unfettered judgment, independent altogether of any sort of control." a. 7 Beav. 560. shock the conscience and common sense of all men, it may amount to proof of fraud. 3 Pomeroy on Eq. Juris. 937. A voluntary donation and the opportunity to exert an undue influence do not amount to proof of it, where there is nothing further unusual in the traiisaction. Ee Martin, 98 N. Y. 193; Montague v. Allen, 78 Va. 593; Carter v. Dixon, 69 Ga. 83 j Post V, Mason, 91 N. Y. 539; Dale v. Dale, 36 N. J. Eq. 369. 218 FORMATION OF CONTRACT. Part II. Aud one may extend the term " parental relations " to all cases in which one member of a family exercises a substan- tial preponderance in the family councils " either from age or from character or from circumstances. Spiritual or confidential. — The power which a spiritual adviser may acquire over persons subject to his influence is also looked upon as raising the presumption of mala fides ^^ and to this may be added a number of relg-tions which it is somewhat hard to define, but which may generally be termed "confidential." Sohcitor or advocate and client, guardian and ward, doctor and patient, trustee and cestui que trust, are some of these.^ Influence, however acquired, may raise presumption of unfair dealing. — But the Courts have shown themselves unwilling to limit or define the relations which they will regard as raising the presumption of influence, being more inclined to reserve to themselves the power of inquiring whether influence was in fact exercised, than to reject the possibility of such exercise because the parties did not stand in certain special relations. The principle applies to every case where " influence is acquired and abused, where confi- dence is reposed and betrayed." In Smith v. Kay^ the defendant, who had barely [*168] attained *his majority, had incurred liabilities to the plaintiff by the contrivance of an older man who ^ had acquired a strong influence over him, and who professed to assist him in a career of extravagance and dissipation. It was held that influence of this nature, though it certainly could not be called parental, spiritual, or fiduciary, entitled the plaintiff to the protection of the Court. a. Harvey t. Mount, 8 Beav. 439. 6. Huguenin t. Baseley, 14 Vesey, 273. e. 7 H. L. C. 750. 11 Marx V. McGIynn, 88 N. Y. 357; St. Leger's Appeal, 34 Conn. 434; Drake's Appeal, 45 Conn. 9. In Thompson v. Hawks, 14 Fed. R. 902, a will was set aside, when the testatoi-'s belief in spiritualism was artfully used by the beneficiary, a spirit medium, so called, to alienate him from his only son and chUd and to obtain his property. Chap. IV. § 5. UNDUE INFLUENCE. 219 " It is not," said Lord Kingsdown, " the relation of solic- itor and client, or trustee and cestui que trust, which consti- tutes the sole title to relief in these cases, and which imposes upon those who obtain such securities as these the duty, before they obtain their confirmation, of making a free dis- closure of every circumstance which it is important that the individual who is called upon for the confirmation, should be apprised of. The principle applies to every case where influence is acquired and abused, where confidence is re- posed and betrayed. The relations with which the Court of Chancery most ordinarily deals are those of trustee and cestui que trust, and such like. It applies specially to those cases, for this reason and for this reason only, that from those relations the Court presumes confidence put and influ- ence exerted. Whereas in all other cases where those rela- tions do not subsist, the confidence and the influence must he proved extrinsically ; but where they are proved extrin- sically, the rules of reason and common sense and the tech- nical rules of a Cpurt of Equity are just as applicable in the one case as the other." " Personal influence may be absent. — The doctrine has been extended to a class of cases from which the element of personal influence is altogether absent. It remains to consider the characteristics of these cases. Catching bargains. — They all appear to possess these common features: the promisor encumbers himself with heavy liabilities for the sake of a small, or, at any rate, an inadequate present gain; and the promisee takes advan- tage either of the improvidence and moral weakness, or else of the ignorance and unprotected situation, of the prom- isor. *In former times the, law attempted to guard in [*169] two ways against advantage being taken of persons in such a situation. Usury Laws provided that a promise to «. 7 H. L. 0. 779. 230 FORMATION OF CONTRACT, Part II. pay interest beyond a certain rate per cent, should be void, and thus prevented extortionate loans of money. And the Court of Chancery adopted a rule that the purchaser of any reversionary interest might always be called upon to show that he had given full value for his bargain, so that he might not take advantage of a man's present necessities to deprive him of his future estates without reasonable re- turn. Expectant heir. — The Usury Laws are repealed, and the 31 and 32 Vict. c. 4, abrogates the rule of law as to rever- sionary interests in all cases of purchases made bona fide and without fraud or unfair dealing. But if a man takes advantage of the present poverty of an expectant heir to extort from him an exorbitant and ruinous rate of interest, ■ he is liable to have the bargain set aside, and to be remitted to his claim for so much money as he has actually ad- vanced," with the current rate of interest upon it. Person in present distress. — And, on similar grounds, a man who bargains on terms of inequality as to age or knowledge with the promisee is considered to be entitled to the protection of the Court of Chancer^'. "In ordinary cases each party to a bargain must take care of his own interest, and it will not be presumed that undue advantage or contrivance has been resorted to on either side; but in the case of " the expectant heir," 6r of persons under pres- sure, without adequate protection,* and in the case of dealings with uneducated, ignorant persons, the burden of showing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract." ' a. Lord Aylesford v. Morris, 8 Ch. 484. 6. Per Lord Hatherley in O'Eorke v. Bolingbroke, 2 App. Ca. at p. 883. 1 The common law rule regarding purchases for expectant heirs is said to prevail in this country. But few instances of its application will be found. 1 Story, Eq. 336; Jenkins v. Pye, 13 Peters, 241 ; Chesterfield v. Janssen, 1 Lead, Cas. in, Eq. 590. In Mayo v. Carrington, 19 Gratt. 74, it is held that mere inadequacy of consideration, unless it be so great Chap. IV. g 5. UNDUE INFLUENCE. 331 The Court will look not merely to the acts of the parties, but to the reasonableness of the transaction under all the circumstances of the case; and if it appear that one has taken advantage of the unprotected condition of the other to drive a hard bargain, the transaction will not be allowed to stand." limits of right to rescind.— The rules respecting the right to rescind contracts entered *into under [*170] Undue Influence follow, so far as equity is concerned, the rules which apply to Fraud, but with one noticeable qualification. In the case of Fraud, so soon as the Fraud is discovered the parties are placed on equal terms, and an affirmation of the contract binds the party who was origi- nally defrauded. But in the case of Undue Influence it is not a particular statement, but a combination of circum- stances which constitutes the vitiating element in the con- tract; and unless it is clear that the will of the injured party is relieved from the dominant influence under which it has acted, or that the imperfect knowledge with which a. Benyon v. Cook, 10 Ch. 389. as to shock the moral sense, is insufficient to avoid the sale of a rever- sionary interest. Ruple v. Bindley, 91 Pa. St. 396 ; Bacon v. Bonham, 33 N. J. Eq. 617, A more common illustration of the rule that no ad- vantage must be taken of persons in vinculis is the sale by a mortgagor of his equity of redemption to the mortgagee. If the mortgagee take any undue advantage of the mortgagor, equity will compel him to re- deed the property on receiving his debt and interest. Bigelow on Frauds, 259. "Courts of law as well as of equity very frequently re- fuse to carry out the express agreements of parties when the result would be gross injustice to one, without any corresponding loss to the other, calling for such injustice. Especially should this be the case where an agreement made between mortgagor and mortgagee, or borrower and lender, is sought to be enforced or interposed as a defense. The law , does and should scrutinize cleai'ly all such agreements and refuses to enforce them, especially where to do so would be both unjust and un- conscionable." Dorrill v. Eaton, 85 Mich, 303; Butler v. Duncan, 47 Mich, 94. 322 FORMATION OF CONTRACT. Part II. he entered into the contract is supplemented by the fullest assistance and information, an affirmation will not be allowed to bind him." ^ a. Moxon v. Payne, 8 Ch. 881. 1 By the proposed New York Code undue influence is said to consist (Civil Code, p. 231): 1. In the use, by one in whom confidence is reposed by another, or who holds a real or apparent authority over him, of such confidence or authority for the purpose of obtaining an unfair advantage over him. (Sears v. Shafer, 6 N. Y. 268, 272; Bergen v. Udall, 31 Barb. 9; Brock V. Barnes, 40 Barb. 531 ; Taylor v. Taylor, 8 How. 183.) 2. In taking an unfair advantage of another's weakness of mind. (Tracy v. Sackett, 1 Ohio St. 58; Rippy v. Grant,' 4 Ired. Eq. 443; Dunn V. Chambers, 4 Bai-b. 376.) 3. In taking a grossly oppressive and unfair advantage of another's necessities or distress. (Cases in support of the last proposition are gen- erally classed under the head of fraud.) CHAPTER Y. Legality of Object. Theee is one more elemenfe" in the formation of contract ■which reinains to be considered — the object of the parties. Certain limitations are imposed by law upon the freedom of contract. Certain objects of contract are forbidden or discouraged by law ; and though all other requisites for the formation of a contract be complied with, yet if these ob- jects are in contemplation of the parties when they enter into their agreement the law will not enforce it. Two matters of inquiry present themselves in respect of this subject. The first is the nature and classification of the objects regarded by law as illegal. The second is the effect of the presence of such objects upon the contracts in which they appear. § 1. Nat/wre of lUegaliiy in Contract. What is illegality ? — The modes in which the law ex- presses its disapproval of certain objects of contract may be described as follows : — (i) Prohibition by Statute. (ii) Prohibition by express rules of Common Law. (iii) Prohibition through the interpretation by the Courts of what is called " the policy of the law." So that illegal agreements may be (1) agreements in * breach of Statute, (2) agreements in breach of express rules of Common Law, (3) agreements contrary to public policy. *These two last are not always very easy to dis- [*172] tinguish, for frequent decisions upon certain matters of public policy have caused tolerably definite and express 234 FORMATION OF CONTRACT. Part U rules regarding them to grow up ; and these are in effect rules of Common Law as express, or nearly so, as those with which we shall deal under class 2. (i) Contracts which are made in breach of Statute. Illegality from statutory prohibition. — A statute may- render an agreement illegal in one of two ways ; — by ex- press prohibition, or by penalty. It may say, in so many words, that contracts of a certain sort are illegal, or void, or both ; and where it thus expressly avoids a contract or makes it illegal, no doubt can arise as to the intentions of the Legislature. Illegality from imposition of a penalty, how ascer- tained. — But where the statute does no more than impose a penalty upon the carrying out of the objects of a contract, a question may arise whether or no the penalty amounts to a prohibition. Two marks may assist us to determine the intention of the Legislature. The first of these is the ob- ject of the penalty. If it be " a protection to the public as well as the revenue," " if it be designed to further objects of public policy in relation to some trade or business, then a penalty amounts, without doubt, to a prohibition. If it be solely to facilitate and secure the collection of the rev- enue, then it is possible that the contract, though penalised, is not prohibited. The soundness of this distinction has however been called in question,* and a more important mark is to be found in the continuity of the penalty.^ a. Brown v. Duncan, 10 B. & C. 93. 6. Cope V. Eowlands, 2 M. & W. at p. 158. 1 The authorities are agreed that a contract is illegal, the subject-mat- ter of which is forbidden by the statute, or is in violation of a statute for the protection of the public against imposition or fraud ; or for the pro- tection of the public health or morals, or when the contract is against public policy. Brackett v. Hoyt, 29 N. H. 264 ; Bull y. Harrigan, 17 B. Mon. 353; Woods v. Armstrong, 54 Ala. 154; Griffith v. Wells, 3 Denio, 326; Dillon V. Allen, 46 Iowa, 399. Brown T. Duncan.— The principle announced in Brown v. Duncan has been recognized in this country by the courts generally. Mandel- Chap. V. § 1. LEGALITY OF OBJECT. 235 "Where a statute forbids the carrying on of a trade except under certain conditions, on pain of incurring a specified penalty once for all, it has been held that contracts made in breach of such provisions are not vitiated." But where the penalty is recurrent upon every breach of the provisions of the statute, then there can be no doubt that the objects of the contract are intended to be regarded as illegal, and the contract itself void. *Resnlt of cases. — The law then upon this point [*1Y3] may be summarised thus. "Where a penalty is in- flicted by statute upon the carrying on of a trade or business in a particular manner, we may assume frvma facie that contracts made in breach of such statutory provisions are illegal and void. But if it appear that the penalty is im- posed, not for the benefit of the public in general, but for the security of the revenue, it is possible that the contract was only intended to be penalised and not prohibited. And o. Smith V. Mawhood, 14 M. & W. 463. baum V. Gregorich, 17 Nev. 95 ; Farer v. Philbrick, 7 N. H. 340 ; Lewis y. Welch, 14 N. H. 398 ; Larnered v. Andrew, 106 Mass. 435 ; Corning v. Abbott, 54 N. H. 471 ; Rather v. First Nat. Bank, 93 Pa. St. 393. The tests, however, which the case suggests for determining when a penalty amounts to a prohibition are frequently regarded as unsatisfactory. Though the statute may be solely to facilitate and secure the collection of the revenue, courts are reluctant to sustain a contract, where the effect ■would be to encourage the violation of the revenue laws. Greenhood, Pub. Pol. 583. The question after all is, did the legislature intend to prohibit the making of the contract in question? The language of the statute is first to be considered and then the subject-matter of it, the •wrong or evil which it seeks to remedy or prevent, the purpose to be ac- complished, and finally, the legislative intent is to be ascertained and the statute enforced accordingly. Aiken v. Blaisdell, 41 Vt. 668; Pag- bom V. Westlake, 36 Iowa, 549; Griffith v. Wells, 3 Denio, 337; Dillon V. Allen, 46 Iowa, 399 ; Bell v. Quinn, 3 Sandf. 146 ; Best v. Bunder, 39 How. Pr. 493 ; Buckman v. Bergholz, 37 N. J. L. 438. There are some de- cisions in support of the proposition, without qualification, that when a statute inflicts a penalty for doing a particular act, that act is, by implication, prohibited and illegal. Pray v. Burbank, 10 N. H. 378 ; Kleckly v. Leyden, 63 Ga. 315 ; Durgen v. Dyer, 68 Me. 143 ; Doe v. Burnham, 31 N. H. 436 ; Hallett v. Novion, 14 Johns. 373 ; Bacon v. Leej 4 Iowa, 490; Carmel v. Kitchen, 30 S. C. 430. 15 226 FORMATION OF CONTRACT. Pai-t IIi if, in addition to this, it appear that the penalty is imposed once for all upon the offending trader, and not upon each successive contract continuously, it is highly prdbahle, if not certain, that contracts so made are not intended to be viti- ated. Objects of statutory proLiMtion. — It is not necessary or desirable to discuss here in any detail the various stat- utes by vfhich certain contracts are prohibited or penalised. They relate (1) to the security of the revenue; (2) to the protection of the public in dealing with certain articles of commerce, (3) or in dealing with certain classes of traders ; (4) to the regulation of the conduct of certain kinds of business. An excellent summary of statutes of this nature is to be found in the work of Mr. Pollock," and it is not proposed to deal further with them here. Wagering contracts. — There is however one class of con- tracts which, from its peculiar character and from the vari- ous forms in which it has been dealt with by the Legislature, it is worth while to examine more particularly. These contracts are "Wagering Contracts. The subject has been somewhat confused by the use of the word wager as a term of reproach, so that some contracts not permitted by law have been called wagers, as opposed to others which, while precisely similar in their nature, will be enforced by Courts of Law if they comply with certain conditions. What is a wager ? — A wager is a promise to pay money or transfer property upon the determination or ascertain- ment of an uncertain event ; the consideration for [*1Y4:] such a promise is either a present *payment or transfer by the other party, or a promise to pay or transfer upon the event determining in a particular way. The event may be uncertain because it has not happened, or it may be uncertain because it is not ascertained, at any rate to the knowledge of the parties. Thus a wager may be made upon the length of St. Paul's, or upon the result of an election which has already happened, though the par- a. Pollock, p. 682, ed. 4. Chap. V. § 1. LEGALITY OF OBJECT. 237 ties do not know in whose favour it has gone. The uncer- tainty then resides in the minds of the parties, and the subject of the wager may be said to be rather the accuracy of each man's judgment than the determination of a par- ticular eyent." Marine insurance is a wager. — It is obvious that a wager may be a purely gambling or sporting transaction, or it may be directed to commercial objects. A man who bets against his horse winning the Derby is precisely in the same position as a man who bets against the safety of his own cargo. Yet we should not hesitate to call the one a wager, while the other is called a contract of marine insurance. A has a horse likely to win *the Derby, and therefore [*1Y5] a prospect of a large return for money laid out in rearing and training the horse, in stakes and in bets ; he wishes to secure that he shall in no event be a loser, and he agrees with ^ that, in consideration of X promising him £4,000 if his horse loses, he promises X £1,000 if his horse wins. The same is his position as owner of a cargo : here too he has a prospect of large profits on money expended upon a cargo of silk, here too he wishes in no event to be a loser, and he agrees with X, an underwriter, that in considera- a. It would seem that to constitute a wager the transaction between the parties must wholly depend on the risk in contemplation, and that neither must look to anything but the payment of money on the determination of an uncertainty. Otherwise a guarantee would be a wager, since it is a promise by A to answer to X for the possible and uncertain default of M. But here the promise of A is supported by the consideration that X supplies M with goods, services or money. If the sum guaranteed by A to X were largely in excess of the consideration furnished, the trans- action would he pro tanto a wager upon the solvency of M. The definition of a wag- ering contract cited by Professor Holland, in the French Code, seems faulty in this respect. It is said to be " one the effects of which, as*to both profit and loss, whether for all the parties or for one or several of them, depend on an uncertain event." This would include any agreement in which the profit and loss of one party depended on a contingency. If, for instance, A undertook to paint a portrait of X, to be paid a certain price if M approved the likeness, otherwise nothing, such a transac- tion would be a wager by the French Code. But what the parties contemplate is that A should give skill, labour, and material, and should be paid only if M certify to the value of his work. Such a transaction is wholly different to an agreement to pay money dependent on the safety of A's ship, the length of ilf 's lite, the immunity of X's house from fli-e. Jurisprudence, 247, ed. 3, art. 1904. 228 FORMAIION OF CONTRACT. Part 11. tion of his paying X£ — , Xpromises to pay him £ — if his cargo is lost by certain specified perils. The law forbids A to make such a contract unless he has what is called " an insurable interest " in the cargo, and con- tracts in breach of this rule have been called mere wagers, while those which conform to it have been called contracts of indemnity. But such a distinction is misleading. It is not that one is and the other is not a wager : a bet is not the less a bet because it is a hedging bet ; it is the fact that one wagering contract is and the other is not perirhitted, ly law which makes the distinction between the two. Apart from this there is no real difference in the nature of the contracts. Life insurance Is a wager. — A life insurance is in like manner a wager. Let us compare it with an undoubted wager of a similar kind. A is about to commence his in- nings in a cricket match, and he agrees with X that if X will promise to give him £1 at the end of his innings, he will pay X a shilling for every run he gets. A may be said to insure his innings as a man insures his life ; for the ordinary contract of life insurance consists in this, that A agrees with Xthat if Xwill promise to pay a fixed sum on the happening of an event which must happen sooner or later, A will pay to X so much for every year that elapses until the event happens. In each of these cases A sooner or later becomes entitled to a sum larger than any of the individual sums which he agrees to pay. On the [*176] *other hand, he may have paid so many of these sums before the event takes place that he is ulti- mately a loser by the transaction. History of the' common law as to wagers. — Let us now turn to the history of the law respecting wagering contracts. At Common Law wagers were enforceable,^ and, until the 1 Gilbert v. Sykes.— In many of the American states the English doctrine that wagers were enforceable has not been adopted or approved, and the courts have held that all ^Vagers upon subjects in which the parties have no interest are void. This is said to have been the rule in Chap. V. § 1. LEGALITY OF OBJECT. 239 latter part of the last century, were only discouraged by the Courts by the imposition of some trifling difficulties of pleading." Gradually however the Courts, finding that- fi'xvolous and sometimes indecent matters were brought be- fore them for decision, established the rule that a wager was not enforceable if it led to indecent evidence, or was calculated to injure or pain a third person; and in some cases general notions of public policy were introduced to the effect that any wager which tempted a man to offend against the law was illegal. Strange, and sometimes ludicrous, results followed from these efforts of the Courts to discourage the litigation of wagers.* A bet upon the duration of the life of JSTapoleon was held to be unenforceable, as tending, on the one side, to weaken the patriotism of an Englishman, on the other, to encourage the idea of the assassination of a foreign ruler, and so to provoke retaliation upon the person of our own sovereign. But it is evident that the substantial motive which pressed'upon the judges was "the inconvenience of countenancing idle wagers in courts of justice," the feeling that " it would be a good rule to postpone the trial of every action upon idle wagers till the Court had nothing else to attend to." a. Jackson v. Oolegrave (1694), Carthew, p. 338. 6. Gilbert v. Sykes (1818), 16 East, 150. the New England States. Love v. Harvey, 114 Mass. 83 ; Amory v. Gil- man, 3 Mass. 1 ; Perkins v. Eaton, 3 N. H. 153 ; Rice v. Gost, 1 Strobh. (S. C.) 83 ; Wheeler v. Spencer, 15 Conn. 30 ; Wilkinson v. Tousley, 16 Minn. 399 : Eldred v. Malloy, 3 Col. 330. In Eldred v. Malloy, Betford, J., said : " Notwithstanding the fact that contracts of wager have been i-egarded as valid at common law, a disposition has been steadily grow- ing in all respectable courts to discountenance and ignore them. It is generally conceded that the principle was engrafted on that system at a time when but little consideration was given to the subject." In Wil- kinson V. Tousley, Berry, J., insisted that the English rule was a per- version of the common law and ought to be condemned by the court, and held that in Minnesota all wagers were invalid. They are so, now, by the statutes of nearly every American state, and it is evident that if the legislatures had not changed the common law rule the courts would have done so ere this. 230 FORMATION OF CONTRACT. Part H. Statute as to wagers. — Meantime the Legislature dealt with various forms of wagering contracts. As regards purely sporting wagers the history of legislation extends over a century and a half. It was enacted by 16 Car. II. c. 7, that any sum exceeding £100 lost in playing at games or pastimes, or in betting on the players, should be irrecoverable, and that all forms of security given for money so lost should be void. The 9 Anne, c. 14, carried the law upon this point a stage further, enacting [*17Y] that *securities of every kind, given for any sum lost in playing at games, or betting on the players, or knowingly advanced for such purposes, should be void ; and that the loser of £10 or more might recover it back, if paid, by action of debt brought within three months of payment. Oases of hardship resulted from the working of this Act. It often happened that securities thus avoided were pur- chased from the holders of them by persons ignorant of their illegal origin. These persons, when they sought to enforce them against the giver of the security, discovered, too late, that they had paid value for an instrument which was void as against the party losing at play. The 5 & 6 Will. lY. c. 41, therefore repealed the Act of Anne so far as regarded the avoidance of securities as specified in that Act, and provided that they should henceforth be taken to have been originally given upon an illegal consideration. The effect of this was, that the holder of such an instru- ment, if it were established after proof of its illegal incep- tion that he was a " hona fide holder for value," could enforce it even against the man who had given the security in payment of an illegal bet." The last enactment relating to wagers of this class is the 8 & 9 Vict. c. 109, which provides, " That all contracts or agreements, whether by parol or in writing, by way of gaming or wagering, shall be null a. See Fart m, ch. U. Chap. V. § 1. USGALITY OF OBJECT. 231 and void; and that no suit shall be brought or maintained in any Court of Law or Equity for recovering any sum of money or valuable thing which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made. Provided always that this enactment shall not be deemed to apply to any subscription or contribution or agreement to subscribe or contribute for or towards any plates, prizes, or sum of money to be awarded to the winner or winners of any lawful Game, Sport, Pastime, or Exercise." Effect of last two statutes. — The same Act repeals the Statutes of Charles and Anne, but does not affect the pro- vision of 6 & 6 Will. IV. c. 41, as to securities. All wagers therefore are now simply null and *void, but [*1Y8] securities given in respect of them still fall into two classes. Consideration illegal. — A promissory note given in pay- ment of a bet made upon a cricket match is tainted with illegality at the outset ; not only is it void as between the original parties to it, but every subsequent purchaser may be called on to show that he gave value for the note; and if it can be shown that he knew of the illegal consideration for which it was first given, he may be disentitled to re- cover upon it.^ Promise void. — A promissory note given in payment of a wager upon the result of a contested election would, as between the parties to it, be given on no consideration at 1 Illegality of consideration is no defense to a note that has passed into the hands of a bona fide purchaser, unless the statute express^ or by- necessary implication declares that the instrument given on such illegal consideration shall be absolutely void. Vallett v. Parker, 6 Wend. 615; Town of .Eagle v. Kohn, 84 111. 292; Glenn v. Farmers' Bank, 70 N. C. 191; PatSn v. Coit, 5 Mich. 505; Root v. Merriam, 27 Fed. Rep. 909; Fuller V. Green, 64 "Wis. 159 ; Cunningham v. National Bank of Au- gusta, 71 Ga. 400 ; Traders' Bank v. Alsop, 64 Iowa, 97. But when the note is void by statute, even a bona fidk holder cannot recover on it. Id. ; Aurora v. "West, 22 Ind. 88 ; Unger v. Boas, 13 Pa. St. 601 ; Bridge V. Hubbard, 15 Mass. 96; Andrews v. Hoxie, 5 Tex. 171. 232 FORMATION OF CONTRACT, Part IL all, inasmuch as it is given in discharge of an obligation which does not exist. But the wager is not illegal, it is simply void ; and if the note be endorsed over to a third party, it matters nothing that he was aware of the circum- stances under which the note was originally given; nor does it lie upon him to show that he gave value for the note," though he could not recover if it were proved that he gave none.^ As regards wagering contracts entered into for commer- cial purposes, there are three important subjects with which the Legislature has dealt. These are Stock Exchange transactions, marine insurance, and insurance upon lives or other events. The first of these subjects was dealt with by Sir John Barnard's Act, 7 Geo. II. c. 8, which was more particularly directed to wagers on the price of stock, or, as they are sometimes called, " agreements to pay differences." These originate in some such transaction as this : A contracts with X for the purchase of fifty Kussian bonds at £78 for every £100 bond. The contract is to be executed on the next settling day. If by that date the bonds have risen in price, say to £80, X, unless he has the bonds on hand, must buy at £80 to sell at £78 ; and if he has them on hand, he is obliged to part with them below their market value. [*179] If, on the other hand, the bonds have gone down *in, the market, A will be obliged to pay the contract price which is in excess of the market value. It is easy to see that such a transaction may be made the medium of purely wagering speculations; that A may never intend to buy nor X to sell the bonds in question ; that they may intend no more than that the winner should receive from the loser the difference between the contract price and the market value on the settling day. And yet such a payment of differences may be perfectly hona fide; a. Fitch V. Jones, 5 B. & B. 345. 1 This would not be llie rule in this country, where wagers are gener- ally held illegal, and frequently so independent of statute. See p. 176. Chap. V. § 1, LEGALITY OF OBJECT. 233 A may have found so much better an investment for his money between the date of the contract and the settling day that it is well worth his while to pay a difference in JT's favour to be excused performance of the contract. Sir John Barnard's Act was repealed by 23 Vict. c. 28, and contracts of this nature, if proved to be simple wagers, fall under the 8 and 9 Yict. c. 109, § 18." But it is hard to prove that they are so. The shares may be bought on the terms that they are not to change hands ; then the transac- tion is a wager on their price at a future day.* But if the- purchase is the result of one agreement and the payment of the difference is the result of another, it is impossible to say that either is a wag^r," and not easy to construct a wager by combining the two transactions.' a. The effect of 8 and 9 Vict. c. 109, § 18, upon Stock Exchange transactions is well summarized in the Appendix to the Beport of the Stock Exchange Commission, 1878 [2157], p. 356. 6. Grizewood v. Blane, 11 0. B. 538. c. Thacker v. Hardy, 4 Q. B. D. 687. 1 Futures, as they are called, have received the severe censure of the American, courts. An agreement for a sale for future delivery is a gambling contract, and as such not enforceable where the intention ia that there shall be no actual sale of property, but that only at the time fixed for delivery the parties shall settle, and the purchaser pay or re- ceive the differences between the agreed price and the market price at that time, according as the market price is less or greater. Such con- tracts are considered immoral, illegal and contrary to public policy. Gregory v. Wendell, 39 Mich. 337 ; Lyon v. Oulbertson, 83 111. 33 ; Samp- son V. Shaw, 101 Mass. 145 ; Rumsey v. Berry, 65 Me. 570 ; Kirkpatrick V. Bonsall, 73 Pa. St. 155 ; Cockrell v. Thompson, 85 Mo. 510 ; Whiteside V. Hunt, 97 Ind. 191; Irwin v. Williar, 110 U. S. 499; Kirkpatrick v. Adams, 20 Fed. R. 287 ; Lowry v. Dillman, 59 Wis. 197 ; Bartlett v. Smith, 13 Fed. R. 263. In Cunningham v. National Bank of Augusta, 71 Ga. 400, it was held that such contracts were within the meaning of the statutes of the state against "gaming," which precluded a recovery by a bona flde holder upon an instrument executed upon a "gaming consideration." A contrary view is held in Shaw v. Clark, 49 Mich. 384 ; Third National Bank v. Harrison, 10 Fed. R. 243. If one of the parties intends a bona flde sale, the contract may be en- forced at his instance, though the other party may have intended sim- ply a wager on future prices. Williams v. Tiedemann, 6 Mo. App. 269; Pixly V. Boynton, 79 111. 351 ; Whiteside v. Hunt, 97 Ind. 191 ; Gregory 334 FORMATION OF CONTRACT. Part II. Marine insurance. — Marine insurance is dealt with by 19 Geo. II. c. 37, the effect of which is to avoid all insur- ances on British ships or merchandise laden oh board such ships unless the person effecting the insurance is interested in the thing insured. What is an insurable interest, that is to say such an interest as entitles a man to effect an insur- ance, is a question of mercantile law with which we are not here concerned. Insurance generally. — The subject of insurance gener- ally was dealt with by 14 Geo. III. c. 48, from which Act, however, marine insurance is excepted. The Act [*180] forbids insurances on the lives of any *persons, or on any events whatsoever in which the person ef- fecting the insurance has no interest; it further requires that the names of the persons interested should be inserted in the policy, and provides that no sum greater than the in- terest of the insured should be recovered by him. A cred- itor may thus insure the life of his debtor, and a lessee for lives may insure the lives upon which the continuance of his lease depends.^ Life insurance differs from other contracts of insur- ance. — But a policy of life insurance differs in an impor- tant respect from a policy of marine or lire insurance. The V. Wendell, 39 Mioh. 337. If the agreement Contemplated an actual purchase and delivery of grain in the future, which one of the parties was to furnish by buying it in the market, the contract is valid. Story V. Salomon, 71 N. Y. 430; Gregory v. Wattowa, 58 Iowa, 713; "Wall v. Schneider, 59 Wis. 353 ; Hatch v. Douglass, 48 Conn. 116. 1 Wager policies upon marine risks have been sustained in this coun- try as valid at common law, though some courts have pronounced them void as against public policy. Wager policies in life and fire insurance are generally condemned by the courts. The assured must have an "insurable interest" in the risk or the policy is void. Bliss on Life Ins. ch. 11; Wood on Fire Ins. 90; Stevens v. Warren, 101 Mass. 564; War- nook v. Davis, 104 U. S. 775. For conflicting decisions on the validity of an assignment by one of an insurance policy, insured upon his own life, to one having no interest in the life of the assured, upon an agree- ment by the assignee to pay the assessments necessary to keep the policy in force, see Price v. Supreme Lodge Knights of Honor, Texas Supreme Court, 36 Albany Law J. p. 83. Chap, V. § 1. LEGALITY OF OBJECT. 235 latter are contracts of indemnity," and if the insured re- covers the amount of his loss from any other source the insurer may recover from him pro tanto. " Policies of in- surance against fire or marine risk are contracts to recoup the loss which parties may sustain from particular causes. "When such a loss is made good aliunde, the companies are not liable for a loss which has not occurred ; but in a life policy there is no such provision. The policy never refers to the reason for effecting it. It is simply a coatract that in consideration of a certain annual payment, the company will pay at a future time a fixed sum,* calculated by them with reference to the value of the premiums which are to be paid, in order to purchase the postponed payment." Thus, though in a life policy the insured is required by 14 Geo. III. c. 48, to have an interest at starting, that inter- est is nothing as between him and the company who are the insurers. " The policy never refers to the reason for effect- ing it." The insurer promises to pay a large sum .on the happening of a given event, in consideration of the insured paying lesser sums at stated intervals until the happening of the event. Each takes his risk of ultimate loss, and the statutory requirement of interest in the insured has nothing to do with the contract. And so if a creditor effects an in- surance on his debtor's life, and afterwards gets his debts paid, yet still continues to pay the insurance premiums, the fact that the debt has been paid is no answer to the *claim which he may have against the company. [*181] This rule has been established in Dalby v. The Lon- don Life Assurance Company^ overruling Godsall -v. Bold- ero,^ in which Lord EUenborough had held that a contract of life insurance, like one of marine or fire insurance, was a contract of indemnity, and that it could not be enforced if the loss insured against had not in fact occurred. a. Darren v. Tibbitts, 5 Q. B. D. 560. 6. Law V. London Indisputable Life Policy Co. 1 K. & J. 229. e. 15 C. B. 365. d. 9 East, 72. 236 FORMATION OF CONTRACT. Part II. (ii) Coni/raots whieh a/re tnade in hreaeh of dejmUe rules of Common Law. Agreement to commit a crime. — It is hardly necessary to state that an agreement to commit a crime or indictable offense would be made on an illegal consideration : but it is difficult to find an instance which is not at the same time a breach of some statutory prohibition. To trade with alien enemies.^ — Again, a contract with an alien enemy is illegal and void, and is stated, in the lead- ing case upon the subject, to be void, not on any ground of public policy," but because " it was a principle of the Com- mon Law that trading with an enemy without the king's license was illegal in British subjects." To commit a civil wrong. — The commonest form of con^ tracts in breach of rules of Common Law is an agreemeuit to commit a civil wrong.^ Thus in Allen v. Rescous * an agreement in which one of the parties undertook to beat a man was held void. An agreement which involves the publication of a libel is in like manner void." Agreements to commit a fraud upon a third party have not unfrequently come before the Courts. Thus in the case of Mallalieu v. Hodgson^ a debtor making a composition with his creditors of 6s. %d. in the pound, entered into a separate contract with the plaintiff to pa}' him a part of his debt in full. This was held to be a fraud on the other creditors, each of whom had promised to forego a portion of his debt in considera- tion of the others foregoing theirs in a like proportion. a. Potts T. BeU, 8 T. E. 548. 6. 2 Lev. 174. c. aay V. Yates, 1 H. & N. 73. d. 16 Q. B. 689. 1 Clement's Appeal, 53 Conn. 464; McCall v. Capehart, 20 Ala. 521; Hatch V. Mann, 15 Wenct". 44; Commissioners of Knox Co. v. MoComb, 19 Ohio St. 330. The authorities are numerous in support of the propo- sitions of the author. See Greenhood on Pub. Pol., rules CLIV, CXCIII; Materne v. Horwitz, 101 N. Y. 470; Huckins v. Hunt, 138 Mass. 866 ; Gray v. McReynolds, 65 Iowa, 461. Cbaip. V. § 1. LEGALITY OF OBJECT. 387 " "Where a creditor in fraud of the agreement to accept the composition stipulates for a preference to himself, his stipu- lation is altogether void." *Thus too where the plaintiff purchased from the [*182] defendants an exclusive right to use a particular scien- tific process, and it turned out that they had no such exclusive right as they professed to sell, it was held that the plaintiff could not recover, because, upon his own showing, it ap- peared that he had purchased this right in order to float a company from which he expected to make a profit by de- frauding the shareholders." Fraud and illegality. — It is worth noticing here a difii- culty sometimes introduced into this part of the law of con- tract arising from a confusion of illegality'' with fraud. Fraud is a civil wrong, and an agreement to commit a fraud is an agreement to do an illegal act. But fraud as a civil wrong must , be kept apart from fraud as a vitiating element in contract. Fraud may vitiate a contract for a reason other than the fact that it constitutes a civil wrong : as between the parties to a contract the fraud of one pre- vents the consent of the other from being genuine. If the fraud is discovered and the discovery acted upon in time, the contract can be avoided, not because the fraud is an illegality, but because the consent of the defrauded party was unreal : if the contract has been executed, the defrauded party must rely upon his remedy in tort and can sue for damages for the wrong he has sustained. But as between the parties to a contract, while still executory, the fraud of one affects it because the consent of the other is not gen- uine. "We may say then that if A is induced to enter into a contract with 2^ by the fraud of X the contract is voidable, because ^'s consent is not genuine. If A and JT make a contract the object of which is to defraud Jtf the contract is void, because A and Xhave agreed to do what is illegal. a. Begbie v. Phosphate Sewage Co. L. E. 10 Q. B. 499. 238 FORMATION OF CONTRACT. Part H. The subject" would be much obscured if we allowed our- selves to confuse reality of consent with legality of ob- ject. [*183] (iii) Contracts which a/re made m breach ofthepoUoi/ of the law. Pulblic policy — General application. — The policy of the law, or public policy, is a phrase of frequent occurrence and somewhat attractive sound, but it is very easily capable of introducing an unsatisfactory vagueness into the law. It would be diificult to find its earliest application; most likely agreements which tended to promote litigation or to re- strain trade or marriage were the first to elicit the principle that the Courts would look to the interests of the public in giving efiicacy to contracts. "Wagers, while they contmued to be legal, were doubtless a frequent provocative of judi- cial ingenuity on this point, as is sufiiciently shown by the case of Gilbert v. Sykes ^ quoted above : but it cannot be said with confidence that the doctrine of public policy originated in the endeavour to elude their binding force. Whatever may have been the origin of the doctrine, it was applied very frequently, and not always with- the happiest results, during the latter part of the last and the commence- ment of the present century." Modern decisions, however, while maintaining the duty of the Courts to consider the public advantage, have tended to limit the sphere within which this duty has been exercised, and the modern .view of the subject is perhaps best expressed by Jessel, M. E. : "You have this paramount public policy to consider, that you are not lightly to interfere with the freedom of con- tract." ^ There are, however, some parts of this question of public policy which can be definitely dealt with, and agreements of a. Smith on Contr. Lect. vl. h. 16 East, 150. c. Edgerton v. Earl Brownlow, 4 H. L. 0. 1. d. Printing Co. v. Sampson, 19 Eq. 462. Chap. V. § 1. LEGALITY OF OBJECT. 239 certain kiuds are illegal, not as breaking express rules, but as infringing established principles or tendencies of the law. "We will endeavour to arrange them under a few conven- ient heads. Agreements tending to mjure the public service. Sale of offices. — The public has an interest in the proper performance of their duty by public servants, and Courts of Law hold contracts to be illegal which have for their object the sale *of public oflBces or the assign- [*184:] ment of the salaries of such offices. This principle was carried so far that in Card v. Hope " a deed was held to be void by which the owners of the majority of shares in a ship sold a portion of them, a part of the consideration for the sale being a covenant that the purchaser should have the command of the ship at sea, and that in the event of his death the sellers would appoint on the nomination of his executors. The judgment proceeded not merely on the ground that the ship was in the service of the East India Company,* which had been held equivalent to being in the public service, but on the ground that the public had a right to the exercise by the owners of any ship of their best judg- ment in selecting oiBcers for it. This is perhaps an extreme case. But there can be no dou bt that the sale of the public offices is contrary to the rules of the Common Law, as it is also subject to statutory prohibition," on the ground that the public has a right to some better test of the capacity of its servants than the fact that they possess the means of purchasing their offices.' Assignment of salaries. — On a somewhat different prin- ciple the same rule applies to the assignment of salaries or a. ZB.& C. 661. b. Blaohford v. Preston, 8 T. E. 89. 5. 5 & 6 Edw. VI. c. 16; 49 Geo. WL, a. 126. 1 Hall V. Gavitt, 18 Ind. 390 ; Theflford v. Hubbard, 23 Vt. 440 ; Stroud V. Smith, 4 Houst. (Del.) 448 ; Gray v. Hook, 4 N. Y. 449 ; Morse v. Eyan, 36 Wis. 356. 240 FORMATION OF CONTEACT. Part 11. pensions.^ " It is fit," said Lord Abinger in Foster v. Wells," " that the public servants should retain the means of a de- cent subsistence and not be ex;posed to the temptations of poverty." And in the same case, Parke, B., lays down the limits within which a pension is assignable. " When a pen- sion is granted, not exclusively for past services, but as a consideration for some continuing duty or service, then, al- though the amount of it may be influenced by the length of service which the party hais already performed, it is against the policy of the law that it should be assignable." ' o. 8 M. & W. 149. 1 The assignment of his salary by a public officer before it becomes due is against public policy. Bliss v. Lawrence, 58 N. Y. 442; Bangs v. Dunn, 66 Gal. 73 ; Beal v. McVicker, 8 Mo. App. 262. Contra, State Bank V. Hastings, 15 Wis. 78. 2 The public service. — The American courts are very jealous of any contract which in any way tends to interfere with the due administra- tion of the public service. (1) Lobbying contracts have received considferable attention, (a) They are agreements to render services in securing legislative action through personal influehco with the public sex-vants and through other objection- able and sometimes corrupt measures, (b) Such contracts, however, must be distinguished from agreements for purely professional services to be rendered openly, as the attorney or a^ent of another in the way of preparing papers, pi-esenting evidence and submitting arguments before public bodies, committees or heads of departments of the government. The latter class of contracts are valid, whereas the former are void as against the policy of the law. As illustrations of objectionable lobbying contracts, see Trist v. Child, 31 Wall. 441; Mills v. Mills, 40 N. Y. 474; Tool Co. V. Norris, 2 Wall. 45; McBratney v. Chandler, 22 Kan. 693; Frost V. Belmont, 6 Allen, 153. As illustrations of valid contracts for professional services, see Wylie V. Cox, 15 How. (U. S.) 415; Stanton v. Embrey, 93 U. S. 548; Taylor v. Bemiss, 110 U. S. 43; Sedgwick v. Stanton, 14 N. Y. 289; Workman v. Campbell, 46 Mo. 305. (3) Contracts to procure administrative action.— There is some con- flict regarding contracts whereby one agrees, for a compensation to be rendered, to procure from the heads of departments of government a contract in another's favor. The New Yqrk courts sustain such agi-ee- ments, unless corrupt measures are contracted for or resorted to. How- land V. Coffin, 47 Barb. 653 ; Lyon v. Mitchell, 86 N. Y. 235 ; Southard V. Boyd, 51 N. Y. 177 ; but the United States supreme court has held to Chap. V. § 1. LEGALITY OF OBJECT. 841 Agreements which tend to pervert the course of justice. Stifling prosecutions. — These most commonly appear in the form of agreements to stifle prosecutions, and we can the contrary. Tool Co. v. Norris, 2 "Wall. 45 ; Osoanyan v. Arms Co. 103 U. S. 361 ; Elkhart Co. Lodge v. Crary, 98 Ind. 338. Unless some improper measures are contemplated, no wrong can come from such contract ■where all parties, the government officers, the principal arid his agent, fully understand the relation of each to the subject-matter of the trans- action. The wrong which the courts strike down is the fraud practiced by a person's attempting to exert his influence with the administrative agents of the government and give apparently disinterested advice, whereas he is in fact the person chiefly interested in the success of his undertaking. Disclose his interest and the matter becomes simply a business transaction between the government and the agent of another, which cannot be objectionable. (3) Contracts to induce corporate action. — Contracts to influence municipal and quasi public corporations to locate their buildings or per- form some other corporate act liave frequently come before the courts. Such corporations are considered, to a certain extent, as servants of the public, and therefore are granted large privileges by the state. In view of this fact, the courts insist that they shall enter into no obligation that may, in any way, interfere with their serving public convenience. (a) If, under any contract with a corporation, the directors or agents of the corporation are to receive any secret and private advantage, then the contract is corrupt and illegal. Fuller v. Dame, 18 Pick. 473 ; Bestor V. Mathin, 60 lU. 138; Linder v. Cai-penter, 63 111. 309; Pacific R. E. Co. V. Seely, 45 Mo. 313. (b) Agreements to donate land or other property, contingent on the location of churches, academies and court-houses at a given point, or contingent on a railroad company constructing its road over a given route, have generally been sustained. First National Bank v. Hendrie, 49 Iowa, 403 ; Cumberland E. E. Co. v. Babb, 9 Watts, 458 ; McClure v. Mo. Eiver R. R. Co. 9 Kan. 378; Railroad Co. v. Ealston, 41 Ohio St. 573. With regard to the validity of contracts, whereby a railroad company agrees to establish and maintain a station at a particular point on its line, the decisions are in conflict, but it is believed that by weight of au- thority such contracts are valid, which do not restrict the company from locating a depot elsewhere, or from rendering any other accommodation which public convenience may demand. The Louisville, etc. E. R. Co. V. Sumner, 106 Ind. 55; Harris v. Roberts, 13 Neb. 631; Williamson v. Chicago, R. I. etc. 53 Iowa, 136 ; First National Bank of Cedar Rapids 16 243 FORMATION OF CONTRACT, Part II. hardly do better than adopt Lord "Westbury's state- [*185] ment of the law in one of the *latest cases on the subject. " You shall not make a trade of a felony. ^ If you are aware that a crime has been committed you shall not convert that crime into a source of profit or benefit to yourself."" But the rule thus laid down must be taken subject to this qualification, that where civil and criminal remedies co-exist, a compromise of a prosecution is permis- sible. "We shall probably be safe in laying it down that the law will permit a compromise of all offences though made the subject of a criminal prosecution, for which of- fences the injured party might sue and recover damages in an action.* It is often the only manner in which he can obtain repress. But, if the offence is of a public nature, no agreement can be valid that is founded on the consideration of stifling a prosecution for it." ^ a. Williams v. Bayley, L. R. 1 H. L. 220. b. Keir v. Leeman, 6 Q. B. 321; and see 9 Q. B. 395. V. Hendrie, 49 Iowa, 103 ; St. Joseph & Denver City, etc. R. R. Co. v. Ryan, 11 Kan. 603; International R. R. Co. v. Dawson, 63 Tex. 360; Taylor v. Cedar Rapids R. R. Co. 35 Iowa, 371 ; Texas, etc. R. R. Co. v. Robards, 60 Tex. 549; Swartout v. Michigan Air Line R. R. 24 Mich. 389. But subscriptions to railroad companies conditioned on their locating a depot at a given point have been held invalid in Holladay v. Patter- son, 5 Oregon, 183; Pacific R. R. Co. v. Seely, 45 Mo. 313; Marsh v. Fairbury, 64 111. 414. 1 The case of Williams v. Bayley has been frequently cited with ap- proval, and the principle involved is unquestioned. Town of Sharon v. Gager, 46 Conn. 189; McMahan v. Smith, 47 Conn. 333; Ormerod v. Dearman, 100 Pa. St. 561 ; Schultz v. Culbertson, 46 Wis. 313 ; Pearc© v. Willson, 111 Pa. St. 14; Ricketts v. Harvey, 106 Ind. 564. By the stat- utes of many states parties are permitted to compromise prosecutions for misdemeanors. Prosecutions are to-day in the name of the public and not in the name of some private person, as formerly. Private parties have the right to settle at any time their claims against each other ; but if in part consideration of such settlement it is.agreed that public pros" ecution of some offense against the state shall be stayed, the agreement is void in toto, unless the statute authorizes such settlement. McMahan V. Smith, 47 Conn. 333; Reed v. McKee, 43 Iowa, 689; Partridge v. Hood, 130 Mass. 405; Malli v. Willett, 57 Iowa, 705; Roll v. Raguet, 4 Ohio St. 400; Oxford National Bank v. Kirk, 90 Pa. St. 49; Atwood v. Chap. V. § 1. LEGALITY OF OBJECT. 843 Reference to arlbitration. — Again, agreements to refer matters in dispute to arbitration are regarded as attempts to " oust the jurisdiction of the Courts," and are not neces- sarily enforced.^ Under the Common Law Procedure Act, ISSi," the Courts have a discretionary power to stay pro- ceedings pending an arbitration, where there has been an agreement to refer an existing dispute. But when a con- tract contains a condition which provides that disputes aris- ing out of it shall be referred to arbitration, the validity of such a condition depends upon rather a fine distinction. Where the amount of damage sustained by a breach of the contract is to be ascertained by specified arbitration before any right of action arises, the condition is good;' but where all matters in dispute, of whatever sort, are to be re- a. 17 & 18 Vict, c, 125, § 11. 6. Scott V. Aveiy, 5 H. L. C. 811. Fisk, 101 Mass. 363; Sohanner v. Farwell, 56 111. 542; Wheaton v. Ansley, 71 Ga. 85. 1 Scott T. Ayery is regarded as a leading case and is a departure from the doctrine, as formerly understood, that arbitration clauses in con- tracts are void. The case has been generally followed in this country and the principle applied to contracts for the construction of buildings, railroads, canals and other works involving numerous details. These contracts give rise to many qu(5stions which a court of law might rea- sonably send to a referee, and the parties may agree that such questions shall be determined by an architect or engineer or by arbitrators, and that such determination, or a bona fide effort to obtain it, shall be a condition precedent to the right to bring an action on the contract, whereas, as stated in the text, an. agreement to submit all difference to arbitrators is void. D. & H. Canal Co. v. Pa. Coal Co. 50 N. Y. 250 ; Holmes v. Eichet, 56 Cal. 307 ; Smith v. Boston & M. R. R. 36 N. H. 458 ; Berry v. Carter, 19 Kans. 135 ; Hudson v. McCartney, 33 Wis. 345 ; Reed v. Washington Ins. Co. 138 Mass. 573 ; Denver & New Orleans Const. Co. V. Stout, 8 Col. 61. See Phoenix Ins. Co. v. Badger, 53 Wis. 388; Mentz v. Armenia Fire Ins. Co. 79 Pa. St. 480; Hurst v. Litchfield, 39 N. Y. 377. But it must be expressly stipulated that the award or de- termination is a condition precedent to the right of action on the con- tract, or the agreement to arbitrate will be of no effect. Mentz v. Armenia Fire Ins. Co. 79 Pa. St. 480; Phoenix Ins. Co. v. Badger, 53 Wis. 288 ; Reed v. Washington Ins. Co. 138 Mass. 573 ; Geer v. Council Bluffs, 67 Iowa, 273. 244 FORMATION OF CONTRACT. Part II. ferred to arbitrators and to them alone, sucli a condition is illegal. The one imposes a condition precedent to a right of action accruing, the other endeavours to prevent any right of action accruing at all." Agreem,ents which tend to encourage litigation. The rules respecting maintenance and champerty are really based upon this consideration of public policy. It is not thought well that one should buy an interest in [*186] another's *quarrel, or should incite to litigation by offers of assistance for which he expects to be paid. Maintenance has been defined to be " when a man main- tains a suit or quarrel to the disturbance or hindrance of right." » Champerty is where "he who maintains another is to have by agreement part of the land, or debt, in suit." ^ o. Edwards v. Aberayron Ins. Society, 1 Q. B. D. 696. 6. Com. Dig. vol. v, p. 22. iln many of the American states the English doctrines regarding maintenance and champerty have not been adopted, the courts finding them inconsistent with existing statutory provisions, or holding,'' as in Richardson v. Rawlind, 40 Conn. 571, that "there are such broad dis- tinctions in the state of society between Great Britain and this coun- try, that the reasons which make a law against maintenance and champerty salutary or necessary there do not exist here.'' Stoddard v. Mix, 14 Conn. 23; Danforth v. Streeter, 28 Vt. 490; Wright v. Meek, 3 Iowa, 472 ; Bayard v. MoLane, 3 Harr. (Del.) 139 ; Bentinck v. Frankhn, 38 Tex. 438; Schemp v. Sohenk, 40 N. J. L. 195; Hoffman v. Vallejo, 45Cal. 564. See Sherley v. Riggs, 11 Humph. (Tenn.) 53. In most states, however, the doctrines of the text are observed, and the principle that there must be something " vexatious in the maintenance,'' as held in Findon v. Parker, is generally followed. Ferine v. Dunn, 3 Johns. Ch. 508 ; McCall v. Capehart, 20 Ala. 521 ; Thallhimer v. Brinkerhoff, 3 Cow. 647; Commonwealth v. Dupuy, Bright (Pa.), 44. The defense of cham- perty or' maintenance can be set up only when the agreement is sought to be enforced, or title is to be made through it ; it is no defense to an action that the prosecution of the cause is by reason of a champertous or illegal contract between one of the parties and a stranger to the suit. Oourtright v. Barnes, 3 McCrary, C. C. 60 ; Barnes v. Scott, 117 U. S. S83. Chap. V. § 1. LEGALITY OF OBJECT. 245 Maintenance. — It seemed true till lately to say that the mere maintaining or assisting another person in a suit would not now avoid a contract entered into for such a pur- pose, unless there were something vexatious in the main- tenance. " The law of maintenance," says Lord Abinger in Findon v. Parker,"' " as I understand it upon the modern constructions, is confined to cases where a man improperly and for the purpose of stirring up litigation and strife en- courages others either to brmg actions or to make defences which they have no right to make." But in the recent case of Bradlaugh v. NewdegaU^ Lord Coleridge held it suffi- cient to constitute maintenance that the conduct of the de- fendant " tended to promote unnecessary litigation." The defendant had given a bond for the costs of a suit brought by one Clarke against the plaintiff to recover penalties due for voting in the House of Commons without having taken the statutory oath. The House of Lords decided" that though the plaintiff had incurred the penalty it was not payable to Clarke, and upon this ground the Lord Chief Justice held that the defendant had promoted unnecessary litigation and that his conduct amounted to maintenance. The case stands alone in modern times as a revival of the ancient severity of the law in respect of maintenance. Champerty. — Eut champerty, or the maintenance of a quarrel for a share of the proceeds, has been repeatedly de- clared to avoid an agreement made in contemplation of it. Its most obvious form, a promise to supply evidence or con- duct a suit in consideration of receiving a portion of the money or property to be recovered, was held illegal in Stanley v. Jones '^ and 8j)rye v. Porter." Its less ob- vious form, a purchase, out and out, *of a right to [*187} sue has been placed on the footing of an assignment of a chose in action, a matter with which we shall presently \ a. 11 M. & W. 682. 6. 11 Q. B. D. 10. c. Bradlaugh v. Clarke, 8 App. Ca. 354. d. 1 Bing. 369. e. 7 E. & B. 81. 246 FORMATION OF CONTRACT. ' Part H. come to deal. The enforceability of such an agreement would depend upon the purchase including any substantial interest beyond a mere right to litigate. If property is bought to which a right to sue attaches, that fact will not avoid the contract, but an agreement to purchase a bare right would not be sustained." Agreements which are cont/rary to good morals. The only aspect of immorality with which Courts of Law have dealt is sexual immorality; and the law upon this point may be shortly stated. ' A promise made in consideration of future illicit cohabi- tation is given upon an immoral consideration,* and is void whether made by parol or under seal.^ A promise made in consideration of past illicit cohabita- tion is not taken to be made on an illegal consideration, but is a mere gratuitous promise, binding if made under seal,"^ void if made by parol.^ And an agreement innocent in itself will be vitiated if intended to further an immoral purpose and known by both parties to be so intended." o. Prosser v. Edmonds, 1 T. & C. 499. 6. Ayerst v. Jenkins, 16 Eq. 375. 0. Gray v. Mathias, 5 Ves. 886; Beaumont v. Eeeve, 8 Q. B. 483. d. Fearce v. Brooks, L. B. 1 Exch. 813. iBaldy v. Stratton, 11 Pa. St. 316; Hawks v. Naglee, 54 Cal. 51; Goodall V. Thurman, 1 Head (Tenn. ), 209 ; Forsyth v. State, 6 Ohio, 19. 2 A parol promise to pay money in consideration of, and after seduc- tion, and as a compensation for the injury sustained by it, is founded upon a valid consideration, Smith v. Richards, 29 Conn. 233; Hotch- kins V. Hodge, 38 Barb. 117 ; Shenk v. Mingle, 13 S. & E. 28 ; but past intercourse or cohabitation with a common harlot is not sufficient to sustain a parol promise, and it has been doubted whether it was suffi- cient to sustain a promise under seal. Wallace v. Eappleye, 103 III. 249 ; McDonald v. Fleming, 12 B. Mon. (Ky.) 286. Promise under seal sustained in following cases, where the pi-omise was given in considera- tion of past cohabitation. Brown v. Kinsey, 81 N. C. 245 ; Bunn v. Win- throp, 1 John. Oh. 329; Wyant v. Lesher, 23 Pa. St. 338. Chap. V. § 1. LEGALITY OF OBJECT. 247 Agreements which affect the freedom or security of Marriage. Restraint of marriage. — Such agreements, in so far as they restrain the freedom of marriage, are discouraged on political grounds as injurious to the increase of the popula- tion and the moral welfare of the citizen. So a promise under seal to marry no one but the promisee on penalty of paying her £1000 " was held void, as there was no promise of marriage on either side and the agreement was purely restrictive. So too a wager in which one man bet another that he would not marry within a certain time was held to be void,* as giving to one of the parties a pecuniary in- terest in his celibacy.' *0r of freedom of choice. — What are called mar- [*188] riage brocage contracts, or promises made upon consideration of the procuring or bringing about a mar- riage, are held illegal" on various social grounds.^ Agreements for separation. — Agreements providing for separation of husband and wife are valid if made in pros- pect of an immediate separation. But if such agreements provide for a possible separation in the future they are illegal, whether made before or after marriage, because they give inducements to the parties not to perform** " duties in the fulfillment of which society has an interest." " a. Lowe v. Peers, 4 Burr. 2235. h. Hartley v. Eice, 10 East, 22. c. Arundel v. Trevilllan, Eep. in Oh. 47. d. Cartwright v. Cartwright, 3 D. M. & G. 982. iMandelbaum v. McDonald, 29 Mich. 78; Chalfant v. Payton, 91 Ind. 202; Sterling v. Sinnickson, 3 South. (N. J.) 756. 2 Chalfant v. Payton, 91 Ind. 203, in which a marriage benefit certifi- cate was held void ; Weeks v. Hill, 88 N. H. 304 ; Crawford v. Russell, 63 Barb. 92; Johnson v. Hunt, 81 Ky. 321. 'Phillips V. Thorp, 10 Oreg. 496; Adams v. Adams, 35 Minn. 79; John- son V. Hunt, 81 Ky. 323 ; Randall v. Randall, 37 Mich. 571, which con- tains an able opinion by Cooley, J., with full citation of authorities on the subject. Obtaining divorces by collusion is against the statutes of many states, and independent of statute is condemned by the courts. Any contract which binds one party to pay money or transfer property 248 FOBMATION OF CONTRACT. Part It Agreements m, resi/radnt of trade. Eestraiut of trade. — It is against the policy of the law that a man should deprive himself of the means of exer. cising his skill and earning his living. The trade of the country and the individual himself may alike be sufferers. The law upon this subject would fill a considerable space, but it is enough for our present purposes to give the simplest and most general rules to which it can be reduced. Rules regarding it. — (1) Consideration is required to support a promise in restraint of trade, even thouglj the promise be' made under seal. Mallan v. May."- Indeed it was at one time thought that the Courts would inquire into the adequacy, as well as the existence of the consideration, but this has been settled not to be so since the case of JSitchcoch V. Goher " (1837).' (2) Until quite recently it was regarded as a settled rule that the restraint may be unlimited as to time, but must not be unlimited as to space.^ 'A man might promise that a. 11 M. & W. 665. b. 6 Ad. & E. 438. in consideration that the other agrees to withdraw his or her opposition to divorce proceedings is void as against the policy of the law. Hamil- ton V. Hamilton, 89 111. 349; Comstock v. Adams, 33 Kan. 513; Stouten- burg v. Lybraud, 13 Ohio St. 238; Viser v. Bertrand, 14 Ark. 366; Muckenburg v. Holler, 29 Ind. 139. iKeeler v. Taylor, 53 Pa. St. 467; following Mallan v. May; Wiley v. Baumgardner, 97 Ind. 68. - Restraint of trade. — Beal y. Chase.— Prior to 1870 it was the gen- erally accepted doctrine in this country that a contract wherein one of the parties promised not to carry on a specified business at any place within the state was void. Wright v. Ryder, 36 Cal. 857; Taylor v. Blanchard, 13 Allen, 370 ; Lawrence v. Kidder, 10 Barb. 641 ; Chappel V. Brockway, 31 Wend. 157 ; Dunlop v. Gregory, 10 N. Y. 341 ; More V. Bonnett, 40 Cal. 351 ; Thomas v. Miles, 3 Ohio St. 374. During the past fifteen years this arbitrary rule has been materially modified if not entirely abrogated. As early as 1839, Bronson, J., said in Cliappel v. Brockway, 31 Wend. 163: "The restraint may extend far enough to afflord a fair protection to the purchaser. How far this will be, must depend in a great degree upon the nature of the trade or business to Chap, V. § 1. LEGALITY OF OBJECT. 349 he would never carry on a certain trade within ten miles of London and the promise would be good ;, but if he prom- ised that he would not carry on the trade anywhere for five years it ,would not be upheld." In direct conflict with this rule and with the decisions based on it is the decision of Fry, J., in Bousillon v. RousiUon.^ If this decision is upheld, the limitation in each case may be judged on its merits by the Court. o. Allsop T. Wheatcroft, IB Eq. 59. 6. 14Ch. D.358. which the contract relates." This dictum, however, had no immediate effect in changing the rule. In Oregon Steam Navigation Co. v. "Winsor, 20 Wall. 67 (1873), a contract restraining one of the parties from running a steamer on any of the waters of the state of California was sustained. Bradley, J., said : "This country is substantially one country, especially in all matters of trade and business ; and it is manifest that cases raay arise' in which it would involve too narrow a view of the subject to con- demn as invalid a contract not to c^arry on a particular business within a particular state." In Beal v. Chase, 31 Mich. 490 (1875), a conti:act not to carry on a publishing business within the state of Michigan was up- held as not being an unlawful restraint of trade. The case in the United States supreme court and Beal v. Chase have been followed in Diamond Match Co. V. Eoeber, 35 Hun (N. Y.), 4S6. See Garrison v. Nute, 87 111. 315 ; Talcott v. Brackett, 5 Brad. (111.) 60 ; Greenhood on Pub. Pol. 691. The rule is practically settled that what is a reasonable restraint must depend upon the nature of the business to which the contract re- lates. As to the validity of a promise not to carry on a particular busi- ness within reasonable limits within the state there is no question. Arnold v. Ki-eutzer, 67 Iowa, 314; Bowers v. Whittle, 68 N. H. 147; Gill V. Ferris, 83 Mo. 156. And where there is no limitation on the restraint as to territory the contract is void. Wiley v. Baumgardner, 97 Ind. 66, distinguishing Eousillon v. Eousillon ; Thomas v. Miles, 3 Ohio St. 374 ; Dean v. Emerson, 103 Mass. 480 ; Curtz v. Gokey, 68 N. Y. 300, and oases cited in Greenhood, Public Policy, rule 563. , Corners in the market. — Contracts to create what are called corners in the market, and, thereby, to control the prices of articles of commerce, such as breadstuff s, fuel and other necessaries of life, are void as against the policy of the law. They are unlawful interference with the freedom •of trade. Moms Eun Coal Co. v. Barclay Coal Co. 68 Pa. St. 174; Arnot V. Pittson & EUnira Coal Co. 68 N. Y. 558 ; Eaymond v. Leavitt, 46 Mich. 447; Sampson v. Shaw, 101 Mass. 145; Wright v. Crabbs, 78 Ind. 487; CentJ-al Ohio Salt Co. v. Guthrie, 35 Ohio St. 666; Craft v. McCon- oughy, 79 111. 346; Fisher v.' Bush, 35 Hun (N. Y.), 645. 250 FORMATION OF CONTEAOT. Part 11. [*189] *(3) The restriction as to space must be reasonable in the judgment of the Court. Beyond this no defi- nite rule as to the extent of restriction permissible can be laid down. The cases since 1854 turning upan this point have been excellently summarised by Mr. Pollock." a § 2. Effect of Illegality upon Contracts in which it exists. Whafls the effect of Illegality. — "We now come to the second branch of the subject of Illegality in Contract, its effect upon the validity of a contract. The effect of ille-. gality upon the validity of contracts in which it appears must of necessity vary according to circumstances. It may affect the whole, or only a part of a contract, and the legal and illegal parts may or may not be capable of separation. The direct object of a contract may be the doing of an ille- gal act, or the direct object may be innocent though the contract is designed to further an illegal purpose. The parties may both be ignorant, or both be aware of the ille- gality which remotely or directly affects the transaction; or one may be innocent of the objects intended by the other. Securities may be given for money due upon or money advanced for an illegal purpose, and the validity of such securities depends upon various considerations. The most that can be done here to elucidate a very complex and lengthy branch of the law is to lay down some rules which will answer roughly, but it is hoped not inaccurately, the questions thus suggested. (i) When the contract is divisible. Legal parts of contract to be severed if possible from illegal. — Where the contract consists of several parts, so that there are several promises based on several considera- tions, the fact that one or more of these considerations is illegal will not avoid all the promises if those Avhich were made upon legal considerations are severable from the others. o. Pollock, 333, ed. i. Chap, V. § 2. LEGALITY OF OBJECT. 251 This is an old rule of law explicitly laid down in Coke's Eeport," *" That if some of the Covenants of [*190] an Indenture or of the conditions endorsed upon a bond or against law, -and some good and lawful; that in this case the covenants or conditions which are against law , are void ah initio, and the others stand good." ^ The rule applies whether the illegality exist by Statute or at Common Law, though at one time the judges held differently, and fearing lest statutes might be eluded, laid it down that " the statute is like a tyrant, where he comes he makes all void, but the common law is like a nursing father, makes only void that part where the fault is and preserves the rest." This distinction has however been held in several modern cases to be without foundation.^ The most frequent illustrations of the general proposition are to be found in cases where a corporation has entered into a contract some parts of which are ultra vires, and so, in a sense, unlawful. In such cases it has always been held that " where you cannot sever the illegal from the legal part of a covenant the contract is altogether void, but where you can sever them, whether the illegality be Created by a,. Pigot's Case, Co. Eep. U, 27. 1 Erie Railway Co. v. Union Locomotive & Express Co. 6 Vroom (N. J.), 246; Stewart v. Lehigh Valley R. R. Co. 38 N. J. L. 520; Ware v. Curry, 67 Ala. 282. The principle is perhaps more frequently applied to contracts containing stipulations in restraint of trade. In Peltz v. Eichele, 62 Mo. 171, it was held that a contract not to engage in a par- ticular trade for a specified time " in the city of St. Louis or at any other place " was divisible, and, as to the restriction imposed in St. Louis, was not void as in restraint Of trade. Dean v. Emerson, 102 Mass. 480 ; Thomas v. Miles, 3 Ohio St. 275. Contra, Moore v. Bennett, 40 Cal. 251. The distinction between malum prohibitum and malum in se is some- times appealed to in settling the divisibility of a contract. In Bierbauer V. Worth it is held that any stipulation to perform an immoral act would taint the entire contract and render it void in toto. 10 Bissell, C. C. 60. '^ State V. Findley, 10 Ohio, 51 ; Thayer v. Rock, 13 Wend. 53 ; Loomis v. Newhall. 15 Pick. 159. 253 FORMATION OF CONTEACT. Part II. statute or common law, you may reject the bad part and retain the good." " (ii) When the contract is indivisible. "Where there is one promise made upon several consider- ations, some of which are bad and some good, the promise is wholly void, for it is impossible to say whether the legal or illegal portion of the consideration most affected the mind of the promisor and induced his promise. An old case which may be quoted in its entirety will illustrate this proposition. [*191] *The grounds of action were stated to be,* " That whereas the plaintiff had taken the bod}'' of one H. >in execution at the suit of J. S. by virtue of a warrant di- rected to him as , special bailiff ; the defendant in consider- ation he would permit him to go at large, and of two shillings to the defendant paid, promised to pay the plaintiff all the money in which H. was condemned: and upon assumpsit it was found for the plaintiff : and it was moved in arrest of judgment, that the consideration is not good, being contrary to the statute of 23 H. 6, and that a promise and obligation was all one. And though it be joine"d with another consideration of two shilhngs, yet being void and against the statute in part it is void in all." ' a. Per WUles, J., in Pickering t. ntraoorabe Railway, L. E. 3 C. P. 250. These cases may serve as an illustration of the proposition before us, but it must be borne in mind that Lord Cairns, in The Ashbury Carriage Co. v. Biche, L. R. 7 H. L. 653, has pointed out that contracts of this nature are invalidated not so much by. the illegality of their object as by the incapacity of the corporation to bind Itself by agreement for purposes beyond its statutory powers. 6. Featherston v. Hutchinson, Cro. Eliz. 199. 1 Filson V. Himes, 5 Pa. St. 452 ; 47 Am. Dec. 432 ; Bredin's Appeal, 93 Pa. St. 347; Wisner v. Basdell, 38 Mich. 378; Clark v. Eicker, 14 N. H. 44; Sumner v. Summers, 54 Mo. 340; Eaguet v. Eoll, 7 Ohio, 76; St. Louis, Jacksonville, etc. E. R. Co. v. Mathers, 104 111. 357; Saratoga County Bank v. King, 44 N. Y. 87. The general principle is that if part of a consideration be merely void, the contract may be supported by the residue of the consideration, if good per se, but if any part of the con- Chap. V. § 3. LEGALITY OF OBJECT. ' 253 (iii) Where the direct object is unlawful lut the intention innocent. Direct object being illegal, the contract is Toid. — "Where the direct object of the parties is to do an illegal act the contract is void. It does not matter whether or no they knew that their object was illegal, " ignorance of law excus- eth none." ^ Unless illegal intent be absent and the contract can be legally performed.— But the knowledge of the parties may become important if the contract admits of being performed, and is in fact performed in a legal manner, though a detail in the performance as originally contemplated by the par- ties would, unknown to them, have directly resulted in a_ breach of the law. In WoMgh v. Morris " the defendant chartered the plaintiff's ship to take a cargo of hay from Trouville to London. The cargo was to be taken from the ship alongside, and was intended to be landed at a wharf in Deptford Creek. Unknown to the parties an Order in Council had forbidden the landing of French hay.* The defendant, on learning this, took the cargo from alongside the ship without landing it, and exported it. The vessel was delayed beyond the lay-days and the plaintiff sued for the delay. The defendant set up the illegal intention as avoiding the contract, but without success. " "We agree," said Blackburn, J., in delivering the judgment of the Court, "that where a contract is to do *a thing [*192] which cannot be performed without a violation of the law, it is void whether the parties knew the law or not. But we think that in order to avoid a contract which can be legally performed, on the ground that there was an in- tention to perform it in an illegal manner, it is necessary a. L. R. 8 Q. B. 203. 6. Under 33 & 33 Vict. u. 70, § 78. Contagious Diseases (Animals^ Act, 1869. sideration be illegal, it vitiates the whole. Cobb v. Oowdrey, 40 Verm. 28; Meguire-v. Cor wine, 101 U. S. 108; "Widoe v. Webb, 20 Ohio St. 431. iSee Greenhood, Pub. Pol., rule 453; Favor v. Philbriok, 7 N. H. 826. 254 FORMATION OF CONTRACT. Part II. to show that there was the wicked intention to break the law ; and if this be so, the knowledge of what the law is becomes of great importance." (iv) Where the direct object is innocent iut the intention un- lawful. Illegality of object ayoids an otherwise innocent con- tract. — Where the object of a contract is innocent in itself but is designed to further an illegal purpose, the contract is void if both parties knew of the illegal purpose at the time the contract was entered into. There is nothing illegal in a loan of money or' a supply of goods; but if these are known to be intended to further an illegal purpose, neither the money lent nor the goods supplied can form the subject of an action. Tbe whole transaction is void.^ The law upon this subject rests mainly 1 Cannan v. Bryce. — As was said by Bradley, J., in Hanauer v. Doane (infra), " When to draw the precise line between the cases in which the vendor's knowledge of the purchasei-'s intent to make an unlawful use of the goods will yitiate the contract, and those in which it will not, may be difficult. Perhaps it cannot be done by exact definitions. The whole doctrine of avoiding contracts for illegality and immorality is founded on public policy ; " and he might have added the words of Bur" rows, J., " Public policy is an unruly horse." (3 Bing. 339.) 1. Sales of goods. — The vendor of goods is entitled to payment though he may have known that the buyer intended to make an illegal use of them. As a rule, he will not be deprived of this right of payment unless (a) it be made a part of the contract of sale that the property shall be used for an unlawful purpose ; or (b) unless the vendor does something beyond making the sale in aid or furtherance of the unlawful design ; or (c) unless the illegal act contemplated is such that no man " having a knowledge o( the design can remain neutral without being in a just sense a criminal himself . "Where the design is to violate the funda- mental laws of society, a positive duty of intervention may arise." The weight of authority in America sustains these propositions, though there is much conflict in the decisions. Tracy v. Talmage, 14 N. Y. 163, 315 ; Hanauer v. Doane, 13 Wall. 343, 349 ; Michael v. Bacon, 49 Mo. 474 ; Curran v. Downs, 3 Mo. App. 471 ; Rose v. Mitchell, 6 Col. 103 ; Hill v. Spear, 50 N. H. 353 (criticising Metcalf on Contr. 360) ; Gaylord v. Sofa- gen, 33 Vt. 110; Webber v. Donnelly, 33 Mich. 469; McKinney v. An- Chap. V. g 2. LEGALITY OF OBJECT. 355 upon three cases which will furnish convenient illustrations of the rule. The first of these is Gannan v. Bryce"- (1819), in which the assignees of a bankrupt sued for the proceeds of goods which they asserted to be a part of the bankrupt's property. The goods had been assigned by the bankrupt to the defendant in part satisfaction of a bond which was to secure to the defendant the payment of money lent by him to the bankrupt to meet losses arising from ^stock-jobbing transactions which were illegal under 7 Geo. 11. c. 8. It was held that the lending of the money, the bond, and the a. 3 B. & Aid. 179. drews, 41 Tex. 363; Rickel v. Sheets, 24'Ind. 1 ; DeGroot v. "Van Deuzer, 17 Wend. 170. Many contracts made during the late war for supplies to be used by the Confederates in aid of the Rebellion came before the courts of the Southern States, and the decisions were conflicting. See Gillam V. Looney, 1 Heisk. (Tenn.) 319 ; Eoquemore v. AUoway, 33 Tex. 461. The question came before the supreme court of the United States in Hanauer V. Doane, 13 Wall. 342, and it was decided that no action could be main- tained on such contracts, on the ground that the vendor knew that the property was to be employed in the commission of a criminal act. 2. Loans of money. — While the American courts have quite generally disapproved of Pearoe v. Brooks, cited by the author (see cases cited above), they have followed Cannan v. Bryce and McKinnell v. Robinson, holding that one who loans money to another "/or th& eocpress purpose " of accomplishing an illegal object, cannot recover his loan. Not that any legal distinction can be drawn between a loan of money and a sale of goods as affecting this question, but money is frequently, if not in the majority of cases, loaned to assist another in some undertaking ; and if the undertaking be illegal, as for instance a gambling transaction, the lender, knowing of the borrower's intention and assisting by way of a loan, will be deprived of his right to recover the money loaned. Culler V. Welsh, 43 N. H. 498 ; White v. Buss, 3 Cush. 450 ; Ruckman v. Bryan, 3 Denio, 340; Peck v. Briggs, 3 Denio, 107; Mordecai v. Dawkins, 9 Rich. (S. C.) 262; 1 Danl. on Neg. Inst. 173; Williamson v. Bailey, 78 Mo. 636 ; Critcher v. Holloway, 64 N. C. 526 ; Viser v. Bertrand, 14 Ark. 367 ; Raymond v. Leavitt, 46 Mich. 447. In Howell V. Stewart, 54 Mo. 404, it was said that, " aside from felonies or crimes involving great moral turpitude, the mere knowledge of the lender or vendor, that the money loaned or the property sold is designed to be applied to an unlawful purpose, will not prevent a legal recovery, based on such loan or sale." Lewis v. Alexander, 51 Tex. 578 ; Lyon v. Respass, 1 litt. (Ky.) 133. 256 FORMATION OF CONTRACT. Part II. assignments under the bond (which were made after bank- ruptcy) were all alike void, and that the plaintiflFs could re- cover the proceeds of the goods. There was no doubt that the defendant knew the illegal object to which his money was to be applied ; and Abbott, C. J"., in giving judgment, said, " Then as the statute has absolutely prohibited the payment of money for compounding differences, it [*193] is impossible to say *that the making such payment is not an unlawful act : if it be unlawful in one man to pay, how can it be lawful for another to furnish him with the means of payment ? It will be recollected that 1 am speaking of a case wherein the means were furnished with a full hnowledge of the object to which they were to he applied, and for the express purpose of accomplishing that object" The second case \s McKinnell v. Robinson'^ (1838). Here an action was brought to recover a sum of money lent, as the plaintiff knew, for the purpose of playing at " Hazard," a game which, apart from 9 Anne, c. 14, is prohibited by 12 Geo. II. c. 28. It was held that the plaintiff could not recover, on the principle " that the repayment of money lent for the express purpose of accomplishing an illegal object cannot be enforced." The third case is Pearce v. Brooks'" (1866). The action was brought by coach-builders to recover payment for the hire of a brougham engaged by a prostitute. Evidence was given that the plaintiffs knew the character of the defend- ant, and from this, and from the nature of the article sup- plied, the jury found-that the plaintiffs knew that it was supplied for the furtherance of an immoral purpose. Upon this it was held that the plaintiffs could not recover. " My difficulty was," said Bramwell, B., " whether though the defendant hired the brougham for that purpose, it could be said that the plaintiffs let it for the same purpose. In one sense it was not for the same purpose. If a man were to ask for dueling pistols, and to say " I think I shall fight a a. 3 M. & W. 435. b. L. E. 1 Exoh. 213. Chap. V. § 2. LEGALITY OF OBJECT. 257 duel to-morrow," might not the seller answer, " I do not want to know your purpose; I have nothing to do with it; that is your business ; mine is to sell the pistols, and I look only to the profit of trade." No doubt the act would be immoral, but I have felt a doubt M'hether it would be ille- gal; and X should feel it still but that the authority of Cannan v. Bryce and MoKinnell v. Robinson concludes the matter." These words exactly indicate the distinc- tion between *this class of contracts and those de- [*194] scribed in (iii). It is not necessary that the parties to a contract prima facie innocent should bind themselves to adapt it to an illegal purpose in order to avoid it. It is enough that the one party knows the unlawful intent of the other, and knows that the contract is intended to be applied to carry it out. Distinction where illegal act is passed. — But a loan of money designed to satisfy debts arising from a past illegal transaction is distinguishable from the cases just cited. In Ccmnan v. Bryce " the statute had forbidden, not only stock- jobbing transactions of a certain sort, but advances of , money to pay debts arising from them: in the other two cases the illegality was still in contemplation when the con- tract was made. Thus in Pylce^s case * a loan of money intended to pay lost bets was held to be recoverable from the estate of the bankrupt borrower. " The mischief had been completed," said Jessel, M. B., "the illegal act had been carried out, before the money was lent. The money was advanced to enable the borrower to pay the debts which he had already made and lost, which seems to me an entirely different thing from a loan of money to enable a man to make a bet." And in a group of oases, of which the most recent is Bridger v. Savage," it has been held that one who is eni- ployed to make bets for another is liable, if the bets are a. 3 B. £ Aid. 179; 7 Geo. IL 0. 8. 6. 8 Ch. D. 756. C. 15 Q. B. D. (C. A.) 363. 17 258 FORMATION OF CONTRACT. Part H. paid, to pay over the mone}'^ to/his employer. This is an extension of the principle laid down in Pylce^s ease, because the consideration for the promise to pay money thus re- ceived was a commission of £6 per cent, on the winnings, and so the liability rested on a contract to make agree- ments which the legislature had rendered void " with a view to their discouragement. But it must be admitted that the decisions of recent years on cases arising out of wagering or speculative transactions leave the law on this subject in a somewhat unsatisfactory condition. [*195] *(v) Where the \inlawful intention is on one side only. Innocent party may avoid contract.— Where one of two parties intends a contract, innocent in itself, to fur- ther an illegal purpose, and the other enters into the con- tract in ignorance of his intention, the innocent party may, while the contract is still executory, avoid it at his option. In Cowan v. Milhourn,'' the plaintiff sued the defendant for breach of an agreement to let him a set of rooms. It ap- peared that the plaintiff intended to use the rooms for the^ purpose of delivering lectures which were unlawful, as be- ing blasphemous within the meaning of 9 & 10 Will. III. c. 32. The defendant was not aware of the. use to which the plaintiff meant to put the rooms at the time the agreement was made; and he subsequently refused to allow the plaint- iff to use them, though he did not at first allege the charac- ter of the lectures as the ground of his refusal. It was held that he was entitled to void the contract, and was not bound to give his reasons.^ a. 8 & 9 Vict. c. 109, § 18. b. L. R. 2 Exch. 230; and see Clay v. Yates, 1 H. & N. 78. 1 Where the intention of one of the parties to a contract is lawful and the contract is capable of being executed in a lawful manner, he is en- titled to full benefits under the contract, whatever may have been the secret intention of the other party. Pixley v. Boynton, 79 111. 351 ; Quirk Y. Thomas, 6 Mich. 76, p. 179, n. 1. In O'Brien v. Brietenbach, 1 Hilt. (N. Y.) 304, a case quite like Cowan v. Milbourn, cited in the text, it was Chap. V. § 3. LEGALITY OF OBJECT. 259 (vi) Securities for money due on illegal transactions. "Where a promise has been given to secure the payment of money due or about to become due upon an illegal trans- action, the validity of such a promise is based upon two considerations : — a. Whether the transaction is illegal or void. /?. Whether or no the promise is made under seal. Where the promise is given in the form of a negotiable instrument, a further question arises as to its value in the hands of third parties, and this is affected by the answer to the first of the considerations above stated. Distinction between "illegal" and "void."— There is a difference, not very easy to analyse but of considerable practical importance, between cases in which Common Law or Statute make an object illegal, and cases in which they make a transaction void. The distinction has been thus stated: "A thing may be unlawful in the sense *that the law will not aid it, and yet that the law [*196] will not immediately punish it ; " " but this dictum does not exactly describe the difference between the oases, inasmuch as it does not cover all the cases in which the dif- ference exists. A bet upon a cricket-match, for example, is not punishable, but it is more than merely void, as has already been explained. The "taint of illegality."— The effect of the difference is this, that in the one case the promise is regarded as given upon an illegal consideration, in the other upon no consid- eration at all ; in the one case everything connected with the transaction is " tainted with illegality," * in the other, a. Per Bramwell, B., in Cowan v. Milbourn, L. E. 2 Exch. 230. 6. Per Curiam in Fisher v. Bridges, 3 E. & B. 642. \ held that the lessor was bound by his lease, and that in esse the lessee kept a bawdy-house, the lessor's remedy was under the statute against disorderly persons. The New York case is quoted approvingly in Tay- lor's Landlord and Tenant, sec. 531. 360 FORMATION OF CONTRACT. Part II. collateral contracts arising out of the avoided transaction are under certain circumstances supported. Effect of contract being illegal. — In cases where the transaction is illegal, a promise under seal given to secure the paymont of money due upon it is void. This was de- cided in the case of Fisher v. Bridges " by the Court of Ex- chequer Chamber, reversing the judgment of the Court of Queen's Bench. The plaintiff sued the defendant upon a covenant to pay a sum of money. The defense was that the c6venant was security for the payment of a sum of money due upon a purchase of land agreed to be sold for a purpose declared to be illegal by Statute.* The Court of Queen's Bench held that the defendant was bound, inas- much as there was nothing unlawful in a simple promise to pay money. The Court of -Exchequer Chamber held that the illegality when pi-oved tainted the subsequent promise, and that this was not a simple promise to pay money, but that it " sprang from and was the creature of an illegal transaction." ' If a promise under seal would be void under these circum- stances, it is obvious that a parol contract, even if based in part upon some new consideration, would be void also. Negotiable instruments, how affected by contract being illegal. — In the case of negotiable instruments we have to consider /lot only the effect of the illegality as between the original parties to the contract, but its effect upon subsequent holders of the instrument. In these cases, as a. E. & B. 642. b. 12 Geo. n. c. S8. 1 No writing, seal or other solemnities in the formation of the con- tract will preclude the court from receiving oral evidence to show that the transaction was illegal and therefore void. The defense of illegality is allowed, not as a favor to or in the interest of either of the contract- ing pajrties, but in the interest of the public. Lyon v. Waldo, 36 Mich. 353 ; Parks v. McKamy, 3 Head (Tenn.), 397 ; Wooden v. Shotwell, SB N. J. L. 465 ; Buffendeau v. Brooks, 28 Cal. 641 j Seidenbender t. Charles, 4 S. & R. (Pa.) 151. Chap. V. § 3. LEGALITY OF OBJECT. 261 we have already *noticed, the ordinary presumption [*197] Iq favour of the holder of such an instrument does not exist. Upon proof of the illegality which tainted the in- strument in its inception, the holder is liable to have to show that he is a holder for value ; that is to say, that he gave consideration for the bill : and even then, if he can be proved to have been aware of the illegality, he will be disentitled to recover. Effect of contract being void. — Where the consideration is not illegal but the transaction is void, a promise given to pay money due upon such a transaction is based upon no consideration at all. If made under seal it is binding, if by parol it is void. (a) On promise nnder seal. — Thus if a contract be en- tered into which is invalid for want of some necessary form, a covenant to pay money due upon a contract of this nature is binding. Where a corporation borrowed money upon mortgage without having first obtained the approba- tion of the Lords of the Treasury, they did what the Mu- nicipal Corporations Act " declared to be " unlawful ;" but having received the mortgage money and covenanted under seal to repay it, they were held bound by their covenant. " Although the mortgage may be invalid, that is no reason why the corporation should not be liable upon their cove- nant to repay the mortgage money." * (5) On parol contracts. — So too in the case of promises of payment made in consideration of past illicit cohabita- tion, such promises are invalid if made by parol," not on the ground that the consideration is illegal, but because there is in fact no consideration at all. But a bond given upon such past consideration would be binding.** (o) On negotiable instruments. — iSTegotiable instruments given upon such consideration are, as between the original o. 5 & 6 Wm. IV. c. 76. 6. Payne v. Mayor of Brecon, 3 H. & N. 579. c. Beaumont v. Reeve, 8 Q. B. 483. d. Ayerst v. Jenkins, 16 Eq. 275. I 263 FORMATION OF CONTRACT. Part II. parties to them, void, for the reason just stated, that they are simple contracts in which the promise is made in con- sideration of a transaction which raises no legal obligation, and therefore cannot support it. Bijt where the negotiable instrument has passed into the hands of a subse- [*198] quent holder, such a holder is not affected *by the fact that as between the original parties the promise is voluntary. In Mtch v. Jones," a promissory note was given by the defendant to X in payment of a bet made on the amount of hop duty in the year 1854. X indorsed the note to the plaintiff. The main question for the Court was, " whether the plaintiff was bound on pi-oof of the origin of the note to show that he had given consideration for the note, or whether it was for the defendant to show that he had given none." ^ " I am of opinion," said Lord Campbell, " that the note did not take its inception in illegality within the meaning of the rule. The note was given to secure payment of a wagering contract, which, even before Stat. 8 & 9 Yict. c. 109, the law would not enforce: * but it was not illegal: there is no penalty attached to such a wager ; it is not in violation of any statute, nor of the Common Law, but is simply void, so that the consideration was not an illegal consideration, but equivalent in law to no consideration at all." (vii) Can a man he relieved from a contract- which he Jcnew to he unlawful? Illegality known at the time, no ground for avoidance.— It remains to consider whether a party to an illegal con- tract can under an}'' circumstances make it a cause of action. We may lay down without hesitation the rule that a party o. E. & B. 215. ^ h. It had been held in a previous case, Atherf old v. Beard, 3 T. E. 610, that a wager on the amount of hop duty was against public policy, because the evidence at the trial would expose to the world the amount of public revenue. 1 See p. 178, note. Chap. V. § 3. LEGALITY OF OBJECT. 863 to such a contract cannot come into a Court of Law and ask to have his illegal objects carried out ; nor can he set up a case in which he must necessarily disclose an illegal purpose as the groundwork of his claim." The general rule is well expressed in the maxim, " in pari delicto potior est conditio defendentis." But there are some exceptional cases in which k man may be relieved of an illegal contract into which he has entered ; cases to whichiihe maxim just quoted does not apply. These *would appear to group themselves in two [*199] classes : (1) cases in which the plaintiff has been in- duced to enter into the contract under the influence of fraud or strong pressure ; (2) cases in which, the contract being unperformed, money paid or goods delivered in fur- therance of it have been held recoverable. Unless plaintiff be not in pari delicto, or a locns poen- itentiae remains. — The first class of cases are best illus- trated by the decisions in Reynell v. Sprye * and Atkinson V. Denhy.'^ In the first case the plaintiff had been induced, by the fraud of the defendant, to make a conveyance of property in pursuance of an agreement which was illegal on the ground of champerty. He sought to get the con- veyance set aside in Chancery. It was urged that the par- ties were in pari delicto, and that therefore his suit must fail; but the Court being satisfied that he had been induced to enter into the agreement by the fraud of the defendant, considered that he was entitled to relief. " Where the par- ties to a contract against public policy, or illegal, are not inpari delicto (and they are not always so), and where pub- lic policy is considered as advanced by allowing either, or at least the more excusable of the two, to sue for relief against the transaction,"* relief is given him." ' a. Begble v. Phosphate Sewage Co. L. E. 10 Q. B. 499. b. 1 D. M. & G. 660. c. 6 H. & N. 778. d. 1 D. M. & G. 669. 1 " The oppresser and oppressed are neverupon a footing of equality." The parties are not in pari delicto, when an officer receives securities S64 FORMATION OF CONTEACT. Part U The case of Atlcinson v. Denhj'^ is a peculiar one, and ap pears almost to indicate an approach on the part of the Common Law Courts to the equitable doctrine of Undue Iniiuence. The plaintiff, a debtor, offered his creditors a composition of 6s. in the pound. The defendant was one of the creditors, and his acceptance or rejection of the offer was known to be certain to determine the decision of sev- eral other creditors. He refused to assent to the composi- tion unless the plaintiff would make him an additional payment of £50, in fraud of the other creditors. This was done: the composition arrangement was carried out, and the plaintiff sued to recover the £50, on the ground that it was a payment made by him under oppression and in fraud of his creditors. It was held that he could recover; and the Court of Exchequer Chamber, in affirming the [*200] judgment of the Court of Exchequer, said, *" it is said that both parties are in pa/ri delicto. It is true that both are in delicto, because the act is a fraud upon the other creditors; but it is not par delictum, because the one has power to dictate, the other no alternati/oe hut to submit^ The second exception to the general rule may be stated in the words of Mellish, L. J., in Taylor v. Bowers,'' al- though the principle there laid down may need to be some- what explained and qualified. While the illegal purpose is executory there is a locus poenitentiae. — '• If money is paid or goods delivered for an illegal purpose, the person who had so paid the money a. 6 H. & N. 778; 7 H. & N. 934. 6. 1 Q. B. D. (C. A.) 300. or money colore officii, but in violation of law. Richardson v. Crandall, 48 N. Y. 363. Where " one holds the rod and the other bows to it," the parties cannot be in pari delicto. Tracy v. Talmage, 14 N. Y. 199; Brooks V. Martin, 3 Wall. 81; McBlair v. Gibbs, 17 How. 237. Where a party has been induced to enter into an illegal contract through fraud, oppression, or under influence, he may have relief both in equity and at law. 1 Pomeroy's Eq. sec. 403 ; Curtis v. Leavitt, 15 N. Y. 9 ; Knowlton v. Congress, etc. 57 N. Y. 583; White v. Franklin Bank, 23 Pick. 189. C!hap. V. § 3. , LEGALITY OF OBJECT. 265 or delivered the goods may recover them back before the illegal purpose is carried out: but if he waits till the illegal purpose is carried out, or if he seeks to enforce the illegal transaction, in neither case can he maintain an action." It would seem necessary in the first instance to note a distinction for which there is no direct authority, though it appears to be a sound one, between money paid in consid- eration of an illegal promise and money paid to effect an illegal object. If A gives X £1,000 in consideration of X undertaking to blow up Westminster Abbey or to write and publish a series of defamatory notices of M, it is assumed that A could not recover that money though at the end of six months Westminster Abbey was unharmed or the notices unwritten, and though X had the money at his bankers. But if A were to place £1,000 to the account of JT with a banker in order that iT might buy dynamite to blow up Westminster Abbey, or purchase a share in the manage- ment of a newspaper with a view to the defamation of M/ and if A changed his mind before the execution of the contract it is presumed that he might recover so much of the £1,000 as had not been spent on the illegal objects con- templated. To allow an action to be brought in the first of these cases would tend " to enforce the illegal transaction," in the second case it would tend to prevent the illegal object from being carried out. Cases where illegal purpose is effected by deposit. — But passing from a rule which it is only possible to illustrate *hypothetically, there is a class of cases in which [*201] money or goods may be wholly or partially intact in the hands of one party to the contract with whom they have been deposited in order to effect an illegal object, and the question has arisen whether the illegal object may not be effected by the mere deposit of the money or goods, and before they have been spent on the object contemplated. In JSerman v. Jeuc/mer," A agreed with Xto go bail for O. IB Q. B. D. 561. aes FORMATION OF CONTEACT. Part II, him for a specified time if X would deposit the amount of the bail in J.'s hands as an indemnity against his possible default, A undertaking to return the money at the expira- tion of the specified time. Before the time had expired X sued A for the money on the ground thatthe agreement was illegal and that he was entitled to rescind it. In a pre- cisely similar case " Stephen, J., had held that since the money was still in the hands of A, and the recognizances had not been forfeited, the locus poenitentiae existed and the money was recoverable. But the Court of Appeal overruled this decision, holding that the illegal purpose was effected when the public lost " the protection which the law affords for securing the good behaviour of the plaintiff." For, as was said by Brett, M. E., " when a man is ordered to find bail, and a surety becomes responsible for him, the surety is bound at his peril to see that his principal obeys the order of the Court: but if money to the amount for which the surety is bound is deposited with him as an in- demnity against any loss which he may sustain by reason of his principal's conduct the surety has no interest in tak- ing care that the condition of the recognizance is per- formed." * A somewhat similar case is that In re Oreat Berlin Steam- hoat Company." X placed £1,000 to the account of a com- pany to give it a fictitious credit in case of inquiries, the money to be returned to X at a specified date. Some of the money was drawn out with his authorit}', but after the date specified, and when the company had gone into liqui- dation, X demanded payment of the balance, on the ground that he had a right to revoke a fraudulent arrange- [*202] ment before it had been carried *out. But the Court held that " the object for which the advance was made was attained ; as the company continued to have a fictitious credit till the commencement of the winding up ; a. Wilson v. Strugnell, 7 Q. B. D. 548. 6. 15 Q. B. D. at p. 563. C 26 Oh. D. 616. Chap. V. § 3. LEGALITY OF OBJECT. 267 and that it was too late for the Appellant to repudiate the bargain and claim the money." Wliere illegal purpose is not eflFected till expenditure.— The two cases above cited must be distinguished in princi- ple from two which I propose to cite, on the ground that in the latter the illegal purpose had not been effected, and the parties could be restored to their original positions. The case of Taylor v. Bowers " arose upon a fictitious as- signment of goods to a third party with a view to defraud creditors. The defendant with knowledge of the circum- stances took a bill of sale of the goods from the assignee and afterwards, although the plaintiff demanded them back, caused them to be put up at auction and sold. Noth- ing had been done in respect of the fraud contemplated against the creditors, and the plaintiff was held entitled to recover. It was laid down by the Court of Appeal that until an illegal purpose is carried out there is a lociis poeni- tentiae for one who has contributed goods or money for such a purpose.' The case of Hampden v. Walsh * illustrates the same rule. The plaintiff and another person each deposited £500 with the defendant to abide the decision of two scientific men as to the shape of the earth; the decision went against the plaintiff, but before the money was paid over he claimed it back, and he was held entitled to recover it. He had re- pudiated the wager before the money had left the hands of a. 1 Q. B. D. (0. A.) 300. 6. 1 Q. B. D. 189. 1 Taylor T. Bowers. — The principle laid down in Taylor v. Bowers has been repeatedly applied in this country. Mount v, Waite, 7 J^hns. 434 ; Skinner v. Henderson, 10 Mo. S05 ; Adams Express Co. v. Eeno, 48 Mo. 268 ; Gowan v. Gowan, 30 Mo. 473 ; Wheeler v. Spencer, 15 Conn. 38 ; Shannon v. Banner, 10 Iowa, 210 ; House v. Kennedy, 46 Me. 94 ; Knowlton v. Congress, etc. 57 N. Y. 518; S. C. 103 U. S. 49; Bank .v. Wallace, 61 N. H. 24. The more common illustration is where money is deposited with a stakeholder on a bet or game of chance. The de- positor may recover the money of the stakeholder if he demands it at auy time before it is paid over to the winner. Id. 268 FORMATION OF CONTRACT. Part H. the stakeholder, and the Court held, on the authority of several cases, that the 8 & 9 Vict. c. 109, § 18, did not de- prive a party to the contract, thereby rendered void, from repudiating the contract and recovering the money ad- vanced before it had been paid." Exceptional cases. — There are two recent cases which create a curious exception to the right to revoke a void or illegal contract before its objects have been effected. The purport of these decisions would seem to be that if , [*203] A employs Xto make a void or even *an illegal contract, and X having made it would be subject to loss if he did not fulfill its terms, A is bound to enable X to fulfill those terms or to indemnify him for having ful- filled them. In Head v. Anderson * a betting commissioner was em- ployed to make bets the non-payment of which would have caused him to be turned out of Tattersalls. It was held that the employer could not revoke the emploj^ment after the bets were lost and before they were paid, but was bound to indemnify the person employed against payments made under this compulsion.' In Seymour v. Bridge " an investor employed a broker to purchase shares for him according to the rules and practice of the Stock Exchange, and it is a rule of the Stock Ex- change to enforce among its members, under penalty of expulsion, the fulfillment of contracts made in violation of Leeman's Act."* This act avoids contracts for the sale of bank shares made without specifying their number, and a. Vame7 v. Hickman, 5 C. B. 371 ; Martin v. Hewson, 10 Ex. 737. 6. 13 Q. B. D. (0. A.) 779. c. 14 Q. B. D. &. 30 & 31 Vict. 0. 29. 1 The conclusions, at least, which the author draws from Read v. An- derson and Seymour v. Bridge, are not law in this country. Ah agent' or broker cannot recover for his services, losses and disbursements in making and performing the illegal contract of his principal. Irwin v. Williar, 110 U. S. 409 ; Kirkpatrick v. Adams, 20 Fed. R. 287 ; Fareira V. Gabel, 89 Pa. St. 89; Gregory v. Wendell, 39 Mich. 397; Greenhood, Pub. Pol. rule 119. Chap. V. § 3. LEGALITY OF OBJECT, 269 makes it a misdemeanour on the part of the broker to effect such a contract. Nevertheless Matthew, J., having found that the defendant was aware of the custom, held him liable to indemnify the broker for payments made in fulfill- ment of the contract. The result of these decisions is a strange one. For A may employ X to make an invalid contract by way of wager or sale, and if X would be subject to loss by not fulfilling the contract so made, as in the case of a betting commissioner at Tattersalls or a broker on the Stock Ex- change, ^can fulfill the contract and enforce payment from A. Thus a contract can be enforced if made by Xwith iV^on behalf of A which if made by A with iV" would be unenforceable. The learned judges who decided Read v. Anderson and Seymour v. Bridge have in fact laid it down that the employment of a man who finds it profitable to belong to a society which enforces invalid or illegal con- tracts will make such contracts enforceable, since the em- ployer cannot revoke and must indemnify. *Oir THE MEAH-IKG OF THE TEEMS "vOID," " VOmAELE," [*204] AKD " UNENFORCEABLE." "We may now, after considering the elements necessary to a valid contract, ask ourselves what we mean by the terms which denote the effect of the absence of one of these elements.* iToid and voidable. — In Beecher v. Marq. & Pao. E. M. Co. 45 Mich. 108, Cooley, J., said: "If it is apparent that an act is prohibited and declared void on grounds of general policy, we must suppose the legislative intent to be that it shall be void to all intents ; while if the manifest intent is to give protection to determinate individuals who are swi juris, the purpose is sufficiently accomplished if they are given, the liberty of avoiding it." The term void is frequently used in the statutes in the sense of voidable. Fuller v. Hasbrouck, 46 Mich. 83. Upon this subject see Terrill v. Anchauer, 14 Ohio St. 80 ; State v. Richmond, 26 N. H. -333 ; Kearney v. Vaughn, 50 Mo. 384 ; Van Shaack v. Bobbins, 36 Iowa, 201; Inskeep v. Lecony, 1 N. J. L. Ill; Bromley v. Goodrich, 40 Wis. 131; Brown v. Brown, 50 N. H. 538; Allis v. Billings, 6 Met. (Mass.) 415. 270 FORMATION OF CONTRACT. Part H. By " void " we mean, destitute of legal effect. By " voidable " we mean, capable of being affirmed or rejected at the option of one of the parties. By " unenforceable " we mean, valid, but Incapable of proof pending the fulfillment of certain conditions. But it seems at first sight as if the word void was capable of bearing two meanings, one of which might apply to a contract not wholly destitute of legal effect. Nullity may be patent or latent.— We say that a con- tract is void on the ground of mistake, or by the operation of the Infant's Relief Act; yet if mistake or infancy be not pleaded to an action on the contract the parties would be held to be bound. Is then such a contract void? In fact it is just as void as one in which the acceptance differs in terms from the offer, or one which has for its object something manifestly illegal. For some causes of nullity in contract are obvious, some are latent. A plaintiff who claims under an alleged promise v/hich he did not accept in the terms in which it was offered, or which is gratuitous yet not under seal, or which bears an illegal object on the face of it, cannot even put the defendant on his defence : but if he claim under a promise made by an infant to buy goods, or made under such mistake as invali- dates contract, there is nothing on the surface of the trans- action to show its nullity. Tet it is void if theT defendant choose to prove it so, and, if he do not, his neglect to use the forms of procedure does not alter the character of the transaction. But if the defendant in these cases may at his option avoid the contract or let it stand, there would seem [*205] to be a ^certain unreality in the distinction between void and voidable contracts. This is not so. When the nullity of the contract becomes apparent the whole transaction falls to the ground. It is incapable of affirmation, nor can third parties bona fide acquire rights for value under it : whereas in voidable con- tracts the party who has the option is not confined in the Chap. V. § 2. LEGALITY OF OBJECT. 271 exercise of his option to the use or neglect of forms of pleading. There is a contract though it is marked by a flaw, and he may say that he will affirm it in spite of the flaw. On the other hand he may lose his right to avoid it, either by his own conduct in taking benefit under it, or by the fact that innocent third parties have acquired rights under it. This could not occur if the contract was void. An illustration will show the essential difference between what is void and what is voidable : — (ffl) Contracts void. — A sells goods to X, being led to think that ^is Y; X sells the goods to M. The contract is void on the ground of mistake, and Jf acquires no right to the goods." (/9) Voidable. — A sells goods to X, being led by the fraud of X to think that the market is falling. !X resells the goods to M, an innocent purchaser for value. If acquires a good title to the goods, and A is left to his remedy against X by the action of deceit.* In the first of these cases the complete nullity of the con- tract prevents any rights arising under it if the mistaken party choose to avoid it. In the second there is a contract, and one capable of creating rights, and the person defrauded has but a limited right to set it aside. TJnenforceaMe. — A contract which is unenforceable can- not be set aside at the option of one of the parties to it: the obstacles to its enforcement do not touch the existence of the contract, but only set difficulties in the way of action being brought or proof given. Such is a contract which fails to comply with the provisions *of the Statute of Frauds, and so cannot [*206] be proved; or a contract in writing which in default of the necessary stamp can only be given in evidence on a. Cundy v. Lindsay, 3App. Ca. 465. b. Badcock T. Lawson, 4 Q. B. D. 394. 273 FORMATION OP CONTRACT. Part II. payment of a penalty; or a pontract which has fallen under the Statute of Limitations, and can only be revived by an acknowledgment in writing. The defect in such contracts is not irremediable, though except in the case of want of a stamp, it can only be remedied with the concurrence of the party to be made liable. PART III. THE OPERATION OF CONTRACT. "Wb come now to deal with the efifects of a valid contract when formed. And we have to ask, To whom does the ob- ligation extend? "Who have rights and liabilities under a contract? And then this further question arises, Can these rights and liabilities be assigned or pass to others than the original parties to the contract? In the first instance we may lay down two general rules. (1) No one but the parties to a contract can be bound by it or entitled under it. (2) Under certain circumstances the rights and liabilities created by a contract may pass to a person or persons other than the original parties to it, either (a) by act of the parties, or (;8) by rules of law operating in certain events. These two rules seem at first to look like one rule subject to certain exceptions, but they are in fact distinct. The obligation binds only the parties to the agreement; but these parties, having created the obligation which binds them to one another, may in certain ways and under certain circumstances be replaced by others who assume their rights or liabilities under the contract. The rules may perhaps be made clearer by an illustration. (1) If John Doe contracts with Eichard Eoe, their con- tract cannot impose liabilities or confer rights upon John Styles. (2) But there are circumstances under which John Doe or Richard Roe may substitute John Styles for himself as a party to the contract, and there are circumstances under which the law would operate to effect this substitution. 18 CHAPTEE I. The Limits of the Contractual Obligation. Contract cannot confer rights. — "We may safely lay down the general rule that a person, who is not a party to a con- tract, cannot be included in the rights and liabilities which the contract creates so as to enable him to sue or be sued upon it. This is not only established by decided cases, but seems to flow from the very conception which we form of contract. A contract is an agreement between two or more persons, by which an obligation is created, and those per- sons are bound together thereby. If the obligation takes the form of a promise hj A to X^ to confer a benefit upon M, the legal relations of M are nevertheless unaffected by that obligation. Se was not a party to the agreement. Sis was not bound by the vinculum juris which it created, and the breach of that legal bond cannot affect the rights of a party who was never included in it. Or liabilities on a third party. — Nor, again, can liability be imposed on such a third party. One characteristic of the contractual as opposed to other forms of obligation con- sists in this, that the restraint which it imposes on individual freedom is voluntarily created by those who are subject to it, is, in fact, the creature of agreement. Trustee and cestui que trust. — The relation of principal and agent which forms an exception to the rule just laid down must form the topic of a separate chapter. A trust, again, has this in common with contract, that it originates in agreement, and that among its other objects it aims at creating obligations. If we could place a trust upon the precise footing of contract we might say that it [*209] formed *a very real and substantial exception to the general rule which we have laid down. There can Chap. I. § 1. LIMITS OF CONTRACTUAl, OBLIGATION. 275 be no doubt that the creator of a trust and the trustee do, by agreement, bring rights into existence which a third party, the cestui que trust, may enforce. But it is better at once to set aside trusts from the discussion, and for this reason. Contract differs from other forms of agreement in having for its sole and direct object the creation of an obligation. The contractual obligation differs from other forms of obligation mainly in taking its origin in the vol- untary act of the parties obliged. A trust and the obliga- tions resulting from a trust correspond to neither of these characteristics. The agreement which creates a trust has many other objects besides the creation of obligations, these . objects may include conveyance, and the subsequent devo- lution of property. The obligation which exists between trustee and cestui gue trust does not come into existence by the act of the parties to it. It is better therefore, having noted the similarities between the contractual and the fidu- ciary obligation, to dismiss the latter altogether from our inquiries. "We may now proceed to illustrate the general proposition laid down at the commencement of this chapter: and it will appear from what has gone before that the proposition is susceptible of a twofold division. A man cannot incur liabilities, and again, a man cannot acquire rights, from a contract to which he was not a party. § 1. ^ man cannot incur liabilities froTn a contract to which he was not a party. Contract cannot impose liability upon a third party. — This proposition is a part of a wider rule to the effect that liability ex contractu or quasi ex contractu cannot be im- posed upon a man otherwise than by his act or consent. A cannot by paying X's debts unasked, make X his debtor ; " a man cannot, of his own will, pay another man's debt without his consent and thereby convert himself into a creditor." " a. Durnford v. ilessiter, 5 M. & S. 448. 276 OPERATION OF CONTRACT. Part lU. And in like manner A and Jf cannot, bj' any con- [*210] tract into * which they may enter, thereby impose liabilities upon X. An illustration of this rule is afforded in the case of Schmaling v. Thomlinson."' The de- fendants in that case employed X, a firm of brokers, to transport a quantity of cocoa from London to Amsterdam. X agreed with the plaintiff to put the whole conduct of the transport into his hands, he did the work and sued the defendants for his expenses and commission. It was held that the defendants were not liable, inasmuch as there was no privity between them and the plaintiff; that is to say, that there was nothing either by writing, words, or con- duct to connect them with the plaintiff in the transaction. JTwas employed by the defendants to do the whole work for them, and there was held to be "no pretence that the defendants ever authorized them to employ any other to do the whole under them: the defendants looked to Xonly for the performance of the work, and X had a right to look to the defendants for payment, and no one else had that right." But does a contract impose a duty on third parties ?— A contract then cannot impose the burdens of an obligation upon one who was not a party to it ; nevertheless a con- tract does impose a duty, upon persons extraneous to the obligation, not to interfere with its due performance. We use the term duty as signifying that necessity which rests upon all alike to respect the rights which the law sanctions, reserving the term obligation for the special tie which binds together definite and assignable members of the commu- nity. In Lumley v. Gye^ the plaintiff, being the manager of an opera house, engaged a singer to perform in his theatre. The defendant induced her to break her contract. The plaintiff sued the defendant for procuring this breach, and the questions raised took the following form. It was ar- a. 6 Taunt. 147. b. 2E. &B. 318. Chap. I. § 1. LIMITS OF CONTRACTUAL OBLIGATION. 277 gued that an action would lie against one who procured the breach of any kind of contract; but that if that were not so an action would lie, at any rate, for inducing a serv- ant to quit the service of his master.^ Peculiar relations of master and servant.— It may be taken that the relations of master and servant have always been held to involve a right on the part of the *master to bring an action against any one who en- [*211] ticed away his servant, and so the Court was called upon to answer two questions : Does an action lie for procur- ing a breach of any contract ? if not, then does the excep- 1 Luniley t. 6ye has been followed in Walker v. Ci-onin, 107 Mass. 555, cited approvingly in Dudley v. Briggs, 141 Mass. 584 ; Haskins v. Roy- ster, 70 N. C. 601 ; Jones v. Stanley, 76 N. C. 355. In Walker v. Cronin, it was said that the principle of Lumley v. Q-ye applied to " all contracts of employment, if not to contracts of every description." In Jones v. Stanley, Rodman, J., speaking of the same subject said: "The same reasons cover every case where one person maliciously persuades an- other to break any contract with a third person. It is not confined to contracts of service." The cases of Rice v. Manley, 66 N. Y. 82; Benton V. Pratt, 2 Wend. 385 ; Jones v. Blocker, 43 Ga. 321, and Burger v. Carpenter, 2 S. C. 7, have been cited as supporting the same doctrine. Not so, however, for fraud was the gist of the action in the New York cases, and the technical relation of master and servant existed in the others. There is no controversy over the proposition that an action will lie for wrongfully enticing away another's servant or apprentice. Woodward v. Washburn, 3 Denio, 369; Bixby v. Dunlap, 56 N. H. 456; Noice V. Bi-own, 39 N. J. L. 569; Ames v. Union Railway Co. 117 Mass. 541. The doctrine of Lumley v. Gye, or more properly of Bowen v. Hall, is at least startling, and cannot be said to have been generally ac- cepted in this country to the extent of applying it to contracts other than those tor personal services. In Hey wood v. Tillson, 75 Me. (1883^ Peters, J., in speaking of Lumley v. Gye, said: "A man may advise another to break a contract, if it be not a contract for personal services. He may use any lawful influences or means to make his advice prevail. In such a case the law deems it not wise or practicable to inquire into the motive that instigates the advice. His conduct may be morally and not legally wrong." See Pollock's Torts, 456 ; Cooley's Torts, 279 ; 20 Am. Law Reg. N. S. 578, n. ; Bigelow's Cas. Torts, 306; 35 Albany Law J. p. 224, " Boycotting," where the authorities on the liability of persons combining to induce parties to break their contracts are collected and considered. 278 OPERATION OF CONTRACT. Part lU. tional rule applicable to the contract of master and servant apply to the manager of a theatre and the actors whom he engages to perform ? The majority of the Court answered both these questions in the afHrmative. Coleridge, J., in an elaborate dissenting judgment answered both in the negative, holding that the action "could not be maintained, because, first, merely to induce or procure a free contracting party to break his covenant, whether done maliciously or not, to the damage of another is . . . not actionable; second, that the law with regard to seduction of servants from their masters' employ, in breach of their contract, is an exception, the origin of which is known," and that that exception does not reach the case of a theatrical performer." The case stood alone from 1853 to 1881. In the latter year the case of Bowen v. Mall * came before the Court of Appeal, offering precisely the same points for decision as Lumley v. Gye." The majority of the Court, setting aside the question whether the relation of master and servant af- fected the rights of the parties, laid down a broad principle that a man who induces one of two parties to a contract to break it, intending thereby to injure the other, does that other an actionable wrong. From this decision Lord Coleridge, C. J.,, dissented, point- ing out that a malicious attempt to make A break his con- tract with ^, if ineffectual, is not actionable, nor is an effectual attempt if not malicious; and that to make the right of action depend upon the motive of the attempt might lead to " dangerous and inexpedient inquiries for a court of justice." This decision of the Court of Appeal settles a question which, despite the case of Lumley v. Oye, must be [*212] considered *to have remained open till 1881. A o. The exception which the law of Master and Servant seems to have engrafted upon the Common Law in this matter is traced by the learned Judge, in a detailed historical argument, to the Statutes of Labourers. 6. 6 Q. B. D. 339. c 8 E. & B. S16. Chap. I. § 3. LIMITS OF CONTRACTUAL OBLIGATION. 279 contract confers upon the parties to it rights in rem as well as rights in personam; it not onlj'^ binds together the parties by an obligation, but it imposes upon all the world a duty to respect the contractual tie. § 2. ^ mam, cannot acquire rights under a contract to which he is not a party. Contract cannot confer rights on a third party. — This is a rule which admits of fuller illustration than the one which we have just been discussing. It is contrary to the common sense of mankind that M should be bound by a contract made between Xand A. But if A and Xmake a contract in which X promises to do something for the bene- fit of M, all three may be willing that M should have all the rights of an actual contracting party ; or if A, and a group of persons which we will call X, enter into a con- tract, it might be convenient that M should be able to sue on behalf of the multitude of which X consists. Unless it amount to a declaration of trust. — If A makes a promise to X, the consideration for which is a benefit to be conferred on M by X, such a contract cannot confer a right of action on M. This is the inflexible rule of English Law, modified only by decisions which go to show that where X's promise amounts to a declaration of trust on behalf of M, then, and not otherwise, J!f can sue: not under the contract but in virtue of the fiduciary rela- tion which it creates.^ 1 Price T. Easton.— This is certainly not the inflexible rule of the American courts. Much depends on the nature of the contract, and the rule is subject to various exceptions : First. "When the circumstances of the transaction are such that the action for money had and received is proper, that is to say, when the defendant has in his hands money which, in equity and good con- science, belongs to the plaintiff, it is no objection that there is want of privity between the parties to the action, or that the consideration did not move from the plaintiff. The law creates both the privity and the promise. Mellen v. Whipple, 1 Gray, 323 ; Lewis v. Sawyer, 44 Me. 333 ; 280 OPERATION OF CONTRACT. Part III. In Price v. Easton " the plaintifif sued upon a promise made by the defendant to Xthat in consideration that X would work for him he would pay the plaintiff a sum of money. It was held by the Court of Queen's Bench that the plaintiff could not recover because he was not a party to the contract, the members of the Court stating in differ- a. 4B. &Ad.433. Keen v. Sage, 75 Me. 140; Spencer v. Towles, 18 Mich. 9; Taylor v. Taylor, 20 111. 650 ; Hosf ord v. Kanouse, 45 Mich. 620. Second. Another exception is the one noted by the author on page 213. The principle of Bourne v. Mason, that nearness of relationship be- tween the promisee and the person who is to take a benefit under the contract will give such person a right of action, has been followed in some courts. Felton v. Dickinson, 10 Mass. 287 ; Mellen v. Whipple, 1 Gray, 323 ; Exchange Bank v. Rice, 107 Mass. 42. Third. In Exchange Bank v. Rice {supra), it was held that the gen- eral rule of law was as stated by the author, and that the recent decis- ions in Massachusetts had tended to narrow the exceptions to it ; citing Field V. Crawford, 6 Gray, 116 ; Dow v. Clark, 7 Gray, 198. See Pipp V. Reynolds, 20 Mich. 88; Rogers v. Union Stair Co. 130 Mass. 583. In the states generally the exceptions have beten extended until the rule practically ceases to exist. Under the code "every action must be prosecuted in the name of the real party in interest, except," etc. This provision gives the party for whose benefit a contract is made the right of action. Pomeroy on Remedies, sec. 139 ; Bliss on Code Plead- ing, 241. Independent of the code it is generally considered that the prevailing rule in this country is that a party may maintain assumpsit on a parol promise made to another for his benefit. Hendrick v. Lind- sey, 93 U. S. 143; Carnigie v. Morrison, 2 Met. 403; Hull v. Marston, 17 Mass. 575 (In Exchange Bank v. Rice, Gray, J., disapproves of the dieta found in the early Massachusetts cases) ; Brewer v. Dyer, 7 Cush. 337 ; Metropolis Bank v. Jersey City Bank, 19 Fed. Rep. 301 ; Sibley v. County of Pine, 31 Minn. 303; KimbaU v. Noyes, 17 Wis. 71; McDoweU V. Laev, 35 Wis. 171; Farley v. Cleveland, 4 Cow. 433; Lawrence v. Fox, 30 N. Y. 370; Devol v. Mcintosh, 33 Ind. 539; Urquhart v. Bray- ton, 13 R. I. 169 ; Glen v. Hope Mutual Life Ins. Co. 56 N. Y. 379 ; Bristow V. Lane, 21 III. 194; Bohanan v. Pope, 43 Me. 96; Hecht v. Caughron, 26 Ark. 132 ; FUnt v. Cadenasso, 64 Cal. 83. It is held that the party to be benefited may recover, though the promise of defendant was under seal. Carter v. Mayor of Albany, 43 N. Y. 411 ; Kimball v. Noyes, 17 Wis. 721 ; McDowell v. Laev, 35 Wis. 171. Contra, Millard v. Baldwin, 3 Gray, 484; Hinkley v. Fowler, 15 Me. 389. Chap. I. § 2, LIMITS OF CONTRACTUAL OBLIGATION. 281 ent forms the same reason for their decision. Lord Den- ma,n, 0. J., said that the declaration did not " show any consideration for the promise moving from the plaintiff to defendant." Littledale, J., said, " ISTo privity is shown between the plaintiff and the ^defendant." [*213] Taunton, J., that it was " consistent with the matter alleged in the declaration that the plaintiff may have been entirely ignorant of the arrangement between X and the defendant : " and Patteson, J., that there was " no promise to the 'plaintiff alleged." Near of kin to tlie promisee. — It was at one time thought that if the person who was to take a benefit under the con- tract was nearly related by blood to the promisee a right of action would vest in him. But this doctrine was finally overruled in the case of Tweddle v. Atkinson"' by the Court of Queen's Bench. The facts of that case were these. M and N married, and after the marriage a contract was entered into between A and X, their respective fathers, to the effect that each should pay a sum qf money to Jf, and that M should ha/oe power to sue for such sums. After the death of A and X, M sued the executors of X for the money promised to him. It was held that the action would not lie, and Wightman, J"., said, " Some of the old decisions appear to support the proposi- tion that a stranger to the consideration of a contract may maintain an action upon it, if he stands in such a near rela- tionship to the party from whom the consideration proceeds, that he may be considered a party to the consideration. The strongest of those cases is that cited in Boxirne v. Mason," in which it was held that the daughter of a physician might maintain assumpsit upon a promise to her father to give her a sum of money if he performed a certain cure. But there is no modern case in which the proposition has been sup- ported. On the contrary, it is now established that no s1/ran%ger to the consideration earn, take advantage of a contract, although made for his ienefit." ' a.lB.& S. 393. 6. 1 Ventr. 6. c. 1 B. & S. 397. 283 OPERATION OF CONTRACT. Part III. The doctrine in equity.— Equity was not always so un- hesitating as the Courts of Common Law in the language used as to the rights of one who is to be benefited by a con- tract to which he is not a party. The question has most frequently arisen in oases where contracts have been made or work done on behalf of [*214:] a Company *which has not yet come into existence." The Company when formed cannot ratify such trans- actions, and attempts have been made to bind it by intro- ducing into the articles of association a clause empowering the directors to fulfill the terms of the contract, or to repay those who have given work or advanced money to promote the existence of the Company. The Common Law Courts have uniformly held that no right of action accrues to the beneficiary under such a pro- vision.* In equity language has been used, sometimes very explicit, to the effect that " where a sum is payable hj A B for the benefit of G D, D cau claim under the contract as if it had been made with himself." " But recent decisions on this subject put the matter on a plain footing and dis- tinguish the cases in which a third party may or may~not sue. In Eley v. Positive Government Security Life Assurance Gompatiy," one of the articles of the association of the de- fendant Company provided that the plaintiff should be em- ployed as its permanent solicitor. The action was brought for a breach of contract in not employing the plaintiff. Lord Cairns, in delivering the judgment of the Court of Appeal, says,* "Articles of association, as it is well known, follow the memorandum, which states the objects of the Company, while the articles state the arrangement between the members. They are an agreement inter socios, and in that view if the introductory words are applied to Article o. Kelner v. Baxter, L. E. 2 C. P. 174. &. Melhado v. Porto Alegre Railway Co. L. E. 9 C. P. 503. c. Touche V. Metropolitan Warehousing Co. 6 Ch. 671; Spiller v. Paris Skating Eink. 7 Ch. D, 368. d. 1 Ex. D. 88 (C. A.). «. See Ashbury Carriage Co. r. Eiohe, L. R. 7 H. L. at p. 667. Chap. I. § 3. LIMITS OF CONTRACTUAL OBLIGATION. 283 118, it becomes a covenant between the parties to it that they will employ the plaintiff. Now so fg.r as that is con- cerned it is res inter alios acta, the plaintiff is no party in it. No doubt he thought that by inserting it he was making his employment safe as against the Company; but his relying on that view of the law does not alter the legal effect of the articles. This article is either a stipulation which would bind the members, or else a mandate to the directors. In either case it is a matter between the directors and shareholders, and not between them and the plaintiff." *An attempt was made in the case of the Empress [*215] Engineering Company'^ to enforce an agreement made between^ and X, wherein A professed to act on be- half of the Company, though it was not as yet formed. The agreement was subsequently introduced into its articles of association, but the Court of Appeal held that the trans- action gave no claim to X against the Company. Declaration of trust needed that third party may sue. — It may well be that an agreement between two parties may be so framed as to make one of them trustee for a third, and as was pointed out in the course of the argument by Jessel, M. K., some cases of this nature have created the impression that a third party who is to be benefited by a contract acquires rights ex contractu in equity. But a mere contract between two parties that one of them shall pay money to a third does not as a rule make that third person a cestui que trust. There must be some undertaking by one of the two contracting parties to stand to the third party in the relation of trustee to cestui que trust. And this distinction is well illustrated by two cases de- cided in 1883. In Murray v. Flavell * it was held that a clause in a contract of partnership which provided for the payment of an annuity, for five years after the determina- tion of the partnership, to the retiring partner or his widow, created a trust in favour of the widow which freed the an- o. 16 Ch. D. 127. 6. 25 Oh. D. 89. 284 OPERATION OF CONTRACT. Part III. nuity from the claims against her husband's estate. On the other hand, in the case of the Motheram Alum Co." where X employed the plaintiff in the formation of the defendant Company and afterwards agreed Avith the Company that it should pay the plaintiff for his services, it was held the agreement gave no right of action to the plaintiff. Attempts to enable a third party to sue for many joint contractors. — Attempts have been made, but without suc- cess, to break the general rule in the case of unincorporated companies and societies who wish to avoid bringing action in the names of all their members. To this end they intro- duce into their contracts a term to the effect that their rights of action shall be vested, in a manager or agent. [*216] Such a case is that of '■''Oray v. Pearson,'' where the managers of a Mutual Assurance Company, not being members of it, were authorised, by powers of attor- ney executed by the members of l^he Company, to sue upon contracts entered into by them as agents on behalf of the Company. They sued upon a contract so entered into, and the Court of Common Pleas held that they could not main- tain the action, "for the simple reason, — a reason not ap- plicable merely to the procedure of this country, but one affecting all sound procedure, — that the proper person to bring an action is the person whose right has been violated." And Montagu Smith, J., said, " This is an attempt to do what has been frequently but fruitlessly attempted before, viz. to get rid of the difficulty of a large number of people suing in their own names, — to appoint a public officer with- out obtaining an Act of Parliament or a Charter of Incor- poration." Statutory relaxations of the rule. — The practical in- convenience under which bodies of this description labour has been met in many cases by the Legislature. Certain companies and societies are enabled to sue and be sued in the name of an individual appointed in that behalf," and o. 25 Cli. D. 104. b. L. E. 5 C. P. 568. c. Statutes of this nature are: —7 Geo. IV. c. 46, relating to Joint Stock Banldng Com- Chap. I. § 2. LIMITS OF CONTRACTUAL OBLIGATION. 285 the Judicature Act " has laid down a general rule that — "Where there are numerous parties having the same inter- est in one action, one or more of such parties may sue or be sued, or may be authorised by the Court to defend in such action on behalf of all the parties so interested." Agency postponed. — But although A cannot by contract with X confer rights or impose liabilities upon J/, yet A may represent M, in virtue of a contract of employment subsisting between them, so as to become his mouthpiece or medium of communication with X. *This employment for the purpose of representa- [*21T] tion is the contract of agency. The subject of agency is one to which it is somewhat diificult to assign a fit place in a treatise on the law of contract. It may be regarded as a mode of the Formation of contract, as a mode of extension of the limits of the. contractual obligation, or as a special contract, a particular aspect of the contract of employment. I prefer to regard it as an extension of the limits of con- tractual obligation by means of representation, but, since its treatment here would constitute a parenthesis of some- what uncouth dimensions, it will be better dealt with in an Appendix, panics; 7 Will. IV. and 1 Vict. c. 73, relating to companies formed under letters patent; 34 and 35 Vict. c. 31, relating to Trades Unions; 38 and 39 Viot. c. 60, relating to Friendlj Societies; and in many cases companies formed bj prirate Acts of Parliament pixssess similar statutory powers. a. Order XIV, § ». CHAPTEE 11. The Assignment of Contract. "We now come to discuss the cases in which the contract- ual obligation may pass to one who was not a party to the original agreement. We have seen that a contract can- not affect any but the parties to it: but the parties to it may under certain circumstances drop out and others take their , places, and we have to ask, first, how this can be brought about by the voluntary act of the parties themselves, or one of them. § 1. Assignment iy act of the parties. This part of the subject also falls into two divisions, the assignment of liabilities and the assignment of rights, and we will deal with them in that order. Assignment of liabilities. Liabilities cannot be assigned. — A man cannot assign his liabilities under a contract.' Or we may present the matter from the point of view of the other party to the contract, and say that a man cannot be compelled to accept performance of the contract from one who was not originally a party to it. ^ The rule seems to be based on sense and convenience. It is not merely that a man is entitled to know to whom he is to look for the satisfaction of his rights under a contract ; but, to use the language of Lord Denman in Humble v. Sunter," u. 12 Q. B. 317. 1 A debtor has no interest in debts owing by him which he can trans- fer. Van Sootter v. Leflets, 11 Barb. 140 ; Jones v. Walker, 3 Paine, C. C. 689; Cannon v. Kreipe, 14 Kan. 324. Chap. II. g 1. THE ASSIGNMENT OF CONTRACT. 287 " you have a right to the benefit you contemplate from the character, credit, and substance of the person with whom you contract." An illustration is supplied by the case of Bdbson ds Sharpe v. J)nttnmond. " Sharpe let a carriage to the ' defendant at a *yearly rent for five years, undertaking [*219] to paint it every year and keep it in repair. Eobsoa was in fact the partner of Sharpe, but the defendant con- tracted with Sharpe alone. After three years Sharpe re- tired from business, and the defendant was informed that Kobson was thenceforth answerable for the repair of the carriage, and would receive the payments. The defendant refused to accept the substitution of Kobson for Sharpe, and it was held that he could not be sued upon the contract. " The defendant," said Lord Tenterden, " may have been induced to enter into this contract by reason of the per- sonal confidence which he reposed in Sharpe. . . . The latter, therefore, having said it was impossible for him to perform the contract, the defendant had a right to object to its being performed by any other person, and to say that he contracted with Sharpe alone and not with any other person." Exceptions to the rule.^— There are certain limitations to this rule. A liability may be assigned with the consent of the party entitled ; but this is in effect the rescission, by agreement, of one contract and the substitution of a new one in which the same acts are to be performed by different parties.* Or again, if A undertakes to do work for X which needs no special skill, and it does not appear that A has been se- lected with reference to any personal qualification, Xcannot complain if A gets the work done by an equally competent person. But A does not cease to be liable if the work is ill done.'- Again, where an interest in land is transferred, liabilities o. 2 B. & Ad. 303. 6. Dicey, Parties to Actions, 235. c. British Waggon Co. v. Lea, 5 Q. B. D. 149. 288 OPERATION OF_CONTRACT. Part UI. attaching to the enjoyment of the interest pass with it. But this arises from the peculiar nature of obligations at- tached to land and will be matter for separate discussion. Assignment qf rights. (i) At Common Law. Assignalbility of the benefit of a contract. — At Com- mon Law, apart from the customs of the Law Merchant, the benefit of a contract, or a chose in action, cannot [*220] *be assigned so as to enable the assignee to sue upon it in his own name. He must sue in the name of the assignor or his representatives; " or rather, the Common Law so far takes cognisance of such equitable rights as are created by the assignment that the name of the assignor may be used as trustee of the benefits of the contract for the assignee. At common law only by substituted agreement. — The only mode by which the rights under a contract can be really transferred is not, strictly speaking, by assignment at all, but by means of a substituted agreement. If A owes M £100, and M owes X £100, it may be agreed between all three that A shall pay JT instead of M, who thus terminates his legal relations with either party.* In such a case the consideration of J.'s promise is the dis- charge by M; for J/'s discharge of A, the extinguishment of his debt to X; for X's promise, the substitution of -4.'s liability for that of M} a. Powles V. Innes. 11 M. & W. 10. 6. Per Lord Tenterden, C. J., Fairlie v. Denton, 8 B. & 0. 400. 1 Novation.— The case cited by the author is an instance of novation; the substitution of a new agreement for an old one, whereby the orig- inal indebtedness is extinguished. See American Lumber Co. v. Mui- crane, 55 Mich. 622 ; Finan v. Babcock, 58 Mich. 301 ; York v. Orton, 65 Wis. 6; Foster v. Paine, 63 Iowa, 85 ; Parsons v. Tillman, 95 lad. 453; Guichard v. Brande, 57 Wis. 534; McClellan v. Robe, 93 Ind. 398; Cadens V. Teasdale, 53 Vt. 469. A contract of novation is not established un- less all the parties affected by it consent to the agreement. Murphy v. Chap. n. § 1. THE ASSIGNMENT OF CONTRACT. 289 In cases of debt. — But there must be ascertained sums due from A to Jf and from i!f to X; and it is further es- sential that there should be a definite agreement between the parties, for it is the promise of each which is the con- sideration for those given by the others." Thus it is not enough that A should say to X" I will pay you instead of M" and should afterwards suggest the arrangement to M and receive his assent. Nor is it enough that M should in writing authorise A to pay to X the debt due from A to himself, and that A should write "acknowledged" at the foot of the document: JC cannot sue A for the money. These were the facts in Ziv- ersidge v. Broadbent. * J/" owed money to the plaintiff, who required security for his debt. M thereupon, being owed money by the defendant, gave to the plaintiff a paper au- thorising the defendant to pay the money to him (the plaintiff); this paper the defendant "acknowledged" in writing; but on his being sued for the money, the Court of Exchequer held that such an acknowledgment gave no right of action. It will be observed that in neither of these cases was there such an agreement as amounted to a discharge by M of the *debt due to him from A; there was [*221] therefore no consideration for JL's promise to pay X, and on that ground X would be unable to maintain an action against A. a. Cnxon v. Chadley, 3 B. & C. 591. 6. 4 H. & N. 603. Hanrahan, 50 Wis. 485; Lynch v. Austin, 51 Wis. 287; 1 Pars. Cont. 270. And it must appear that the original indebtedness was extinguished. Jaudon v. Randall, 47 N. Y. Super. Ct. 374; Irwin v. Atkins, 7 111. App. 17 ; Butterfield v. Hartshorn, 7 N. H. 345. The statute of frauds does no£ apply to a contract of novation. Mulcrane v. Amer. Lumber Co. 55 Mich. 626, citing Dearborn v. Parks, 5 Greenl. 81 ; Rowe v. Whittier, 21 Me. 545 ; Pike v. Brown, 7 Cush. 131 ; Farley v. Cleveland, 4 Cow." 433 ; Files v. McLeod, 14 Ala. 611 ; Bowea v. Kurtz, 37 Iowa, 239 ; Barker V. Bucklin, 2 Den. 45 ; Rice v. Carter, 11 Ired. 298 ; Robbins v. Ayers, 10 Mo. 538. 19 290 OPERATION OF CONTRACT. Part HI. Ill the case last mentioned, Martin, B., thus gave reasons for holding that X could not recover: — " There are two legal principles which, so far as I knOw, have never been departed from : one is that, at Common Law, a debt cannot be assigned so as to give the assignee a right to sue for it in his own name, except in the case of a negotiable instrument; and that being the law, it is per- fectly clear that M could not assign to the plaintiff the debt due from the defendant to him. . . . The other principle which would be infringed by allowing this action to be maintained is the rule of law that a bare promise cannot be the foundation of an action. . . . No doubt a debtor may, if he thinks fit, promise to pay his debt to a person other than his creditor; and if there is any consid- eration for the promise, he is bound to perforrti it. But here there was none whatever. There was no agreement to give time, or that the debt of M should ie extinguished, — no indulgence to him or detriment to the plaintiff. There was nothing in the nature of the consideration moving from the plaintiff to the defendant, but a mere promise by the defendant to pay another man's debt." It is thus apparent that a contract cannot be assigned at Common Law except (1) by an agreement between the orig- inal parties to it and the intended assignee, which is subject to all the rules for the formation of a valid contract, and •which is limited in its operation to the transfer of a debt ; or (2) by the rules of the Law Merchant under circum- stances to be noted presently. (ii) In EQurrT. Assignability of contracts in eqnity. — Equity will per- mit the assignment of a chose in action, or the rights which a man possesses under a contract, whenever the contract is not for exclusively personal services ; and a suit [*222] *in equity may be maintained by the assignee in his own name. a. Per Martin, B., Liversidge v. Broadbent, 4 H. & N. 6101 Chap. n. § 1. THK ASSIGNMENT OF CONTRACT. 291 Is su])ject to certain conditions. — But certain conditions affect the rights of the assignee. (a) The assignment will not be supported unless consider- ation has been given by the assignee. (/3) It will not bind the person liable until he has received notice, although it is effectual as between assignor and as- signee from, the moment of the assignment. {x) The assignee takes subject to all such defences as might have prevailed against the assignor. In other words, the assignor cannot give a better title than he has got. These last two propositions require some illustration. I Notice. Notice. — It .is fair upon the person liable that he should know to whom his liability is due. So if he receive no no- tice that it is due to another than the party with whom he originally contracted, he is entitled to the benefit of any payment which he may make to his original creditor. A convenient illustration is furnished in the case of covenants to pay interest on a mortgage debt. If the mortgage be assigned by the mortgagee without notice to the mortgagor, and interest be afterwards paid by the mortgagor to the duly-authorized agent of the mortgagee, the money so paid, though due to the assignee, cannot be recovered by him from the debtor. We must put the case thus :" — Money is due at regular intervals from A to X, and is ordinarily paid by A to the agent of X: X assigns his interest in the debt to M. A receives no notice but continues to pay the money to X's agent: the money so paid cannot be recovered by M from A. The rationale of the rule is thus expounded by Turner, L. J., in Stocks^ v. Dolson:'^ — "The debtor is liable at law a. Williams t. Sorrell, 4 Vesey, 389. b. 4 D. M. & G. 15. 1 Stocks T. Dobson. — The rule that " equitable titles have priority ao- cording to the priority of notice," that as between successive purchas- ers of a chose in action he will have the preference who first gave 293 OPERATION OF CONTRACT, Part III. to the assignor of the debt, and at law must pay the as- signor if the assignor sues m respect of it. If so, it follows that he may pay without suit. The payment of the debtor to the assignor discharges the debt at law. The [*223] assignee has no *legal right, and can only sue in the assignor's name. How can he sue if the debt has been paid ? If a Court of Equity laid down the rule that the debtor is a trustee for the assignee, without having any notice of the assignment, it would be impossible lor a debtor safely to pay a debt to his creditor. The law of the Court has therefore required not,ice to be given to the debtor of the assignment in m-der to perfect the title of the assignee." And the same case is authority for this further proposi- tion, that " equitable titles have priority according to the priority of notice." The successive assignees of an obliga- tion rank as to their title, not according to the dates at which the creditor assigned his rights to them respectively, but according to the dates at which they gave notice to the party to be charged. Title. Assignee takes subject to equities. — "The general rule, both at law and in equity, is that no person can acquire a notice to the debtor, even if he be a subsequent purchaser, has been fol- lowed by the United States supreme cpurt and some of the state courts. Judson V. Corcoran, 17 How. 615 ; Ward v. Morrison, 25 Vt. 593 ; White V. Prentiss, 3 Mon. 510; Murdock v. Dickson, 21 Mo. 138; In re Gillespie, 15 Fed. Rep. 734; Clodfelt v. Cox, 1 Sneed (Tenn.), 330; Morrison v. Lynch, 86 La. Ann. 611. Many of the American courts, however, hold to the rule that equitable titles have priority according to the priority of time; that the assignment of a chose in action is complete without notice to the debtor, so far as the rights of persons other than the debtor may be involved ; that the purchaser must abide by the case of the person from whom he buys, and that he can take no rights which his assignor did not possess. Thayer v. Daniels, 113 Mass. 139 ; Muir v. Schenck, 3 Hill, 228 (but see Bush v. Lathrop, 33 N. Y. 535) ; Moore v. Metropolitan Bank, 55 N. Y. 41 (overruling Bush v. Lathrop) ; Greentree v. Rosen- stock, 61 N. Y. 593 ; Summers v. Huston, 48 Ind. 330 ; Newberry v. Hill, 3 Met. (Ky.) 530; Kamena v. Huelbig, 23 N. J. Eq. 78; Tingle v. Fisher, 20 W. Va. 507. See, favoring this view, 1 Pars, on Cont, 237], 2 Pqme- roy, Eq. Juris, 714, 715, Chap. II. § 1. THE ASSIGNMENT OF CONTRACT, S93 title, either to a chose in action or any other property, from one who has himself no title to it." And further, " if a man takes an assignment of a chose in action,'^ he must take his chance as to the exact position in which tho party giv- ing it stands." ^ The facts of the case last cited will afford an apt illustra- tion of this proposition. M chartered half his vessel to X, using the other half himself, and taking half the risks of the adventure. The form in which the agreement between the parties was ex- pressed was this : — M and X executed a charter party whereby X appeared as sole charterer : by a second docu- ment a clerk of M undertook the payment of half the freight and half the risks of the adventure ; and by a third document J[f guaranteed to Xthe performance by his clerk of the undertaking contained in the second document. The whole arrangement was 'bona fide, and its peculiarities arose from the diflBculty created by M being the charterer of a portion of his own vessel. *Subsequently M assigned the charter to A for a [*224] large sum, without communicating to him the ac- companying documents which divided both the profits and the risks between the owner Jf and the charterer X. A sued at Common Law in the name of Jf and recovered the whole freight, the Court of Exchequer holding that X was bound on the true construction of the agreements to pay over the freight to M in the first instance, and afterwards settle the balance of profit and loss.* X applied to the Court of a. Crouch v. Credit Foneier, L. E. 8 Q. B. 380; Mangles v. Dixon, 3 H. L. 0. 733. 6. Boyd v. Mangles, 3 Ex. 395. i-The doctrine that the assignee of a non-negotiable chose in action takes it su^)ject to all equities is applied to three leading classes of facts: First. Cases wherein the equities are in favor of the debtor. Second. Cases wherein the equities arise between successive assignees. Third. Cases wherein there are equities in favor of some third party, who claims a right or interest in the thing assigned. The principle is applied to the flfst class of cases without question, but the other two give rise to what are called "latent equities," regarding which the law is unsettled. See p. 223, u. 1 ; p. 224, n. 1. 294 OPERATION OF CONTRACT. Part HI. Chancery to have an account taken in respect of the joint adventure, and to restrain A from proceeding on the Com- mon Law judgment. It was held by the House of Lords that A must stand in the same position with Jf as to the whole agreement, that he was not entitled to more than a moiety of the freight, and was liable for half the losses of the adventure." In like manner, if one of two parties be induced to enter into a contract by fraud, and the fraudulent party assign his interest in the contract for value to X, who is wholly innocent in the matter, the defrauded party may get the contract set side in equity in spite of the interest acquired in it by X." This rule may be excluded Iby express terms. — It is possible, however, that two parties to a contract may stip- ulate that if either assign his rights under it, such an assignment shall be "free from equities;" that is to say, that the assignee shall not beliable to be met by such de- fences as would have been valid against his assignor." It is questionable, however, whether such a stipulation would protect the assignee against the effects of Fraud, or any vital defect in the formation of the original contract. (iii) By Statute.^ Assignment of contract by statute. — It remains to con- sider, so far as mere assignment goes, the statutory excep- tions to the Common Law rule that a chose in action is not assignable. o. Mangles v. Dixon, 3 H. L. C. 702. 6. Graham t. Johnson, 8 Eq. 33. li. Ex parte Asiatic Banking Corporation, 3 Ch. 397. 1 In the American states choses in action are assignable by statute, but the statutes of the several states are so unlike in their terms that are- view of the decisions under them would be out of place at this time. A few leading principles may be stated which apply quite generally. 1. What is assignable ?— Frequently the right to transfer the legal interest in a chose in action is not expressly given by statute, but in- directly by some provision affecting procedure, as authorizing the as- Chap. n. § 1. THE ASSIGNMENT OF CONTRACT. 295 (a) The Judicature Act of 1873 " gives to the as'signee of any debt or legal chose in action all legal rights and remedies. *But (1) the assignee takes subject to [*225] equities; (2) the assignment must be absolute; (3) must be in writing signed by the assignor ; (4) express no- a. 36 & 37 Vict. o. 66, § 25, sub-§ 6. Bignee to bring the action in his own name, or requiring that suit shall be brought in the name of the real party in interest. Under such pro- visions it has been held: First. That every right of property which was assignable in equity and survives to the personal representatives of the owner is assignable. The thing assigned must directly or indirectly involve a right of prop- erty. Cook V. Bell, 18 Mich. 387; Dayton v. Fai-go, 45 Mich. 153; The Louisville, etc. R. R. Co. v. Goodbar, 88 Ind. 318; Mulhall v. Quinn, 1 Gray, 107; Grant v. Ludlow, 8 Ohio St. 37; Hoyt v. Thompson, 5 N. Y. 820. Second. As a general rule the right of action for a tort is not .assign- able, but such rights of action for torts as survive to the personal rep- resentatives may be assigned. An unliquidated claim for personal injury, however, a merely personal wrong which does not survive on the death of the person wronged, is not assignable. Stewart v. Houston & Texas R. R. Co. 63 Tex. 346; Miller v. Newall, 30 S. C. 138; Dayton V. Fargo, 45 Mich. 153; Brush v. Sweet, 38 Mich. 574; Smith v. Sher- man, 4 Cush. 408; Meech v. Stoner, 19 N. Y. 36; Lattimore v. Simmons, 13 Serg. & R. 183; Zabriskie v. Smith, 13 N. Y. 333. When the right of action arises out of the personal suflferings of the party w^ronged, mental or corporeal, it is not assignable. Actions for deceit, for breach of promise of marriage, for negligent injury to the person and malicious prosecution are of this class. Dayton v. Fargo, 45 Mich. 153; Zabriskie v. Smith, 13 N.Y. 333; Ward v. Blackwood, 41 Ark. 395; HufiE V. Watkins, 30 S. C. 477; Sawyer v. Concord R. R. Co. 58 N. H. 517; Jenkins v. French, 58 N. H. 533; Clark v. Carroll, 59 Md. 180; Hannah v. Richnaond, etc. R. R. 87 N. C. 851. Third. Parties cannot transfer their rights or liabilities arising out of an executory contract for personal service or involving personal trust and confidence. The right to compensation may be assigned after the service has been performed, but the right and duty to render the serv- ice cannot be. Chapin v. Longworth, 31 Ohio St. 421 ; Griswold v. Carthage, etc. R. R. 18 Mo. App. 53; Palo Pinto County v. Gano, 60 Tex. 349; Bethlehem v. Annis, 40 N. H. 34; Lansden v. McCarthy, 45 Mo. 106; Burger v. Rice, 3 Ind. 135; Derlin v. The Mayor, etc. 63 N. Y. 8. Fourth. While the assent of the debtor is not essential to the validity of an assignment, stiU a creditor cannot assign a part of his claim 298 OPERATION OF CONTRACT. Part m. tice in writing must be given to the party to be charged, and the title of the assignee dates from notice. It is to be noted that the requirements of this section as to form are far more stringent than those of the Equity Courts, which apparently did not require writing either for the assignment or the notice. It should further be noted that the assignment operates without the consent of the party liable. In Brice v. Ban- nister "■ the defendant received express notice of the assign- o. 3 Q. B. D. 569. without the debtor's assent, who has a right to pay the claim as a whole. Mandeville v. Welch, 5 Wheat. 377; Tripp v. Brownell, 13 Cush. 383 ; Carter v. Nichols, 58 Vt. 553 ; Beardsley v. Morgan, 73 Mo. 23 ; Getchell v. Maney, 69 Me. 443 ; Philadelphia'^ Appeal, 86 Pa. St. 179 ; Milroy v. Spurr Mt. Iron Co. 43 Mich. 335. 3. Form of assignment. — A parol assignment good in equity is gen- erally good under the statutes. No particular form is required, and as between the parties to the assignment it need not be absolute, but may be conditional and by way of security. "Draper v. Fletcher, 26 Mich. 154 ; Heebstreet v. Beckwith, 35 Mich. 93 ; 3 Schouler, Per. Prop. 676. 3. Notice. — ^ As between the assignor and assignee, and in order to complete the latter's right to the thing assigned, no notice of the assign- ment need be given the debtor; but to protect himself against sub- sequent assignees and against payment or other acts of the debtor which might charge the claim with equities, the assignee should give the debtor, trustee or holder of the fund prompt notice of the assignment. Judson V. Corcoran, 17 How. (U. S.) 613; Farley's Appeal, 76 Pa. St. 42; Richards v. Griggs, 16 Mo. 416; Randall v. Reynolds, 53 N. Y. Super. C. 145; VanKeuren V. Corkins, 66 N. Y. 77: Stebbins v. Bruce, 80 Va. 389 ; Winberry v. Koonce, 88 N. C. 351 ; Porter v. Dunlap, 17 Ohio St. 591 ; 2 Schouler, Per. Prop. 679. 4, Equities. — The assignee takes the chose in action Bubject to all the equities existing in favor of the debtor at the time of the assignment. Bloomer v. Henderson, 8 Mich. 403 ; Spinning v. Sullivan, 48 Mich. 5 ; Littlefield v. Albany Co. Bank, 97 N. Y. 581 ; Russell v. Kirkbride, 63 Tex. 455; Lane v. Smith, 108 Pa. St. 415; Oallanan v. Edwards, 31 N. Y. 483; Barney v. Grover, 28 Vt. 891; Kamena v. Huelbig, 33 N. J. Bq. 78; Kleeman v. Frisbie, 63 111. 483; Edson v. Gates, 44 Mich. 353. Whether the assignee takes the chose in action subject to what are called " latent equities," the equities of a prior assignor or a third person, is a question upon which the authorities are not agreed. See Bush v. Lathrop, 33 N. Y. 585; Bloomer v. Henderson, 8 Mich. 395; Sumner v. Waugh, 56 111. 531 ; 3 Pomeroy's Eq. Juris, sees. 708-715. Chap. n. § 1. THE ASSIGNMENT OF CONTRACT. 297 ment of a debt accruing from him to the assignor. He refused to be bound by the assignment and paid his debt to the assignor. He was held liable notwithstanding to the assignees for the amount assigned. 03) Policies of life insurance.— By 30 & 31 Vict. o. IM, policies of life insurance are assignable in a form specified by the Act, so that the assignee may sue in his own name. ITotice must be given by the assignee to the Assurance Com- pany, and he takes subject to such defences as would have been valid against his assignor. iy) Policies of marine insurance. — By 31 & 32 Yict. c. 86, policies of marine insurance are similarly assignable ; but this statute contains no requirement as to notice. {d) Shares in Companies are assignable under the pro- visions of the Companies Clauses Act, 1845, and the Com- panies Act, 1862." ( e) Mortgage debentures issued by Companies under the Mortgage Debenture Act* are assignable in a form specified by the Act.* Negotiability. Assignability to be distinguislied. — So far we have dealt with the assignment of contracts by the rules of Common Law, equity and statute, and it would appear that under the most favourable circumstances the assignment of a contract binds the party chargeable to the *assignee, [*226] only when notice is given to him, and subject always to the rule that a man cannot give a better title than he possesses in himself. From negotiability. — We now come to deal with a class of promises the benefit of which is assignable in such a way that the promise may be enforced by the assignee of the benefit without previous notice to the promisor, and without the risk of being met by defenses Avhich would have been good against the assignor of the promise. In other words. o. 8 & 9 Vict. c. 16, § 14; 25 & 26 Vict. 0. 89, § 23. 6. 28 & 29 Vict. c. 78. 298 OPERATION OF CONTRACT. Part IE. we come to consider negotiable instruments as distinguished from assignable contracts. Features of negotialbility. — The essential features of negotiability appear to be these. Firstly, the written promise gives a right of action to the holder of the document for the time being, though he and his holding may be alilie unknown to the promisor. Secondly, the holder is not -prejudiced by defects in the title of his assignor; he does not hold subject to such de-- fences as would be good against his assignor. Notice therefore need not be given to the party liable, and the assignor's title is immaterial. Negotiability Iby custom. — Certain contracts are nego- tiable by the custom of merchants recognised by the Courts; such are bills of exchange, foreign and colonial bonds ex- pressed to be transferable by delivery, and scrip certificates which entitle the bearer to become a holder of such bonds or of shares in a company." By statute. — Certain other contracts have been made negotiable by statute, as promissory notes by 3 & 4 Anne, c. 9, and East India bonds by 51 Geo. III. c. 4. Bills of lading, which are afifected both by the law mer- chant and by statute, possess some characteristics which will call for a separate consideration. Bills of exchange and promissory notes figure so con- stantly in the law of contract, and are so aptly illus- [*22T] trative of the *nature of negotiability, that we will shortly consider their principal features. A bill of exchange is an unconditional written order ad- dressed by M to X directing Xto pay a sum of money to a specified person or to bearer.* Usually this specified per- son is a third person A, but M may draw a bill upon Xin favour of himself, or he may draw upon X in favour of X "Wo must assume that the order is addressed to X either be- a. Rumball t. Metropolitan Bank, 2 Q. B. D. 184. 6. 45 & 46 Vict. 0. 61, § 1.. Chap. n. § 1. THE ASSIGNMENT OF CONTRACT. 299 cause he has in his control funds belonging to M or is pre- pared to give him credit; and since we are here dealing with bills of exchange merely as illustrat^ive of negotiabil- ity, we will adopt the most usual, as it is the most con- venient form for illustration. How drawn. — J/" directs ^to pay a sum of money to A or order, or to A or bearer. M is then called the drawer of the bill, and by drawing it he promises to pay the sum specified to A or any subsequent holder if Xdo not accept the bill or, having accepted it, fail to pay. How accepted. — ^ Until acceptance, X, upon whom the bill has been drawn, is called the drawee. When X has assented to pay the sum specified, he is said to become the acceptor. Such assent must be expressed by writing on the bill signed by the acceptor, or by his simple signature.^ An acceptance is an unconditional promise to pay the sum named when due. If the bill be payable to A or bearer, it may be trans- ferred from one holder to another by mere delivery : if it is payable to A or order, it may be transferred by indorse- ment. How indorsed. — Indorsement is an order, written upon the bill, and signed by ^, in favour of D. Its effect is to assign to D the right to demand acceptance or payment of the bill from X when due, and in the event of default by X to demand it of M, the original drawer, or of A, against whom he has a concurrent remedy as being to all intents a new drawer of the bill. (a) Specially. — If the indorsement be simply to D, or to ]) or order, the bill may be assigned by D to whomsoever he will in the same manner as it was assigned to him. (b) In blanh. — If the indorsement be the mere signature of A, it is *indorsed in blank, and the bill [*228] then becomes payable to bearer, that is, assignable 1 By the law merchant a verbal acceptance was binding on the ac- ceptor, and is so now in those states where statutes have not been enacted providing to the contrary. The rule stated by the author is statutory. 19 and 30 Victoria, c. 97, sec. 6. 300 OPERATION OF CONTRACT. Part ni. by delivery. A has given his order and that addressed to no one in particular ; the bill is in fact indorsed over to any one who becomes possessed of it. A promissory note is a promise in writing made by Xto A that he will pay a certain sum at a specified time or on demand to A or order, or to A or bearer. X, the maker of the note, is in a similar position to that of an acceptor of a bill of exchange ; and the rules as to assignment by deliv- ery or indorsement are similar to those relating to a bill of exchange. Assignability distinguished from negotiability. — "We may now endeavour to distinguish, by illustration from the case of instruments of this nature, the difference between assigndbility and negotiability. Let us suppose that X makes a promissory note payable to A or order, and that A indorses it over to D. D calls upon X to pay the value of the note, and sues him upon default. In the case of an ordinary contract, D would, at the least, be called upon to show that he had given consideration to A for the assignment ; that notice of the assignment had been given by him to Xy and he would then have no better title than A. Consideration presumed — Notice not needed. — In the case of negotiable instruments Consideration is presumed to have been given until the contrary is shown, and notice of assignment is not required. The assignee may have a better title than the as- signor. — But suppose it turn out that the note was given by X to ^ for a gambling debt, or was obtained from him by fraud. The position of i? is then modified to this ex- tent. As between A and X the note would be void or voidable according to the nature of the transaction, but this does not affect the rights of a bona fide holder for value, that is, a person who gave consideration for the note and had no no- tice of the vitiating elements in its origin. The presamp- CJhap. II. § 1. THE ASSIGNMENT OF CONTRACT. 801 tions of law^ under these circumstances are, (1) that D did not give *value for the bill, but (2) that he [*229] was ignorant of the fraud or illegality' ; for fraud, or participation in an illegal act, is never presumed.' It will be for D to show that he gave value for the bill, but for Xto show that D knew that the bill was tainted in its origin. If D proves his point and X fails to prove his, then D can recover in spite of the defective title of A, his assignor." The case of Crouch v. Credit Fonder of England * fur- nishes an illustration both of the nature of negotiability and the limits within which the creation of negotiable in- struments is permissible. An mstrument under seal is not negotiable. — A de- benture, assigUable under the Companies Act and expressed to be payable to the bearer, was stolen ; the thief sold it to the plaintiff, and he sued the Company for non-payment ; the jury found that he was a l)ona fide holder for value of the debenture, but the Court held that he could not recover, because, in spite of the wording of the debenture, it was an instrument under seal and therefore could not be, what it purported to be, a negotiable instrument assignable by a. Byles on Bills, ed. 12, p. 122. 6. L. E. 8 Q. B. 374. 1 The rule stated in the text is said not to apply when the bill or note is made payable to bearer, and that, in such case, the holder must show that he was a bona Jide holder, and not the person to whom the note was given, Bissell v. Morgan, 11 Cush. 198; and by the weight o£ American authority, where it is shown that the bill or note was ob- tained through fraud or upon an illegal consideration, the holder has the burden of establishing that he purchased the note without knowl- edge or notice of such fraud or illegality. Paton v. Coit, 5 Mich. 510 ; Carrier v. Cameron, 31 Mich. 379 ; Conley v. Winsor, 41 Mich. 253 ; Per- rin V. Noyes, 39 Me. 384; McKisson v. Stanberry, 3 Ohio St. 156; Sloan V. Union Bank Co. 67 Pa. St. 470; Smith v. LivingstoUj 111 Mass. 344; Clark V. Thayer, 105 Mass. 318. This rule is understood as requiring the holder of the note or bill to show the circumstances under which he obtained title to the instrument sued on, and not that he should prove a negative. 1 Danl. Nag. Inst, sec. 819 ; Davis v. Bartlett, 13 Ohio St. 541. 303 OPERATION OF CONTRACT. Part HI. delivery. The plaintiff therefore suffered for the defective title of his assignor. Had the debenture been a negotiable instrument, the plaintiff could have recovered; for, as Blackburn, J., said, in speaking of such contracts, " the person who, by a gen- uine indorsement, or, where it is payable to bearer, by a delivery, becomes holder, may sue in his own name on the contract, and if he is a hona fide holder for value, he has a good title, notwithstanding any defect of title in the party (whether indorser or deliverer) from whom he took it." " But the case further goes to show that a man cannot, by merely making an instrument payable to bearer, make, it thereby negotiable, if the custom of the law merchant does not recognise it as such ; or if, by being so recognised by the custpm of merchants, the character of the instrument preclude its negotiability. For it had been the custom of merchants to treat these debentures as assignable by [*230] delivery ; yet when *one of them came before the Courts it was at once denied the incidents of nego- tiability as incompatible with its character of an instru- ment under seal. Bill of lading. — It would not be desirable to go further ' into the subject of negotiable instruments than is neces- sary to exhibit the essential features of negotiability. We may however notice the character of "bills of lading," as possessing some peculiar marks. A bill of lading is called "a document of title," "a symbol of property;" and the meaning of these phrases is this. The bill of lading is a receipt by the master of a ship for goods bailed to him for delivery to X or his assigns. Of this receipt three copies are made, each signed by the master. One is kept by the consignor of the goods, one by the master of the ship, and one is forwarded to X, the consignee, who, on re- ceipt of it, acquires a property in the goods, which can a. L. R. 8 Q. B. p. 883. Chap. II. § 1. THE ASSIGNMENT OF CONTRACT. 303 only be defeated by the exercise of the vendor's equitable right of stoppage in transitu.'^ What rights its assignment confers. — The assignment of the bill of lading by indorsement by the consignee to a holder for value gives to that holder a better right than the consignee himself possessed. He has a title to the goods which overrides the vendor's right of stoppage in transitu, and gives him a claim to them in spite of the insolvency of the consignee and the consequent loss of the price of his goods by the consignor.* ^ By law merchant, proprietary rights. — ■ His right, how- ever, which in this respect is based upon the law merchant, is a right of property only. The assignment of the bill of lading gives a right to the goods. It did not, at Common Law; give any right to sue on the contract expressed ia the bill of lading. By 18 and 19 Yict. c. Ill, contractual rights. — This right is conferred by 18 and 19 Yict. c. 111. By that act the assignment of a bill of lading is made to transfer *not only the property in the goods, but " all rights [*231] of suit " and all liabilities in respect of the goods " as if the contract contained in the bill of lading had been made with himself." As regards the negotiability of a bill of lading, it differs in some important respects from the instruments with which we have just. been dealing. Its assignment transfers rights in rem, rights to specific goods, and these to a certain extent wider than those pos- sessed by the assignor; therein it differs from negotiable instruments which only confer rights inpersoncmv. a. Stoppage in transitu is the right of the unpaid vendor, upon learning the in- solvency of the buyer, to retake the goods before they reach the buyer's possession. For the history of this right the reader is referred to the judgment of Lord Abinger, C.B., In Gibson v. Carruthers, 8 M. & W. 339; for its application, to Benjamin on Sales, bk. v, part i. 6. Lickbarrow v. Mason, 1 Sm. L. C. 825. 1 Bank of Rochester v. Jones, 4 N. Y. 497 ; Blossom v. Champion, 28 Barb. 233; First National Bank v. Crocker, 111 Mass. 163. A valuable note regarding the negotiability of biUs of lading is found in Chandler V. Sprague, 38 Am. Dec. 423. 304 OPERATION OF CONTRACT. Part HI. But not independent of assignor's title. — But though the assignee is relieved from one of the liabilities of the assignor, he does not acquire proprietary rights independ- ently of his assignor's title : a bill of lading stolen, or trans- ferred without the authority of the person really entitled, gives no rights even to a hona _7?^« •indorsee.'^ And again, the contractual rights conferred by statute are expressly conferred subject to equities. A bill of lading then may be called a contract assignable without notice, partaking in some respects of the character of conveyance, inasmuch as it gives a title to property, but incapable of giving a better title, whether proprietary or contractual, than is possessed by the assignor;' subject always to this exception, that one who takes from an assignor with a good title is relieved from liability to the vendor's right of stoppage in transitu which might have been exercised against the original con- signee. § 2. Assignment of conl/ractual rights and liabilities Tnj op- eration of law. "We have hitherto dealt with the mode in which the par ties to a contract may by their own acts assign to others the benefits or the liabilities of the contract. But rules of law may also operate to transfer to one person the rights or the liabilities of another. Assignment of interests in land. — If A by purchase or lease acquire an interest in land of Jf, upon terms [*233] which bind them by contractual obligations in Re- spect of their several interests, the assignment by either party of his interest to X will within certain, limits operate as a transfer to X of those obligations. eU v. Baily: * — " It must not be supposed that incidents of a novel kind can be devised and attached to property, at the fancy or caprice of the owner. . . . Great detriment would arise and much confusion of rights, if parties were allowed to invent new modes of holding and enjoying real property, and to impress upon their lands and tenements a peculiar character, which should follow them into all hands however remote.' " Equitalt)le enforcement of restrictiye covenants. — But the Courts of Equity have established a class of exceptions to this general rule, and although these have been mainly confined to covenants in the case of land sold for building purposes, it is difficult to see what limitations can be intro- a. Stockport Waterworks Co. v. Potter, 3 H. & C. 300. 6. 2 Mylne & Keen, 517. 1 Keppell V. Baily. — "The benefit of a covenant passes with the land to which it is incident, but the burden or hability is confined to the orig- ■ inal covenantor, unless a privity of estate between him and the cove- nantee exists, or is ci-eated at the time the covenant is made." Cole v. Hughes, 54 N. Y. 444; Todd v. Stokes, 10 Pa. St. 155; Weld v. Nichols, 17 Pick. 543; Brewer v. Cheeseman, 18 N. J. Eq. 337; Dorsey v. St. Louis, etc. R. R. Co. 58 111. 65 (Conduitt v. Ross, 102 Ind. 166); Block v. Isham, 38 Ind. 37 ; Mai-tin v. Dryman, 128 Mass. 515 ; Parish v. Whitney, 3 Gray, 516 ; Kennedy v. Owen, 136 Mass. 201 ; National Bank v. Segur, 39 N. J. L. 184; Hazlett v. Sinclair, 76 Ind. 489; Scott v. McMillan, 76 N. Y. 141. In National Bank v. Segur, supra, Beasley, C. J., said: " There is such an essential difference, in social eflEeot, between permit- ting a burthen to be annexed to the transfer of land and the giving to a benefit such a quality, that the subject will unavoidably run into ob- scurity, unless the distinction is kept constantly in view. The con- spicuous impolicy of allowing land to be trammeled in its transfer, to the extent that previous owners may choose to affect it by their con- tracts, viras pointed out and condemned in the case of Brewer v. Mar- shall, 8 C. E. Green, 337." See Hartung v. Witte, 59 Wis. 294. Ohap. II. § 2. THE ASSIGNMENT OF CONTRACT. 309 duced to the principle on which they are enforced. The view taken by Courts of Equity may be thus illustrated. A sells land to X and covenants that he A, being possessed of adjoining land, will never use it otherwise than in a particular way. A sells his land to M with notice of the covenant, and ^'s enjoyment of the land is then limited by the terms of *the covenant. The prin- [*235] ciple is thus stated by Lord Cottenham : — " That this Court has jurisdiction to enforce a contract between the owner of land and his neighbour purchasing a part of it, that the latter shall either use or abstain from using the land purchased in a particular way, is what I never knew disputed. . . It is said that the covenant," being one which does not run with the land, this Court cannot enforce it ; but the question is, not whether tJie covenant runs with the land, hut whether a party shall he permitted to use his land in a manner inconsistent with the contract entered into hy his vendor, and with notice of which he purchased^ ' Assignment of contractual obligation upon marriage. The only effect which marriage now * produces by way of assignment of rights or liabilities is that if the separate estate of the wife be insufficient to satisfy her antenuptial contracts the husband is liable to the extent of all property which he shall have acquired or became entitled to through his wife.^ Assignment of contractual obligation by death. Representatives acquire all contractual rights which affect personal estate. — Death oasses to the executors or a. Tulk V. Moxhay, 2 Ph. 774. 6. 45 & 46 Vict. c. 75, §§ 13, 14. 1 Stines v. Dorman, 25 Ohio St. 460; Haskell v. "Wright, 8 C. E. Green 389 ; Clark v. Martin, 49 Pa. St. 289 ; Trustees of Columbia College v. Thacher, 87 N. Y. 312. 2 In the states generally there is no assignment of contractual obliga- tions upon marriage. The husband does not acquire any property through his wife. The common-law rule which transferred to the hus- band his wife's personal property and burthened him with her liabilities has been abrogated by statutes of the states. 310 OPERATION OF CONTRACT. Part in. administrators of the deceased all his personal estate, all rights of action which would affect the personal estate, and all liabilities which are chargeable upon it. Thus covenants which are attached to leasehold estate pass, as to benefit and liability, with the personalty to the executor or admin- istrator, while covenants affecting freehold, as covenants for title in a conveyance of freehold property, pass to the heir or devisee of the realty. If not dependent on personal skill or service.— And fur- ther performance of such contracts as depend upon the per- sonal services or skill of the deceased cannot be demanded of his representatives, nor can they insist upon offering such performance. Contracts of personal service expire with either of the parties to them : an apprenticeship contract is thus terminated by the death of the master, and no claim to the services of the apprentice survives to the exec- utor." [*236] *In like manner a breach of contract which in- volves a purely personal loss does not confer a right of action upon executors. In Ohamherlain v. Williamson,'' an executor sued for a breach of promise to marry the deceased, the promise having been broken and a right of action hav- ing accrued in the life-time of the testatrix. But the Court held that such an action could not be brought by represent- atives of a deceased 'person, inasmuch as it did not clearly - appear that the breach of contract had resulted in damage to the personal estate. " Although marriage may be re- garded as a temporal advantage to the party as far as re- spects personal comfort, still it cannot be considered as an increase of the transmissible personal estate." ' a. Baxter v. Burfleld, S Str. 1266. 6. 2 M. & S. 408. I Chamberlain t. 'Williamsoii. — Notwithstanding the fact most states have statutory provisions to the effect that a personal representative may sue or be sued on any contract of or with his deceased, still it is gener- ally held that such statutes do not change the rule in Chamberlain v. Williamson, and that an action on a breach of promise to marry is in the nature of an action ex delicto. Grubb, Adm'r, v. SuU, 33 Grat. 203 ; Chap. n. § 3. THE ASSIGNMENT OP CONTRACT. 311 Assignment of contraotual obligation hy tanlcruptcy. Trustee's powers: their extent, and limits. — The trustee of a bankrupt is appointed for the purpose of getting in and dividing the property for the benefit of the creditors. The Bankruptcy Act, 1883, provides that vrhere any part of the property of a bankrupt consists of things in action, such things shall be deemed to have been duly assigned to the trustee." And inasmuch as the duty of the trustee is not merely to represent the bankrupt, but to represent him with special reference to the interests of his creditors, he is able to dis- claim, and so discharge such executory contracts as he thinks will not be beneficial to the estate. But, it may be doubted whether, like the representative of a deceased person, he is not excluded from suing for " personal injuries arising out of breaches of contract, such as contracts to cure or to marry." * o. 46 & 47 Vict. c. 52, § 50 (5); id. | 55. 6. Drake v. Beckham, 11 M. & W. 319. Stellins v. Palmer, 1 Pick. 71; Smith v. Sherman, 4 Gush. 408; Latti- mors V. Simmons, 13 Serg. & R. 183 ; Wade v. Kalbfleisoh, 58 N. Y. 282; Chase v. Fitz, 133 Mass. 863 ; Hovey v. Paige, 55 Me. 143. The cases cited hold that for the reasons stated in the leading case, the action cannot be maintained against the representatives of the promisor. PART IV. THE INTERPRETATION OF CONTRACT. Interpretation of contract. — After considering the^ele- ments necessary to the formation of a contract, and the operation of a contract as regards those who are primarily interested under it, and those to whom interests in it may be assigned, it seems that the next point to. be treated is the mode in which a contract is dealt with when it comes before the Courts in litigation. In considering the interpretation of contract we require to know how its terms are proved; how far, when proved to exist in writing, they can be modified by evidence extrinsic to that which is written ; what rules are adopted for construing the meaning of the terms when fully before the Court. Rules relating (1) to evidence, and (2) to construction. The subject then divides itself into rules relating to evidence and rules relating to construction. Under the first head we have to consider the sources to which we may go for the purpose of ascertaining the expression by the parties of their common intention. Under the second we have to consider the rules which exist for construing that intention from ex- pressions ascertained to have been used. CHAPTER I. Rules relating to evidence. Provinces of Court and Jury. — If a dispute should arise as to the terms of a contract made by word of mouth, it is necessary in the first instance to ascertain what was said, and the circumstances under which the supposed contract was formed. These would be questions of fact to be deter- mined by a jury. When a jury has found, as a matter of fact, what the parties said, and that they intended to enter into a contract, it is for the Court to say whether what they have said amounts to a contract, and, if so, what its effect may be. When a man is proved to have made a contract by word of mouth upon certain terms, he cannot be heard to allege that he did not mean what he said." The same rule applies to contracts made in writing. Where men have put into writing any portion of their terms of agreement they cannot alter by parol evidence that which they have written. When the writing purports to be the whole of the agreement between the parties, it can neither be added to nor varied by parol evidence. Why oral contracts need not be discussed. — We may, as regards rules of evidence, dismiss purely oral contracts from our consideration. For the proof of a contract made by word of mouth is a part of the general law of evidence; the question whether what was proved to have been said amounts to a valid contract is a question to be answered by reference to the formation of contract ; the interpretation of such a contract when proved to have been made may be dealt with presently under the head of rules of construc- tion. a. See p. 127. 314 INTERPBETATION OF CONTRACT. Part TV. [*239] *Three matters of inquiry.— Our consideration of the rules relating to evidence may be confined to their effect upon written contracts and contracts under seal; and we may say that admissible evidence extrinsic to such contracts falls under three heads. (1) 1. Proof of existence of document. — Evidence as to the fact that there is a document purporting to be a con- tract, or part of a contract. (2) 2. Of fact of agreement. — Evidence that tho prof essed contract is in truth what it professes to be. It may lack some element necessary to the formation of contract, or be subject to some parol condition upon which its existence as a contract depends. (3) 3. Of terms of contract. — Evidence as to the terms of the contract. These may require illustration which necessitates some extrinsic evidence; or they may be am- biguous and then may be in like manner explained; or they may comprise, unexpressed, a usage the nature and effect of which have to be proved. We thus are obliged to consider (1) evidence as to the existence of a document, (2) evidence that the document is a contract, (3) evidence as to its terms. Difference between formal and simple contract — In the first the instrument is the contract. — We must note that a difference, suggested some time back, between con- tracts under seal and formal contracts, is illustrated by the rules of evidence respecting thenl. A contract under seal derives its validity from the form " in which it finds expres- sion: therefore if the instrument is proved the contract is proved, unless it can be shown to have been executed under circumstances which preclude the formation of a contract, or to have been delivered under conditions which have re- mained unfulfilled, so that the deed is no more than an es- crow. In the second the writing is only evidence of the con- tract. — But " a written contract not under seal is not the a. F.45. Chap. I. § 1. RULES RELATING TO EVIDENCE. 816 contract itself, but only evidence, the record of the con- tract."" Even where statutory requirements for writing exist, as under 29 Oar. II. c. 3, § 4, the writing is no more than evidentiary of a previous or contemporaneous agree- ment. A written offer containing all the terms of the con- tract signed by A and accepted by performance on the part of J5, is enough to enable B to sue A under that section. And where there is no such necessity for writing, it is optio:^al to the parties *to express their agreement [*24:0] by word of mouth, by action or by writing, or partly by one, and partly by another of these processes. It is always possible therefore that a simple contract may have to be sought for in the words and acts, as well as in the writing of the contracting parties. But in so far as they have reduced their meaning to writing, they cannot adduce evidence in contradiction or alteration of it. " They put on paper what is to bind them,* and so make the written document conclusive evidence against them." ^ § 1. Proof of Document. Proof of contract under seal. — A contract under seal is proved b}'^ evidence of the sealing and delivery. Formerly it was necessary to call one of the attesting witnesses where a contract under seal was attested,^ but the Common Law a. Wake V. Harrop, 6H. & N. 775. b. Wake v. Harrop, 6 H. & N. 775. ' 1 See supra, p. 47. 2 Jackson V. Sheldon, 22 Me. 569; Burke v. MUler, 7 Gush. 547; Mel- cher V. Flanders, 40 N. H. 139; McAndrews v. Still well, 13 Pa. St. 90; Dorr V. School District, 40 Ark. 237 ; Henry v. Bishop, 3 Wend. 575 ; Barry v. Ryan, 4 Gray, 523; Hess v. Griggs, 43 Mich. 397. If the at- testing witness be dead, or incapable of testifying, or out of the juris- diction of the court, execution of the deed may be proved by proving the handwriting of such witness. Dunbar v. Marden, 13 N. H. 311 ; Beattie v. Hillard, 55 N. H. 436; Richards v. Skiff, 8 Ohio St. 586; Val- entine V. Piper, 22 Pick. 85; Davis v. Higgins, 91 N. C. 382; Elliott v. Dycke, 78 Ala. 150 ; 1 Whart. Ev. 736. The tendeacy of modern decis- ions, however, is to hold that proof of the handwriting of the paxty is 316 INTERPRETATION OF CONTRACT. Part IV. Procedure Act, 1854," enacted that this should no longer be required save in those exceptional eases in which attesta- tion is necessary to the validity oi the deed. A warrant of attorney and a cognovit afford instances of instruments to which attestation is thus necessary.* Of simple contract — Supplementary oral eridence where contract written only in part. — In proving a sim- ple contract parol evidence is always necessary to show that the party sued is the party making the contract and is bound by it." And oral evidence must of course supplement the writing where the writing only constitutes a part of the contract. For instance: AB in Oxford writes to ^ in London, " I will give £50 for your horse ; if you accept send it by next train to Oxford. (Signed) AB." To prove the conclusion of the contract it would be necessary to prove the despatch of the. horse. And so if A puts [*241] the terms of an agreement into a written offer *which X accepts by word of mouth ; or if, where no writ- ing is necessary, he puts a part of the terms into writing and arranges the rest by parol with X, oral evidence must be given in both these cases to show that the contract was concluded upon those terms by the acceptance of X" Or where connection of parts does not appear from doc- uments. — So too where a contract consists of several docu- ments which need oral evidence to show their connection, a.>17&18Vict. c. 26. h. Ante, p. 44. c. As a matter of practice, written contracts are commonly admitted by the parties, either upon the pleadings, or upon notice being given by one party to the other to ad- mit such a document. Such admissions are regulated by the Judicature Act, 1875, Order xxxii. Or one party may call upon the other to produce certain documents, and upon his failing to do so, and upon proof having been given of the notice to pro. duce, the party calling for production may give secondary evidence of the contents of the document. d. Harris v. Bickett, 4 H. & N. 1. STifflcient, when the witnesses cannot be produced, unless the instru- ment is one which the law requires to be attested by witnesses. Land- ers v. Bolton, 36 Cal. 394; Newson v. Luster, 13 111. 183; Woodman v. Segar, 35 Me. 90; Coe v. Davis, 17 Ala. 717. Caiap. I. § 2. EULES RELATING TO EVIDENCE. 317 such, evidence may be given to connect them.* From this rule we must except contracts of which the Statute of Frauds requires a written memorandum. There the con- nection of the documents must need no oral evidence to establish its existence." But this is an illustration of the rule that where the Stat- ute of Frauds requires written evidence of a contract it re- quires such evidence as to the whole of the contract. And this requirement has been held inapplicable to contracts out- side the Statute. " I see no reason," says Brett, J., " why parol evidence should not be admitted to show what docu- ments were intended by the parties to form an alleged con- tract of insurance." * There are circumstances, such as the loss or inaccessibil- ity of the written contract, in which parol evidence of the contents of a document is allowed to be given, but these are a part of the general law of evidence. The reader is re- ferred for a summary of the rules existing upon this sub- ject to Mr. Justice Stephen's Digest of the Law of Evidence, pp. 68-T3. § 2. Evidence as to fact of Agreement. Thus far we have dealt with the mode of bringing a document, purporting to be an agreement, or part of an agreement, before the Court. But extrinsic evidence is ad- missible to show that the document is not in fact a valid agreement. It may be shown that incapacity of one of the parties, want of genuine consent, or illegality of object made the agreement of the parties unreal,^ or such as the law forbids to be carried *into effect. In the case of a [*24:2] simple contract it may be shown, where the promise a. Boydell v. Drummond, 1 East, 142. 6. Edwards v. Aberayron Mutual Ins. Society, 1 Q. B. D. 587. 1 Myers v. Munson, 65 la. 433 ; Bergan v. Williams, 138 Mass. 544 ; Colby V. Dearborn, 59 N. H. 336 ; Beers v. Aultman-Taylor Co. 83 Minn. 90 ; Blake v. Coleman, 33 Wis. 396. 2 There is no question but that parol evidence may be received to show 318 INTERPRETATION OF CONTRACT. Part IV. only appears in writing, that no consideration was given for the promise. Such evidence is/ constantly admissible to con- tradict the presumption of value given for a bill of exchange , or promissory note." But this must be distinguished from evidence which maj' be given as to the total failure of con- sideration promised, for this is a mode of discharge.* Evidence of condition suspending operation of con- tract. — Similarly in the case of a deed, where fraud or undue influence is alleged, the absence or inadequacy of consideration may be adduced in derogation of the deed. Extrinsic evidence is thus, admissible, not to alter the pur- port of the agreement, but to show that it was made under such conditions as to preclude the reality of consent. In-the case of a deed. — Apart from such circumstances as these it is permissible to prove a parol condition sus- pending the operation of the contract. Thus a deed may be shown to have been delivered subject to the happening of an event or the doing of an act." Until the event happens or the act is done the deed remains an escrow, and the terms upon which it was delivered may be proved by oral or docu- mentary evidence extrinsic to the sealed instrument. Of a simple contract. — And so it is with a written con- tract. Evidence may be given to the effect that a docu- ment purporting to be a contract is not so in fact. It may be dependent upon a condition unexpressed in the document so that until the condition happens, the parties agree that the written contract is to remain inoperative. Thus in Pym v. CampheW the defendants agreed to pur- o. Foster v. JoUy, 1 C. M. & E. 708. 6. See Part V, ch. m, § 2. c See p. 47. d. 6 E. & B. 370. that a written contract, valid on its face, was entered into for an ille- gal purpose or upon an illegal consideration. Wooden v. Shotwell, 23 N. J. L. 465: BuflEendean v. Brooks, 28 Cal. 641; Allen v. Hawks, 18 Pick. 79; Totten v. United States, 92 U. S. 105; Ferguson v. Sutphen, 8 111. 547; Shackford v. Newington, 46 N. H. 415; Pratt v. Langdon, 97 Mass. 97. Contra, Porter v. Viete, 1 Biss. 177 ; Leslie v. Langham, 40 Ala. 524. Chap. I. § 2. EULBS RELATING TO EVIDENCE. 319 chase from the plaintiffs a portion of the benefits to be de- rived from a mechanical invention made by the plaintiffs. The purchase was to be made if one X approved of the in- vention, but before this approval had been given they signed a memorandum of agreement on the express understanding that they did so for convenience only and that the agree- ment was not to bind them until the approval of one Abernethie had been *intimated. Abernethie did [*243] not approve of the invention. The plaintiffs con- tended that the agreement was binding and that the verbal condition was an attempt to vary by parol the terms of a written contract. But the Court held that the evidence was admissible, not to vary a written contract but to show that there had never ieen a contract at all} The law was thus stated by Erie, J. : — " The point made is, that this is a written agreement, absolute on the face of it, and that evidence was adduced to show it was conditional: and if that had heen so it would have been wrong. But I am of opinion that the evidence showed that in fact there was never an agreement at all. The production of a paper pur- porting to be an agreement by a party, with his signature attached, affords a strong presumption that it is his written agreement ; and if in fact he did sign the paper animo con- trahendi, the terms contained in it are conclusive, and can- not be varied by parol evidence : but in the present case the defence begins one step earlier; the parties met and ex- pressly stated to each otlier that, though for convenience 1 Parol evidence is admissible for the purpose of showing that a con- tract formally executed never received the assent of the parties to it or was to receive their assent only upon a contingency that never happened ; but is not admissible to vary the legal effect of a written contract as- sented to by the parties or to show that their liability thereunder, abso- lute in terms, was subject to a pprol condition. Stephen's Ev. art. 90 ; 3 Whart. Ev. 927; 1 Green. Ev. 284; Cuthrell v. Cuthrell, 101 Ind. 375; Anderson v. Walter, 34 Mich. 113. The writing is conclusive only as to the terms of the contract and does not conclusively establish its exist- ence. Burnes v. Scott, 117 U. S. 583; White v. Boyce, 21 Fed. R. 328; Leddy v. Barney, 139 Mass. 394. 330 INTERPRETATION OF CONTRACT. Part IV. they would then sign the memorandum of the terms, yet they were not to sign it as an agreement until Abernethie was consulted. I grant the risk that such a defence may be set up without ground; and I agree that a jury should therefore always look on such a defence with suspicion ; but, if it be proved that in fact the paper was signed with the express intention that it should not be an agreement, the other party cannot fix it as an agreement upon those so signing. The distinction in point of law is, that evidence to vary the terms of an agreement in writing is not ad/missihle, hut evidence to show that there is not an agreement at all is admissible." § 3. Evidence as to the terms of the Contract. Evidence as to terms — General rule. — "We now come to extrinsic evidence as affecting the terms of a contract, and here the admissibility of such extrinsic evidence is [*244:] narrowed to a small compass : for " according to *the general law of England the written record of a con- tract must not be varied, or added to by verbal evidence of what was the intention of the parties." " Exceptions. — We find exceptions to this rule — (ffl) in cases where terms are proved supplementary, or collateral to so much of the agreement as is in writing; (5) in cases where explanation of the terms of the contract is required ; (c) in the introduction of usages into the contract; , {d) in the application by equity of its peculiar remedies in the case of mistake. {a) Supplementary terras. — It may happen that the parties to a contract have not put all its terms into writing. Evidence of the supplementary terms is then admissible, not to vary but to complete the written contract.^ a. Per Blackburn, J., in Burges v. Wickham, 3 B. & S. 669. 1 Lyon V. Lenon, 106 Ind. 567; Walter A. Wood, etc. v. Gertner, 55 Mich. 453; Mobile, etc. v. Jurey, 111 U. S. 584; Reynolds v. Hassam, 56 Vt. 449; Lash v. Parlin, 78 Mo. 391. Chap. I. § 3. RULES RELATING TO EVIDENCE. 321 In Jervis v. Berridge" the plaintiff agreed to assign to tlie defendant a contract for the purchase of lands from M. The assignment was to be made upon certain terms, and a memorandum of the bargain was made in writing, from which at the request of the defendant some of the terms were omitted. In fact the memorandum was only made in order to obtain a conveyance of the lands from M. When this was done and the defendant had been put in possession he refused to fulfill the omitted terms which were in favour of the plaintiff. On action being brought he resisted proof of them, contending that the memorandum could not be added to by parol evidence. Lord Selborne however held that the memorandum was "a mere piece of machin- ery obtained by the defendant as subsidiary to and for the pv/rposes of tJie verbal and only real agreement under circum- stances which would make the use of it, for any purpose inconsistent with that agreement, dishonest and fraudu- lent." Collateral terms. — Again, evidence may be given of a verbal agreement collateral to the contract proved, subject- ing it to a term unexpressed in its contents. Such a term however can *only be enforced if it be not [*245] contrary to the tenor of the written agreement. Thus, where a farmer executed a lease upon the promise of the lessor that the game upon the land should be killed down, it was held that he was entitled to compensation for dam- age done to his crops by a breach of such a verbal promise, though no reference to it appeared in the terms of the lease. Mellish, L. J., in giving judgment said, " !N"o doubt, as a rule of law, if parties enter into negotiations affecting the terms of a bargain, and afterwards reduce it into writing, verbal evidence will not be admitted to introduce additional terms into the agreement ; but, nevertheless, what is called a collateral agreement, where the parties have entered into an agreement for a lease or for any other deed under seal, may be made in consideration of one of the parties execut- a. 8 Cb. 351. 21 323 INTERPRETATION OF CONTRACT. Part IV. ing that deed, unless, of course, the stipulation contradicts the terms of the deed itself. I quite agree that an agree- ment of that kind is to be rather closely watched," and that we should not admit it without seeing clearly that it is sub- stantially proved." ' (5) Explanation of terms; to identify parties. — Expla- nation of terms may merely amount to evidence of the identity of the parties to the contract, as where two per- sons have the same name, or where an agent * has con- tracted in his own name but on behalf of a principal whose name or whose existence he does not disclose.* Or sulbject-matter. — Or it may be a description of the subject-matter of the contract, as in a case in which A agreed to buy of J^ certain wool which was described as " your wool," and the right of X to bring evidence as to the quality and quantity of the wool was disputed. The Court held that it was admissible, and Erie, J., thus stated the grounds of decision : — "I am of opinion that the plaintiffs are entitled to suc- ceed. I assume that they must prove a written contract, and that that contract must contain all the material terms. The contract here is most explicit : it is to purchase [*24:6] of the plaintiffs *" your wool," at 16s. a stone, to be delivered at Liverpool. The oral evidence is no doubt admissible to identify the subject-matter of the con- tract, and to show what "your wool "really was. The judge, who has to construe the written document, cannot a. Ersklne t. Adeane, 8 Ch, at p. 776. b. Wake v. Harrop, 6 H. & N. 768. 1 Walker v. France, 113 Pa. St. 203; Liebke v. Methuda, 18 Mo. App. 143; Keen v. Beckman, 66 la. 673; Hersey v. VerrUl, 89 Me. 271; Binney V. Morrill, 57 Me. 373; Carr v. Dooley, 119 Mass. 294; MoCormick v. Cheevers, 134 Mass. 263. 2 Leach v. Dodson, 64 Tex. 185; Johnson v. Bennett, 67 Iowa, 679 Cleveland v. Burnham, 64 Wis. 347 ; Brewster v. Baxter, 3 Wash. 135 Sauer v. Brinker, 77 Mo. 289; Bartlett v. Remington, 59 N. H. 364 Mobberley v. Mobberley, 60 Md. 876; Barkley v. Tarrant, 20 S. C. 574 Nutt V. Humphrey, 83 Kans. 100. Caiap. L §;3. RULES RELATING TO EVIDENCE. 82S have judicial knowledge of the subject-matter ;" and evi- dence has been invariably allowed to identify it."^ To show application of pbrase. — Explanation of terms may be an explanation of some word not describing the subject-matter of the contract, but the amount and char- acter of the responsibility which one of the parties takes upon himself as to the conditions of the contract. Where a vessel is warranted " seaworthy," a house promised to be kept in "tenantable " repair, a thing undertaken to be done in a " reasonable " manner, evidence is admissible to show the application of these phrases to the subject-matter of the contract, and so as to ascertain the intention of the parties. In Surges v. Wickham^ a vessel called the Ganges, in- tended for river navigation upon the Indus, was sent upon the ocean voyage to India, having first been temporarily strengthened so as to be fit to meet the perils of such a voyage. Her owner insured her, and in every policy of marine insurance there is an implied warranty by the in- sured that the vessel is "seaworthy." The Ganges was not seaworthy in the sense in which that term would be ordi- narily applied to an ocean-going vessel, but her condition was made known to the underwriters, and though the ad- venture was more dangerous than an ordinary voyage to India, there appeared to be a reasonable probability of its being brought to a safe ending. At any rate, the under- writers took the risk in full knowledge of the facts. The Ganges was lost, and the owner sued the underwriters; they defended the action on the ground that the vessel was unsea- worthy in the ordinary sense of the word as applied to an ocean voyage, and maintained that evidence could not be ad- o. Macdonald v. Longbottom, 1 E. & E. 977. 6. 3 B. & S. 660. 1 Barrett v. Murphy, 140 Mass. 133 ; Tbornell v. Brockton, 141 Mass. 151; Homev. Chatham, 64 Tex. 36; Robinson v. Douthit, 64 Tex. 101 j Lyman v. Gedney, 114 111. 388; Baker v, McArthur, 54 Mich. 139; Thompson v. Stewart, 60 la. 333. 834 INTERPRETATION OF CONTRACT. Part IV. mitted to show that, with reference to this particular pSiT] vessel and voyage, the term was understood *in a modified sense. It. was held that such evidence was admissible. The grounds on which it was admissible are stated by Blackburn, J., in a judgment which explains the rule with the utmost clearness : — " It is always permitted to give extrinsic evidence to ap^ ply a written contract, and show what was the subject- matter to which it refers. When the stipulations in the contract are expressed in terms which are to be understood, as logicians say, not simpliciier, sed seoimdum quid, the ex- tent and the obligation cast upon the party may vary greatly according to what the parol evidence shows the subject- matter to be; but this does not contradict or vary the contract. For example, in a demise of a house with a . cov- enant to keep it in tenantable repair, it is legitimate to inq^uire whether the house be an old one in St. Giles's or a mew palace in Grosvenor-square, for the purpose of ascertain- ing whether the tenant has complied with his covenant ; for that which would be repair in a house of the one class is not so when applied to a house of the other (see Payne v. Haine)."' So, suppose a sale of a horse warranted to go well in harness ; the qualities necessary to constitute a good goer in harness would be different in a pony fit to draw a lady's carriage or a dray-horse ; or in a lease of "Whiteacre for a year with an express contract to cultivate it in a proper manner, the quantity of labour and manure which the tenant would have to bestow must be different according as "White- acre consists of /hop gardens or meadows. In each of these cases you legitimately inquire what is the subject-matter of the contract, and then the terms of the stipulation are to be understood, not simpliciter, but secundum quid. The two last instances I have supposed are not, as far as I know, decided cases ; but I give them to explain my meaning as examples of a general rule. Now, according to the view already expressed, seaworthiness is a term relative t6 the ' a. 16 M. & W. 541. Chap. I. § 3. RULES RELATING TO EVIDENCE. 325 nature of the adventure, it is to be understood, not simplio- iter, but secundum quid." " Cases of the sort we have just described are called cases of *latent ambiguity, and are sometimes dis- [*24;8] tinguished from patent ambiguities, where words are omitted, or contradict one another ; in such cases ex- planatory evidence is not admissible. Thus, where a biU of exchange was drawn for " two hundred pounds" but the figures at the top were " 215," evidence was not admitted to show that the bill was intended to be drawn for the larger amount.* (o) Usage to annex incidents. — Evidence is admissible of the usage of a trade or a locality which may add a term to a contract, or may attach a special and sometimes non- natural meaning to one of its terms.^ As an instance of a usage which annexes a term to a contract we may cite the warranty of seaworthiness just mentioned, which by custom is always taken to be included in the contract of marine in- surance, though not specially mentioned. Similarly in the case of agricultural customs, a usage that the tenant, quitting his farm at Candlemas or Christmas, was entitled to reap the corn sown the preceding autumn, was held to be annexed to his lease, although the lease was un- der seal, and was silent on the subject." The principle on which such usages are annexed is stated by Parke, B., in Sutton v. Warren,^ to rest on the " presump- tion that in such transactions the parties did not mean to express in writing the whole of the contract by which they a. Burges v. Wickham, 8 B. & S. 699. 6. Sanderson v. Piper, 5 Bing. N. C. 425. c. Wigglesworth v. Dallison, 1 Sm. L. C. 698. cJ. 1 M. & W. 466; and see judgment of Blackburn, J., In Mollett v. Robinson, L. B. 7 C. P. at p. 111. 1 Foster v. Robinson, 6 Ohio St. 90 ; Steamboat Albatross v. Wayne, 16 Ohio St. 513 ; Lowe v. Lehman, 15 Ohio St. 179 ; Brown Chemical Co. V. Atkinson, 91 N. C. 389; Everingham v. Lord, 19 111. App. 565; Potter V. Morland, 3 Cush. 384; Wilcox v. Wood, 9 Wend. 346; Swift Iron & Steel Works v. Drury, 37 Ohio St. 242. 836 INTERPRETATION OF CONTRACT. Part IV. intended to be bound, but to contract with reference to those known usages." To explain phrases. — The admissibility of eviderice of usage to explain phrases in contracts, whether commercial, agricultural, or otherwise subject to known customs, might be exemplified by reference to very numerous cases. The principle on which such explanation is admitted has been stated to be, " that words perfectly unambiguous in their ordinary meaning are used by the contractors in a different sense from that. In such cases the evidence neither adds to, nor qualifies, nor contradicts the existing contract ; it only ascertains it by expounding the language." " f*24:9] *Thus in commercial contracts in the case of charter-parties in which the days allowed for un- loading the ship " are to commence running ' on arrival ' at the ship's port of discharge, evidence may be given to show what is commonly understood to be the port. Some ports are of large area, and by custom ' arrival ' * is understood to mean arriving at a particular spot in the port." In like manner a covenant" by the lessee of a rabbit warren that he would leave 10,000 rabbits on the warren was explained by evidence of a usage of the locality that 1,000 meant l,200.i_ «. Brown v. Byrne, 3 E. & B. 718. b. Per Coleridge, C. J., Norden Steam Co. T. Dempsey, 1 C. P. D. 658. c. Smith v. Wilson, 3 B. & A. D. 728. 1 Sraitll T. Wilson has been, followed in Soutier v. Kellerman, 18 Mo. 609, and is regarded as a leading case. Lawson on Usages and Customs, p. 334. It is of doubtful authority, however. Hinton v. Locke, 5 Hill, 438; Barlow v. Lambert, 38 Ala. 710; Wilkinson v. Williamson, 76 Ala. 163; Sweeney v. Thomason, 9 Lea (Tenn.), 359. In the last case cited in a suit upon contract " to pay $8 per thousand for brick in the wall," the court declined to receive evidence that by usage the number of brick in a wall was to be ascertained by measurement and not by actual count. " It would hardly be admissible to prove that, by custom or usage of brick masons, ' one thousand ' bricks means ' five hundred ' or any number less than 'one thousand.'" Abbreviated expressions and am- biguous phrases may be used with reference to some usage or custom, and in an action on a contract containing such terms, usage may be appealed to to explain them ; but as a rule, words of manifest and cer- Chap. L § 3. RULES RELATING TO EVIDENCE. 327 Closely connected with, the principle that usage may ex- plain phrases is the admissibility of skilled evidence to explain terms of art or technical phrases when used in doc- uments." Conditions under wMcTi usage operates. — In order to affect a contract a usage must be consistent with rules of law.* " A universal usage cannot be set up against the general law." And it must also be consistent with the terms of the contract, for it is optional to the parties to exclude the usage, if they think fit, and to frame their con- tract so as to be repugnant to its operation. Proved mistake a ground for refusing specific perform- ance. — In the application of equitable remedies, the grant- ing or refusal of specific performance, the rectification of documents or their cancellation, extrinsic evidence is more freely admitted. Thus, though, as we have seen, a man is ordinarily bound by the terms of an offer unequivocally expressed, and ac- cepted in good faith, evidence has been admitted to show o. HUls Y. Evans, 31 L. J. Ch. 457. 6. Ber Erie, C. J., in Meyer v. Drener, 16 C. B. N. S. 616. tain import cannot be given an unnatural meaning. Caldwell v. Meek, 17 111. 239; Corwin v. Patch, 4 Cal. 204; Atkinson v. Allen, 29 Ind. 375 George v. Bartlett, 23 N. H. 496; Hedden v. Roberts, 134 Mass. 188 Greenstone v. Burchard, 50 Mich. 434; Gibney v. Curtis, 61 Md. 193 Brown v. Foster, 113 Mass. 136; Lawson on Usages and Customs, p. 434. Usage. — The intention of contracting parties cannot be shown by evi- dence of a usage which is at variance with the express terms of the con- tract, or repugnant to statutory law, Mansfield v. Inhabitants, 15 Gray, 149 ; Cayzer v. Taylor, 10 Gray, 410 ; or against piiblie policy, Raisin v. Clark, 41 Md. 158 ; 20 Am. R. 66 ; or unreasonable and oppressive. Strong V. Grand Trunk R. R. Co. 15 Mich. 206 ; Pennsylvania Coal Co. v. Sander- son, 94 Pa. St. 303. Many usages against the rules of the common law have been sustained, but courts have frequently pronounced them in- valid on the principle that no custom can be established which .contra- venes the general rules of law. The principle admitting evidence of such usages is generally recognized, but in its application the author- ities are conflicting. Dickinson v. Gay, 7 Allen, 29 ; Lawson on Usages and Customs, pp. 465-486. 328 INTERPRETATION OF CONTRACT. Part IV. that the offer was made by inadvertence. An illustration is afforded by the decision in Wdtster v. Cecil." A offered to X several plots of land for a round sum ; immediately after he had despatched his offer he discovered that by a mistake in adding up the prices of the plots he had offered his land for a lower total sum than he intended. He in- formed X of the mistake without delay, but not before JT had concluded the contract by acceptance. [*250] *0n proof of this, specific performance of the con- tract was refused, and X was left to such remedy by way of damages as the Common Law Courts might give him.* Again, where a parol contract has been reduced to writ- ing, or where a contract for a lease or sale of lands has been performed by the execution of a lease or conveyance, evi- dence may be admitted to show that a term of the contract is not the real agreement of the parties. And this is done for two purposes and under two sets of circumstances. Eectification of documents. — Where a contract has been reduced into writing, or a deed executed, in pursuance of a previous agreement, and the writing or deed, owing to mutual mistake, fails to express the intention of the par- ties, the Chancery Division will rectify the written instru- ment in accordance with their true intent. This may be done even though the parties can no longer be restored to the position which they occupied at the time when the con- tract was made." Should the original agreement be ambig- uous in its terms, extrinsic and, if necessary, parol evidence will be admitted to ascertain the true intent of the parties. But there must have been a genuine agreement {Macken- zie V. Ooulson) : ^ its terms must have been expressed under mutual mistake {Fowler v. Fowler) : " and the oral evidence, if the only evidence, must be uncontradicted. a. SO Bear. 62. b. Webster v. Cecil, 30 Beav. 62. e. Earl Beauchamp v. Winn, L. K. 6 H. L. at p. 232; Murray t. Parker, 19 Bear. 806. d. 8 Eq. 375. B. 4 D. & J. 230. See oases cited in Pollock, 470, 478, ed. A. Chap. L § 3. RULES RELATING TO EVIDENCE. 389 Correction of mistake which is not mntnal. — Where mistake is not mutual, extrinsic evidence is only admitted in certain cases which appear to be regarded as having something in the character of Fraud, and is admitted for the purpose of offering to the party seeking to pi-oflt by the mistake an option of abiding by a corrected contract, or having the contract annulled. Instances of such cases are Garrard v. Frankel,'^ cited above, or Harris v. Pepperell,'' in which the mistake of the one party was caused by the other, though not with any fraudulent intent, and known to him before his position had been affected by the con- tract. It would seem that, in such cases, these corrective powers *are not used unless the parties can be placed [*251] in the same position as if the contract had not been made. i The Judicature Act " reserves to the Chancery Division of the High Court a jurisdiction in " all causes for the rec- tification or setting aside or cancellation of deeds or written instruments." a. 80 Beay. 444. See p. 134 b. 6 Eq. 1. «. 86&S7Vict. c. 66, $34. CHAPTEK n. Rules relating to Construction. § 1. General Rules. So far we have dealt with the admissibility of evidence in relation to contracts in writing. We now come to deal with the rules of construction which govern the interpreta- tion of the contract as it is found to have Been made be- tween the parties. (1) Words to Ibe understood in their plain meaning. — The first rule to lay down is that words are to be under- stood in their plain and literal meaning. And this rule is followed even though its consequences may not have been in the contemplation of the parties, subject always to ad- missible evidence being adduced of a usage varying the usual meaning of the Avords, and subject to the next rule which we proceed to state. (2) Subject to inference of intention from the whole document. — " An agreement ought to receive that construc- tion which will best effectuate the intention of the parties to be collected from the whole of the agreement; " ' ' Greater regard is to be had to the clear intention of the parties than to any particular words which they may have used in the expression of their intent." " These two rules would seem sometimes to be in conflict, but they come substantially to this; men will be taken to have meant precisely what they have said, unless, from the whole tenor of the instrument, a definite meaning can be col- lected which gives a broader interpretation to specific words than their literal meaning would bear. The Courts will not make an agreement for the parties, but will ascertain what o. Mallan T. May, 13 M. & W. 517; Ford v. Beech, 11 Q. B. 866. Chap. II. § 3. RULES RELATING TO CONSTRUCTION. 331 their agreement was, if not by its general purport, *then by the literal meaning of its words. Subsid- [*253] iary to these main rules there are various others, all tending tolhe same end, the effecting of the intention of the parties so far as it can be discerned. Subsidiary rules. — Thus Courts, both of Law and Equitj^, wiU correct obvious mistakes in writing and grammar. They will restrain the meaning of general words by more specific and particular descriptions of the subject-matter to which thej' are to apply. They assign to words susceptible of two meanings that which will make the instrument valid. Thus in TIaigh v. BrooJcs," a document was expressed to be given to the plaint- iffs " in consideration of your being in advance " to J. S. It was argued that this showed a past consideration, but the Court held that the words might mean a prospective ad- vance, and be equivalent to " in consideration of your her coming in advance," or " on condition of your being in advance." They will construe words most strongly against the party who used them. The principle on which this rule is based seems to be that a man is responsible for ambiguities in his own expression, and has no right to induce another to con- tract with him on the supposition that his words mean one thing, while he hopes the Court will adopt a construction by which they would mean another thing, more to his ad- vantage.* § 2. Bules of LoAJO and Equity as to Time and Penalties. There are two points of construction on which law and equity once differed though they differ no longer. These have reference to terms respecting time and penalties. Time — Of the essence of the contract at Common I^aw. — At law, '^time was always of the essence of the contract." If A made a promise to X whereby he under- a. 10 A. & E. 326. 6. Fowkes v. Manchester Assurance Co. 3 B. & S. at p. 939. 333 INTERPRETATION OF CONTRACT. Part IV. took to do a certain thing by a certain day in consideration that X would thereupon do something for him, X was dis- charged from his promise if, by the date named in the con- tract, ^'s promise was unfulfilled. Equity however [*254] looked further into the *intention of the parties, so as to ascertain whether in fact the performance of the contract was meant to depend upon J.'s promise being fulfilled to the day, or whether a day was named in order to secure performance within a reasonable time. If the latter was found to be the intention of the parties, equity would not refuse to A the enforcement of X's promise if his own was performed within a reasonable time. It is nevertheless open to the parties," by express agreement, to make time of the essence of the contract.^ o. Lennon v. Napper, 2 Sell. & L. 684. 1 Time is not so far of the essence of the contract as to prevent its en- forcement in equity within a reasonable time after the lapse of the time specified. Moote v. Scriven, 33 Mich. 500; Maltby v. Austin, 65 Wis. 537. The rule in the states generally, is, that while equity will not re- gard the time specified as of the essence of the contract, still the parties by express agreement may make it so, and in case they do, equity wiU not relieve the party in default. Barnard v. Lee, 97 Mass. 93 ; Reed v. Braden, 61 Pa. St. 460; Grey v. Tubbs, 43 Cal. 359; Bullock v. Adams, 5 C. E. Greene, 371; Scott v. Felds, 7 Ohio, 90; Morgan v. Bergen, S Neb. 209; Gregg v. Landis, 31 N. J. Eq. 494; Kemp v. Humphrey, 36 111. 33. In Michigan a stipulation in the contract that " time is declared to be of the essence of this contract " is of little force. Equity may disregard it. Time cannot be made essential in a contract, merely by BO declaring, if it would be unconscionable to allow it.'' Richmond V. Robinson, 13 Mich. 201; Kimball v. Goodburn, 32 Mich. 10; Cole v. Wells, 49 Mich. 453. And in other states the same result is accomplished by the courts finding a waiver of the stipulation on very slight evi- dence. Whether specific performance will be decreed depends in a great measui'e upon judicial discretion ; and the fact that parties have made time of the essence of their contract does not necessarily preclude the courts from granting relief against such a provision, where it is in the nature of a penalty, or the circumstances render it inequitable to en- force the forfeiture. Pomeroy on Contr. sec. 391 ; Quinn v. Roath, 37 Conn. 16; O'Fallen v. Kennerly, 45 Mo. 137; Ballard v. Cheney, 19 Neb. 68; Thayer v. Wilmington Starr Mining Co. 105 111. 540; Austin v. Wacks, 30 Minn. 335 ; Barsolou v. Newton, 63 Cal. 223. Chap. II. § 2. RULES RELATING TO CONSTRUCTION, 833 The distinction between tlie rales of law and equity in this respect is now swept away by the Judicature Act," which enacts that " Stipulations in contracts as to time or otherwise, which would not before the passing of this Act have been deemed to be, or to have become of the essence of such contracts in a Court of Equity, shall receive in all Courts the same construction and effect as they would have heretofore re- ceived in equity." Penalties; general principle governing rules. — "We have had occasion to note in the case of Bonds and Mort- gages the attitude of the Equity Courts towards an agree- ment which imposes on one of the parties, for a breach of all or any of its terms, a loss in money or property dis- proportionate to the objects which the agreement was in- tended to effect. And for a long time past Courts of Law have taken a similar view of the subject.' The question of construction is of this kind. Where the partiies affix a penalty to the non-performance of his promise by one, or each of them, they may have intended to effect either of two purposes; to assess the 'damages at which they rate the non-performance of the promise, or to secure its performance by the imposition of a penalty in excess of the actual loss likely to be sustained. Penalty and liquidated damages. — If the former was their intention, the sum named is recoverable as " liquidated damages."* If the latter, 'the amount *re- [*255]; coverable is limited to the loss actually sustained, in spite of the sum undertaken to be paid" by the defaulter. In construing contracts in which such a term is introduced, the Courts will not be guided by the name given to the sum to be. paid. If it be in the nature of a penalty they will not o. 36 & 37 Tiot. c. 66, § 25, sub-§ 7. b. Liquidated damages are " the sum agreed upon in the contract by the parties themselves as the damages for a breach of it." Unliquidated damages are such as are left to be assessed by a jury according to the loss sustained. Bullen & Leake, Free, of Pleadings, 188. iTayloe v. Sandiford,,? Wheat. 13; Watts v. Connors, 115 U.S. 353 834, INTERPRETATION OF CONTKACT, Part IV. allow it to be enforced although the parties have expressly stated that it is to be paid as liquidated damages and not as a penalty.' 1 Kemble t. Farren has been generally followed, and is cited approv- ingly in Whitefield v. Levy, 35 N. J. L. 149 ; Shiel v. McNitt, 9 Paige, 101; Niver v. Rossman, 18 Barb. 50; Perkins v. Lymann, 11 Mass. 83, note; Morse v. Eathburn, 43 Mo. 598; Berry v. Wisdom, 3 Ohio St. 844; and to the same eflfeot are Curry v. Larer, 7 Pa. St. 470; Shrive v. Brereton, 51 Pa. St. 175; Heatwole v. Gorrell, 35 Kans. 697; Bradstreet V. Baker, 14 R. I. 546 ; Pennybacker v. Jones, 106 Pa. St. 337 ; Lansing V. Dodd, 45 N. J. L. 535 ; Daily v. Litchfield, 10 Mich. 39 ; Trustees v. Walrath, 37 Mich. 333 ; Daniel v. Brown, 54 Me. 468. But the case has not passed without criticism. Brewster v. Edgerley, 13 N. H. 375 ; Pierce V. Jung, 10 Wis. 30 ; Clement v. Cash, 31 N. Y. 353 ; Jacqueth v. Hud- son, 5 Mich. 134. In Jacqueth v. Hudson, Christiancy, J., held that the inquiry in this class of cases was whether the principle of just compen- sation had been violated; " not what the parties intended, but whether the sum is, in fact, in the nature of a penalty; and this is to be deter- mined by the magnitude of the sum, in connection with the subject- matter, and not at all by the words or the understanding of the parties. The intention of the parties cannot alter it." Johnston v. Whittemore, 27 Mich. 463; Myer v. Hart, 40 Mich. 533. In Myer v. Hart, Marston, J., said: " Parties contracting are not permitted to stipulate and fix the measure of damages that shall be recovered in case of a breach of the contract, grossly in excess of what the damages should actually appear to be. Just compensation for the injury sustained is the principle at which the law aims, and the parties wUl not be permitted, by express stipulation, to set this principle aside." This leads up to the conclu- sion that, in any case, if the sum agreed upon by the parties, as stipu- lated damages, shocks the conscience of the court, the jury will be asked to afford relief by assessing the actual damages sustained. Beal V. Hayes, 5 Sandf. 640; Cotheal v. Talmage, 9 N. Y. 551; Caldwell v. Lawrence, 38 N. Y. 71. Upon this subject there are many contradictory decisions, and various rules have been suggested to assist in arriving at the intention of the contracting parties. 'The rules stated in the text have been generally followed in this country and are perhaps sufficient at this time. There would be less call for false reasoning, regarding the meaning of the terms "liquidated damages" and "penalty" in con- tracts, in cases where there is not the slightest doubt as to wh^t the par- ties intended, if the practical results of the decisions were announced as correct conclusions of law ; that penalties are left to the state, where the power of punishpient belongs, to be inflicted on its citizens for breach of statutory duty, and stipulated damages were to serve their purpose in the compromise of existing causes of action, while agree- Chap. n. § 3. RULES RELATING TO CONSTRUCTION. 885 For determining this question of construction the follow- ing rules may be laid down. If the contract is for a matter of certain value and a sum is fixed to be paid on breach of it which is in excess of that value, then the sum fixed is a penalty and not hquid&,ted damages^ If the contract is for a matter of uncertain value and a sum is fixed to be paid on breach of it, the sum is recover- able as liquidated damages. There is " nothing illegal or unreasonable in the parties, by their mutual agreement, settling the amount of damages, uncertain in their nature, at any^ sum upon which they may agree." " And if a debt is to be paid by instalments it is no penalty to provide that on default of any one payment the entire balance of unpaid instalments is to fall due.* If the contract contains a number of terms some of which are of a certain value and some not, and the penalty is ap- plied to a breach of any one of them, it is not recoverable as liquidated damages, however strongly the parties may have expressed their intention that it shall be so. Thus in Kemble v. Farren," the defendant agreed to act at Covent Garden Theatre for four consecutive seasons and to conform to all the regulations of the theatre, and the plaint- iff promised to pay the defendant £3 6s. Sd. every night, during that time, that the theatre should be open for per- formance, and to give him one benefit night in each season. a. Per Tindal, C. J., in Kemble v. Farren. 6. Protector Loan Co. v. Grice, 5 Q, B. D. (C. A.) 59a c. 6 Bing. 147. ments whereby parties attempt to anticipate the damages which may arise from the breacli of an executory contract are condemned as un- conscionable and against the policy of the law. This would be a start- ling innovation upon established priticiples, but no more so than the practice of submitting to the jury to find not what the contract was, but what it ought to have been under the circumstances ; and that, too, under the pretense that, though the language be ever so clear and strong, " the parties must be considered as not meaning exactly what they say." ggg INTERPRETATION OF CONTRACT., Part IV. It was further agreed that for a breach of any term of this agreement by either party, the one In default [*256] should pay the *other £1,000, " to which sum it was thereby agreed that the damages sustained by such omission, neglect, or refusal, should amount; and which sum was thereby declared by the said parties to be liquidated and ascertained damages and not a penalty or penal sum or in the nature thereof." The defendant refused to act dur- ing the second season, the jury put the damages for his breach of contract at £750, and the plaintiff moved for a rule to raise them to £1,000. But the Court held, that in spite of the explicit stateraent of the parties that the sum, was not to be regarded as a penalty, it must be so regarded. If the penal clause had been limited to breaches uncertain in their nature and amount, it might, as was thought, have had the effect of ascertaining the damages, for the reason above cited. " But," said Tindal, C. J., " in the present case the clause is not so confined; it extends to the breach of any stipulation by either party. If, therefore, on the one hand, the plaintiff had neglected to make a single payment of £3 6s. ?id. per day, or on the other hand, the defendant had refused to con- form to any usual regulation of the theatre, however minute or unimportant, it must have been contended that the clause in question, in either case, vrould have given the stipulated damages of £1,000. But that a very large sum should be- come immediately payable, in consequence of the non-pay- ment of a very small sum, and that the former should not be considered as a penalty appears to be a contradiction in terms ; the case being precisely that in which courts of equity have always relieved, and against which courts of law have, in modern times, endeavoured to relieve, by directing juries to assess the real damages sustained by the breach of the agreement." PART Y. DISCHARGE OF CONTRACT. Discharge of contract. — We have now dealt with the elements' which go to the formation of Contract, with the operation of Contract when formed, and with its interpre- tation when it comes into dispute. It remaias to consider the modes in which the contractual tie may be loosed, and the parties wholly freed from their rights and liabilities un- der the contract. And in dealing with this part of the subject it will be proper to consider, not merely the mode in which the original contract may be discharged, but, in case of its being discharged by breach, the mode in which the right of action arising thereupon may be extinguished. How effected. — The modes in which a contract may be discharged would seem to be these. (a) Agreement. — It may be discharged by the same pro- cess which created it, mutual agreement. (/3) Performance. — It may be perfornjied; and all the duties undertaken by either party may be thereby fulfilled, and all the rights satisfied. (j") Breach. — It may be broken ; upon this a new obliga- tion connects the parties, a right' of action possessed by the one against the other. , 8) Impossibility. — It may become impossible by reason of certain circumstances which are held to exonerate the parties from their respective obligations. (e) Operation of lam. — It may be discharged by the oper- ation of rules of law upon certain sets of circumstances, to be hereafter mentioned. CHAPTER L Discharge of Contract by Agreement. Forms of discharge Iby agreement. — We have often "noted, as the essential feature of the contractual obligation, that it is the result of the voluntary act of the parties, ex- pressed by their agreement. As it is their agreement which binds them, so by their agreement they may be loosed. And this mode of discharge may occur in one of three forms: waiver; substitute agreement; condition subsequent. § 1. Waiver. Waiver. — A contract, may be discharged by express agreement that it shall no longer bind either party. This process is called a waiver, cancellation, or rescission of the contract. An agreement of this nature is subject to the rule which governs all simple contracts, with regard to consideration. And the consideration for the promise of each party is the abandonment by the other of his rights under the contract. The rule, often stated, that " a simple contract may, before breach, be waived or discharged, without a deed and with- out consideration," " must be taken to mean that, where the contract is executory, no further consideration is needed for an agreement to rescind, than the discharge of each party by the other from his liabilities under the contract.^ a. Bylea on Bills, 197. i " An agreement to waive a claim for damages after it has fully ac- crued, nothing remaining to be done, would be without consideration ; but it is not thus where something is still to be done, and is only per- formed in consideration of such waiver." Moore v. Detroit Locomotive Works, 14 Mich. 266. See supra, *81, note. In an executory contract the release of each party is a sufficient consideration for the waiver. Kelly V. Bliss, 54 Wis. 187. CJhap. I. § 1. BY AGREEMENT. 339 Mere waiver of contractual rights inyalid. — There seems to be no authority for saying that a contract, exe- cuted upon one side, can be discharged before breach, with- out consideration ; that where A has done all that he was bound to do and the time for Xto perform his promise has not yet arrived, a bare waiver of his claim by A would be an effectual discharge to X} *In fact, English law knows nothing of the aban- [*259] donment of such a claim, except by release under seal, or for consideration. The plea of " waiver " " under the old system of pleading was couched in the form of an agreement between the parties to waive a contract, an agreement consisting of mutual promises, the consideration for which is clearly the relinquishment of a right by each promisee. Where a discharge by waiver is alleged as a de- fence in an action for breach of contract, the cases tend to show that the defendant must set up, in form or substance, a mutual abandonment of claims, or else a new considera- tion for the waiver. In King v. Gillett,^ the plaintiff sued for breach of a promise of marriage; the defendant pleaded that before breach he had been exonerated and discharged by the plaint- iff from the performance of his promise. The Court held that the plea was allowable in form; "yet we think," said Alderson, B., " that the defendant will not be able to suc- ceed upon it, . . . unless he proves a proposition to ex- onerate on the part of the plamtiff, acceded to hy himself^ and this in effect will be a rescission of the contract." In Dohson v. Espie," the plaintiff sued the defendant for non-payment of deposit money due upon a sale of land. The defendant pleaded that, before breach of his promise to pay, the plaintiff had given him leave and license not to pay. The Court held that such a plea was inapplicable to o. Mullen & Leake, Preo. of Pleadings, Tit. Waiver; Rescission, ft, 7 M. & W. 55. c. 2 H. & N. 79. iSeep. 360, n. 340 DISCHARGE OF CONTRACT. Part V. a suit for the breach of a contract, and that the defendant should have pleaded an exoneration and discharge; but it is difficult to see why the pleader should not have adopted the latter form of plea, unless it were that (according to the reasoning of Alderson, B., in King v. Oillett) an exoneration means a promise to exonerate, which like any other promise needs consideration to support it. It is clear that in Ddbson V. Es-pie the plaintiff was to obtain nothing for his alleged waiver; neither the relinquishment of a claim, nor any fresh consideration. Finally, we have the express authority of Parke, [*260] B., in ^Foster v. Dawber^iov saying that an executed contract, i. e. a contract in which one of the parties has performed all that is due from him, cannot be dis- charged by a parol waiver. But this case illustrates an- other feature of the matter under discussion, to which we will now proceed. Peculiarity of bills of exchange and promissory notes. To the general rule which we have laid down there is an important exception in the case of bills of exchange and promissory notes. The rights of the holder of such instru- ments may be waived and discharged without any consid- eration for their waiver. The point arose in the case of Foster v. Dawber. The plaintiff was the executor of one J. 0., to whom the defendant had given promissory notes for £1,000 as security for a loan of that amount. After- wards J. G. had given the defendant a discharge for the promissory note. It was held that the discharge, though unsupported by consideration, was valid.^ a. 6 Exch. 839. 1 Parol wairer — Foster t. Dawber.— By the weight of American au- thority bills of exchange and promissory notes present no exception to the general rule that a cause of action cannot be discharged by a parol waiver, unsupported" by any consideration. The case of Poster v. Dawber is not followed to that extent by our courts. Crawford v. Millspaugh, 13 Johns. 87 ; Seymour v. Menham, 17 Johns. 169 ; Smith V. Bartholomew, 1 Met. 276 ; Myers v. Byington, 34 la. 205 ; 2 Pars. N. & B. 235. It is sometimes said that the holder of a bill of exchange Chap. I. § 3. BY AGREEMENT. 341 The Court said, " It is competent for both parties to an executory contract, by mutual agreement, without any sat- isfaction, to discharge the obligation of that contract. But an executed contract cannot he discharged except hy a release under seal, or hy performance of the ohligation, as by pay- ment, where the obligation is to be performed by payment. But a promissory note or a bill of exchange appears to stand on a different footing to simple contracts. . . . The rule of law has been so often laid down and acted upon, although there is no case precisely on the point as between immediate parties, that the obligation on a bill of ex- change may be discharged by express waiver, that it is too late now to question the propriety of that rule." And it was further held that the rule as to bills of ex- change, originating in the law merchant by which those instruments are almost entirely governed, would apply to promissory notes which derive their negotiable character from statute. The statute 3 & 4 Anne, o. 9, makes the same law applicable to both instruments. *§ 2. Substituted Contract. [*261] Substituted contract, how difiFerent from waiver. — A contract may be discharged by an alteration in its terms may by parol waiver discharge the acceptor. The true ground is that a waiver works by way of estoppel rather than by way of contract, and is effectual only when the holder's renunciation of his rights has induced the acceptor to part with funds or xshange his condition e^o that it would be inequitable to enforce the contract of acceptance. 1 Pars. N. & B. 326, n. ; 1 Danl. Neg. Inst. sec. 544. But a surrender of the obliga- tion, bill or note, with the intent and for the purpose of discharging the debt, and without fraud or mistake, operates in law as a discharge of the liability thereon ; nor is any consideration required to support such a transaction when it has been fully executed. Vanderbeok v. Vanderbeck, 30 N. J. Eq. 370; In re Campbell's Estate, 7 Pa. St. 100; Albert v. Ziegler, 39 Pa. St. 50; Beach v. Endress, 51 Barb. 570; Doty V. Wilson, 5 Lans. 10: Larkin v. Hardenbrook, 90 N. Y. 334. These authorities also support the proposition that a mere parol release of a debt without consideration is void. There must be a surrender to the debtor of the evidence of the debt. 343 DISCHARGE OF CONTRACT. Part V. which, in effect, substitutes a new agreement for the old one. The difference between this and the first-mentioned mode of discharge by agreement lies in the fact that the first is a total obliteration of the contract, the second is a substitution of a new bond between thei parties in place of the old one. May be an implied discharge.— And it operates as a rescission in this way, that if it does not in terms express an intention that the original contract should be waived, it indicates such an intention by the introduction of new- terms or new parties. The change of rights and liabilities, and consequent extinction of those which before existed, forms the consideration on each side for the new contract. But the implication must he clear. — But the intention to discharge the original contract must distinctly appear, from the inconsistency of the new terms with the old ones. If there be a mere postponement of performance, for the convenience of one of the parties, the contract is not thereby discharged. How different from postponement of performance. — The question has often arisen in contracts for the sale and delivery of goods, where the delivery is to extend over some time. The purchaser requests a postponement of de- livery, then refuses to accept the goods at all, and then alleges that the contract was discharged by the alteration of the time of performance ; that a new contract was thereby created, and that the new contract is void for non-com- pliance with the 17th section of the Statute of Frauds.^ But the Courts have always recognized " the distinction iTo what extent a written contract, required to be in writing undfer the Statute of Frauds, may be modified by a subsequent oral agreement, is a serious question, and the authorities are conflicting. In Swain v. Seamans, 9 Wall. 373, CliflEord, J., said : " The better opinion is that a written contract falling within the Statute of Frauds cannot be varied by any subsequent agreement of the parties, unless such new agreement is also in writing;" and the majority of cases support this view. Browne on Stat, of Frds. 411; 1 Benj. on Sales, sec. 815; 3 Reed on Stat, of Frds. sec. 458. ^ Chap. I. § 2. BY AGREEMENT. 343 between a substitution of one agreement for another, and a voluntary forbearance to deliver at the request of an- other,"" and will not regard the latter as affecting the rights of the parties further than this, that if a man asks to have performance of his contract postponed, he does so at his own risk. For if the market value of the goods which he should have *accepted at the earlier [*262] date has altered at the latter date, the rate of dam- ages may be assessed, as against him, either at the time "when the performance should have taken place, and when by non-performance the contract was broken, or when he ultimately exhausted the patience of the vendor, and defi- nitely refused to perform the contract.* The contract is discharged by alteration of its terms" when (a) what is to be done is so far altered as to be incon- sistent with it and to amount to a new contract, or (5) when a new party is substituted for a previous one by agreement , of all three. (a) Substituted terms. — A good illustration of the first of these modes of discharge is afforded by the case of Thornhill v. Neats.^ A undertook certain building opera- tions for X, which were to be completed by a certain date, or a sum to be paid as compensation for delay. "While the building was in progress an agreement was made between the parties for additional work, by which it became impos- sible that the whole of the operations should be concluded within the stipulated time. It was held that the subsequent agreement was so far inconsistent with the first, as to a. Hickman V. Haynes, L. E. 10 C. P. 608. 6. Willes, J., in giving judgment in the vExcIiequer Chamber in the case of Ogle v. Earl Vane, L. E. 2 Q. B. 373, holds that by the forbearance on the part of the plaintiff, at the request of the defendant, to insist upon delivery of the goods at and after the time for the performance of the contract, an agreement arose which, though for want of consideration for the forbearance it could not furnish a cause of action, was never- theless capable of affecting the measure of damages. He calls it an Accord without a Satisfaction. As to the nature of Accord and Satisfaction, see Fart V, cb. iil, § 4 (aj. c. Ogle T. Earl Vane, L. E. S Q. B. 275; L. B. 3 Q. B. 373. d. 8 C. B. N. S..831. 344 DISCHARGE OF CONTKACT. Part V. amount to a waiver of the sum stipulated to be paid for delay.^ (b) Substituted parties. — A contract may be discharged by the introduction of new parties into the original agree- ment, whereby a new contract is created, in which the terms remain the same but the parties are different.^ This may be done eitlier by express agreement such as was described in a previous chapter, or by the conduct of the parties, indicating acquiescence in a change of lia- bility. [*263] *If A has entered into a contract with X and M and Xand Jf agree among themselves that J/" shall retire from the contract and cease to be liable upon it, A may either insist upon the continued liability of M, or he may treat the contract as broken and discharged by the renun- ciation of his liabilities by one of the parties to it. If however JL, after he becomes aware of the retirement of J/" from the contract, continues to deal with Xas though no change had taken place, he will be considered to have entered into a new contract to accept the sole liability of X, and will not be entitled to hold M to his original con- tract. The case of Mart " v. Alexander ' illustrates this rule. The o. 2M. &W.484. 1 Howard v. Wilmington, etc. R. R. Co. 1 Gill (Md.), 311; Munford v. Wilson, 15 Mo. 540 ; Stewart v. Keteltas, 86 N. Y. 388 ; Reed v. McGrew, 5 Ohio, 375; Rogers v. Rogers, 139 Mass. 440; Church v. Florence Iron Works, 45 N. J. L. 139; Norton v. Browne, 89 Ind. 333; Chrisman v. Hodges, 75 Mo. 413 ; Maxwell v. Graves, 59 la. 613. 2Byrd v. Bertrand, 7 Ark. 331; Litchfield v. Garrett, 10 Mich. 436; Moore v. Fowler, 1 Hempst. 536. 3 Hart T. Alexander.— The case cited by the author is in conflict with some eai-ly English cases, such as Lodge v. Dicas, 8 B. & Aid. 611; David V. EUice, 5 B. & C. 196, which were followed in Cole v. Sackett, 1 Hill, 516; Waydell v. Luer, 5 Hill, 448; Frentress v. Markle, 2 Greene (la.), 556 ; Wildes v. Fessenden, 4 Met. 13. In Waydell v. Luer, Cowen, J., strongly disapproved of Hart v, Alexander, and held that the giving Chap. I. § 2. BY AGREEMENT. 845 plaintiff employed the defendant with other members of a firm as his bankers ; the defendant retired ; notice, in va- rious forms, of his retirement was shown to have reached, or to have been accessible to, the plaintiff, who nevertheless continued to bank with the firm. Finally, the firm became bankrupt ; the plaintiff sued the defendant as liable to him upon the original contract, as being one of the members of the firm whom he had retained as his bankers. The jury ■ of a promissory note by one of several partners or joint debtors for a demand antecedently due from all, would not extinguish their liability, though the creditor expressly accepted the note in satisfaction; that tha partners being liable in solido for the debt, the promise of one to pay the debt was no consideration for the creditor's promise to release the other. The case of Waydell v. Luer came before the cqurt of errors inSDenio, 410, 417, and the decision of Cowen, J., was reversed, and the case of Bart v. Alexander followed to the extent of holding that the note of one of the members of the firm was a new security expressing an obligation unlike that arising out of the original contract, and was sufficient consideration for the discharge of the other members of the firm. And the weight of American authority is to the same effect. Livingstone v. EadclifE, 6 Barb. 301; Millard v. Thome, 56 N. Y. 403; Powell v. Charless, 34 Mo. 485 ; Very v. Levy, 13 Hun, 485 ; Maxwell v. Day, 45 Lid. 509 ; Stone v. Chamberlain, 30 Ga. 259 ; Bank v. Green, 41 Ohio St. 431; 1 Smith's Lead. Cas. 456; 3 Am. Lead. Cas. (5th ed.) 273; La?Farge v. Herton, 11 Barb. 171; Luddington v. Bell, 77 N. Y. 141; Maier v. Canavan, 8 Daly, 273. But the note or other security must be i-eceived with the intention that it shall satisfy the original obligation, or it will not effect a discharge, and the intention of the parties in this regard is a question of fact for the jury. Gates v. Hughes, 44 "Wis. 333. The creditor's promise to discharge one of- several joint debtors or part- ners must be supported by some consideration ; some advantage gained by the creditor, or some prejudice suffered by the promisee. The simple promise of a creditor to look to one of two or more joint debtors for his pay is nudum pactum. Li the case cited the individual note of the debtor was considered as a new security which might be received as collateral to or in discharge of the original indebtedness according to the intention of the parties ; but when on the dissolution of partnership one member agrees to pay the liabilities of the firm, and as creditor assents to such an arrangement, and promises to discharge the retiring member, such promise of the creditor is not binding unless something has been done, or some rights have been lost on the strength of such promise to the prejudice of the promisee. Malstrom v. Hopkins, 103 Pa. St. 118; Eagle Manuf. Co. v. Jennings, 39 Kan. 657. 346 DISCHARGE OF CONTRACT, Part V. found that the defendant's retirement was sufficiently brought to the notice of the plaintiflf, and, as he had still continued to employ the firm, the Court held that a new- contract had been formed between the plaintiff and its re- maining members. " I apprehend the law to be now set- tled," said Parke, B., " that if one partner goes out of a firm and another comes in, the debts of the old firm may by the consent of all the three parties — the creditor, the old firm, and the new firm — be transferred to the new firm." Thus a change of liabilities, accepted by the plaintiff, re- scinded the original contract by the creation of a new one to which the defendant was not a party. § 3. Provisions for Discharge. A contract may contain within itself the elements of its own discharge, in the form of express provisions [*264:] for its ^'determination under certain circumstances. These circumstances may be the non-fulfillment of a specified term of the contract ; the occurrence of a particu- lar event; or the exercise by one of the parties of an option to determine the contract. Discharge optional on non-f nlfillment of a term. — In the first of these three cases, that in which the non-fulfillment of a specified term of the contract gives to one of the parties the option of treating the contract as discharged, we seem to be approaching very near to the subject of the discharge of contract by breach. For this too may arise from the non-fulfillment of a term which the parties consider to be vital to the contract. But there is a marked difference between a non-f ulfiUment contemplated by the parties, the occurrence of which shall, it is agreed, make!i^e contract determinable at the option of one, and a breach, or non-fulfillment not contemplated or provided for by the parties. In the one case the parties have, in the other they have not looked beyond the imme- diate objects of the contract : in the one case the default Chap. I. § 3. BY AGREEMENT. 847 which is to constitute a discharge is specified by the agree- ment of the parties ; in the other it must always be a ques- tion of fact or of construction whether or no the default was in a matter vital to the contract, so as to operate as a discharge by breach. A good illustration is afforded by the case of Head v. TattersaW of such a condition, or provisional discharge of a contract introduced into its terms.* A bought a horse of X The contract of sale contained, among others, these two terms: that the horse was war- ranted to have beea hunted with the Bicester hounds, and that if it did not answer to its description the buyer should be at liberty to return it by the evening of a specified day. The horse did not answer to its description and had never been hunted with the Bicester hounds. It was returned by the day named, but as it had in the meantime been injured, *though by no fault of A, X disputed the [*265] right of A to return it. It was held that he was entitled to do so. " The effect of the contract," said Cleasby, B., " was to vest the property in the buyer subject to a right of rescission in a particular event, when it would re- vest in the seller. I think in such a case that the person who is eventually entitled to the property in the chattel ought to bear any loss arising from any depreciation in its value caused by an accident for which nobody is in fault. Here Xis the person in whom the property revested, and he must therefore bear the loss." (2) Occurrence of a specified event. — The parties may introduce into the terms of their contract a provision that the fulfillment of a condition or the occurrence of an event o. L. E. 7 Exch. 7. 1 Head y. Tattersnll.— Hunt v. Wyman, 100 Mass. 198; Dearborn v. Turner, 16 Me. 17; Boswell v. Bicknell. 17 Me. 344; Martin v. Adams, 104 Mass. 263; McKinney v. Bradlee, 117 Mass. 331; Kimball v. Vro- man, 35 Mich. 327. If the chattel sustains injury through the buyer's fault, the right of return is lost and the seller may bring assumpsit for the price. Bay v. Thompson, 12 Gush. 281. 848 DISCHARGE OF CONTRACT. Part V. shall discharge them both from further liabilities under the contract. Condition of Bond. — Such a provision is called a condi- tion subsequent, and is well illustrated by the case of a Bond, which is a promise subject to, or defeasible upon a condition expressed in the Bond. Excepted risks of charter-party. — Such a provision may be further illustrated by the " excepted risks " of a charter- party. In a contract of that nature the ship-owner agrees with the charterer to make the voyage on the terms ex- pressed in the contract, " the act of God, Queen's enemies, restraints of princes and rulers, fire, and all and every other dangers and accidents of the seas, rivers, and navigation, of whatsoever nature or kind, during the said voyage, always excepted^ The occurrence of such an excepted risk releases the ship-owner from the strict performance of the contract; and if it should take place while the contract is wholly ex- ecutory, and amount to a frustration of the entire enter- prise, the parties are altogether discharged. In Geipel v. Smith,"' the plaintiff had chartered the de- fendant's vessel to go to a spout, load a cargo of coals, and proceed thence to Hamburg: the contract contained the usual excepted risks. Before anything was done under the contract a war broke out between France and Germany, and the port of Hamburg was blockaded by the [*266] French fleet. The *defendant thereupon, regarding a blockade as a " restraint of princes," refused even to load a cargo, and treated the contract as being at an end. The plaintifif sued him for not having fulfilled so much of the contract as would not have involved the risk ; but the Court held that as a performance of the main ob- ject of the contract had become impossible by the occur- rence of an excepted risk, the defendant was not bound to attempt a fulfillment of his preliminary duties. Limitations of carrier's liahility. — Another illustration may be drawn from the contract entered into by a common a. L. B. 7 Q. B. 404. Chap. I. § 3. BY AGREEMENT. 849 carrier. A common carrier is said to warrant or insure the safe delivery of goods entrusted to him ; and by this w© mean that ho makes an almost unqualified promise to bring the goods safely to their destination or to indemnify the owner for their loss or injury. His promise is, however, not wholly unqualified ; it is defeasible upon the occurrence of certain excepted risks, — " The Act of God and of the Queen's enemies," and injuries arising from defects inherent in the thing carried." This qualification is an implied term in every contract made with a carrier, and the occurrence of the risks exonerates him from liability for loss incurred through their agency. The Act of God is a phrase which needs some explana-^ tion, but which has not until very recently received any judicial exposition. Meaning of phrase " Act of God." — The case of JVu- gent v. Smith, however, affords a good definition of its meaning, so far as its meaning is susceptible of definition. In that case the defendant, a common carrier by sea, re- ceived from the plaintiff a mare to be carried from London to Aberdeen. In the course of the voyage the ship met with rough weather, and the mare, being much frightened and struggling violently, suffered injuries of which she died. No negligence was proved against the defendant, but the Court of Common Pleas " held him to be liable on the ground that the rough weather was not so violent and un- usual as to amount to " the Act of God," nor was the struggling of the *mare alone enough to show [*267] that it was from her inherent vice that she was in- jured. But the Court of Appeal reversed this decision, and endeavoured to frame an intelligible definition of such an " irresistible cause of loss " as is described by the term "Act of God." The difference between the two decisions comes to this : — The Court of Common Pleas held that to constitute the o. Nugent v. Smith, 1 C. P. D. 423. 6. 1 a P. D. 19. ' 350 DISCHARGE OF CONTRACT. Part V. " Act of God," a loss must arise from " such a direct and violent and sudden and irresistible act of nature " " as could not be foreseen, or, if foreseen, prevented ; the Court of Ap- peal held " that it is not necessary to prove that it was ab- solutely impossible for the carrier to prevent it,* but that it is sufficient to prove that iy no reasonable precaution under the circumstances could itha/oe teen prevented." ^ This exception from the general liability of the carrier of goods is a known and understood term in every contract w^hich he makes. The discharge hence arising must be dis- tinguished from discharge arising from a subsequent impos- sibilitj'^ of performance not expressly provided against in the terms of the contract. With this we shall deal hereafter. (3) Discharge optional with notice. — Thirdly, a con- tinuing contract may contain a provision making it determi- a. Per Brett, J., p. 34. 6. Per Mellish, L. J., p. 441. 1 Smith T. Nugent. — In The Propeller Niagara v. Cordes, 31 How. 7, it was held that after a vessel is stranded, there is still an obligation to take all possible care of the cargo, and proof merely of reasonable care and diligence will not excuse him from liability ; that he is responsible for any loss or injury which "human exertion, skill and prudence" might have prevented. This rule has been considerably modified by a later decision of the same court. In Railroad Co. v. Reeves, 10 Wall. 176, Miller, J., said "when carriers discover themselves in peril by in- evitable accident, the law requires of them ordinary care, skill and fore- sight:' Morrison y. Davis & Co. 20 Pa. St. 171; Nashville R. R. v. David, 6 Heisk. 361. Act of God. — Many attempts have been made to define this term. It is more easily understood and illustrated than defined. " By the act of God is meant, any accident produced by physical causes : such as light- ning, storms, perils of the sea, earthquakes, inundations, sudden death, or illness. The act of God excludes all idea of human agency." Fisk V. Chapman, 3 Ga. 349 ; 46 Am. Dec. 399 ; MoArthur v. Sears, SI Wend. 190. The use of the terms " inevitable accident " and "act of God " as synonymous leads to confusion, for accidents arising from human agency are sometimes inevitable. Many courts, however, insist that there is no distinction in the terms. Neal v. Saunderson, 3 S. & M. (Miss.) 573 ; Walpole v. Bridges, 5 Blackf. 333 ; Crosby v. Fitch, 13 Conn. 410. Caiap. I. § 3. BY AGREEMENT. 351 nable at the option of one of the parties upon certain terms. Such a provision exists in the ordinary contract of domestic service," the servant can terminate the contract by a month's notice, the master by a month's notice or the payment of a month's wages.* And similar terms may be incorporated with other contracts between employer and employed, either expressly or by the usage of a trade. A was engaged by X to serve him for a year as agent in his business of a woollen merchant,* but was dismissed in the course of the year at a month's notice. He sued X for breach of contract. It was proved to be a custom of the trade that all such engagements were determinable at a month's notice. The jury found that the custom existed, but they further found that it did not form a part of the contract.^ *The Court, however, decided that, having [*268] been found to exist, the custom must be taken to form a part of the contract, and that it was not for the jury to construe the contract so as to exclude it. X was there- fore held to be entitled to determine the contract in virtuo of this implied term, although the engagement was to have lasted for a year had he not exercised the option given to him by the custom. a. Nowlan v. Ablett, 2 C. M. & E. 64. 6. Parker v. Ibbetson, 4 C. B. N. S. 347. 1 The presumptions of fact, recognized in the English courts, regard- ing the term of service in contracts between master and servant and the right to determine such service on a month's notice, do not prevail in this country. Miller v. Goddard, 34 Me. 103 ; Wood on Master and Serv- ant, sees. 3, 116; The Saxonia M. & R. Co. v. Cook, 7 Col. 573; 1 Cooley's Blackstone, 4S5, note. 2 In Parker v. Ibbetson the hiring was at a yearly salary, and the court held that, " generally speaking, a yearly salary imports a yearly hiring," and that the custom to determine such engagement on a month's notice ' was not at variance with the words of the contract, which contained no express agreement regarding the term of service. But where the en- gagement is for a term certain, evidence of such a custom should be ex- cluded. A local usage cannot be considered a part of a contract when it contradicts that contract. Sweet v. Jenkins, 1 E. I. 147 ; Barlow v. Lambert, 38 Ala. 704; Lawson on Usages and Customa, sec. 310. 353 DISCHARGE OF CONTRACT. Part V. Form of discharge by agreement. — It remains to con- sider the form in which it is necessary to express an agree- ment purporting to discharge a contract already existing. The general rule is, that a contract must be discharged in the same form as that in which it is made. A contract under seal can only be discharged by agreement, if that agreement is also under seal ' a contract entered into by parol may be discharged by parol. 1 Contracts under seal. — The general doctrine that a contract under Beal cannot be discharged by a parol agreement is recognized in this country ; but it is subject to qualification. 1. Executory contracts. — An executory contract under seal cannot be modified or rescinded by an executory parol contract. Allen v. Jac- quish, 31 Wend. 633; Sherwin v. Rut. & Bur. E. R. Co. 34 Vt. 347; Del- acroix V. Bulkley, 13 Wend. 71 ; French v. New, 38 N. Y. 150; Loach v. Farnum, 90 111. 368; Chapman v. McGrew, 30 III. 100; Smith v. Lewis, 24 Conn. 641. 2. Execitted contracts. — Where the subsequent parol contract has been acted upon the rule is different. While evidence of a subsequent parol agreement, that has not been carried into effect, cannot be received to vary or discharge a sealed instrument, still, when the parties have al- tered their situation by acting on the new agreement, the evidence is proper. Under the English rule a parol agreement to vary a contract under seal is not valid, even when it has been acted upon by the parties, and cannot be recalled without injustice. Such is not the prevailing rule in this country. Allen v. Jacquish, 21 Wend. 633 ; Jewett v. Schoeppel, 4 Cow. 564; Dearborn v. Cross, 7 Cow. 48; Monroe v. Perkins, 9 Pick. 298; Green v. Wells, 2 Cal. 584: Le Fever v. Le Fever, 4 Serg. & R. 241; Cook V. Murphy, 70 111. 96; Whiting v. Heslep, 4 Cal. 337; Lawrence v. Dole, 11 Vt. 555 ; Cabe v. Jameson, 10 Ired. 193. In Canal Co. v. Ray, 101 U. S. 533, Strong, J. , said : "Notwithstanding what was said in some of the old cases, it is now recognized doctrine that the terms of a contract under seal may be varied by a subsequent parol agreement. Certainly, whatever may have been the rule at law, such is the rule in equity." To the same effect, Robinson v. Bullock, 66 Ala. 554; Mill Dam Foundry v. Henry, 21 Pick. 439. See Lawrence v. Miller, 86 N. Y. 131 ; Jenks v. Robertson, 58 N. Y. 631 ; Hyderville Co. v. Eagle R. R. . & Slate Co. 44 Vt. 395 ; but as we have said, the parol contract must be executed or it will not operate as a discharge or rescission of the specialty. Unthank V. Henry County Tump. Co. 6 Ind. 126; McMurphyv. Garland, 47 N. H. 333, 333 ; Buell v. Miller, 4 N. H. 196. Many of the cases cited are authority for the proposition that a contract under seal cannot be discharged before breach by a parol contract, yet may after breach. See McMurphy v. Garland, 47 N. H. 333, 333. Ch^ I. § 3. BY AGREEMENT. 358 (1) In case of contract under seal, discharge must be under seal. — Parties to a deed cannot therefore discharge their obligations by a parol contract ; but it is possible for them to make a parol contract which creates obligations separate from, and yet substantially at variance with the deed. If J/" and X enter into a contract under seal, they cannot meet and by word of mouth or by writing waive their re- spective rights under the contract. But they may make such a contract as does in effect contravene the terms of the deed, and gives a right of action to which the deed furnishes no ansRrer. JT and Centered into a contract under seal, by which Jflet to X certain rooms for a certain time at a rent to be ascertained in a certain way." Jf died, and A his administrator agreed with X by parol, that in consideration of £70 to be paid by X and to be taken as a reasonable rent, neither party should be called upon to perform his part under the deed. X failed to make the payment agreed upon, and A sued him upqn the parol contract. It was urged on be- half of X that the parol contract was an attempt to vary the deed by an instrument not under seal ; and that a perform- ance of this contract, being no discharge of the deed, would *leave him liable to his previous obligation. [*269] But the Court held that the parol contract created a new obligation, and was not an attempt to vary an old one; that a performance of this new contract would fur- nish a good equitable answer to an action brought upon the contract under seal ; and that therefore A was entitled to bring action upon the parol contract. (2) In case of parol contracts. — A parol or simple con- tract may be discharged by writing or by word of mouth, whether or no the original contract be in writing; and this follows from what has been said before, that the writing is not the agreement but the evidence of it, and that, as the essentials of agreement lie in the expressed intention of the parties and not in the writing which is the instrument of a. Nash v. Armstrong, 10 C. B. N. S. 239. 23 354 DISCHARGE OF CONTRACT. Part V. that expression, the contract may be discharged " eo liga- mine quo ligatum est" by a valid expression of the inten-i tion to put an end to it.^ But an exception must be m!ade where a contract is re- quired by Statute " to be in writing. In such a case there appears to be authority for saying that an absolute dis-. charge of the contract may take place by word of mouth. But if the discharge be not a simple rescission or cancella- tion, if ' it be such an implied discharge as arises from the making of a new agreement inconsistent with the old one, then there must be writing such as would satisfy the enact- ment which governs the original contract.* The most recent authority upon this point is the case of Noble " V. Ward.'' There a contract was made for the sale of o. Under 29 Car. U. c. 3, § 4. ' b. Goman v. Salisbury, 1 Vern. 240. t. L. R. 2 Exch. 135. 1 Seaman v. O'Hara, 29 Mich. 66 ; Brown v. Everhard, 53 Wis. 205 ; Aid- rich V. Price, 57 la. 151 ; McNichols v. Reynolds, 95 Pa. St. 483 ; Swain V. Seam ens, 9 Wall. 254 ; Thurston v. Ludwig, 6 Ohio St. 1 ; Wiggin v. Goodwin, 63 Me. 389; Flanders v. Fay, 40 Vt. 316; Bryan v. Hunt, 4 Sand. 543. 2 Noble V. TVard.— In the early case of Cuff v. Penn, 1 M. & S. 21' (1813), it was decided that a contract in writing and within the statute of frauds might be varied by a subsequent verbal contract, extending the time of performance. This case has been overruled, and the modern English doctrine is in accordance with Noble v. Ward. In this country the case of Cuff v. Penn has been followed by some courts, and to the extent of holding that a contract withih the statute may be modified by a subsequent oral agreement for a substituted performance. Cum- mings V. Arnold, 8 Met. 486 ; Whittier v. Dana, 10 Allen, 336 ; Richard- son V. Cooper, 35 Me. 450; Negley v. Jeflers, 28 Ohio St. 90. In Blanch- ard V. Trim, 38 N. Y. 227, Hunt, O. J., said, " The statute requires the maiing of the contract to be in writing, but it does not undertake to regulate its performance, nor does it say that it shall not be varied by parol. That is left to be decided by the general rules of law and evi- dence." These cases are not, however, in accord with the weight of authority in this country. In Swain v. Seamens, 9 Wall. 373, Clifford, J., said: " The better opinion is, that a written contract falling within the statute of frauds cannot be varied by any subsequent agreement of the parties, unless such new agreement is also in writing." Musselmap Chap. I. § 3. BY AGREEMENT, 355 goods upon the 18th. of August, in which it was agreed that the goods should be delivered within a certain time. This contract was in writing and satisfied the requirements of 29 Oar. 11. c. 3, § 17. On the 2Yth of September a ver- bal agreement was made extending .the time for delivery. An action was brought by the vendors for non-acceptance of the goods, and " the defendants contended that the effect of the contract to extend the time for delivery was to re- scind the contract of the 18th of August." But the agreement *of the 2Tth of September, being [*2Y0] made by word of mouth, was invalid, and could " be allowed to be good " as a new contract for the sale of the goods. The defendants nevertheless contended that though invalid to create a new contract, it was valid to rescind the existing one. But this contention the Oourt would not allow; it was, in fact, laid down "that no rescission could take place by an invalid contract." And the same rule " has been applied to contracts under the 4th, and contracts un- der the lYth sections of the Statute of Frauds. o. Goss v. Lord Nugent, 5 B. & Ad. 65. V. Stoner, 31 Pa. St. 365 ; Dana v. Hancock, 30 Vt. 616 ; Blood v. Goodrich, 9 "Wend. 68 ; Sohultz v. Bradley, 57 N. Y. 646 ; Carpenter v. Galloway, 73Ind. 418; Hasbrouck v. Tappen, 15 Johns. 204; Abell v. Munson, 18 Mich. 313; Packer v. Steward, 34 Vt. 133; Organ v. Stewart, 60 N. Y. 413, 419; Hill v. Blake, 97 N. Y. 316. But a substituted performance agreed upon by parol, actually and fully exfeouted by the vendor and accepted by the vendee, may be set up in defense at law in a suit on a written contract within the statute of frauds. Long v. Hartwell, 34 N. J. L, 116. CHAPTER II. Discharge of Contract by Performance. This branch, of our subject need not detain us long, but there are some aspects of performance which call for a brief notice. Kinds of performance. — We must distinguish perform- ance which discharges one of two parties from further lia- bilities under a contract, and performance which amounts to an extinction of the obligation. Where promise is given for executed consideration. — Where a promise is given upon an executed consideration, the performance of his promise by the promisor discharges the contract : all has been done on both sides that could be required to be done under the contract. Where promise is given for promise. — Where one promise is given in consideration of another, performance by one party does not necessarily discharge the contract, though it discharges him who has performed his part from doing more. Each must have done his part in order that performance may be a solutio obligationis, and so if one has done his part and not the other, it is still possible that the ■contract may be discharged in any one of the ways we have mentioned. Whether or no a contract has been performed is a matter which, so far as the person performing the contract is concerned, must be answered by reference to the operation of contract; so far as the performance is concerned, must be answered by reference to the construction of contract. If there be a failure of performance, partial or total, then the contract is broken ; whether the breach amounts to a dis- charge is a question to be discussed hereafter. Chap. II. BY PERFORMANCE. 857 *But there are two aspects of Performance which [*2725 we may shortly dwell upon : these are, Payment and Tender. Patment. Payment as a mode of discharge. — In dealing with pay- ment as a form of discharge we must place it under the head of performance, although payment is intimately con- nected with the discharge of contract and of the rights aris- ing from breach of contract, by means of a substituted agree- ment. Of original contract. — If in a contract between A and X the liability of X consists in the payment of a sum of money in a certain way or at a certain time, such a pay- ment discharges X by the performance of his agreement. Of substituted contract. — If, again, X being liable to perform various acts under his contract, wishes instead to pay a sum of money, or, having to pay a sum of money, "wishes to pay it in a manner at variance with the terms of the contract, he must agree with A to accept the proposed payment in lieu of that to which he may have been entitled under the original contract. Payment is then a perform- ance of X's duties under the new agreement, and, so far as he is concerned, a consequent discharge. Of liability arising from Ibreach of contract. — Again, where one of the parties has made default in the perform- ance of his part of the contract, so that a right of action ac- crues to the other, the obligation formed by this right of action may be discharged by accord and satisfaction, an agreement the consideration for which is usually a money payment, mad e by the party against whom the right exists, and accepted in discharge of his right by the other. " Payment is performance. — Payment, then, is the per- formance of a contract, whether it be a performance of an original, or of a substituted contract, or of a contract in which payment is the consideration for a forbearance to a. Fost, p. 315. 358 DISCHARGE OF CONTRACT, PartV. exercise a right of action which may have arisen, from the breach of an agreement. It remains to notice some points which arise when [*273] a *negotiable instrument is given in payment of a sum due, whether as the performance of a contract or in satisfaction for the breach of it. Negotiable instrument as payment. — The giving of such an instrument in payment of a liquidated or unliquidated claim is in effect a substitution of a new agreement for the old one, but it may affect the relations of the parties in either one of two different ways. If X makes a payment to A either in performance of an existing contract, or in satisfaction of a broken contract, and that payment takes the form of a negotiable instrument, Xmay be discharged from his previous obligation either absolutely or conditionally. May be an absolute or conditional discharge. — A may take the bill or note, and promise, in consideration of it, expressly or impliedly to discharge X altogether from his existing liabilities.' A then relies upon his rights con- ferred by the instrument, and if it be dishonoured," must o. Sard v. Ehodes, 1 M. & W. 153. 1 Payment of precedent debt. — The English rule is followed in the fedei-al courts, and under the decisions of the state courts generally a promissory note of the debtor or a stranger does not discharge the precedent debt for which it is given, unless such be the express agree- ment of the parties. The note only operates to extend the period for the payment of the debt. The Kimball, 3 Wall. 37 ; Emerine v. O'Brien, 86 Ohio St. 491 ; Walsh v. Lennon, 98 111. 27; Case v. Sears, 44 Mich. 195; Brown v. Olmstead, 60 Cal. 162; Vail v. Foster, 4 N. Y. 312; Feld- man v. Bier, 78 N. Y. 293; McGuire^^TBiawSHTeT Tex. 43; Akin v. Peters, 45 Ark. 313; Lochenmeyer v. Fogarty, 112 III. 572; Racine Bank V. Case, 63 Wis. 504. Numerous authorities on this proposition are col- lected in. 2 Benj. on Sales,. 4th Am. ed. 1081, n. 17; and note of Prof . Rogers in 21 Am. Law Reg. 518. In some of the American states the English rule is departed from, and a note governed by the law mer- chant, received upon an indebtedness, is regarded as absolute payment, unless a contrary intention is made to appear. Such is the rule in Maine, Massachusetts, Indiana and Vermont. Paine v. Dwinell, 53 Me. Chap. n. BY PERFORMANCE. 359 sue on it, and cannot revert to the original cause of action. But the presumption, where a negotiable instrument is taken in lieu of a money payment, is, that the parties intended it to be a conditional difecharge. Their position then is this: A having certain rights against X, has agreed to take a negotiable instrument instead of immediate payment," or immediate enforcement of his right of action, and X has so far satisfied A's claim. But if the biU be dishonoured at maturity, the consideration for J.'s promise has wholly failed and his original rights are restored to him. The agreement is "defeasible upon condition subsequent;" the payment by X which is the consideration for the promise by A is not absolute, but may turn out to be, in fact, no pay- ment at all. Payment then consists in the performance either of an original or substituted contract by the delivery of money, or of negotiable instruments conferring the right to receive money ; and in this last event the payee may have taken the instrument in discharge of his right absolutely, or sub- o. Sayer v. Wagstafl, 5 Beav. 433. 53; Dodge V. Emerson, 131 Mass. 467; Smith v. Bettger, 68 Ind. 254; Hutchins v. Olcutt, 4 Vt. 549; Wait v. Brewster, 31 Vt. 516. See Reeder V. Nay, 95 Ind. 164. Payment of contemporaneous delbt. — Courts generally distinguish between those cases where a note is given for a precedent debt, and those where a note is given for a contemporaneous debt. When the note o£ a third person is given for a debt contracted at the time, the infer- ence is that such note was i-eceived in payment of the indebtedness ; but no such inference arises where the note of the debtor or of a third per- son is given for a precedent debt, or where the note of the debtor is given for a contemporaneous consi,deration. Wilson v. Force, 6 Johns. 110 Whitbeck v. Van Ness, 11 Johns. 409; Noel v. Murray, 13 N. Y. 167 Mclntyre v. Keniiedy, 29 Pa. St. 448; Bayard v. Shink, 1 W. & S. 95 Devlin v. Chamblin, 6 Minn. 827; Booth v. Smith, 8 Wend. 66; Ford v. Mitchell, 15 Wis. 308. If, however, the debtor indorses the note or bill of a third party, given for an indebtedness created at the time, such in- dorsement is evidence that the creditor does not4;ake the note at his own risk; and it will be regarded only as conditional payment. Whitney v. Goin, 20 N. H. 354; Shriver v. Keller, 37 Pa. St. 61; 3Danl. Neg. Inst. 1265. See Soife v. Gallagher, 3 E. D. Smith, 516. 360 DISCHARGE OF CONTRACT. Part T. ject to a condition (which will be presumed in the absence of expressions to the contrary) that if payment be [*274:] not made *when the instrument falls due, the par- ties revert to their original rights, whether those rights are, so far as the payee is concerned, rights to the performance of a contract or rights to satisfaction for the breach of one." "We have dwelt thus upon Payment because it is often so involved with the subject of substituted agreement as to cause some obscurity.* Tendee. Tender by delivery. — We now come to an attempted Performance, or Tender. The word is applied to perform- ance of two kinds, and to attempts to perform which are not similar in their results. It is applied to a performance of a promise to do something, and to a performance of a promise to pa}'' something. In each case the performance is frustrated by the act of the party for whom the perform- ance is to take place. Where in a contract for the sale of goods the vendor satisfies all the requirements of the con- tract as to delivery, and the purchaser nevertheless refuses to accept the goods, the vendor is discharged by such a tender of performance," and may either maintain or defend successfully an action for the breach of the contract.^ Tender of payment. — But where the performance due consists in the payment of a sum of money, a tender by the debtor, although it may form a good defense to an action by the creditor, does not constitute a discharge of the debt." If the creditor will not take the money due to him when he has a right to demand it, he puts himself at a certain a. See judgment of Parke, B., Robinson v. Eead, 9 B. & C. 455. 6. Sayer v. Wagstafl, 5 Beav. 423. c. startup v.Maodonald, 6 M. & G. 593; Benjamin on Sales, p. 663. a. Dixon v. Clark, 5 C. B. 376. 1 Berry v. Nail, 54 Ala. 446; Simmons v. Green, 35 Ohio St. 104 j Phelps V. Hubbard, 51 Vt. 489 ; Cleveland v. Sterrett, 70 Pa* St. 204. Chap. IL BY PERFOEMANCE. 361 (Jisadvantage in trying to recover it by. action; but the debtor must, in order to defend himself successfully by a plea of tender, continue always ready and willing to pay the debt. Then when he is sued upon it, he can plead that he tendered, but he must also pay the money into Court. If he proves his plea, the plaintiff gets nothing but the money which was originally tendered to him, the defendant *gets judgment for his costs of defence, [*2Y5] and so is placed in as good a position as he held at the time of the tender. Tender, to be a valid performance to this extent, must observe exactly any special terms which the contract may contain as to time, place, and mode of payment. Besides these requirements the tender must be an offer of money produced and accessible to the creditor, not necessarily of the exact sum, but of such a sum as that the creditor can take exactly what is due without being called upon to give change.^ 1 A tender of payment must be unconditional and not a mere offer of compromise ; must be made in good faitli by the debtor or by some per- son duly authorized, and to the creditor or a person authorized to re- ceive payment ; must be made within reasonable hours, and to stop the running of interest and costs must be kept good. Elderkin v. Fellows, 60 Wis. 339; Aulger v. Clay, 109 111. 487; Mathews v. Lindsay, 20 Fla. 96; Stafford v. Welsch, 59 N. H. 46; Waldron v. Murphy, 40 Mich. 668; Sinclair v. Leamerd, 51 Mich. 339; Carman v. Pultz, 21 N. Y. 547; Potts V. Plaisted, 30 Mich. 149. As a general rule the party should not only have the money about him, but should produce it, unless its production is waived by the creditor; and it is said that a declaration on the part of the creditor that he will not or can not receive it amounts to such waiver. Hazard v. Loring, 10 Cush. 267 ; Pinney v. Jorgenson, 27 Minn. 26 ; Guthman v. Kearn, 8 Neb. 502 ; Berthold v. Eeyburn, 61 Mo. 586 ; Parker v. Pettifc, 43 N. J. L. 512; Oakland Savings Bank v. Applegarth, 67 Cal. 86; Mathis v. Thomas, 101 Ind. 119. The decisions are nuinerous and not entirely harmonious upon the requisites of tender. In most states the legislatures have determined what obligations may be effected by tender, and have provided regarding its formal requisites. Under the constitution of the United States no state can make anything but gold and silver coin a tender in payment of debts. Art, 1, sec, 10. 362 DISCHARGE OF CONTRACT. Part V. Legal tender, as regards coinage and notes, is regulated by various statutes." a. 3 and 4 Will. IV. c. 98, § 6, enacts that Bank of England notes are legal tender for any sum above £5. 29 and 30 Viot. c. 65, gives power to the Queen to proclaim that gold coinage of colonial mints should be legal tender throughout any part of her do- minions specified in the proclamation. 33 and 31 Vict. c. 10, enacts that the coinage of the mint shall be legal tender as follows: —gold coins, to any amount; silver coins, up to forty shillings; bronze coins, up to one shilling. CHAPTEK III. Discharge of Contract by Breach. Breach always gives right of action, not always a dis- charge. — If one of two parties to a contract breaks through the obligation which the contract imposes, a new obligation will in every case arise, a right of action conferred upon the party injured by the breach. Besides this, there are circumstances under which the breach wiU discharge \he injured party from such performance as may still be due from him. We must, however, bear in mind that, though every breach of the contractual obligation confers a right of action upon the injured party, every breach does not necessarily discharge him from doing what he has under- taken to do under the contract. The contract may be broken wholly or in part ; and if in part, the breach may or may not be sufficiently important to operate as a discharge; or, if it be so, the injured party may choose not to regard it as a breach, but may continue to carry out the contract, reserving to himself the right to. bring action for such dam- ages as he may have sustained by the breach. It is often very difficult to ascertain whether or no a breach of one of the terms of a contract discharges the party who suffers by the breach. By discharge we must understand, not merely the right .to bring an action upon the contract because the other party has not fulfilled its terms, but the right to consider oneself exonerated from any further performance under the con- tract,-^ the right to treat the legal relations arising from the contract as having come to an end, and given place to a new obligation, a right of action. Discharge indicated hy old forms of pleading. — *The discharge of contract is indicated with some [*2Y7] 364 DISCHARGE OF CONTRACT. Part V. precision by the pleadings in use before the Judicature Acts. Many of the cases which illustrate this part of the subject turn upon questions of pleading, and we shall find that the understanding of the remedy, as often happens, is a material assistance to the ascertainment of the right. At the risk of a digression we will turn for a moment to this aspect of the question before us. § 1. Position of parties where a Contract is discharged hy Breach. Exoneration from performance. — In a contract between A and X, a breach by X might be considered to be a dis- charge of the contract if A, in bringing action upon it, was not required to allege that he had performed or endeavoured to perform that which was stiU due from him under the con- tract ; or if X could not successfully use such non-perform- ance by A either as a cause of action or a ground of defence. Right to sue in indebitatus assumpsit.^ — Further, where X made default after A had done all or a part of that which he promised, the contract was discharged by such default if A could sue for the value of that which he had done in iiv- delitatus assumpsit, that is, on a new and distinct contrapt arising upon the acceptance' of money, goods, or services offered by the plaintiff and .accepted by the defendant. This needs a short explanation. Nature of the indebitatus counts. — Before the Judica- ture Acts came into operation, where an action was brought upon a contract arising on consideration executed, that is a promise, acted or uttered, to pay for money, goods, or serv- ices offered and accepted, the plaintiff might state his case in certain short forms known as the indebitatus counts. These, which were an adaptation of the action of Assumpsit to the subject-matter of the action of Debt, did no more than state a money claim existing for money due, goods supplied, or services rendered. [*2'r8] When applicable to special contract. — *In cer- tain cases these counts were applicable to a claim Chap. III. § 1. BY BREACH. 365 arising out of a special contract, that is a contract arising upon express promises made on either side, but they were so applicable only where the contract was discharged Ixy 'breach. If A had performed allthat he had promised in a contract made with X, aiid there remained only a money payment due from Xresulting in a present liability in which Xmade default by non-payment, A might sue X'ra. the form of an indebitatus count. This means that A niight sue upon a new and distinct contract, arising upon the offer and accept- ance of that which he had performed. The performance of the original contract was so far complete that nothing re- mained to be done but a payment to be made by X to A : the payment was presently due ; default discharged the con- tract, and A might sue, not only on the special contract as having been made and broken, but upon a contract arising from conduct, from the offer of an act, its acceptance, and a consequent implied promise to pay its worth, such as we described in speaking of executed consideration." " The principle as to the proper form of declaring where the original contract has been executory, but the period of credit has expired, or condition has been performed, is, not that the law alters the mode of declaring on the original contract and states it not according to the fact, but that it conclusively i/nfers that simple contract to pay the price for goods sold and delivered which would arise upon tJie facts of a sale and deli/oery without any special circumstances accom-' pamying them. He who seeks to disturb that inference must not content himself with merely showing conditions, or other special provisions forming part of the contract at the time of its being entered into : he must show them in existence and operation at the time of action brought: if not, they must be struck out of consideration and the contract treated as originally simple, unconditional, and executed," * A quantum meruit. — A similar practice prevailed where, A having done a *part, though not all that he [*2Y9] a. Ante, p. 90. 6. Per Cur., Beverley v. Lincoln Qas Light & Coke Co. 6 A. & E. 837. 366 DISCHARGE OF CONTRACT. Part Vj was bound to do under the contract, X committed a breach which amounted to a discharge. If that which A had done could be represented in a claim for money payment, A was entitled to sue, not only on the special contract, but in indebitatus assumpsit, for a q^iantum meruit or the value of so much as he had done. " If a man agrees to deliver me one hundred quarters of corn, and after I have received ten quarters, I decline tahing any more, he is at all events entitled to recover against me the value of the ten that I have received." " When it may be sued upon. — But the right to sue in this form on a quantum meruit is frequently and emphat- ically stated to depend on the fact that the contract has been discharged. On the other hand, it is laid down* "as an invariably true proposition, that wherever one of the par- ties to a special contract not under seal has in an unquali- fied manner refused to perform his side of the contract, or has disabled himself from performing it by his own act, the other party has thereupon a right to elect to rescind it, and may, on doing so, immediately sue on a quantum meruit, for anything which he had done under it previously to the re- scission." 1 It is possible that A may have done nothing under the contract which can be estimated at a money value, or that the default made by Xis not such as can be stated in the form of a money claim. Then if the breach amount to a discharge, A is exonerated from such performance as may still be due from him, and is entitled to sue at once upon, the special contract for such damages as he has sustained; a. Per Best, 0. J., Mavor v. Pyne, 3 Bing. 88. 6. HuUe T. HeigMman, 2 East, 145; 3 Smitli's L. C. 21. 1 Hulle T. Heigrhtman is a leading case in this country and of un- questioned authority. Dermott v. Jones, 2 Wall. 1; Chesapeake & Ohio Canal Co. v. Knapp, 3 Peters, 541 ; "Willing v. Sherman, 7 Wend. 109 ; Baker v. Corey, 19 Pick. 496 ; MoKee v. Vincent, 33 Minn. 508 ; McGraw v. Sturgeon, 39 Mich. 436; 3 Smith, L. C, Hare & Wallace's notes, 49. Chap. m. § 2. BY BREACH. 367 The new rules of pleading lately issued under the Judica- ture Act" do not alter the relations of the parties, though the forms of pleading are shortened and a simple indorse- ment on the writ of summons may be substituted for the old indebitatus counts. Bights of party discharged. — Thus where a contract between A and X is discharged by the default of X, A may — *(a) Consider himself exonerated from any fur- [*280] ther performance which may have been due on his part ; and successfully defend an action brought for non- performance : * {§) Sue at once upon the contract for such damages as he has, sustained bj'' its breach, without being obliged to show that such performance has been done or tendered by him:'' {y) Lastly, if he has done all or a portion of that which he promised, so as to have a claim to a money payment for such performance, he may deal with such a claim as due upon a different contract arising upon a promise which is understood from the acceptance of an executed considera- tion." § 2. Forms of Discharge iy Breach. We are now in a position to ask, "What are the circum- stances which confer the rights just mentioned? "What is the nature of the breach which amounts to a discharge? A contract may be broken in iany one of three ways : a party, to a contract (1) may renounce his liabilities under it, (2) may by his own act make it impossible that he should fulfill them, (3) may totally or partially fail to perform what he has promised. Of these forms of breach the first two may take place while the contract is still wholly executory, i. e. before a. A. D. 1883. Order xix, App. 0. 6. Behn v. Bumess, 3 B. & S. 756. a. Cort T. Ambergate Railway Co. 17 Q. B. 127. i. PlancM v. Colburn, 8 Bing. 14. 368. • DISCHARaE OF CONTRACT. Part V. either party is entitled to demand a performanee by the other of His promise. The. last can, of course, only take place at or during the time for the performance of the con- tract. "We will therefore deal first with renunciation and impos- sibility created by the act of one party Itefore performancie is due, then with such renunciation and impossibility so created in the oov/rse of performance, and then with simple failure in performance. (1) Discharge hy renunciation iefore performance is due. (1) Breach before performance is due. — The parties to a contract which is wholly executory have a right to some- thing more than a performance of the contract [*281] *when the time arrives. They have a right to the maintenance of the contractual relation up to that time, as well as to a performance of the contract when due. By renunciation. — It is now settled that a renunciation of a contract by one of the parties before the time for per- formance has come, discharges the other, if he so choose, and entitles him at once to sue for a breach. Eochster " v. Delatour ^ is the leading case ijpon this sub. a. 2E. &B. 678. 1 Anticipatory breach. — Hoclister t. Delatour and Frost v. Knight have been followed in Crabtree v. Messersmith, 19 la. 183; Bungee v. Koop, 48 N. Y. 335; Howard v. Daly, 61 N. Y. 363; Ferris v. Spooner, 103 N. Y. 10 ; James v. Adams, 16 W. Va. 367 ; Crist v. Armour, 34 Barb 387; HoUoway V. Griffith, 33 la. 409; Fox v. Kitton, 19 lU. 519; Cham- ber of Commerce v. Sollitt, 43 111. 519 ; Mountjoy v. Metzger, 13 Am. Law Eeg. 443 ; Hancock v. New York Life Ins. Co. 13 Am. Law Reg. 103; McCormick v. Basal, 46 la. 335; Piatt v. Brand, 36 Mich, J75; Hos- mer v. Wilson, 7 Mich. 304. In England the law is regarded as settled in accordance with Hochster v. Delatour, Roper v. Johnson, L. R. 8 C. P. 178. The novel doctrine introduced by these cases has been seriously questioned by respectable authority in this country. In Burtis v. Thompson, 43 N. Y. 346, 350, Grover, J., held that an action for breach of promise would lie at once, upon a positive refusal to perform a contract of marriage, although the time specified for the performance bad not Chap. III. § 2. BY BREACH. 869 jeot. A engaged X upon the 12th of April to enter into his service as courier and to accompany him upon a tour ; the employment was to commence on the 1st of June, 1852. Oa the 11th of May A wrote to Xto inform him that he should not require his services. X at once brought an ac- tion, although the time for performance had not arrived. The Court held that he was entitled to do so. " Where there is a contract to do an act on a future day, there is a rela- tion constituted between the parties in the meantime by the contract, and they impliedly promise that in the mean- time neither will do anything to the prejudice of the other inconsistent with that relation." It seems hardly necessary to have created an implied arrived, on the ground that the defendant had, by his renunciation, oc- casioned plaintiff all the damage that a breach at the day would inflict ; but in speaking of Hoohster v. Delatour he said that he was "not fully prepared to concur in the judgment of this case without fui-ther consid- eration." Its application, however, to actions for breaches of promise of marriage is generally recognized. See cases cited swpra. In Daniels V. Newton, 114 Mass. 530, the cases, Hochster v. Delatour, Frost v. Knight and other English cases are reviewed, and- the doctrine of the text is disapproved of. Wells, J. , in an able opinion gave strong reasons why the English cases should not be followed, and it was held by the court that an action for the breach of a written agreement to purchase land, brought before the expiration of the time given for the purchase, could not be maintained by proof of an absolute refusal on the defend- ant's part ever to purchase. In Dingley v. Oler, 11 Fed. Rep. 373, La- vell, J., criticises the opinion of Wells, J., in Daniels v. Newton, and follows the English rule, which he states as follows : " That doctrine is that in contracts for services, for marriage, for deliveries of merchan- dise, if the principal, before the time for performance arrives, renounces the contract, an immediate action will lie." The case of Dingley v. Oler came before the supreme court of the United States, see 117 U. S. 503 (1885), and was reversed, but on the ground that no such renuncia- tion of the contract was shown as brought the case within the English authorities, and the court expressly declined to discuss or decide whether the doctrine of these authorities could be maintained. Mathews, J., called attention to the fact that they had been disputed in other courts and had never been applied in this. With regard to a renunciation it should be noted : 1st. That a mere expression of intention not to perform is not sufficient to effect a breach of the contract. There must be a distinct and unequivo- 24 370 DISCHARGE OF CONTRACT. Part V, contract in order to give the plaintiff in this case a right of action. If X makes a binding promise to A, the obligation comes into existence at once, and consists in X's promise as well as in his performance of that promise. A is en- titled, not only to the promised act at the promised time, but to the liability of Xup to that time. In other words, the contract is a contract from the time it is made, and not from the time that performance of it is due; and if this is so, it seems hardly in accordance with reason to introduce into every contract an implied promise that, up to a certain period of its existence, it shall riot be broken. The sense of the rule is very clearly stated by Cockburn, C. J., in a case " which offers a somewhat further develop- ment of the rule in Hoohster v. Delatour. In that case a time was fixed for performance, and before it ar- [*282] rived the defendant *renounced the contract. In Frost V. Knight performance was contingent upon an event which might not happen within the life-time of the parties. a. Frost v. Knight, L. B. 7 Exoh. 114, in Bxch. Cham. cal absolute refusal to perform the promise, which must be treated and acted upon as such by the party to whom the promise was made. Smoot's Case, 15 Wall. 36 ; Dingley v. Oler, 117 U. S. 503. 3d. The renunciation may justify the other party in treating tl^e con- tract as rescinded and excuse him from performance on his part or from offering performance before taking proceedings to enforce his rights ; and may deprive the party disavowing his obligations under the con- tract, of the right to withdraw his declaration and continue the con- tract, after the other party had acted on such disavowal. Shaw v. Republic Life Ins. Co. 69 N. Y. 293; Daniels v. Newton, 114 Mass. 533; Cauda v. Wick, 100 N. Y. 127. 3d. Where the contract establishes between the parties a present re- lation of mutual obligations and the promisor renounces his liability thereunder, under such circumstances as to effect something to the prejudice of the promisee inconsistent with that relation, an action may be maintained at once though the time of performance has not arrived; but whether such renunciation will give an immediate right of action in all cases is an open question in this country. It could have no effect on the right of parties to commercial paper, and it is believed that much must depend on the nature of the contract. Dingley v. Oler, 11 Fed. Kep. 873 ; Burtis v. Thompson, 42 N. Y. 250 ; 2 Pars. Cont. 676. Chap. m. § 3. BY BREACH. 371 A promised to marry X upon his father's death, and dur- ing his father's life-time renounced the contract; X was held entitled to sue upon the grounds explained above. " The promisee," " said Cdckburn, C. J., " has an inchoate right to the performance of the bargain, which becomes complete when the time for performance arrives. In the meantime he has a right to have the contract Jcej>t open as a subsisting and effective contract. Its unimpaired and unim- peached efficacy may be essential to his interests." The rule thus laid down must be regarded as subject to two limitations. Must go to the whole performance. — The first is that the renunciation must deal with the entire performance to which the contract binds the promisor. In Johnstone v. Milling,'' a tenant claimed damages of his landlord for breach of contract by repudiation of a covenant to rebuild the premises at a period of the tenancy which had not ar- rived when the repudiation was made. Though the deter- mination of this point was not necessary to the decision, the Court of Appeal doubted whether the rule in Sochster v. Belatour was applicable to cases where the renunciation did not go to the whole of the consideration. " The contract," said Lord Esher, M. E., " was the whole lease. The covenant in question is a particular covenant in the lease, not going to the whole consideration. If there were an actual breach of such a covenant at the time fixed for performance, such breach would not, according to the authorities, entitle the tenant to throw up his lease. That being so, I do not hesitate to say, though it is not necessary in this case to decide the point, that an anticipatory breach would not entitle him to do so, and that it does not appear to me that he could elect to rescind part of the contract." The promisee must treat renunciation as a discharge. — The second is that if the promisee will not accept the re- nunciation, and continues to insist on the perform- ance of *the promise, the contract remains in ex- [*283] a. ti. E. 7 Exch. at p. 114. h. 16 Q. B. D. 460. 873 DISCHARGE OF CONTRACT. Part\. istence for the benefit and at the risk of both parties, and if anything occur to discharge it from other causes, the prom- isor may take advantage of such discharge. Thus in Avery v. Bowden," A agreed with X b}'' charter- party that his ship should sail to Odessa, and there take a cargo from X's agent, which was to be loaded within a certain number of days. The vessel reached Odessa, and her master demanded a cargo, but X's agent refused to supply one. Although the days within which A was en- titled to load the cargo had not expired, his agent, the master of the ship, might have treated this refusal as a breach of contract and sailed away. A would then have had a right to sue upon the contract. But the master of the ship continued to demand a cargo, and before the run- ning days were out — before therefore a breach by non- performance had occurred — a war broke out between England and Kussia, and the performance of the contract became legally impossible. Afterwards A sued for breach of the charter-party, but it was held that as there had been no actual failure of performance before the war broke out (for the running days had not then expired), and as the re- nunciation of the contract had not been accepted as a breach by J.'s agent, X was entitled to the discharge of the contract which took place upon the declaration of war. (2) Impossibility created by one party before performance is due. By making performance impossible. — If a renunciation of his contract by A discharges X and gives him a right of action before the time for performance has arrived, it would appear that a fortiori a similar discharge and right of action accrues to X if A, before the time for performance arrives, makes it impossible that he should perform his promise. A promised to assign to X, within seven years from the date of the promise, all his interest in a lease. Be- [*284:] fore the end *of seven years A assigned his whole a. 6 £. & B. 714. Chap. m. § 3. BY BEEAOH. 373 interest to another person. It was held that X could sue at once, without waiting until the end of seven years." " The plaintiff has a right to say to the defendant, You have placed yourself in a situation in which you cannot perform what you have promised; you promised to be ready during the period of seven years, and during that period I may at any time tender you the money and call for an assignment, and expect that you should keep your- self ready; but if I now were to tender you the money, you would not be ready ; this is a breach of the contract." ' The cases just cited illustrate the rule that a contract may be broken while it is yet executory, and before any performance on either side has fallen due. They are com- paratively simple, because the circumstances leave no doubt of the intention of the party in default ; their interest lies in the enforcement of the principle that performance of a promise is not all that a promisee is entitled to, that the continuous liability of the promisor, until the time for per- formance arrives, is a substantial element in the rights aris- ing from the contract, and that a refusal to maintain this liability is an immediate breach and confers an immediate right of action. (3) Menunoiation in the course of performance. Renunciation during performance. — It may also happen that in the course of performance one of the parties may by word or act deliberately and avowedly refuse perform- o. Lovelock v. FranMyn, 8 Q. B. 371. ' It should be noted that the decision in Lovelock v. Franklyn was based on the fact that the option as to the time, within the seven years, was with the plaintiff. In this particular contract the defendant under- took to keep himself ready for the whole time. The case is followed in Crabtree v. Messersmith, 19 la. 183; Lovering v. Lovering, 13 N. H. 513; Wolf V. Marsh, 54 Cal. 328; Christ v. Armour, 34 Barb. 387. On the same principle where one is bound to perform on demand, yet no demand is necessary where he has voluntarily put it out of his power to perform. Delamater v. Miller, 1 Cow. 75 ; Boyle v, Guysinger, 13 Ind. 378 ; Bassett v. Bassett, 55 Me. 137 ; Smith v. Jordan, 13 Minn. 364. 874 DISCHAEGE OF CONTEACT. Part V. ance of his part. He may do this by renouncing the con- tract, or by rendering it impossible of performance. The other party is then exonerated from a continued perform- ance of his promise, and is at once entitled to bring action. An illustration of such a discharge by renunciation of the contract is furnished by the case of Oort v. The Ambergate Jtailway Company!^ The plaintiffs contracted with the defendant Company to supply them with 3,900 tons [*285] of railway *chairs at a certain price. The chairs were to be delivered in certain quantities at specified dates. After 1,Y87 tons had been delivered, the defenda,nts desired the plaintiffs to deliver no more, as they would not be wanted. Action was brought upon the contract, the plaintiffs averring readiness and willingness to perform their part, and that they had been prevented from doing so by the Company. They obtained a verdict, but the Company moved for a new trial on the ground that the plaintiffs should have proved not merely readiness and willingness to deliver, but an actual delivery of the chairs. , The Court of Queen's Bench held that where a contract was renounced by one of the parties to it,- the other party need not do more than show that he was willing to have performed his part. And the principle of the decision was thus stated : — " When there is an executory contract for the manufact- uring and supply of goods from time to time, to be paid for after delivery, if the purchaser, having accepted and paid for a portion of the goods contracted for, gives notice to the vendor not to manufacture any more as he has no oc- casion for them and will not accept or pay for them, the vendor having been desirous and able to complete the con- tract, he may, without manufacturing and tendering the rest of the goods,^ maintain an action against the purchaser for breach of contract ; and he is entitled to a verdict on pleas traversing allegations 'that he was I'eady and willing to perform the contract, that the defendant refused to ac- o. 17 Q. B. 127. Chap. m. § 2. BY BREACH. 375 cept the residue of the goods, and that he prevented and discharged the plaintiff from manufpipturing and delivering them."i (4) Impossihility created hy one parly in the course of -^per- formance. Impossibility created during performance. — The rule of law is similar in cases where one party has by his own act made the contract impossible of performance. In Planohe v. Oolhurn " the plaintiff was engaged by the ^'defendants for £100 to write a treatise on [*286] " Costume and Ancient Armour " to be published in a serial called " The Juvenile I^ibrary." The plaintiff in- curred expense in preparing his work and actually completed a portion of it, but before it was delivered to the defend- ants they had abandoned the " Juvenile Library " on the ill-success of its first numbers. The plaintiff sued the de- fendants on the special contract and also on a quantum meruit for the work and labour expended by him on his treatise. He thus set up two distinct contracts, the original executory contract for the breach of which he claimed damages, and a contract arising from the execution of work upon request, under which he claimed the value of so much as was done before the contract was put an end to by the plaintiff. It was argued that he could not recover upon this latter aspect of his claim because his part of the original contract a. 8 Bing; 14. 1 Cort T. Ambergate Railway Co. has been generally followed in this country. In Hosmer v. Wilson, 7 Mich. 304, Christiancy, J., it was sai4 that an absolute refusal to accept goods ordered, although the goods were not in readiness for delivery, should be considered in the same light, as respects plaintiff's remedy, as an absolute, physical prevention by defendants, and that the plaintiff might bring his action ia such a case before completing the goods ordered and tendering a performance on his part. Derby v. Johnson, 31 Vt. 31 ; Haines v. Tucker, 50 N. H. 311; Smith v. Lewis, 34 Conn. 634; Clement v. Mesaerole, 107 Mass. 363; Collins V. Delaporte, 115 Mass. 163. 876 DISCHAEGE OF CONTRACT. Part V. being unperformed, that contract was not wholly at an end : but the Court held that the abandonment of the pub- lication in question did put an end to the contract and effect a discharge. " I agree," said Tindal, C. J., " that, when a special con- tract is in existence and open, the plaintiff cannot sue on a quantum ineruit; part of the question here, therefore, was whether the contract did exist or not. It distinctly- appeared that the work was iinally abandoned; and the jury found that no new contract had been entered into. Under these circumstances, the plaintiff ought not to lose the fruit of his labour." ^ (5) Breach lyy failur^e of jperfoTma/rhce. In the two cases of discharge last dealt with it is appar- ent that X has in word or act so dealt with the contract as to intimate to A that a further performance on his part is needless. The Courts have been asked in these cases to de- cide whether A is bound to tender a performance which he well knows that X will not or cannot accept, and they have decided that he is not so bound. Breach by failure of performance, how deter- [*287] mined. — *But where the breach of contract by X does not make the contract wholly incapable of per- formance, or is not accompanied with any overt expression of intention to abandon his rights, it is not always easy to determine whether A is thereby discharged or whether he mer.ely acquires a right of action from the breach. "We have to look to the terms of the contract and endeavour to as- certain the intention of the parties as to the nature of their respective promises ; and the difficulties resolve themselves into this question — "Were the promises of the parties inde- dependent of, or conditional upon, one another? iHawley V. Keeler, 53 N. Y. 114; Woolner v. HiU, 93 N. Y. 681; Smith V. Rowe, 7 Col. 95; Rankin v. Darnell, 11 B. Mon. 80; 52 Am. Dec. 557; Lovell v. St. Louis Mut. Life Lis. Co. Ill U. S. 264. Chap. m. § 8. BY BREACH. 877 Independent Promises. A promise may be independent in several ways. (a) A promise may be absolute. . -4's promise to X may be wholly unconditional upon the performance by X of his promise to A. In such a case a failure of performance by X would not discharge A, but would only furnish ground for an action against X. (h) The performance of a promise may be divisible. The promise may be susceptible of more or less complete performance; and the damage sustained by an incomplete performance or partial breach may be apportioned according to the extent of failure. The promise is in fact regarded as a number of promises to do a number of similar acts, and a breach of one or soine of these does not discharge the promisee. (o) A promise may be subsidiary. The breach committed by one of the parties may be a breach of a term of the contract only, and of a term which the parties have not, upon a reasonable construction of the contract, regarded as vital to its existence. The injured party is then bound to continue his performance of the con- tract, but may bring action to recover such damages as he has sustained by the default of the other. * Absolute Promises. In absolute promises, one party relies on the promise and not its performance by the other. — *If [*288] A make a promise to Xin consideration of a promise made by Xto A, and A has not, in express terms, or upon a reasonable construction of the contract, made the perform- ance of his promise depend upon the performance of X's promise, a breach of his promise by X will not discharge A. The position of A is this : his promise is given in considera- tion of X's promise, not in consideration of the performance by X of his promise : in other words, he has been content 878 DISCHARGE OF CONTRACT. Part V. with ^s liability, and has not insisted upon X's .perform- ance as a security for his promise.^ Some of the old cases upon this subject turn upon very technical constructions of terms : if A make a promise to X in consideration of its beihg " agreed''^ "^ \hsX Xdo something for J., each promise is regarded as absolute and independent of the other: if the promise be made '■'■provided''^ that Xdo something for A, the promise of A is conditional, and is dis- charged on failure of performance by X. An old case (1649) furnishes a good instance of such ab- solute promises.* , " Ware brought an action of debt for £500 against Chappell upon an indenture of covenants be- tween them, viz. that "Ware should raise 600 soldiers and bring them to such a port, and that Chappell should find shipping and victuals for them to transport them to Galicia; and for not providing the shipping and victuals at the time appointed was the action brought. The defendant pleaded that the plaintiff had not raised the soldiers at that time ; and to this plea the plaintiff demurs. EoUe, C. J., held that there was no condition precedent, but that they are distinct and mutual covenants, and that there may be several actions brought for them : and it is not necessary to give notice of the number of men raised, for the number is known to be 500 ; and the time for the shipping to be ready is also known by the covenants ; and you have your remedy against him if he raise not the men, as he hath against you for not pro- viding the shipping." [*289] Reasons assigned for rnle. — *The reason for holding such promises to be dbsohite is thus stated by Holt, 0. J. : — " What is the reason that mutual promises shall bear an action without performance ? One's bargain a. EoUe, Abr. 1. 518. 6. Ware V. ChappeU, Style, 186. 1 Where promises in a contract are independent, and performance is not to be concurrent, either party may recover for a breach thereof with- out showing performance on his part. Gould v. Banks, 8 Wend. 563 ; Pey V. Hox, 9 Wend. 129. Chap. m. § 3. BY BREACH. S79 is to be performed according as lie makes it. If he makes a bargain, and rely on the other's covenant or promise to have what he would have done to him, it is his own fault. If the agreement be, that A shall have the horse of B, and A agree that £ shall have his money, they may make it so; and there needs no averment of performance to main- tain an action on either side ; but if it appear by the agree- ment that the plain intent of either party was to have the thing to be done to him performed before his doing what he undertakes of his side, it must then be averred ; as where a man agrees to give so much money for a horse, it is plain he meant to have the horse first, and, therefore, he says the money shall be given for the horse." " And another reason is suggested by Willes, C. J., in Thomas v. Cadwallader," namely, " When two covenants in a deed have no relation to each other, I was clearly of opinion that the non-performance of one could not be pleaded in bar to an action brought for the breach of an- other covenant in the same deed ; and for this plain reason amongst others, that the damages sustained by the breach of one such covenant may not be at all adequate to the damages sustained by the breach of the other." ° Tendency of modern decisions. — The cases dating from the close of the last century seem to show a tendency of the Courts not to construe promises to be independent of one another, where they form the whole consideration for one another, unless there be some very definite expression of the intention of the parties to that effect. " The older cases," says Grose, J., in Olazebrooh v. Woodrowf' " lean to construe covenants of this sort to be independent, *contrary to the real sense of the parties and the [*290] true justice of the case;" and the interpretation of a. Thorpe v. Thorpe, 12 Mod. Kep. 4S5. 6. Willes, 490. _ c. But this view of the matter is certainly open to the criticism passed upon it by an Americanjudge: — " Courts are not required to speculate upon the inequality of loss to the parties, or to look beyond the agreement to its performance in order to ascertain its character, as suggested by some judges and commentators." Per Qardine, J., in Grant v. Johnson, Langdell, 620. d. 8 T. E. 366. 380 DISCHARGE OF CONTRACT. Part V. such promises may now be taken to rest upon " the good sense of the case and the order in which the things are to be done." " The order in which the things are to be done would ap- pear now to be the main test of the existence of such abso- lute promises. Thus where X makes a promise to A, the date of performance not being fixed, and A in consideration thereof promises to pay a sum of money to ^ at a fixed date, the payment is independent of performance. In March, 18Y9, A agrees to purchase land of iTand cove- nants to pay a sum of money on the 1st of April, 1879. X covenants in turn to convey the lands to A, but no day is fixed for the execution of the conveyance. So soon as , the 1st of April is passed, X can sue A for the money, and it is \no answer to his claim that he has never conveyed, or of- fered to convey the land to X. And so the law is laid down in Mattoah v. Kingldke," where the facts were such as those just described: — " A time being fixed for payment, and none for doing that which was the consideration for the payment, an ac- tion lies for the purchase money without averring perform- ance of the consideration." " But, upon the whole, it may be safe to say that, in the absence of very clear indications to the contrary, promises each of which forms the whole consideration for the other will not be held to be independent of one another. A fail- ure to perform the one will exonerate the promisee from a performance on his part.^ a. Per Lord Kenyon, 0. J., in Morton v. Lamb, 7 T. E. 125. h. 10 A. & E. 50. c. Per LittledaJe, J., in Mattock v. Kinglake, 10 A. & E. 50. I See rules of Sergeant Williams considered at length in 3 Smith, L, C. (H. & W. notes), 24; Dey v. Dox, 9 Wend. 139. "Although many nice distinctions are to be found in the books upon the question whether the covenants or promises of the respective parties to the contract are to be considered independent or dependent, yet it is evident the inclination of the courts has strongly favored the latter construction as being ob- viously the most just." Bank of Columbia v. Hagner,,! Peters, 465; Hamilton v. Thrall, 7 Neb. 318 ; Scheland v. Erpelding, 6 Greg. 358 ; CJhap. m. § 3. BY BREACH. 881 Promises the performance of which is divisible. Contracts frequently occur in which the promise of one or both parties admits of a more or less complete perform- ance; such would be a contract by way of charter-party to load and deliver a complete cargo ; or a contract for the sale of goods in which delivery and acceptance are to take *place by instalments extending over a con- [*291] siderable period of time. A partial breach is no discharge. — In contracts of this nature it may be laid down as a general rule, that a breach, which only deprives the promisee of a part of that to which he was entitled, does not discharge him from such perform- ance as may be due from him. In Ritchie v. AtMnson " the plaintiff promised to take his ship to St. Petersburgh and there load a complete cargo of hemp and iron, and to deliver the same on being paid freight at specified rates. He came away with an incom- plete cargo, under a mistaken impression that an embargo was about to be laid on British ships, and the defendant refused to pay any freight, on the ground that the complete- ness of the cargo was a condition precedent to any payment being due. Where performance is divisible. — Lord EUenborough said that whether it was so, or no, depended " not on any formal arrangement of words, but on the reason and sense of the thing as it is to be collected from the whole con- tract;" and with regard to the promise before us, he held that " where the freight is made payable upon an indivisi- ble condition, such as the arrival of the ship with her cargo at her destined port of discharge, such arrival must be a condition precedent ; because it is incapable of being appor- a. 10 East, 295. Quigley v. De Haas, 83 Pa. St. 667; Lutz v. Thompson, 87 N. C. 334. The order in which the things are to be done is made the test in Front Street B. R. Co. v. Butler, 50 Gal. 574; State v. Winona R. R. Co. 31 Minn. 474 ; McCoy v, Bixbee, 6 Ohio, 313 ; Couch v. IngersoU, 3 Pick. 398. 382 DISCHARGE OF CONTRACT. Part V, tioned : l)ut here the delivery of the cargo is in its nature di- visible, and therefore I think it is not a condition 'precedent; but the plaintiff is entitled to recover freight in proportion to the extent of such delivery; leaving the defendant to his remedy in damages for the short delivery." Instalment contracts. — The case of Simpson v. Orvpjpin " was decided upon similar grounds. In that case A agreed with ^to supply him with a given quantity of coal to be delivered in equal monthly instalments for twelve months. X agreed to send waggons to receive the coal. ^ did not during the first month send waggons enough to receive one- twelfth of the coal. A rescinded the contract. It was held that he was not entitled to do so, inasmuch as JTwas will- < ing to continue the contract as to the remaining in- [*292] stalments, and it did not appear to have been *the intention of the parties to determine the contract upon the failure of one of the parties to fulfill one of a series of terms. Later cases than Simpson v. Orippin^ show that it is very difficult to lay down any general rule as to the divisibility a. L. E. 8 Q. B. 14. 1 Instalment contracts. — Simpson v. Crippin has occasioned much discussion. It is usually compared with Hoare v. Rennie, 5 H. & N. 19, which some American courts prefer to follow. The action in Hoare v. Rennie was upon a contract to ship six hundred and sixty-seven tons of bar iron from Sweden to London, in June, July, August and Septem- ber, in about equal portions each month, at a certain price payable on delivery. The seller, plaintiff in the action, shipped about twenty tons otily in June, and failed to complete the shipment for that month ac- cording to the contract. Defendants refused to receive the twenty tons and gave notice that they would not accept the rest. Judgment was given for the defendants in the action to recover damages for failure to accept the iron purchased. Pollock, C. B., saying: "The defendants had the right to say that this was no performance of the contract, and they were no more bound to accept the short quantity than if a single delivery had been contracted for." These cases are in direct conflict, and it is difficult to determine which one is followed by the weight of Amer- ican authority. Mr. Benjamin says : " In America the law appears to be fairly settled in accordance with the decision in Simpson v. Crippin." Benj. on Sales, sec. 909; and Mr. Landreth, in his review of Norrington Chap. III. § 3. BY BREACH. 383 of contracts. The cases of Brandt v. Lawrence " and l^eutef V. Sola * may be referred to as illustrations of the fineness of the distinctions drawn. But the case which may best be compared with Simpson v. Orippvn is that of itonch v. Midler " where failure to deliver the first of a series of in- o. 1 Q. B. D. (0. A.) 344. 6. 4 0. P. D. (C. A.) 239. c. 7 Q. B. D. 9i V. Wright, infra, comes to the same conclusion — this review was writ- ten, however, while the case was pending in the United States supreme court — 21 Law Rep. 398. But Mr.Oorbin, inhis edition of Benjamin on Sales, expresses a contrary opinion regarding the weight of American authority, and he is sustained, in his view, by the recent decision of the United States supreme court. The following cases accord with Simp- son V. Crippin: Scott v. Killaning Coal Co. 89 Pa. St. 331; Morgan v. McKee, 77 Pa. St. 338; Cohen v. Piatt, 69 N. Y. 348; and Mr. Landreth, in his note to Norrington v. Wright, cites many other cases, which do not, however, pass on the right of rescission, but are simply illustrative of the disposition of courts, under certain circumstances and for vari- ous reasons, to treat contracts which have been partially performed, as severable rather than entire. The fact that a single contract may be regarded by the courts as severable for certain purposes does not estab- lish that the same contract is made up of several contracts, distinct and independent for all purposes. See 31 Am. Law Reg. 379, opinion of Butler, J., in Norrington v. Wright, U, S. 0. 0. Eastern District of Pennsylvania. The following cases expressly disapprove of Simpson v. Crippin: Bang Phillip Mills v. Slater, 13 R. I. 83; Norrington v. Wright, 115, U. S. 311. See, also, Hill v. Blake, 97 N. Y. 331; Welsh V. Gossler, 89 N. Y. 540 ; Catlin v. Tobias, 36 N. Y. 317 ; Smith v. Lewis, 40 Ind. 98 ; Dwinell v. Howard, 30 Me. 358 ; Robson v. Bohn, 37 Minn. 333; Bradley v. King, 44 Ul. 339; Hill v. Chipman, 59 Wis. 318; Boll- man V. Burt, 61 Md. 415. Norrington \. Wright is an important case, and may be said to have cast the weight of American authority against Simpson v. Crippin. This was an action upon a contract wherein N., the plaintiff, agreed to ship from European ports to W., the defendant, at Philadelphia, five thousand tons of old T iron rails, at the rate of about one thousand tons per month, beginning February, 1880. The February and March ship- ments fell short, the plaintiff having shipped only four hundred tons in February. On learning of this W. gave notice of rescission of the con- tract and declined to receive the remaining instalments. N. brought suit. The court held that the shipment of one thousand tons per month was a condition precedent, upon the failure or non-performance of which the party aggrieved might repudiate the whole contract. Justice 884 DISCHARGE OF CONTRACT. Part V. stalments of goods was held to operate as a discharge. There were but three instalments, each of a large amount. Bramwell, L. J., distinguished the facts from those in Simp- son V. Orippin; Baggallay, L. J., was prepared to overrule Grey, delivering the opinion of the court, considers the English cases at length, and comes to the conclusion that Hoare v. Eennie is supported by the greater weight of authority in England and America, and disap- proves of Simpson v. Crippin. For a recent decision of the House of Lords in accord with Simpson v. Crippin, see Mersey Co. v. Naylor, 9 Q. B. Div. 648 ; 9 App. Cas. 434. Followed in Blackburn v. Reilly, 47 N. J. L. 308 (1885); Trotter v. Heokscher, 40 N. J. Eq. 656. See Tucker v. Billing, 3 Utah, 82. Whatever may be the weight of authority on this question, certain principles are generally recognized in determining the right of rescission in this class of contracts. 1st. A contract may be regarded as entire and indivisible in its nature, although the subject of the contract consists of several entire things, to which certain values are aiHxed, and which are to be performed at different times; and when so regarded, the aggrieved party has the right to rescind on a breach of any essential term of the contra,ct. Thompson v. Conover, 33 N. J. L, 468 ; Smith v. Lewis, 40 Ind. 98. 3d. Though the contract call for performance by instalments and be severable or divisible in its nature, still the right of rescission may be exercised on failure to perform an instalment. (a) When by express terms of the contract performance of each stip- ulation is made a condition pi-ecedent to the continuing obligations of the contract. Cutter v. Powell, supra; Tyson v. Doe, 15 Vt. 571 ; Nor- rington v. Wright, supra. (b) Where it is evident, from the nature and circumstances of the bargain, that the regular performance of each stipulation was an induce- ment to the contract, and " so went to the root of the matter as to make its performance a condition of the obligation to proceed in the contract." Catlin V. Tobias, 36 N. T. 331 ; Norrington v. Wright, supra; Jenness V. Shaw, 35 Mich. 20. (c) Where the conduct of the party in default is such as to evince an intention to abandon the contract or a design no longer to be bound by its terms. Blackburn v. Eeilly, 47 N. J. L. 308: Haines v. Tucker, 50 N. H. 307 ; Stephenson v. Cady, 117 Mass. 6. The New York courts have been regarded as governed in their decisions by Simpson v. Crippin, but in a recent case the court of appeals considers that a contract may be called divisible or distributive for certain purposes and still be treated as entire for the purpose of determining the right of rescission. The case of Norrington v. Wright is approved, Finch, J., saying : " The reasoning of that case seems to us accurate and decisive, and we follow it without hesitation." Pope v. Porter, 103 N. Y. 371. Chap. m. § 2. BY BREACH. 88S that case ; Brett, L. J., rested his dissenting judgment on its authority. In fact the law as to these contracts to deliver by instalments is not settled. Default in one instalment may show intent to break contract. — But it is clear that if a default in one item of a continuous contract of this nature be accompanied with an announcement of intention not to perform the contract upon the agreed terms, the other party may treat the con- tract as being at an end. And in like manner,* if non- payment of one instalment of goods be accompanied by circumstances which give the seller reasonable ground for thinking that the buyer will not be able to pay for the rest, he may take advantage of the one omission to repudiate the contract.* Or be made a discharge by terms of contract. — And the general rule applicable to contracts of this sort may be contravened by express stipulation. It is always open to the parties to agree that the entire performance of a con- sideration, in its nature divisible, shall be a condition prec- edent to the right to a fulfillment by the other party of his promise. In such a case nothing can be obtained either upon the contract or upon a quantum m,eruit for what has been performed. In Cutter v. Powell," a sailor being at Jamaica, took a promissory note from the master of his ship to the follow- ing effect : " Ten days after the ship Governor Parry, myself master, arrives at Liverpool, I promise to pay to Mr. T. Cutter the sum of thirty gmnesiS, provided he pro- ceeds, continues *and does his duty as second mate in [*293] the ship from hence to the port of Liverpool. Kingston, July 31st, 1T93." The sum agreed to be paid was larger than the ordinary wages of a mate. The ship sailed on the 2nd of August, and reached Liverpool on the 9th of October; the sailor did his duty as second mate until the 20th of September, when he died. It was held that his representa- o. Withers v. Ee3molds, 2 B. & Ad. 882. 6. Bloomer v. Bernstein, L. E. 9 0. P. 588. c. 6 T. B. 330; and see Sm. L. C. ii, 1, and notes thereon. 25 386 DISCHARGE OF CONTRACT. Part V. tives could not recover upon the express contract, for its terms were unfulfilled; nor could they recover upon a quantum meruit for such services as he had rendered, be- cause the terms of the express contract excluded the arising of any such implied contract as would form the basis of a claim upon a quomtum meruit. " It may fairly be considered," said Grose, J., " that the parties themselves understood that if the whole duty were performed the mate was to receive the whole sum, and that he was not to receive anything un- less he did continue on board during the whole voyage." Siibsidiary promises. "We shall have to speak, in a later portion of this chapter, of subsidiary promises, or wa/rranties as we will venture to call them, as distinct from conditions or terms on which the right to performance depends. But it is desirable to illus- trate here the difference which exists between a subsidiary promise the breach of which cannot under any circumstances operate as a discharge, and a promise such as we have just described, which admits of being performed with more or less completeness, but which may be so completely broken as to discharge the promisee. A good instance of such a subsidiary promise is to be found in the case of Bettini v. Gye.'^ There the plaintiff, a professional singer, entered into a contract with the defend- ant, director of the Eoyal Italian Opera in London, for the exclusive use of his services as a singer in concerts and operas for a considerable time and upon a number of terms, one of which was as follows : — [*294] *" (T) Mr. Bettini agrees to be in London without fail at least six €ays before the commencement of his engagement, for the purpose of rehearsals." How distinguished from conditions. — The plaintiff broke this term by arrivmg only two days before the commence- ment of the engagement, and the defendant treated this o. : Q. B. D. 183. Chap. III. § 3. BY BREACH. 887 breach as a discharge of the contract. The Court held that in the absence of any express declaration that the term was vital to the contract, it must "look to the whole con- tract, and see whether the particular stipulation goes to the root of the matter, so that a failure to perform it would render the performance of the rest of the contract by the plaintiff a thing different in substance from what the de- fendant has stipulated for; or whether it merely partially affects it, and may hy compensated for in damages^ And it was decided that the term did not go to the root of the matter, so as to require to be considered a condition precedent. And generally it may be said that where a promise is to be performed in the course of the performance of the con- tract and after some of the consideration, of which it forms a part, has been given, it will be regarded as subsidiary, and its breach will not effect a discharge unless there be words expressing that it is a condition precedent, or unless the performance of the thing promised be plainly essential to the contract." " Where a person has received part of the consideration for which he entered into the agreement, it would be unjust that, because he had not the whole, he should therefore be permitted to enjoy that part without either payment or doing anything for it. Therefore the law obliges him to perform the agreement on his part, leaving him to his reuieAj to recover any damages he may have sustained in not having received the whole consideration." ^ o. Per Parke, B., in Grares v. Legg, 9 Ex. 718. ; 1 Part performance of entire contract. — This principle is unques- tioned where the contract is severable, but where the contract is entire and indivisible, it is held, in New York, that a part performance gives the party in default no remedy, unless there has been a waiver of full performance. Grant v. Johnson, 5 N. Y. 247 ; Champlin v. Rawles, 18 Wend. 194; but see Avery v. Wilson, 81 N. Y. 341. And the New York rule has been followed in Larkin v. Buck, 11 Ohio St. 561 ; Haslack v. Mayers, 36 N. J. L. 284; Clark v. Baker, 5 Met. 453; Holden Steam MiU Co. V. Westervelt, 67 Me. 446. But the tendency of recent decisions is toward a more equitable rule. As was said in Wilson v, Wagar, 36 Mich. 464, Christiancy, Ch, J., " Where the articles delivered were a part only 388 DISCHARGE OF CONTRACT. Part V. Warranty of quality, when subsidiary. — Another illus- tratioa of a subsidiary promise of this nature is to be found in the warranty of quality in a sale of goods. Where a contract of sale is executory, so that the prop- erty in the chattel has not passed to the buyer, and the terms of the sale include a promise that the chattel [*295] shall *possess a particular quality, the acceptance of the chattel by the buyer is condiiional on its possess- ing that quality. Having promised to take, and pay for an article of a particular sort, he is not obliged to receive one which is not of the sort he bargained for." But if the contract of sale be executed, as being, in its in- ception, such a bargain and sale of a specific chattel as was described in an earlier chapter, the promise as to quality becomes subsidiary. For, the property having passed, the buyer can only reject the goods if there be an express con- dition that he should do so (as in Mead v. Tattersall)^ or possibly in the event of the goods being dififerent in descrip- tion to the terms of the agreement, or wholly worthless in o. Benjamin on Sales, 748; ante, p. 64; and see Benjamin, Bk. ii, oh. 1, 3. 6. L. E. 7 Ex. 7. of those agreed to be furnished upon a special contract, which was en- tire in its nature, providing one gross sura for the whole, yet the dehvery of a part of the contracted articles only, and the defendant's acceptance and appropriation of these, had conferred a benefit upon him, and created a corresponding duty or implied contract, separate from and independ- ent of the special contract, to pay what such delivered portion was rea- Bonably worth ; leaving to the defendant the right to recoup in this action, or to recover in another such damages as be might be able to show he had sustained by the plaintiff's failure to perform the special contract." Brittan v. Turner, 6 N. H. 481 ; Wolf v. Gerr, 43 la. 339 ; Richards v. Shaw, 67 111. 233 ; Lee v. Ashbrook, 14 Mo. 378 ; Hollis v. Chapman, 36 Tex. 1 ; Duncan v. Baker, 31 Kan. 99 ; Blood v. Enos, 13 Vt. 625 ; Ryan v. Dayton, 25 Conn. 188 ; Bast v. Byrne, '51 "Wis. 537 ; Pixlerv. Nichols, 8 la. 106; Byerlee v. Mendell, 39 la. 383; Parcell v. McComber, 11 Neb. 309; Murphy v. St. Louis, 8 Mo. App. 483. The authorities upon this are numerous. They are collected and reviewed in an able note by Mr. Corbin in 4th Am. Ed. of Benjamin on Sales, 3 Vol. p. 903. See Denton v. Atchison, 84Kan3. 488. Chap. m. § 2. BY BREACH. 389 quality." The promise as to quality is then a warranty in the strict sense of the term, " a stipulation by way of agree- ment, for the breach of which compensation must be sought in ^damages," * in other words, a promise to indemnify against failure to perform a term in the contract. Conditional Promises. Conditional Promises are of three kinds. — We now come to deal w^ith conditional promises, and before we touch upon the sort of condition which is especially con- nected with the subject of discharge, it may be well to speak shortly of conditions in general. If A make a promise to X which is not an absolute prom- ise, but subject to a condition, that condition must, as re- gards its relation to the promise in time, be either subsequent, concurrent, or precedent. (1) In the case of a condition subsequent, the rights of X under A's promise are determinable upon a specified event. The condition does not aflfect the commencement of X's rights, but its occurrence brings thetn to a conclusion. We have already dealt with conditions of this nature in speak- ing of the discharge of contract by agreement. (2) Tn the case of a condition concurrent, the rights of X under J.'s promise are dependent upon his doing, or being *prepared to do, something simultaneously with [*296] the performance of his promise by A. Such a condi- tion exists in the case of a sak of goods where no time is specified for the payment of the price ; payment and deliv- ery are concurrent conditions, and the right of the seller to receive the price and that of the buyer to receive the goods are dependent upon the readiness of each, the one to deliver and the other to pay." (3) In the case of a condition precedent, the rights of X under J.'s promise do not arise until something has been a. See post, p. 39i. 6. Behn v. Bumess, 3 B. & S. p. 755. c. Per Bayley, J., in Bloxam v. Sanders, 4 B. & C. 94t 390 DISCHARGE OF CONTRACT. Part V. done, or has happened, or some period of time has elapsed. But in dealing with conditions of this nature we must note that they are of two kinds, and that with one of these we are not here immediately concerned. (1) Conditions which do not discharge — Floating or suspensory conditions. — We must distinguish conditions which suspend the operation of a promise - until they are fulfilled, from conditions the non-fulfillment of which is a cause of discharge. It is perhaps permissible to call the toriaQV floatvng conditions, as opposed to conditions the per- formance of which is fixed by time or circumstances. It may be well shortly to illustrate the character of such con- ditions. The happening of an event. — A promise may be condi- tional on the happening of an uncertain event, as in the case of the underwriter whose liability accrues upon the loss of the vessel insured." Or it may depend upon the act of a third party, as in the case of a promise in a building con- tract to pay for the work upon'receiving a certificate of ap- proval from the architect. Such promises might be called contingent rather than conditional, for they depend for their operation on events which are beyond the control of the promisee and which may never happen. The lapse of time. — Again, a promise may be conditional in the sense that its operation is postponed until the lapse of a certain time — as in the case of a debt for which a fixed period of credit is to be given — or until the happening of an event that is certain to happen, as in the case of an in- surance upon life. The act of the promisee. — Or again, a promise may be conditional in the sense that its operation awaits the [*297] performance of some act to be done *by the prom- isee. If no time is specified within which the act is to be done, the non-fulfillment of the condition merely sus- pends and does not discharge the rights of the promisee. Common illustrations of such conditions are furnished by a. Morgan v. Bimie, 9 Bing. 672. Chap. III. § 3. BY BREACH. 391 cases of promises conditional upon demand or notice. A may promise Xthat he will do something upon demand: he cannot then be sued until demand has been made. Or A may promise Xthat he will do something upon the hap- pening of an event, and he may stipulate that notice shall be given to him of the event having happened. Or it may be that the happening of the event is peculiarly within the knowledge of X, and then an implied condition would be imported into the contract that notice must be given to A before he can be sued upon his promise." In all these cases it would appear that an action brought upon the promise, before the fulfillment of the condition, would be brought prematurely; and though neither the non-fulfillment of the condition, nor the action brought be- fore it was fulfilled, would discharge the contract, the con- dition suspends, according to its terms, the right to the performance of the promise.* (2) Conditions precedent which may effect discharge. — But the conditions, with which we are concerned effect a discharge of contract by their breach, if not performed at a fixed time or within a reasonable time from the making of the contract ; and the breach of such a condition is the breach of a term expressly made, or necessarily implied in the contract, whereby one party loses either the whole or an essential part of that in consideration of which he made his promise. And so we may say that where -4's promise to^is a conditional and not an absolute promise, he may be dis- charged — (1) By the failure of X to perform a " concurrent con- dition," 1. e. to do something or to be ready to do some- thing which should be simultaneous with the performance of his promise by A. (2) By the fact that there has been a total or substan- tial failure on the part of X to do that which he was a. MaklnT. Watkinson, L. B. 6 Ex. SB, b. Palmer y. Temple, 9 A. & E. SSil. 393 DISCHARGE OF CONTRACT. Part Y-. [*298] bound to *do under the contract — a state of things which we may describe as virtual failure of consid- eration. (3) By the untruth of some one statement or the breach of some one term which the parties considered to be vital to the contract. breach of Concurrent Condition. Concnrrent conditions are mutual conditions prece- dent. — Concurrent conditions seem, in point of fact, to be conditions precedent ; for the simultaneous performance of his promise by each party must needs be impossible except in contemplation of law. But what we mean by the phrase is, that there must be a concurrent readiness and willing- ness to perform the two promises, and that if one is not able or willing to do his part, the other is discharged." This form of condition is more particularly applicable to contracts of sale, where payment and delivery are assumed, in the absence of express stipulation, to be intended to be contemporaneous. In Morton v. Larrib^ the plaintifif agreed to buy a certain quantity of corn of the defendant at a certain price, and the defendant promised to deliver the corn within one month. The plaintifif alleged that he had always been ready and willing to receive the corn, but that it had not been delivered within the month. The Court held that readiness to receive was not a suiHcient performance of his obligation by the plaintifif ; that payment of the price was intended to be concurrent with delivery of the corn. As the plaintifif did not allege that during the time in which delivery might have been made he had been ready to pay the price, there was nothing, as he had shaped his case, to show that he had not himself broken the contract and dis- charged the defendant by non-readiness to pav. And so the law is laid down by Bayley, J., in Bloxam v. a. Benjamin on Sales, p. 480, 6. 7T.B. 125. Chap. in. § 8. BY BREACH. 893 Scmders:'* — ""Where goods are sold, and nothing is said as to the time of the delivery or the time of payment, ^.nd everything the seller has to do with them is com- plete, the property *vests in the buyer, so as to sub- [*299] ject him to the risk of any accident which may happen to the goods, and the seller is liable to deliver them whenever they are demanded upon payment of the jprice; but the buyer has no right to have possession of the goods till he pays the jprioeP ' Breach hy Virtual Failure of Oonsideration. It is laid down by high authority that " where mutual promises or covenants go to the whole consideration on both sides, they are mutual conditions and performance must be averred." * i By this we must understand that where J.'s promise is the entire consideration for X's promise, then, in the ab- sence of any clear indication that Xis to perform his promise first, or that X, as the consideration for his promise, relied solely upon his right of action against A, A will not be able to sue X unless he can aver that he has performed or is ready to perform his promise ; and if performance is no longer possible for him within the terms of the contract, X will be discharged.^ It seems tolerably obvious that a total failure by A in performing that which was tlie entire consideration for X's promise, and which should have been antecedent to X's per- il. 4B. &C. 941 6. Williams' Saunders, I, 556; Boone v. Eyre, 1 H. Bl. 373, n. 1 Allen V. Hartfleld, 76 111. 358; Wabash Elevator Co. v. Bank of To- ledo, 33 Ohio St. 311; Henderson v. Louck, 31 Pa. St. 859; Ruasell v. Minor, 33 Wend. 659 ; Adams v. O'Connor, 100 Mass. 515 ; Stone v. Perry, 60 Me. 48; Hodgson v. Barrett, 33 Ohio St. 63; Simmons v. Green, 35 Ohio St. 104; Turner v. Moore, 58 Vt. 455; Brunswick & Balke Co. v. Martin, 30 Mo. App. 158; Pierce v. Cooley, 56 Mich. 553. 2 As to the remedy where there has been a part performance only of an earlier contract, see 394, n. 894 DISCHARGE OF CONTRACT. Part V. formaiice of his promise, will exonerate, X; but it will be well to note some of the less obvious applications of the rule, and to mark its effect in cases where the performance of a promise has been illusory and consideration for the promise of the other party has consequently failed. In cases of executory contract of sale. — In every ex- ecutory contract of sale the buyer, if he has contracted for an article of a particular quality, is entitled to reject the article tendered if it do not correspond in quality with the terms of the contrkct. This however is a matter of express condition falling under the next and not the present head of conditional promises. Eat in the absence of express stipulations of this nature there are certain terms implied in every contract of sale which protect the buyer, if [*300] *he has not been able to inspect the goods, from the imposition upon him of an article different to that which he contracted to buy, or practically worthless and unmarketable. " In every contract to supply goods of a specified descrip- tion which the buyer has no opportunity to inspect, the goods must not onlj in fact answer the specified descrip- tion, but must also be salable or merchantable under that description."" Where goods do not answer to description. — Thus the buyer is not bound to accept goods which do not correspond, to the description of th^ article sold, even though they do correspond to the sample by which they were bought. In NicTiol v. Oodts^ the plaintiff agreed to sell to the de- fendant a certain quantity of foreign refined rape oil, war- ranted only equal to samples; and the action was brought for the refusal by the defendant to accept oil which corre- sponded to the samples, but which turned out not to be foreign refined rape oil. It was held that he was entitled to be discharged from the contract," inasmuch as the nature of o. Jones V. Just, L. R. 3 Q. B. 197. 6. 10 Exeh. 191. e. And see Azemar v. Casella, L. R. 3 C. P. 431 and 677. Chap. III. § 2. BY BREACH. 395 the article delivered was different from that which he had agreed to buy.^ Or are not marketable. — On the same principle, in Zaing v. Fidgeon " a contract to supply saddles was held to be discharged, and the purchaser exonerated from receiving the goods, on the ground that they were not of a merchant- able quality. In cases of executed contract of sale. — In the case of an executed contract of sale, in which the property in the article sold has passed unconditionally to the buyer, there does not seem to be express authority to the effect that the terms, imported into all executory contracts of sale in which the buyer cannot inspect the goods, * give a right to return the article bought.^ a. 6 Taunt. 108. 6. Benjamin on Sales, p. 741. 1 See 131, n. Under most of the American decisions under a con- tract of sale there is an implied warranty that the thing sold shall cor- respond to the description given. Hogins v. Plympton, 11 Pick. 97; White V. Miller, 71 N. Y. 118; Wolcott v. Mount, 36 N. J. L. 262; For- cheimer v. Stuart, 65 la. 593 (co^jiraTEyan v. Ulmer, 108 Pa. St. 333) ; Catchings v. Hacke, 15 Mo. App. 51 ; Cosgrove v. Bennett, 33 Minn. 341 ; Lampson v. Cummings, 53 Mich. 491. On the importance of the distinction hetween the terms warranty and condition, as applied to the description of the thing sold, see 2 Benjamin on Sales, § 966, note; West Republic Mining Co. v. Jones, 108 Pa. St. 55 ; Ryan v. Ulmer, id. 332. 2 By the later English decisions the right to rescind an executed con- tract of sale for breach of warranty is confined to cases of fraudulent warranty. This rule is followed in Voorhees v. Earl, 2 Hill, 388; MuUer V. Eno, 14 N. Y. 597 ; Hoover v. Sidener, 98 Ind. 290 ; Freyman v. Kaeoht, 78 Pa. St. 141; Wright t. Davenport, 44 Tex. 164; Buckingham v. Os- borne, 44 Conn. 133 ; and is said to be sustained by the weight of authority. But in Massachusetts, Maine and Maiyland it has been long established that the purchaser may rescind the contract and return the property, for breach of warranty, although there is no express agreement that he may do so and no fraud on the part of the vendor. Bryant v. Isburgh, 13 Gray, 607 ; Marston v. Knight, 39 Me. 341 ; Franklin v. Long, 7 Gill & J. 407 ; and there is a growing disposition in American courts to follow this rule. Bronson v. Turner, 77 Mo. 489 ; Johnson v. Whit- man, 20 Mo. App. 103; Boothby v. Scales, 37 Wis. 636; Warder v. Fisher, 48 Wis. 338; Ruff v. Jarrett, 94 111. 475; Rogers v. Hanson, 35 la. 283; Byers v. Chapin, 28 Ohio St. 306. 396 DISCHARGE OF CONTRACT. Part V. But it would seem that although the property has passed to the buyer, still if the article prove to be worthless and unmarketable, or different in character from that which he agreed to buy, he can exercise rights closely analogous with the right of return, and such as we have described as flow- ing from the discharge of contract by breach. [*301] *(1) He can defend an action successfully for the whole amount of the price. (2) He can, if he has paid the price, recover it back, as money received to his use, on the principle " explained above, that where a man has done all or any part of his share of a contract which is afterwards broken by the default of the other party, he may reoover as upon a distinct contract arising upon the acceptance by the other of money, goods, or services offered by him. In Poulton V. Lattimore^ the plaintiff sued the defendant for the price of seed ; the seed had been sold as new growing seed, but when sown it proved wholly unproductive. The defendant refused to pay anything for the seed, and his de- fence was successful to the whole amount of the price. In Young v. Oole," the defendant employed the plaintiff as a stockbroker, and delivered to him some Guatemala bonds to sell. The plaintiff sold them and paid the price to the defendant. The bonds turned out to be worthless because unstamped, and were returned to the plaintiff, who took them back, repaid to the purchaser their price, and sued the defendant for the amount which he had paid, as money re- ceived by the defendant for his use. The Court held that he was entitled to recover inasmuch as the purchaser of the bonds was entitled to return them and demand their price back from the broker, and the plaint- iff had thus been compelled to make the payment on behalf of the defendant. " It is not a question of warranty," said Tindalj C. J., " but whether the defendant has not delivered o. Ante, p. 377, 6. 9 B. & C. 259. c 8 Bing. N. 0..784, Chap. m. § 2, BY BREACH. 397 something which, though resembling tlie article Gontracted to ie sold, is of no valueH'' ^ It follows from what has been said that the buyer under the circumstances described may always maintain an action for damages sustained by the supply to him of an unmarket- able article, or of something different in character to that which he agreed to buy." There needs no expressed term in the contract to enable him to do this. *It is somewhat unfortunate that the phrase "im- [*302] plied warranty" should have been used to describe terms of this nature. A non-compliance with such terms is, in fact, a breach of the entire contract, a substantial failure of consideration. If A agrees to buy beef of X, it seems hardly reasonable to say that Z impliedly warrants that he will not supply mutton, or that he will not supply an article unJSt for human food. The use of the term " warranty " in this sense has been emphatically condemned by eminent judges,* but it still ex- o. Josling V. Kingstord, 13 0. B. N. S. 447; Mody v. Gregson, L. R. 4 Ex. 49. 5. Per Lord Abinger, C. B., Chanter v. Hopkins, 4 M. & W. 399; Per Martin, B., Azema v. Casella, L. E. 2 C. P. 677. 1 Day V. Pool, 53 N. Y. 416 ; Crenshaw v. Slye, 53 Md. 140 ; Richard- son V. Grundy, 49 Vt. 23 ; Ferguson v. Hosier, 58 Ind. 438 ; Vincent v. Leland, 100 Mass. 433; Scott v. Raymond, 31 Minn. 437. The New York rule regarding the right to retain the goods and then sue for breach of warranty, where the goods had been accepted under an executoi-y con- tract of sale, which has been regarded as unsettled, is definitely set forth in Brigg v. Hilton, 99 N. Y. 539, by Danforth, J. "If the sale is of ex- isting and specific goods, with or without warranty of quality, the title at once passes to the purchaser, and where there is an express warranty, it is, if untrue, at once broken, and the vendor becomes liable in dam- ages, but the purchaser cannot for that reason either refuse to accept the goods or return them. If the contract is executory, and the goods yet to be manufactured, no title can pass until delivery or some equivalent act to which both parties assent ; and when offered, the vendee may re- ject the goods as not answering the bargain, but if the sale was with warranty, he may receive the goods, and then the same consequences attach as in the former cases, and among others, the right to compensa- tion if the warranty is broken. See 3 Benjamin on Sales (4th Am. ed.) sec. 1356, n. 398 DISCHARGE OF CONTRACT. Part V, ists, and tends to obscure the subject of the performance and breach of contract.^ And this matter of total failure of consideration has been introduced, with not very happy results, into the subject of Mistake. As a rule a man makes a contract with an honest intention to keep his promise, and, if he fail to do so, fails from circumstances of which he was not aware, or upon which he did not calculate at the time he made it. And the promisee in like manner expected with more or less reason that he would get what he bargained for.* If both are wrong and the promise is broken by the supply of an article different in kind from what was contemplated, the rights of the promisee are not dependent on the mutual error of the parties, but on the somewhat elementary truth that a con- tract expressed in unequivocal terms gives a right of action to the party injured by its breach. In cases of clivisible performance which wholly fails. — The rule further applies to the case of promises which we have described as capable of more or less complete perform- ance, and which may be broken in part without such breach affecting the existence of the contract. Where the performance of a promise is divisible so that a partial breach will not discharge the other contracting party, a total failure of performance will nevertheless operate as a discharge.* And even where the failure is not total, there ' may well be a point at which its amount alters the [*303] character *of the transaction, and makes the tender of any further performance nugatory for the pur- poses which the contract was originally designed to effect. Thus in Ritchie v. Atkinson," cited above, it was admitted that though the failure to deliver a complete cargo did not exonerate the charterer, yet that if no cargo had been de- livered he would have been discharged. a. Pollock, 436, 437, and cases there cited. 6. Poussard v. Spiers, 1 Q. B. D. 410. 0. 10 East, 295. 1 See ante, 300, note. Chap. m. § 3. BY BREACH. 399 And so with a promise which the parties regard as a sub- sidiary term in the contract in so far as its exact perform- ance is not a condition upon which the rights of the promisor depend : if it be broken in such a way as to frustrate the objects of the contract, it operates as a condition and the breach of it as a discharge. So in the case of a charter-party, "not arriving with due diligence or at a day named is the subject of a cross-action only. But not arriving in time for the voyage contemplated, hut at such a time that it is frustrated, is not only a hreach of contract hut discharges the charterer." " Conditions Precedent. In the cases with which we have been dealing, one of the parties to a contract has been excused from performance of his promise hy reason of the entire failure of the considera- tion which was to have been given for it. We now come to Conditions Precedent in the narrower and more frequent use of the word, as meaning a single term in the contract, but a term possessing a particular character. Condition Precedent defined. — We will define a Condi- tion Precedent, in this sense, as a Statement or Promise, the untruth or non-performance of which discharges the con- tract. The difficulty which has always arisen, and must needs' continue to arise with regard to Conditions Precedent, con- sists in discovering whether or no the parties to a contract regarded a particular term as essential. If they did, the term is a Condition : its failure discharges the contract.* If a. Jackson v. Uiiiou Marine Ins. Co. L. E. 10 C. P. p. 148. 1 Breach of condition precedent. — It is well settled that the breach of a condition precedent will discharge a contract, unless performance of the condition is waived or rendered impossible by the act of God, the law or the other party. Dermott v. Jones, 3 Wall. 1 ; Button v. Russell, 55 Mich. 478; Bell v. Hoffman, 93 N. 0. 373; Kirkpatrick v. Alexander, 60 Ind. 95 ; Rogers v. Sheerer, 77 Me. 333 ; Harder v. Marion Co. Com. 97 Ind. 455; NewhaU v. Clark, 3 Cush. 376; Husted v. Craig, 36 N. Y. 321. See ante, 393, note. 400 DISCHARGE OF CONTRACT. Part V. they did not, the term is a "Warranty : its failure can [*3Q4:] only *give rise to an action for such damages as have been sustained by the failure of that particular term. "Warranty and Condition are alike parts, and only parts, of a contract consisting in various terms. We have tried to define Condition, we will venture further to try and de- fine Warranty. Warranty defined. — Warranty is a more or less unqual- ified promise of indemnity against a failure in the perform- ance of a term in the contract. It is right to say that the word warranty is used in the most confusing manner, and in a great variety of [*305] senses,"' but *itis submitted that the definition which has just been given assigns to the term its primary a. It would be a work of some researcli to enumerate the various senses in which the word warranty is used. The following are some of the commoner uses of the term: — (1) Warranty is used as equivalent to a condition precedent in the sense of a descrip- tive statement on the truth of which the rights of one of the parties depend. Behn v. Bumess, 3 B. & S. 761. (2) It is used as equivalent to a condition precedent in the sense of a promise with the effect above described. Behn v. Bumess. (3) It is used as meaning a condition the breach of which has been acquiesced in, and which therefore forms a cause of action but does not create a discharge. Behn v. Bumess. (4) It is used as an independent subsidiary promise, collateral to the main object of the contract. Chanter v. Hopkins. This, It is submitted, is its legitimate meaning, i M. & W. 404. (5) In relation to the contract of sale, warranty is used for an express promise that an article shall answer a particular standard of quality; and this promise is a condi- tion until the sale is executed, a warranty after it is executed. Street v. Blay, Si B. & Ad. 456. (6) Implied warranty is a term used very often in such a sense as to ^amount to a repetition by implication of the express undertaking of one of the contracting parties. We have mentioned the implied warranty in an executory contract of sale that goods shall answer to their specific description and be of a merchantable quality; in other words, that there shall be a substantial performance of the contract. Jones v. Just, L. R. 3 Q. B. 197; ante, p. 301. Implied warranty of title appears to be a somewhat vexed question; but the better opinion seems to be that on the sale of an article a man is supposed to imdertake that he has a right to sell it; in other words, "that he sells a chattel and not a lawsuit." Eicholz V. Bannister, 17 C. B. N. S. 708. But the strangest applications of the implied warranty are the warranty of author- ity which a man is supposed to give to a person contracting with him as agent, of which more hereafter; and the warranty of possibility which a man is said to give, if he omits to introduce into his promise conditions which guard him from being bound by it in the event of its becoming impossible of performance. Collen v. Wright, 7 E. & B. 301; 8 E. & B. 647; Clifford v. Watts, L. E. 5 C. P. 577. C!hap. lU. § 2. BY BREACH. 401 meaning. "A warranty is an express or implied state- ment of something which the party undertakes shall be part of the contract; and though part of the contract, collateral to the express object of it." " The breach of a term which amounts to a warranty will give a right of action, though it will not take away existing liabilities ; it is a mere prom- ise to indemnify. "We have called a warranty " a more or less unqualified promise ; " and we will illustrate the meaning of this phrase from the contract between a Eailway Company and its pas- sengers. It is sometimes said that a Eailway Company as a common carrier warrants the safety of a passenger's lug- gage, but does not warrant his punctual arrival at his des- tination in accordance with its time tables. In truth it warrants the one just as much as it warrants the other. In each case it makes a promise subsidiary to the entire con- tract, but in the case of the luggage its promise is qualified only by the excepted risks incident to the contract of a common carrier ; * in the case of the time table its promise amounts to no more than an undertaking to use reasonable diligence to ensure punctuality. A promise is not more or less of a warranty because a greater or less degree of dili- gence is exacted or undertaken in the performance of it." That the promises are warranties and not conditions is apparent from the fact that neither loss of luggage nor un- punctuality would emtitle the passenger to rescind the con- tract and recover back his fare.' o. Per Lord Abinger, 0. B., in Chanter v. Hopkins, 4 M. & W. 404. 6. Richards v. London, Brighton & S. 0. Eailway Co. 7 0. B. 839. c. Le Blanche v. L. & N. W. Railway Co. 1 C. P. D. 311. 1 Warranty. — The author seeks to impress upon the reader the im- portance of a correct use of the terms warranty and condition. While the legitimate meaning of the term warranty may be "an independent subsidiary promise, collateral to the main object of the contract,'' still, under the decisions, it is either independent or conditional, according to' the intention of the parties expressed in the contract. As illustrative of the manner in which these words are used interchangeably, we may quote from the opinion of Justice Gray in Norrington v. Wright, 115 U. 403 DISCHAEGE OF CONTRACT. Part V, Difflcttltios of distinguishing condition and warranty. — The question whether a particular term in a contract is a Condition Precedent or a Warranty is one which, as it turns upon the construction of each individual contract, need not detain us longer here. " The rule has been established," said Tindal, 0. J., in Stavers v. Citrling," " by a long series of decisions in modern times, that the question whether covenants are to be held dependent or independent of each other, is to be [*306] determined *by the intention and meaning of the parties as it appears on the instrument, and by the application of common sense to each particular case; to which intention when once discovered all technical forms of expression must give way." And Blackburn, J., puts the matter in the same light in the recent case of Bettini v. Gye:* — " Parties may think some matter, apparently of very little iniportance, essential; and if they sufficiently express an intention to make the literal fulfillment of such a thing a condition precedent, it will be one ; or they may think that the performance of some matter, apparently of essential importance and prima facie a condition precedent, is not really vital, and may be compensated for in damages, and if they sufficiently expressed such an intention, it will not be a condition precedent." This being the rule as to the ascertainment of a condition o. 3 Bing. N. C. 355. 6. IQ. B.D. 187. S. 303. " A statement descriptive of the subject-matter, or of som^e ma- terial incident, such as the time or place of shipment, is ordinarily to be regarded as a warranty, in the sense in which that term is used in insur- ance and maritime law, that is to say, a condition precedent, upon the failure or non-performance of which the party aggrieved may repudiate the whole contract. See, also, Davison v. Van Lingen, 113 U. S. 40. Again : Under the English law in a contract of sale, words of description import a condition and not a warranty, whereas the American courts generally treat the description as a warranty that the property sold is of that description. See 3 Benjamin on Sales (4th Am. ed.), g 965. Chap. m. § 2. BY BREACH. 403 precedent, it will be enough to note that a condition prec- edent may assume the form either of a statement or of a promise. In speaking of Misrepresentation," we pointed out the mode in which statements forming the basis of a contract or regarded as essential to it were incorporated into the body of the contract, and were placed upon a level with promises the breach of which would confer a right of action, and in certain cases effect a discharge. Acq^uiescence in a breach of condition turns it into a warranty. — But it must be borne in mind that a condition precedent may change its character in the course of the performance of a contract ; and that a breach which would have effected a discharge if treated as such at once by the promisee, ceases to be such if he goes on with the contract and takes a benefit under it. This aspect of a condition precedent is pointed out by WiUiams, J., in Behn v. Burness,^ where he speaks of the right of the promisee, in the case of a broken condition, to repudiate the contract, " provided it has not already been partially executed in his favour ; " and goes on to say that if *after breach the promisee continues to ao- [*30Y} cept performance, the condition loses its effect as such, and becomes a warranty in the sense that it can only be used as a means of recovering damages. An illustration of such a change in the effect of a condi- tion is afforded by the case of Pust v. Dowie." The de- fendant chartered the plaintiff's vessel for a voyage to Sydney, he promised to paj' £1,550 in full for this use of the vessel on condition of her taking a cargo of not less than 1,000 tons weight and measurement. The charterer had the use of the vessel as agreed upon ; but it appeared that she was not capable of holding so large a cargo as had been made a condition of the contract. To an action brought for non-payment of the freight the defendant a. Ante, p. 147. b. 3 B. & S. 756. c. 83 L. J. Q. B. 179. 404 DISCHAEGE OF CONTRACT. Part V. pleaded a breach of this condition. The term in the con- tract which has been described was held to have amounted, in its inception, to a condition. " It is not easy to see," said Blackburn, J., " what is meant by these latter words unless they import a condition in some sense ; and if when the matter was still executory, the charterer had refused to put any goods on board, on the ground that the vessel was not of the capacity for which he had stipulated, / will not say that he might not have heen justified in repudiating the contract altogether; and in that case the ■ condition would have been a condition precedent in the full sense." He then quotes with approval the dicta of Williams, J.-, in Behn v. Burness,"' and goes on to say, "Il^o doubt that principle is adopted from the judgment of Lord Wensley- dale, in Graves v. Legg, and this distinction will explain many of the cases in which, although there appears to have been a condition precedent not performed, a party having received part of the consideration has been driven to his cross-action.' Now is not this a case in which a substantial part of the consideration has been received? And to say that the failure of a single ton (which would be enough to support the plea) is to prevent the defendant from [*308] being compelled to pay *anything at all, Avould be deciding contrary to the exception put in the case of Behn v. Burness." But not if the breach be of a substantial character. — But the part performance thus accepted after breach must be " a substantial part of the consideration " or the condi- tion does not lose its force. In Ellen v. Topp,'' the father of an apprentice was sued a. 9 Exch. 709, ante, p. 394. b. 6 Exoh. 484. 1 There is no question but that a condition precedent may be waived and the promisee be required to pay for such benefits as he may have received under the contract, less the damage sustained by the promisor's default ; but the American authorities do not agree on the proposition that a party having received a part of the consideration is driven to his cross-action. See cases cited § 294, note. Chap. m. § 3. BY BEEACH. 405 upon an apprentice^ship deed to which he was a party, by the master, for a discontinuance of service by his son. The boy had served for three years out of a term of five. The father pleaded that the master, having agreed to teach the apprentice three trades, had abandoned one of them. It was argued that as the plaintiff had given so much of the consideration as a three years' instruction, the condi- tion that he should practice the three trades which he had originally promised to teach, had ceased to be a condition precedent and that the apprentice was not discharged by the breach. The Court admitted that " the construction of an instrument may be varied by matter ex post facto; and that which is a condition precedent when the de^d is exe- cuted may cease to be so by the subsequent conduct of the covenantee in accepting less." But it was held that the failure, although some performance had since been accepted, was a failure to fulfill a substantial part of the considera- tion, that the covenant to teach was a continuing condition precedent to the covenant to serve, and that, in conse- quence, the rule under discussion did not apply. § 3. Remedies for Breach of Contract. Remedies for breach. — Having endeavoured to ascertain the rules which govern the discharge of contract by breach, it remains to consider the remedies which are open to the person injured by the breach. If the contract be discharged by the breach, the person injured acquires or may acquire, as we have seen, three distinct rights : (1) a right to be exonerated from further performance ; (2) a right, if he has done anything under the contract, to sue upon a quantum meruit, a cause of action distinct from that arising out of the original con- tract, and *based upon a new contract originating [*309] in the conduct of the parties ; (3) a right of action upon the contract, or term of the contract broken. Damages and specific performance. — But we are now no longer specially concerned with that breach of contract 406 DISCHAEGE OF CONTEACT. Part V. which amounts to a discharge : we may therefore consider generally what are the remedies open to a person who is injured by the breach of a contract made with him. They are of two kinds: he may seek to obtain damages for the loss he has sustained ; or he may seek to obtain specific per- formance of the contract which the other party has refused or neglected to perform. But there is this difference between the two remedies : every breach of contract entitles the injured party to damr- tiges, though they be but nominal; but it is only in the case of certain contracts and under certain circumstances, that specific performance can be obtained. "We do not propose to treat of these remedies otherwise than in the most general way, for the matter is one which barely comes within the scope of this work : but it may be well to state briefly some elementary rules which govern the two remedies in question. Damages. When a contract is broken and action is brought upon it, — the damages being unliquidated, that is to say unas- certained in the terms of the contract, — how are we to ar- rive at the amount which the plaintiff, if successful, is entitled to recover ? (1) Damages should represent loss sustained. — "The rule of the Common Law is," that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed." ^ a. Per Parke, B., Eobinson v. Harman, 1 Ex. 855. •Allison V. Chandler, 11 Mich. 552. "The principle of compensation for the loss or injury sustained, is, we think, that which lies at the basis of the whole question of damages in most actions at common law, whether of contract or tort." Griffin v. Colver, 16 N. Y. 494; Noble v. Ames Manuf. Co. 112 Mass. 497; Croucherv. Oakman, 3 Allen, 185; Tufts v. Plymouth Gold Mining Co. 14 Allen, 407 ; Buckley v. Buckley, 13 Nev. 439. Chap. m. § 3. BY BEEACH. ' 407 Thus where no loss accrues from the breach of contract, the plaintiff is nevertheless entitled to a verdict, but for nominal damages only, and "nominal damages, in fact, mean a sum of money that may be spoken of, but that has no existence in point of quantity." " And so in ac- tion for the *non-payment of a debt, where there is [*310] no promise to pay interest upon the debt, nothing more than the sum due can be recovered; for the possible loss arising to the creditor from being kept out of his money is not allowed to enter into the consideration of the . jury in assessing damages, unless it was expressly stated at the time of the loan to be within the contemplation of the parties.' But by 3 & 4 Will. lY. c. 42, § 28, a jury may al- ' low interest at the current rate by way of damages, in all cases where a debt or sum certain was payable by virtue of a written instrument, or if not so payable was demanded in writing with notice that interest would be claimed from the date of the demand. (2) So far as it was in contemplation of the parties. — The rule laid down by Parke, B., in Robinson v. Harmam must be taken subject to considerable limitations in practice. The breach of a contract may result in losses which neither party contemplated, or could contemplate at the time that the contract was entered into, and the Courts have striven to lay down rules by which the limit of damages may be ascertained. The damages to which the plaintiff is entitled are such as might have been supposed by the parties to be the natural a. Per Maule, J., in Beaumont v. Greathead, 2 C. B. 494. 1 " Where the obligation to pay money, however, is special, and has reference to other objects than the mere discharge of a debt, as where it is agreed to be done to facilitate trade, and to maintain the credit of the promisee in a foreign country ; to take up commercial paper ; pay taxes; discharge liens; relieve sureties; or for any other supposable ulterior object, damages beyond interest for delay of payment accord- ing to the actual injury may be recovered." 1 Sutherland on Damages, .128, citing English authorities. See Prehn v. Royal Bank of Liverpool, L. R. 5 Ex. 93. ' 408 DISCHARGE OF CONTRACT. Part V. result of a breach of the contract ;" such as might have been in their contemplation when the contract was made.* c. Hadley v. Baxendale, 9 Exch. 355; Grebert Borgnis v. Nugent, 15 Q. B. D. 85. 1 Hadley t. Baxendale, cited by the author, is a leading case and is generally followed in this country. Plaintiffs, the owners of a flour mill, brought suit against a common carrier to recover damages for loss sustained by reason of defendant's unreasonable delay in the shipment of a shaft, whereby plaintiffs were unable to work their mill for Want of the shaft and incurred a loss of profits. The following rules were an- nounced by the court, Alderson, B., delivering the opinion: "Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be (1) such as may f aii'ly and reasonably be considered either arising naturally, i. e. according to the usual course of things, from such breach of contract itself ; (3) or such as may reasonably be sup- posed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.'' (3) And if the damages arose out of the special circumstances under which the contract was made, and such circumstances were communicated by the plaintiff to the defendant, " the damages resulting from the breach of Buch a contract, which the parties would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of a contract under these special circumstances so known and communi- cated." (4) " But on the other hand, if these special circumstances were wholly unknown to the party breaking the contract, he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances so known and communicated." Under these rules defendant had judgment. This case has been cited ap- provingly by nearly every American court. See Shouse v, Neiswaanger, 18 Mo. App. 245 ; Hammer v. Schoenf elder, 47 Wis. 459 ; Shepard v. Mil- waukee, etc. 15 Wis. 318 ; Illinois Central R. R. Co. v. Cobb, 64 111. 128 ; Fleming v. Beck, 48 Pa. St. 312; Ti-ue v. International Tel. Co. 60 Me. 25 ; Culling v. Grand Trunk R. R. Co. 18 Allen, 385 ; Hurd v. Densmore, 63 N. H. 171; Buffalo Barb Wire Co. v. Phillips, 64 Wis. 338; H. & T. C. R'y Co. V. Hill, 63 Tex. 385. Many judges, in commenting on the third rule in Hadley v. Baxendale, have held "that a bare notice of special consequences which might result from a breach of the contract, unless under such circumstances as to imply that it formed the basis of the agreement, would not be sufficient." Booth v. Spuyten Duy vilRoU- ing Mill Co. 60 N. Y. 494; Snell v. Cottingham, 73 111! 161; Bridges v. Stickney, 38 Me. 369 ; Friend v. Miiller, 67 Gal. 464 ; McKinnon v. McEwan, 48 Mich. 108; Osborne v. Poket, 83 Minn. 10. Chap. III. § 3. BY BREACH. 409 Exceptional loss should ie matter of special terms. — Any special loss which, might accrue to the plaintiff, but which would not naturally and obviously flow from the breach, must, if it is to be recovered, be matter of express terms in the making of the contract. In Home v. Midland Railway Oonvpa.ny," the plaintiff being under contract to deliver shoes in London at an un- usually high price by a particular day, delivered them to the defendants to be carried, with notice of the contract only as to the date of delivery. The shoes were delayed in carriage, were consequently rejected by the intending purchasers, and the plaintiff sought to recover, besides the ordinary loss for delay, the difference between the price at which the shoes were *actually sold and that [*311] at which they would have been sold if they had been punctually carried. It was held that these damages were not recoverable, in the absence of any evidence that the Company undertook to be liable for the exceptional loss which the plaintiffs suffered from an unpunctual delivery. (3) Damages for breach of contract not vindictive. — Damages in an action for breach of contract are by way of compensation and not of punishment. Hence a plaint- iff can never recover more than such pecuniary loss as he has sustained, subject to the above rules. To this general rule, however, the breach of promise of marriage is an ex- ception, for in such cases the feelings of the person injured are taken into account, apart from * such specific pecuniary loss as can be shown to have arisen.' (4) Assessment by parties. — The parties to a contract not unfrequently assess the damages at which they rate a breach of the contract by one or both of them, and intro- duce their assessment into the terms of the contract. Under a. Per Blackburn, J., in Home v. Midland Railway Co. L. E. 8 C. P. 131. 6. Hamlin v. Great Northern Eailway Co. 1 H. & N. 408. 1 Sedgwick on Damages, 487; Duohe v. Wilson, 37 Hun (N. Y.), 519; Field on Damages, 110 ; Johnson v. Travis, 33 Minn. 231 ; Coit v. Wal- lace, 34 N. J. L. 391 ; Tliorn v. Knapp, 43 N. Y. 474. 410 DISCHARGE OF CONTRACT. Part V. these circumstance arises the distinction between penalty and liquidated damages, which we have already dealt with in considering the construction of contracts. (5) Difficulty of assessment must Ibe met Iby jury. — It follows from the general rule laid down by Baron Parke," that a difficulty in assessing damages can in no way disen- title a plaintiff from having an attempt made to assess them. A manufacturer was in the habit of sending specimens of his goods for exhibition to agricultural shows, and he made a profit by the practice. He entrusted some such goods to a railway company, who promised the plaintiff, under cir- cumstances which should have brought his object to their notice, to deliver the goods at a certain town on a fixed day. The goods were not delivered at the time fixed, and conse- quently were late for a show at which they would have been exhibited. It was held that though the ascertainment of dapaages was difficult and speculative, its difficulty was no reason for not giving any damages at all.* [*312] *And further, the plaintiff is entitled to recover for prospective loss arising from a refusal by the defendant to perform a contract by which the plaintiff would have profited.* Thus where a contract was made for a. Eobinson v. Harman, 1 Ex. 855. 6. Simpson v. L. & N. W. Eailway Co. 1 Q. B. D. 274. 1 Prospective profits which would have been realized but for the defendant's fault are recoverable. Those which are speculative or con- tingent are not. Thfey must be proved with sufScient certainty and not be left to conjecture. Griffin v. Colver, 16 N. Y. 489 ; United States v. Behan, 110 U. S. 338; Hubbard v. Russel, 51 Conn. 423; Sterling Organ Co. V. House, 25 W. Va. 64; Rice v. Candle, 71 Ga. 605; Fairchild v. Rogers, 33 Minn. 369; White v. Miller, 71 N. Y. 118; Hay v. Gronoble, 34 Pa. St. 9 ; Dennis v. Maxfield, 10 Allen, 138 ; Masterton v. Mayer, 7 Hill, 61; Goodrich v. Hubbard, 51 Mich. 63. The rule that merely speculativ,e profits are not allowed is unquestioned, but there is some difficulty in determining what degree of certainty is required. In a re- markable case recently decided in New York, it was held that the rule that damages which are contingent and uncertain cannot be recovered embraces only such as are not the certain result of the breach, not such as are the certain result, but uncertain in amount ; and that prospective Chap. m. § 3. BY BREACH. 411 the supply of coal by the defendants to the plaintiff by monthly instalments, and breach occurred and action was brought before the last instalment fell due, it was held that the damages must be calculated to be the difference between the contract price and the market price at the date when each instalment should have been delivered, and that the loss arising from the non-delivery of the last instalment must be calculated upon that basis, although the time for its delivery had not arrived." Speoifio Performance. Jurisdiction of Chancery, as to specific performance. — The jurisdiction, once exclusively possessed by the Court of Chancery, to compel performance of a promise, supple- mented the remedy offered by the Common Law Courts, which was often inadequate or inapplicable to the loss sus- tained. A promise to do a thing can be enforced by a decree for specific performance; a promise to forbear by an injunc- tion. o. Eoper v. Johnson, L. E. 8 C. P. 167. profits are allowable, as damages, although the amount is uncertain; that with the facts and circumstances proved, before them, the jury will " approach as near the proper measure of justice as the nature of the case and the infirmity which attaches to the administration of the law will admit." Wakeman v. Wheeler & Wilson Manuf . Co. 101 N. Y. 205 (1886). This decision is at variance with many cases, and lays down a rule in some respects quite unsatisfactory. Howe Machine Co. v. Bryson, 44 la. 159 ; Brigham & Co. v. Carlisle, 78 Ala. 348 ; Union Refin- ing Co. V. Barton, 77 Ala. 148; Lewis v. Atlas Mutual Ins. Co. 61 Mo. 534; ^tna Life Ins. Co. v. Noxson, 84 Ind. 347; Allis v. McLean, 48 Mich. 433. In Brigham v. Carlisle (supra), Clopton, J., said : "Profits are not excluded from recovery because they are profits; but when ex- cluded it is on the ground that there are no criteria by which to esti- mate the amount with the certainty on which the adjudications of courts and the findings of the juries should be based. The amount is not susceptible of proof." See 3 Sutherland on Damages, 157 ; Jones v. Nathrop. 7 Cbl. 1 ; Miller v. Jannett, 63 Tex. 87; H. & T. C. R'y Co. v. Hill, 63 Tex. 387. 413 DISCHARGE OF CONTRACT. Part V. How limited. — The exercise of this jurisdiction bj the Court of Chancery was limited by several rules, some of which have been already noticed. Defects in the forma- tion of a contract " afforded an answer to a claim for specific performance, and in some cases Equity was more guarded than the Common Law in granting its remedy to suitors. The remedy was refused to a gratuitous promise though made under seal ; nor can an infant obtain specific perform- ance of a contract which cannot be enforced against him.* Speaking generally on a subject which it is impossible to deal with here in detail, one may say that the substantial limitations on the employment of the remedy were these. The Courts will not decree specific performance — 1. Where the Common Law remedy of damages is ade- quate to the loss sustained. 2. "Where the matter of the contract is such that the Courts cannot supervise its execution. [*313] *(1) Specific performance only where damage an iQade<][uate remedy. — The first of these rules is illustrated by the different attitude which the Court has as- sumed in this matter towards contracts for the sale of land and contracts for the sale of goods. The objects with which a man purchases a particular piece of land are different to those with which he pur- chases goods. He may be determined, in making the con- ' tract, by the merits of the site or its neighborhood, and these cannot be represented by a money compensation; whereas goods of the kind and quality that he wants are generally to be purchased. Hence specific performance of a contract for the sale of goods is only decreed in the case of specific chattels the value of which, either' from their beauty, the interest attaching to them, or some other cause, cannot be represented by damages." o. Pages 50, til, 163. 6. Kekewich v. Manniiig, 1 D. M. & Q. 176; Flight v. Bollaud, 4 Euaa. 298. e. Leake on Contracts, 1137, and cases there collected. Chap. ni. § 3. BY BREACH. 413 (2) And where tlie Court can insure performance. — And the distinction drawn between land and goods illustrates the second rule also. An agreement for the purchase of land can be performed by the doing of a specific act, the execution of a deed or conveyance. In a contract for the sale and delivery of goods performance may extend over some time and involve the fulfillment of various terms, and " The Court acts only where it can perform the very thing in the terms specifically agreed upon." " But the second rule is more distinctly illustrated by the refusal of the Courts to grant specific performance of con- tracts involving personal services ; though it will enforce by injunction a promise not to act in a particular way. Thus in Jjiomley ' v. Wagner^ the defendant agreed with the plaintiff to sing at his theatre upon certain terms, and during, a certain period to sing nowhere else. Subsequently she entered into an engagement with another person to sing at another theatre, and refused to perform her contract with the plaintiff. o. See Per Lord Selbome, Wolverhampton Railway Co. v. L. & N. W. Railway Co. L. R. 16 Eq. at p. 439; Gervaa v. Edwards, 2 Dr. & War. 80. 6. 1 D. M. & G. 604. 1 Lumley v. Wagner. — In Sanquirico v. Benedetti, 1 Barb. 3l5, the court declined to restrain the defendant by injunction from the breach of an agreement not to make engagements with persons other than plaintiff to perform and sing in concerts, operas, etc., throughout the United States and Canada. Under the early equity rule a court of equity would not restrain the violation of the negative part of an agree- ment when it could not enforce the affirmative stipulations. In such a case the party was left to his remedy at law. Kemble v. Kean, 6 Sim. E. 383; Hamblin v. Dunneford, 2 Ed. 535; Burton v. Marshall, 4 Gill (Md.), 487. Later decisions have overthrown this doctrine, and Lumley V.Wagner is generally followed. The relief may be granted though the negative promise is not express, but implied from the contract. Daly V. Smith, 38 N. T. Superior Ct. 158 (1874) ; McCall v. Braham, 16 Fed. R. 37; Chicago & A. R'y Co. v. New York, L. E. & W. R. Co. 24 Fed. R. 531 ; Port Clinton R, Co. v. Cleveland & T. R. Co. 13 Ohio St. 550; Marble Co. v. Ripley, 10 Wall. 358. But see Woolensack'v. Briggs, Illinois Supreme Court, 35 Albany Law J. 443. 414 DISCHAEGE OF CONTRACT. PartV. The Court declined to enforce so much of the contract as related to the promise to sing at the plaintiff's [*314] theatre, but *it restrained the defendant by injunc- tion from singing elsewhere. The remedy has been extended to breach of contract for the sale of specific goods by the Mercantile Law Amend- ment Act." Effect of Judicature Acts. — And specific performance may now be granted hj any one of the Divisions of the High Court of Justice; for the Judicature* Act has re- moved the old distinctions of jurisdiction between the Com- mon Law and Chancery Courts. There is however assigned to the Chancery Division," as a special department of its business, suits for "specific performance of contracts be- tween vendors and purchasers of real estate, including con- tracts for leases." § 4. Discharge of Bight of Action a/rising from Breach of Contract. Discharge of right of action. — The right of action aris- ing from a breach of contract can only be discharged in one of three ways : — {a) By the consent of the parties. (5) By the judgment of a Court of competent jurisdic- tion. (c) By lapse of time. {a) Discharge Tyy consent of thej>arties. By release. — This may take place either by Eelease or by Accord and Satisfaction ; and the distinction between these two modes of discharge brings us back to the element- ary rule of contract, that a promise made without Consid- eration must, in order to be binding, be made under seal. A Eelease is a waiver, by the person entitled, of a right of o. 19&30Viot.e. 97, §2. 6. 36 & 37 Viot. 0. 66, § 85, BUb-5 7. e. % 34, sub-§ 3. Chap. m. § 4. BY BREACH. 413 action accruing to him from a breach of a promise made to • him. In order that such a waiver should bind the person mak- ing it, it is necessary that it should be made under seal ; otherwise it would be nothing more than a promise, given without consideration, to forbear from the exercise of a right. To this rule bills of exchange and promissory notes form *an exception. We have already seen that [*315] these instruments admit of a parol waiver before they fall due. It appears to be correct to say that the right of action arising upon a bill or note can be discharged by express," though gratuitous, renunciation.* By Accord and Satisfaction. — Accord and Satisfaction' is an agreement, which need not be by deed, the effect of which is to discharge the right of action possessed by one of the parties to the agreement. But in order to have this ef- fect it is not merely necessary that there should be consid- eration for the promise of the party entitled to sue, but that the consideration should be executed in his favour. Other- wise the agreement is an accord without a satisfaction? The promisor must have obtained what he bargained for in lieu of his right of action, and he must have obtained some- thing more than a mere fresh arrangement as to the pay- ment or discharge of the existing liability.^ The satisfaction may consist in the acquisition of a new right against the debtor, as the receipt from him of a negoti- able instrument in lieu of payment ; ^ or of new rights against a. Ante, p. 260; Byles on Bills, 12 Ed. 198. 6. Bayley v. Homan, 3 Bing. N. C. at p. 920; McManus v. Bark, L. E. 6 Exch. 65. 1 Ante, p. 360, note. 2 Kromer v. Heim, 75 N. Y. 574 ; Johnson v. Hunt, 81 Ky. 321 ; Schlitz V. Meyer, 61 Wis. 418 ; Brennan v. Ostrander, 50 N. Y. Super. Ct. 436 Hemmingway v. Stansell, 106 U. S. 399 ; Ogilvie v. Hallam, 58 la. 714 Lankton v. Stewart, 37 Minn. 346 ; Simmons v. Hamilton, 56 Cal. 498 Browning v. Grouse, 43 Mich. 489 ; Pettis v. Bay, 13 R. I. 344. ' See ante, 373 n. ; Varney v, Conery, 77 Me. 537 ; Bennett v. Hill, 14 R. I. 333; Mason v. Campbell, 37 Minn. 54; Guild v. Butler, 137 Mass. 416 DISCHARGE OF CONTRACT, Part V. the debtor and third parties, as in the case of a compositiail •with creditors ; " or of something different in kind to that which the debtor was bound by the original- contract to perform ; but it must have been taken by the creditor as satisfaction for his claim in order to operate as a valid discharge. (5) Discharge hy the judgment of a Court of competent jurisdiction. The judgment of a court of competent jurisdiction in the plaintiff's favour discharges the right of action arising from breach of contract. The right is thereby merged in the more solemn form of obligation which we have described as a Contract of Kecord. The result of legal proceedings taken upon a broken con- tract may thus be summarized:— Effect of bringing action. — The bringing of an action has not of itself any effect in discharging the right to [*316] bring the action. Another action *may be brought for the same cause in another Court ; and though proceedings in such an action would be stayed, if they were merely vexatious, upon application to the summary jurisdic- tion of the Courts,* yet if action for the same cause be brought in an English and foreign Court, the fact that the defendant is being sued in the latter would not in any way help or affect his position in the former. Judgment by way of estoppel. — When the action is pur- sued to judgment, a judgment adverse to the plaintiff dis- charges the obligation by estoppel. The plaintiff cannot bring another action for the same cause so long as the judg- ment stands. The judgment may be reversed by\;he Court, in which case it may be entered in his favour, or else th6 parties may be remitted to their original positions by a rule being obtained for a new trial of the case.^ a. Goddard v. O'Brien, 9 Q. B. D. 40; and Sm. L. C. i, 351. b. Judicature Acts, order 51, § 4. 1 Whatever the right of action may rise out of, as a simple conti'act, a specialty, a judgment or tort, it is merged in the judgment recovered •which becomes a new contract. Freeman on Judgments, sec. 216. Chap. m. § 4. BY BREACH. 417 But it is important to bear in mind that an adverse judg- ment, in order to discharge the obligation by estopping the plaintiff from reasserting his claim, must have proceeded upon the»merits of the case. If a man fail because he has sued in a wrong character, as executor instead of adminis- trator ; or at a wrong time, as in the case of action brought before a condition of the contract had been fulfilled," such as the expiration of a period of credit in the sale of goods, a judgment proceeding on these grounds will not prevent him from succeeding in a subsequent action.' By way of merger. — If the plaintiff get judgment in his favour, the right of action is discharged and a new obligation arises, a form of the so-called Contract of Eeoord.* It re- mains to sa^'' that the obligation arising from judgment may be discharged by payment of the judgment debt, under 4:& 6 Anne, c. 16, § 12, or by satisfaction obtained by the cred- itor from the property of his debtor by the process of exeG^^^ tion. (c) Lapse of Time. Eecept Try express ^tutory provision, lapse of time does not affect the rights of parties to contracts. The rights arising from contract are of a permanent and indestructible *character, unless either from the nature of the con- [*317] tract, or from its terms, it be limited in point of duration." But though the rights arising from contract are of this permanent character, the remedies arising from their viola- tion are, by various statutory provisions, withdrawn after a a. Palmer v. Temple, 9 A. & E. B21. 6. p. 44. c. Per Lord Selborae, Llanelly Eaflway Co. v. L. & N. W. Railway Co. L. B. 7 H. L. 567. 1 Wood V. Fant, 55 Mich. 185 ; Britton v. Thornton, 112 U. S. 526 ; Pen- dergrasa v. York Manuf . Co. 76 Me. 509^ Maxwell v. Clark, 139 Mass. 112 ; Knapp V. Eldridge, 33 Kan. 106 ; Moore v. Dunn, 41 Ohio St. 62 ; Lord v. Wilcox, 99 Ind. 491 ; Atkins v. Anderson, 63 la. 739 ; Paget v. Oakes, 64 la. 198; Philpott v. Brown, 16 Neb. 387; Gage v. Ewing, 114 111, 815 Braokett v. People, 115 IlL 89. 418 DISCHABGE OF CONTRACT. Part V. certain lapse of time. The remedies are barred, though the rights are not extinguished. Simple contract. — ^^It was enacted *hy 21 Jac. I. c. 16, § 3, that . " All actions of account, and upon the case . . - and all actions of debt grounded upon any lending or contract without specialty, all actions of debt for arrearages of rent . . . shall be commenced and sued within . , . six years next after the cause of such action or suit and not after." It will be noted that " action upon the case " includes ac- tions of Assumpsit, as was explained in an earlier chapter." Specialties.— The Statute 3 & 4 Wm. IV. c. 42, § 3, lim- its the bringing of actions upon any contract under seal to a period of twenty years from the cause of action arising. Disabilities suspending operation of Statutes. — These Statutes begin, in the ordinary course of things, to take ef- fect so soon as the cause of action arises, but there are cer- tain circumstances which suspend their operation. The Statute of James * provided that infancy, coverture, insan- ity, imprisonment, or absence beyond seas should, where the plaintiff was affected by any of these disabilities at the time the cause of action arose, suspend the operation of the Statute until the removal of the disability. The Statute of William the Fourth made the same rule apply, except in case of imprisonment, to actions on specialties. The Mercantile Law Am,endment Act" provides that neither imprisonment of the plaintiff nor his absence be- yond seas shall operate as a suspensory disability in actions on simple contract or specialty. Where the defendant is beyond seas at the time the right of action accrues, the operation of the Statute " is suspended until the defendant returns. But where there are two or more defendants, one of A disability arising after the period of limitation has be- gun to run will not affect the operation of the Statute : " nor will ignorance that a right of action existed. But where that ignorance is produced by the fraud of the defendant, and no reasonable diligence would have enabled the plaint- iff to discover that he had a cause of action, the statutory period commences with the discovery of the fraud.' This is an equitable rule,* not observed by the Common Law Courts before the passing of the Judicature Act but now adopted under s. 24, sub-s. 1 of that Act. Revival of right of action.-;- It is possible that Statutes of Limitation may be so framed as not merely to bar the remedy, but to extinguish the right : such is the case with regard to realty under 3 and 4 Will. IV. c. 27, but as re- gards contract the remedy barred by the Statutes of Lim- itation may be revived in certain ways. In case of specialty. — "Where a specialty contract re- sults in a money debt, the right of action may be revived for the statutory period of limitation, (1) by an acknowl- edgment of the debt in writing, signed by the party liable, or his agent ; or (2) by part payment, or part satisfaction o. 19 & 20 Vict. c. 97, S 11. 6. Blair v. Bromley, 6 Hare, 659; Hunter t. Gibbons, 10 A. & N. 459; Gibbs v. Guild, 9 Q. B. D. 66. 1 A review of the statutes of the several states on limitation of actions would be out of place in these notes. They differ considerably in their provisions, but are all founded on the statute of James, and the sub- stance of Lord Tenderden's Act is generally adopted. The state statutes on this subject will be found in "Wood on Limitation of Actions. 2 Jackson v. Johnson, 5 Cow. 74; Hogan v. Kurtz, 94 U. S. 773; Hogg V. Ashman, 83 Pa. St. 80; Bozeman v. Browning, 31 Ark, 364; Swear- ingen v. Robertson, 39 Wis. 462. s Campbell v. Long, 20 la. 382; Stevenson v. Robinson, 39 Mich. 160; Atlantic Bank v. Harris, 118 Mass. 147; Commiesioners t. Smith, 23 Minn. 97, 430 DISCHARGE OF CONTRACT. Part V. on account of any principal or interest due on such a spe- cialty debt. Such a payment if made by the agent of the party liable will have the effect of reviving the claim." Of simple contract — By promise. — Where a simple contract has resulted in a money debt the right of action may also be revived by subsequent acknowledgment or promise, and this rule is affected by two Statutes, Lord Tenterden's Act,* which requires that the acknowledgment or promise, to be effectual, must be in writing; and the Mercantile Law Amendment Act (19 & 20 Yict. c. 97), which provides that such a writing may be signed by the agent of the party chargeable, duly authorised [*319] *thereto, and is then as effective as though signed by the partj' himself. By acknowledgment. — The sort of acknowledgment or promise which has been held to be requisite in order that a simple contract debt may be revived for another period of six years, is thus described by Mellish, L. J. : "-' — " There must be one of three things to take the case out of .the Stat- ute (of Limitation). Either there must be an acknowledg- ment of the debt from which a promise to pay is implied; or, secondly, there must be an unconditional promise to pay the debt ; or, thirdly, there must be a conditional promise to pay the debt, and evidence that the condition has been performed." ^ a. 3 &4 Will. IV. 0.42, §5. 6. 9 Geo. IV. c. 14. K. In re Eiver Steamer Co. 6 Ch. 828. 1 Acknowledgment and part payment. — The authorities on acknowl- edgment and part payment as affecting the statute are numerous, and though the principles pertaining to them have been passed upon again and again by the courts of every state in the Union, still many perplex- ing questions regarding their application remain unsettled. It may be stated generally: ' First. Many of the early cases -wherein it was held that a simple aUu- sion to a debt as existing, although accompanied by an express declara- tion not to pay, removed the statutory bar, are wholly inapplicable to the present state of the law. The statute is now regarded as a statute of repose as well as a statute of presumption. In Jewett v. Petit, 4 CJhap. m. § 4. BY BREACH. 431 This being the principle, its application in every case must turn on questions of construction of the words of the alleged promisor. And as was remarked in the most recent case upon the subject, " When the question is, what effect is to be given to particular words, little assistance can be derived from the effect given to other words in applying, a principle which is admitted." " By part payment. — The debt, however, admits of revival in another mode than by express acknowledgment or prom- ise. A part payment, or payment on account of the prin- cipal, or a payment of interest upon the debt will take the contract out of the Statute of Limitation. And it is ex- pressly provided in Lord Tenterden's Act that nothing • a. Per Cleasbj, B., in Skeet v. Lindsay, 2 Ex. D. 317. Mich. 509, Douglass, J., said, " The law of limitation is almost univer- sally conceded to have a twofold foundation; in the first place, the actual probability that a debt which has not been claimed for a long time was paid, and that this was the reason of the silence of the cred- itor ; and, in the second place, the inexpediency and injustice of per- mitting a stale and neglected claim or debt, even if it has not been paid, to be set up and enforced after a long silence and acquiescence." Parker V. Butterworth, 46 N. J. L. 247. Second. An acknowledgment to remove the bar must be made to the proper person, by the proper person, and with proper formalities when they are required by statute ; and must be in terms sufficient to war- rant the inference of a promise to pay the debt. Wood on 'Lam. of Actions, 138; Abercombie v. Butts, 73 Ga. 74; Perry v. Chesley, 77 Me. 393; Holt v. Gage, 60 N. H. 536; Krebs v. Olmstead, 187 Mass. 504; Biddel v, Brizzolara, 64 Cal. 854; Parker v. Shuford, 76 N. C. 219; Hussey v. Kirkman, 95 N. C. 63; Cronshore v. Knox (Pa. St.), 36 Alb. L. J. 178. Third. Part payment in order to remove the bar must be made under such circumstances as amount to an acknowledgment of the debt. It must appear that the payment was made on account of the debt for which the action was brought, and that it was made as a part payment of a greater debt. Tippets v. Heane, 1 C. M. & R. 353 ; Benton v. Hol- land, 58 Vt. 533; State v. Corlies, 47 N. J. L. 108; Miner v. Lorman, 56 Mich. 212; Alms House Farm v. Smith, 53 Conn. 434; Whitney v. Chambers, 17 Neb. 90. 423 DISCHAEGE OF CONTEACT. Part V. therein contained " shall alter, or take away, or lessen the effect of any payment of any principal or interest made by any person." But the payment must be made with refer- ence to the original debt, and in such a manner as to amount to an acknowledgment of it." o Waters t. Tompkms, 2 C. M. B. 723. CHAPTEE ly. Impossibility of Performance. Impossibilitt of performance arising subsequently to the formation of the contract will, in certain cases, operate as a discharge. But before proceeding to consider and classify these cases, it may be well to say something as to Impossi- bility in general in its relation to contracts. Unreality of consideration. — Obvious physical impossi- bility, or legal impossibility which is apparent upon the face of the promise, avoids the contract, because, as we have seen," the promise is an unreal consideration for any prom- ise given in respect of it. Mistake. — Impossibility which arises from the non-exist- ence of the subject-matter of the contract avoids it, as we have seen, on the ground of mistake? There are however two cases of this sort which may safely be said to be irrec- oncilable, and it may be well to notice them here lest the student should be perplexed in the attempt to reconcile them. In Hills V. Suffhrue," the defendant agreed with the plaintiff by charter-party to take his (the defendant's) ship to the island of Ichaboe and there load a complete cargo of guano and return with it to England, being paid a high rate of freight. There was so little guano at Ichaboe that the performance of the defendant's promise to load a com- plete cargo was impossible. The plaintiff sued him for damages for failure to bring home a cargo, and was held to be entitled to recover: impossibility of Performance was a. p. 80. 6. Strickland r. Turner, 7 Ezcb. 317; ante, p. 129. c. 16 M. & W. 253. 434 DISCHARGE OF CONTEACT. Part V. held to be no answer to an absolute promise such as the de- fendant had made. On the other hand, in Clifford v. Watts " the plaintiff and defendant were landlord and tenant, and the plaint- [*321] iff sued *upon a covenant in the lease in which the defendant undertook to dig from the premises not less than 1,000 tons of potter's clay annually, paying a royalty of 2s. 6*^. per ton. The defendant pleaded that there never had been so much as 1,000 tons of clay under the land. The Court held that the plea furnished a good answer to the plaintiff's claim. "Here," said Brett, J., " both parties might well have supposed that there was clay under the land. They agree on the assumption that it is there; and the covenant is applioable only if there he clay" The cases are practically indistinguishable. It is notice- able that the Judges in the Court of Common Pleas, in dis- tinguishing Hills V. Sughrue * from Clifford v. Watts,', cu- riously misapprehended the point of the earlier case ; " and. this makes it useless to attempt to draw fine distinctions be- tween the two cases. Subsequent impossibility no excuse. — We now come to deal with Impossibility arising subsequent to the Formation of the Contract, and we may lay it down as a general rule that whether or no such impossibility originates in the de- fault of the promisor, he will not thereby be excused from performance. "We have already dealt with what are termed " conditions subsequent," or " excepted risks," and what was then said a. L. R. 5 C. p. 577. 6. 15 M. & W. 253. c. L. E. 5 0. P. 577. d. It is clear from the language of Willes, J., at p. 586, and of Brett, J., at p. 689, that they thought the action in Hills v. Sughrue, L. R. 5 0. P., was brought by the ship-owner against the charterer for not furnishing a cargo, whereas it was brought by the char- terer against the owner for not loading a cargo which the owner, contrary to the ordi- nary practice in charter-parties, undertook to do (see dicta of Parlce, B., 15 M. & W. S53-9;. There is a great difEerence between a man promising to go and bring home a thing which proves to be non-existent, and a man promising that, if another will let out his ship on certain terms, he will enable him to earn freight by loading a cargo which, when the ship is sent, and the consideration so far given, proves to be non- existent. It must seem that the Court of Common Pleas unintentionally decided con- trai7 to Hills v, Sughrue. CJhap. IV. IMPOSSIBILITY OF PERFOEMANCB. 485 may serve to explain the rule now laid down. If the prom- isor make the performance of his promise conditional upon its continued possibility, the promisee takes the risk: in the event of performance becoming impossible, the promisee must *bear the loss. If the promisor makes [*322] his promise unconditionally, he takes the risk of being held liable even though performance should become impossible by circumstances beyond his control. An old case, Paradine v. Jane^ illustrates the law upon this subject briefly and perspicuously.* The plaintiff sued for rent due upon a lease. The defend- ant pleaded " that a certain German prince, by name Prince Eupert, an alien born, enemy to the king and his kingdom, had invaded the realm with an hostile army of men; and with the same force did enter upon the defendant's posses- sion, and him expelled, and held out of possession . . . whereby he could not take the profits." The plea then was a. Aleyn, 26. iParadine t. Jane is followed in The Harriman, 9 Wall. 173; Beebe V. Johnson, 19 Wend. 500 ; Harrison v. Missouri Pacific R. Co. 74 Mo. 371 ; Harmony v. Bingham, 13 N. Y. 99, and the principles of the case are adhered to in numerous decisions. Stees v. Leonard, 20 Minn. 494; Dermott v. Jones, 3 Wall. 1 ; School Trustees v. Bennett, 27 N. J. L. 513; Bacon v. Cobb, 45 III. 47; Adams v. Nichols, 19 Pick. 275. "Impos- sible conditions cannot be performed ; and if a person contracts to do what, at the time, is absolutely impossible, the contract wiU not bind him, because no man can be obliged to perform an impossibility ; but where the contract is to do a thing which is possible in itself, the per- formance is not excused by the occurrence of an inevitable accident or other contingency, although it was not foreseen by the party nor was within his control." Jones v. United States, 96 U. S. 39. In The Har- riman case, supra, Swayne, J., gives a lucid explanation of the meaning of the term impossibility in this connection. 9 Wall. 173. Kitzinger v. Sanborn, 70 111. 146. This principle was applied in School District No. 1 V, Dauchy, 35 Conn. 580, where defendant agreed to build and complete a school-house for plaintiff. When nearly completed,, the building was struck by lightning and destroyed. The court held that the destruction of the building did not excuse defendant's non-performance of the con- tract. 436 DISCHARGE OF CONTRACT. Part V. in substance that the rent was not due, because the lessee had been deprived by events beyond his control of the profits from which the rent should have come. But the Court held that this was no excuse ; " and this difference was taken, that where the law creates a duty or charge and the party is disabled to perform it without any default in him, and hath no remedy over, there the law will excuse him. As in the case of Waste, if a house be destroyed by tempest, or by enemies, the lessee is excused. . . . But when a party hy his own contract creates a duty or charge upon himself, he is bound to make it good, if he may, not- withstanding any accident or inevitable necessity, because he might have provided against it hy his contract. And therefore if the lessee covenant to repair a house, though it be burnt by lightning, or thrown down by enemies, yet he ought to repair it." This being the general rule of law, we milst now note a group of exceptions to it. And these must be distin- guished from cases in which the Act of God is said to excuse from non- performance of a contract; for this use of the term " Act of God " has been condemned by high authority." There are, as we have seen, certain contracts into which the Act of God is introduced as an express, or, by [*323] custom, an *implied condition subsequent absolving the promisor. But there are forms of impossibility which are said to excuse from performance because " they are not within the contract; " that is to say, that neither party can reasonably be suppased to have contemplated their occurrence, so that the promisor neither excepts them specifically, nor promises unconditionally in respect of them.* We will deal with them seriatim. a. Per Curiam in Bailey v. De Ctespigny, L. E. 4 Q. B. p. 185b 6. L. B. 4 Q. B. 185. Chap. IV. IMPOSSIBILITY OF PERFORMANCE. ' 437 (1) Legal impossibility, arising from a change in the law of our own country, exonerates the promisor} Except where there he change of the law. — In Bailey V. De Crespigny," the plaintiff was lessee to the defendant for a term of 89 years of a plot of land : the defendant re- tained the adjoining land, and covenanted that neither he nor his assigns would, during the term, erect any but orna- mental buildings on a certain paddock fronting the demised premises. A Kailway Company, acting under parliament- ary powers, took the paddock compulsorily, and built a sta- tion upon it. The plaintiff sued the defendant upon the covenant: it was held that he was exc^used from the ob- servance of his covenant by an impossibility arising from the action of the Legislature. " The Legislature, by com- pelling him to part with his land to a railway company, whom he could not bind by any stipulation, as he could an assignee chosen by himself, has created a new hind of assign, such as was not in the contemplation of the parties when the contract was entered into. To hold the defendant responsi- ble for the acts of such an assignee is to make an entirely new contract for the parties." (2) Where the continued existence of a specific thing is es- sential to the performance of the contract, its destruction, from no default of either party, operates as a discharge. Destruction of subject-matter. — The leading cas« upon this subject is Taylor v. Caldwell.* There the defendant agreed to let the plaintiff have the use of a Music Hall for the purpose of giving concerts upon *certain days : [*324] before the days of performance arrived the Music Hall was destroyed by fire, and the plaintiff sued the de- a. 6L. E. 4Q. B. 180. 6. 3 B. & S. 8^6. I Jones V. Judd, 4 N. Y. 411: People v. Insurance Co. 91 N. Y. 174; Semmes v. Insurance COi 13 W-all. 158 ; Baker v. Johnson, 43 N. Y. 136; The Mississippi, etc. R. R. Co. v. Green, 9 Heisk. (Tenn.) 588; Brick Pres. Church v. Mayor, 5 Cow. 538. 438 ' DISCHARGE OF CONTRACT. Part V. fendant for losses arising from the consequent breach of contract. The Court held that, in the absence of any express stipu- lation on the matter, the parties must be talcen " to have contemplated the continuing existence " " of the Music Hall " as the foundation of what was to be done ; " and that therefore, " in the absence of any express or implied stipu- lation that the thing shall exist, the oontraot is not to he oor^- strued as a positive contract, hut as subject to an implied con- dition that the parties shall he excused in case, hefore hreach, performance hecomes impossible from the perishing of the thing without default of the contractor P ' It will be observed that in this case the Court introduces an " implied condition " into the contract, that the subject- matter of it shall continue to exist; whereas in the latter case quoted above, express note is taken of the fact that the impossibility is " not within the contract," and has not been made the subject of any condition ; and this, it is submitted, a. Atp. B33. 1 Taylor t. Caldwell is frequently referred to in our courts as a lead- ing case. Dr. Bishop, in his recent work on Contracts, § 588, says: " If the contract assumes the continued existence of the thing, then on per- formance becoming due, if, without the fault of the parties, the thing has ceased to exist, tfte case has become one of mutual mistake, and the duty to perform no longer remains." To which our author would undoubtedly take exception, as mistake does not discharge a contract, but prevents its formation. The principle, however, that in every con- tract there is an implied condition that the subject-matter of the con- tract shall be in existence at the time performance is due, where its continued exisfence was contemplated by the parties, is unquestioned ; and in Powell v. D. S. & G. R. R. Co. 12 Orog. 489, it is said : " In every contract for the conveyance of property there is an implied condition that the subject-matter of the contract shall be in existence when the time for the performance of the contract arrives.'" Wells v. Calnan, 107 Mass. 514; The Tornado, 108 U. 8. 343; Gould v. Murch, 70 Me. 288; Thompson v. Gould, 20 Pick. 134; Brumby v. Smith, 3 Ala. 123; Walker v. Tucker, 70 111. 527; Lord v. Wheeler, IGray, 382; Ward v. Vance, 12 Norris (Pa.), 498 ; School District No. 1 v. Dauchy, 25 Conn. 530; Dexter v. Norton,. 47 N. Y. 65, where Church, Ch. J., considers at length discharge by non-existence of the subject-matter of the contract. Chap. IV. IMPOSSIBILITY OF PERFORMANCE. 429 is a more satisfactory interpretation of the rule than to in- troduce a term into the contract which was never present to the mind of either party to it. (3) A contract which has for its object the rendering of personal services is discharged Try the death or incapacitating illness of the promisor. Incapacity for personal seryice.— In Robinson v. Davi- son,'^ an action was brought for damage sustained by a breach of contract on the part of an eminent pianoforte player, who having promised to perform at a concert, was prevented from doing so 1?y dangerous illness. The law governing the case was thus laid down by Bram- well, B. : — " This is a contract to perform a service which no deputy could perform, and which, in case of death, could not be performed by the executors of the deceased ; and I am of opinion that, by virtue of the terms of the original bargain, *inoapacity of body or mind in [*325] the performer, without default on his or her part, is an excuse for non-performance. Of course the parties might expressly contract that incapacity should not excuse, and thus preclude the condition of health from being an- nexed to their agreement. Here they have not done so; and as they haVe been silent on that point, the contract must, in my judgment, be taken to have been conditional and not absolute." ^ a. L. E. 6 Exch. 269. 1 Bobinson y. Darison. — This principle has been quite liberally ap- plied by our courts, and the extent to which death or sickness of the promisor works a discharge of his contract to render personal services is illustrated in Green v. Gilbert, 21 Wis. 401, where it is held that in case of a partial non-performance of such contract, by reason of sick- ness, a recovery for the work done can be had only on a quantum,' mer- uit, and not on the contract. Jennings v. Lyons, 39 Wis. 553 ; Wolf v. Howes, 20 N. Y. 201; Harrington v. Fall River Ironworks Co. 119 Mass. 83; Fenton v. Clark, 11 Vt. 557; Hubbard v. Belden, 37 Vt. 645; aark v. Gilbert, 36 N. Y. 197; Stewart v. Loring, 5 Allen, 306. In Spalding v. Eosa, 71 N. Y. 40, an opera company was discharged from 430 DISCHARGE OF CONTRACT. Part V.. its contract to give a certain number of performances, on account of the sickness of its leading tenor and chief attraction, whose presence was regarded as of the essence of the contract, following Robinson v. Davi- son. Cornell v. Cornell, 96 N. Y. 115. In Lakeman v. Pollard, 43 Me. 463, a laborer was discharged from his contract on account of the prev- alence of a fatal disease in the vicinity of a place where he had con- tracted to work for a specified time, the danger being such as to render it unsafe and unreasonable for men of ordinary care and common pru- dence to remain there. But in Dewey v. Alpena School District, 43 Mich. 480, it was held that the prevalence of small-pox in the community wUl not excuse a school district from liability on a contract with a teacher, the performance of which the district has prevented by closing the school. " The act of God which will release from the obligation of a contract is one which renders its performance impossible." The Maine decision might be more satisfactorily sustained on the ground that re- covery may be had for part performance of an entire contract, which the plaintiff has declined to perform for just cause. See 294, n. As to what contracts for personal services come within the rule of Robinson V. Davison, " in general terms it may be said that no contract which may be performed by an agent can be discharged by a cause of this kind." PoUock, Cont. 378. CHAPTEE Y. Discharge of Contract by Operation of Law. There are rules of law which, operating upon certain sets of circumstances, will bring about the discharge of a con- tract, and these we will briefly consider. Merger. Merger. — The acceptance of a higher security in the place of a lower, that is to say, a security which in the eye of the law is inferior in operative power, ipso facto, and apart from the intention of the parties, merges or extin- guishes the lower. We have already seen " an instance of this in the case of judgment recovered which extinguishes by merger the right of action arising from breach of contract. And, in like manner, if two parties to a simple contract embody its contents in a deed which they both execute, the simple contract is thereby discharged. The rules governing this process may be thus summar- ised : — (a) The two securities must be different in their legal operation, the one of a higher efficacy than the other.* A second security taken in addition to one similar in character will not affect its validity, unless there be discharge by substituted agreement.* a. See p. 308. 6. Eiggen's Case, 6 Co. Rep.;456. 1 Martin V, Hamlin, 18 Mich. 364; Hines v. Barker, 3 Johns, 506; Waer v. Westfall, 21 Barb. 177 ; Banorgee v. Hovey, 5 Maes. 11 ; Bill v. Porter, 9 Cionn. 30; Andrews v. Smith, 9 Wend. 53. 433 DISCHARGE OF CONTRACT. Part V. (j8) The subject-matter of the two securities" must be identical.' (j-) The parties must be the same.* [*32'r] '''Alteration of a Written Instrument. Rules as to alteration. — If a deed or contract in writing be altered by addition or erasure, it is discharged,' subject to the following rules : — (a) The alteration must be made by a party to the con- tract, or by a stranger while in his possession * and for his benefit.* a. Holmes v. Bell, 3 M. & G. 213. 5. Pattinson v. Luckly, L. E. 10 Ex. 330. 1 Whitbeck v. Wayne, 16 N. Y. 533 ; Hutchins v. Hebbard, 34 N. Y. 34. 2 Doty V. Martin, 33 Mich. 463. As a rule of evidence, it is stated that whenever parties enter into an agreement and reduce their agreement to writing, the writing merges all preceding negotiations, and must be received as conclusive evidence of their final understanding. Savercool V. Farwell, 17 Mich. 308; Galpin v. Atwater, 39 Conn. 97; Polaski v. Mutual Life Ins. Co. 56 N. Y. 640 ; but this is not a strictly accurate use of the term of merger as understood in the law of contracts, for a simple contract in writing is not of any higher nature than an oral agreement. As a general rule, merger of estate arises where a greater and less estate are united in the same person, but " a court of equity will keep an incumbrance alive or consider it extinguished, as will best serve the purposes of justice and the actual and just intention of the parties." Richardson v. HockenhuU, 85 111. 135 ; Corwin v. CoUett, 16 Ohio St. 289; Tower v. Divine, 87 Mich. 445; Horton v. Maffitt, 14 Minn. 289. 3 Davis V. Bauer, 41 Ohio St. 257; Johnson v. Moore, 88 Kan. 90; Thompson v. Massie, 41 Ohio St. 307 ; Woodworth v. Anderson, 63 la. 503; Morrison V. Garth, 78 Mo. 434; Nicholson v. Combs, 90 Ind. 515; Needles v. Shaffer, 60 la. 65; Booth v. Powers, 56 N. Y. 23; Union Na- tional Bank v. Roberts, 45 Wis. 373. < Spoliation. — As was said in Kountz v. Kennedy, 63 Pa. St. 190, " There is no subject in the books which has occupied a much larger share of attention than questions of the alteration of writings ; but after all that has been said, each case must stand much more on its own facts than upon the rules announced in any given case." Dr. Bishop, in his recent and enlarged edition on Contracts, chapters 37, 28, has treated of the subject at length. The questions which usually occasion difficulty In Buch cases are: Was the alteration material? Was it made with CJhap. V. BY OPERATION OF LAW. 433 Alteration by accident or mistake occurring under such circumstances as to negative the idea of intention will not invalidate the document." (j3) The alteration must be made without the consent of the other party, else it would operate as a new agreement. (y) The alteration must be made in a material part.* What amounts to a material alteration must needs depend upon the character of the instrument, and it is possible for a. WflMnson v. Johnson, 3 B. £ C. 438. fraudulent intent? And if innocently made, to what extent are the rights of the parties affected by it? In Martin v. Tradesmen's Ins. Co. 101 N. Y. 504, Ruger, Oh. J., said, " The rule is well established that an alteration of a contract under which a plaintiff claims, made by a de- fendant or some third party, without the plaintiff's consent, and while the contract is out of plaintiff's hands, has no effect, and the con- tract will remain as it originally stood, provided the nature and extent of the alteration can be clearly ascertained, and it can be seen what the contract was at the time it was executed." "Wilmington, etc. v. Kitchen, 91 N. C. 39; Moore v. Ivers, 83 Me. 29; Condict v. Flower, 106 111. 118; Rose Clare Lead Co. v. Madden, 54 111. 261 ; Fullerton v. Sturges, 4 Ohio St. 529 ; Medlin v. Piatt, 8 Mo. 335 ; Peirsol v. Grimes, 30 Ind. 139 ; Bigelow V. Stilphens, 35 Vt. 531. The English rule stated by the author, that an alteration of a written instrument by a stranger while in his possession, and for his benefit, discharges the contract, is at variance with the foregoing decisions and the weight of American authority. 3 Danl. Neg. Inst. 836. If the change was made without any fraudulent intent on the part of the plaintiff or person claiming benefits under the instrument and under a mistake of facts as to the rights of the parties, the better rule now is that the alteration may be erased and the instrument restored and a recovery had on the original contract; In Nickerson v. Swift, 135 Mass. 518, the terms of a promissory note were changed while in the custody of the payee, as to the rate of interest, by his agent, but without any authority to make the change ; it was held that the sureties were liable on the note upon the principle above stated. Milbery v. Storer, 75 Me. 71 ; Smith v. Dunham, 8 Pick. 346; Adams' v. Frye, 3 Met. 103 ; Thornton v. Appleton, 39 Me. 398 ; Kountz v. Ken- nedy, supra; Sullivan v. Rudisill, 63 la. 158. 1 A material alteration is defined in 4 Greenleaf , Ev. 5, as follows : " Any altei'ation which causes the instrument to speak a language dif- ferent in legal effect from that which it originally spoke is a material alteration." Fuller v. Green, 64 Wis. 159; Wessel v. Glenn, 108 Pa. St. 104. 28 484 DISCHARGE OF CONTRACT. Part V. the character of the instrument to be affected by an al- teration which does not touch the contractual rights set forth in it. In a Bank of England note the promise to pay- made by the Bank is not touched by an alteration in the number of the note; but the fact that a Bank note is a part Of the currency, and that the number placed on it is put to important uses by the Bank and by the public for the de- tection of forgery and theft," causes an alteration in the number to be regarded as material and to invalidate the note. An alteration, therefore, to effect a discharge of the con- tract, need not be an alteration of the contract, but must be "an alteration of the instrument in a material way. " The Bills of Exchange Act, 1882,* provides that a bill shall not be avoided as against a holder in due course, though it has been materially altered, " if the alteration is not apparent :" and the provisions of the Act respecting bills apply to prom- issory notes " with the necessary modifications." These last words have been held to exclude Bank of England notes, and therefore do not affect the decision in SuffeWs case." Loss of written instrument. — The loss of a written in- strument only affects the rights of the parties in so [*328] far as it occasions a difficulty of proof; but *an ex- ception to this rule exists in the case of bills of exchange and promissory notes. If the holder of the in- strument lose it, he loses his rights under it, unless he offer to the party primarily liable upon it an indemnity against possible claims.'' Bankruptcy. Bankruptcy effects a statutory release from debts and liabilities provable under the bankruptcy, when the bank- o. Suffell V. Bank of England, 9 Q. B. D. 555. 6. 46 & 47 Vict. o. 61, § 64. e. Leeds Bank v. Walker, 11 Q. B. D. 84. d. Hansard v. Eobinaon,'7 B. & C. 90j Conflans Quarry Co. T. Parker, L. B. J 0. P. 1. Chap. V. BY OPERATION OF LAW. / 435 rupt has obtained from the Court an order of discharge. It is sufficient to call attention to this mode of discharge, without entering into a discussion as to the nature and ef- fects of Bankruptcy, or the provisions of the Bankruptcy Act of ISSS." a. 4a & r Vict c. 53. PART VI. AGENCY. When dealing with the Operation of Contract we had to note that although one man cannot by contract with another confer rights or impose liabilities upon a third, yet that one man might represent another, as being employed by him, for the purpose of bringing him into legal relations with a third. Employment for this purpose is called Agency. The subject of Agency is interesting as a matter of legal history, as well as of practical importance, but we can only deal with it in outline here, in its relation to Contract. Agency in Bomau Law.-^ Eoman Law never attained to the simplicity of our doctrine of representation for the pur- pose of acquiring rights and liabilities. "We must look to the relations of paterfamilias with those inpotestate for the beginnings of Agency. The benefit of a contract made by such persons inured to paterfamilias, but he could only be fixed with its liabilities in certain cases. The man who con- tracted with son or slave on the faith of the peculium, or separate estate, of the latter had a remedy against pater- familias to the extent of that estate ; and the liability was somewhat increased if the debts were trading debts incurred with the knowledge of the party charged. Again, if the father expressly authorised the contract of one in potestate, or if, not having given an antecedent au- thority, he took advantage of it, he incurred its liabilities at the same time that he acquired its rights. And here we get the only correspondence with our modern conception [*330] of agency; for *here the rights and liabilities of a contract accrue to him who authorised it before, or Part VI. OUTLINE OF SUBJECT. 437 • ratified it after, it was made, while the agent drops out of the transaction. As between persons sui juris, agency did not take the form of representation, but of a contract for gratuitous em- ployment, followed by a cession, real or feigned, of the rights of action acquired in the course of the transaction by the person employed. Agency a form of employment.— English law, though till lately it leaned strongly against the assignment of actions, has fully recognised agency in the sense of the representation of one man by another. And it would seem that this liability of one for the act or default of another springs universally from the contract of employment." The liability of the master for the negligence of his servant is the undesigned result of such a contract ; the liability of the principal for the act of his agent is its designed or contem- plated result. But the master is not liable for the act of his servant done outside the scope of his employment, nor the principal for the act of his agent done outside the limits of his authority. To discuss the law of master and servant fi'om this point of view would here be out of place, otherwise it would be interesting to inquire how far the doctrine of representation in such cases is of modern origin. It may be that the ex- treme form w^ich the employer's liability has assumed in English law is an application to modern society of rules which are properly applicable when the master is served by slaves, and is liable for injuries done by them as being a part of his property. ■ But so far as we are concerned with Agency for the pur- pose of creating contractual relations it retains no trace in English law of its origin in status. Even where a man em- ploys as his agent one who is incapable of entering into *a contract with himself, as where he gives [*331] authority to his child, being an infant, the author- a. Writers on Agency seem loth to recognise that agency is a form of employment- Yet in dealing with the principal's liability for the agent's torts, they always introduce lai;ge selections from the law of Master and Servant. 438 AGENCY. Part VI. ity must be given, it is never inherent. There must be evi- dence of intention on the one side to confer, on the other to undertake, the authority given, though the person em- ployed may, from defective status, be unable to sue or be sued on the contract of employment. Except agency of necessity. — From this general rule we must, however, except that form of agency known as " agency of necessity," a quasi-contractual relation formed by the operation of rules of law upon the circumstances of the parties, and not by the agreement of the parties them- selves. Outline of subject. — The rules which govern the relation of Principal and Agent fall into three chapters. 1. The mode in which the relation is formed. 2. The effects of the relation when formed : and here we have to consider — (a) "What is the effect of the contract of employment as between Principal and Agent. {^) What are the relations of the parties where the agent contracts for a principal whom he names. Is the agent more than a mere instrument of communication ; and does he incur any liabilities, and of what sort, if he exceeds his powers or asserts an authority which he does not possess ? (j-) Or he may have contracted as agent, but without disclosing his principal's name : or in his own name, with- out disclosing his principal's existence. What then are the relations to each other of the two real parties to the con- tract, and of the agent to the party who is not his employer ? 3. Lastly, we have to consider the mode in which the relation is brought to an end. CHAPTEE I. The Mode in •which the Relation of Principal and Agent is created. Capacity of parties. — "We may deal shortly with the capacity of parties to this relation by saying that any one may be an agent, whether or no he is, in other respects, of contractual capacity : but that no one can appoint an agent who is not otherwise capable of entering into contracts. How the relation may arise. — As regards the mode in which the assent of the parties may be signified we may ac- cept the processes described in the chapter on Offer and Acceptance as applicable to the constitution of this relation. (a) By oflter of a promise for an act. — It may arise from consideration executed upon request: as where serv- ices are asked for in such a manner as to import a prom- ise of indemnity for any loss, risk, or expense incurred in rendering them. Such are all cases of gratuitous agency in which the par- ties do not create, and very possibly do not contemplate as between themselves, any legal relation at the time the re- quest is made. The obligation springs up when the service is rendered ; the agent then becomes liable for misperform- ance of his undertaking, and the principal upon his implied promise of indemnity. Employment a wider term than agency. — But in deal- ing with this aspect of the subject we should be very care- ful to avoid a not uncommon use of the word agency to signify employment merely. We use it here to mean em- ployment for the purpose of bringing the employer into legal relations with a third party. Gratuitous agency. — *It is said that a man who [*333J undertakes to do a service for another gratuitously 440 AGENCY. Part Yl. is liable only for misfeasance and not for nonfeasance. The law on this point is somewhat obscure. Perhaps it may best be explained by saying that where a man undertakes to act as agent or do any other service for another gratui- tously, the contractual liability does not arise till he has entered upon the work and so affected the position of his employer; and that up to that moment there is nothing but a request to him to do the work importing a promise to indemnify him for losses which may be incurred if he do it. So, in Wilkinson v. Coverdale,'' ^it was held a good cause of action that the defendant gratuitously undertook to effect a fire insurance for the plaintiff and by omitting some necessary formalities made it impossible for the plaintiff to recover upon the policy. It was assumed that no action would have lain if he had simply neglected to insure at all. i^j By oflfer of an act for a promise; as Iby ratification. — Or secondly, the relation may be created by the acceptance of an executed consideration. Such is the case where A ratifies a contract which X, without any antecedent au- thority, has made on his behalf. A accepts the bargain and thereby takes over its liabilities from X.' (;-) By offer of a promise for a promise. — Or thirdly, the relation may be created by mutual promises, to employ and remunerate on one side, and to do the work required on the other. Formal grant of authority only needed for contract un- der seal. — These being the modes in which the relation of. principal and agent is created, it follows that we should consider the form, if any, in which the authority should be expressed, and the circumstances under which it will be assumed to exist. I In order that an agent may make a binding contract un- der seal it is necessary that he should receive authority a. 1 Esp. 74. iBeidman v. Groodale, 56 la. 593; Strasser v. Conklin, 54 Wis. 103. C!hap. I. FORMATION OF AGENCY. 441 under seal.' Such a formal authority is called a power of attorney. Except in such a case it is not necessary that authority should be given in any special form. "Writing or words may indicate the intention of the parties.^ Conduct. — *But this intention may also be inferred [*334] from the conduct of the parties, and this inference is more readily drawn where they stand in certain relations to one another. In case of master and servant. — If a master allows his servant to purchase goods for him of X habitually, upon credit, X becomes entitled to look to the master for pay- ment for such things as are supplied in the ordinary course of dealing." Of husband and wife. — So too with husband and wife. Cohabitation does not necessarily imply agency. But if the wife is allowed to deal with a tradesman for the ordi- nary supphes of the household the husband will be consid- ered to have held her out as his agent and to be liable for her purchases.* But there is nothing in the relations of master and serv- ant or husband and wife to give any inherent authority to a. 1 Shower, 95. 6. Debenham v. Mellon, Thesiger, L. J., 5 Q. B. D. 403. 'Elliott T. Stocke, 67 Ala. 336; Hanford v. MoNair, 9 Wend. 54; Banorgee v. Hovey, 5 Mass. 11; Wheeler v. Nevins, 34 Me. 54; Shuetz V. BaUey, 40 Mo. 69; Smith v. Perry, 29 N. J. L. 74. But if the instru- ment executed under seal does not require a seal, as a lease for one year, a parol appointment is sufficient. State v. Watts, 44 N. J. L. 136 ; but see Wheeler v. Nevins, 34 Me. 54. An agent may by simple con- tract bind his principal to convey, when he himself could not convey for want of authority under seal. Force v. Dutcher, 18 N. J. Eq. 401 Baum V. Du Bois, 43 Pa. St. 360 ; Ledbetter v. Walker, 31 Ala. 175 Johnson v. McGruder, 15 Mo. 365 ; Morrow v. Higgins, 39 Ala. 448 Dodge V. Hopkins, 14 Wis. 630. Parol agency to charge the realty of the principal should be express, and clearly estabUshed. Challoner v. Bouek, 66 Wis. 653. 2 Bank of North America v. Embury, 38 Barb. 333; Stackpole v. Ar- nold, 11 Mass. 37; Shaw v. Nudd, 8 Pick. 9. 442 AGENCY. Part VI. the servant or the wife. The authority can only spring from the words or conduct of the master or husband. Different rule for partners. — "We can see this more clearly, if we contrast these relations with that of partner- ship. Marriage does not of itself create the relation of agent and principal : partnership does. The contract of partner- ship confers on each partner an authority to act for the others in the ordinary course of the partnership business. And each partner accepts a corresponding liability for the act of his fellows." The relations above described, marriage and employment, enable an authority to be i;eadily inferred from conduct. But apart from these, conduct alone may create so strong a presumption of authority that the person so acting is estopped from denying that it has been conferred. In Pickering v. Busk,* the plaintiff allowed a broker to purchase for him a quantity of h^mp which by the plaint- iff's desire was entered in the place of deposit in the brokers name. The broker sold the hemp, and it was held that the conduct of the plaintiff gave him authority to do so. "Strangers," said Lord Ellenborough, " can only look to the acts of the parties and to the external indicia of prop- erty, and not to the private communications which [*335] may pass between a *prinoipal and his broker: and if a person authorise another to assume the apparent right of disposing of property in the ordinary course of trade, it must be presumed that the apparent authority is the real authority." ^ We may apply to all the cases above described (except- ing, of course, partnership) the term agency by estoppel. They differ only in the greater or less readiness with which the presumption will be created by the conduct of the par- o. Hawken v. Bourne, 8 M. & W. 710. b. 15 East, 48. 1 Pennsylvania E. E. Co. v. Atha, 23 Fed. E. 930 ; Freiberg v. Beach Hotel, etc. Co. 63 Tex. 449; Paine v. Tillinghast, 53 Conn. 532; Web- ster V. Wray, 17 Neb. 579; Emerson v. Miller, 37 Pa. St. 378. Chap. I. FORMATION OF AGENCY. 443 ties. By estoppel we must be understood to mean a prohi- bition to deny facts a belief in which has been created by the conduct of the party estopped. Necessity. — Circumstances operating upon the conduct of the parties may create in certain cases Agency from necessity. A husband is bound to maintain his wife : " if therefore he wrongfully leave her without means of subsistence she becomes " an agent of necessity to supply her wants upon his credit." ^ May create agency q[uasi ex contractu. — A carrier of goods, or a master of a ship, may under certain circum- stances, in the interest of his employer, pledge his credit, and win be considered to have his authority to do so. It has even been held that where goods are exported, unor- dered, or not in Correspondence with samples, tbe consignee has, in the interest of the consignor,* an authority to effect a sale of them. But here the relation of principal and agent does not arise from agreement, it is imposed by law on the circumstances of the parties. The agent occupies the position of the negotiorum gestorjol Koman Law. Satification. — It remains to consider Eatifioation^ as a mode of constituting agency, and the rules under which a a. Eastland v. Bvirchell, 3 Q. B. D. at p. 436. 6. Kemp v, Pryor, 1 Ves. 346. 1 Filer v. CruU, 99 Ind. 375; Watkins v. DeArmond,- 89 Ind. 553; Fer- ren v. Moore, 59 N. H. 106 ; Pierpont v. Wilson, 49 Conn. 450. 2 Ratification is equivalent to antecedent authority. Goss v. Stevens, 32 Minn. 473; Kinsley v. Norris, 60 N. H. 131; Alexander v. Jones, 64 la. 207 ; Wallace v. Lawyer, 90 Ind. 499 ; Breed v. Central City Bank, 6 Cal. 235; Sheldon H. B. Co. v. Eickemeyer H. B. M. Co. 90 N. Y. 613; Jones V. Atkinson, 68 Ala. 167. The first element necessary to render a ratification effectual is, that it he made virith a full knowledge of aU the material facts. Saville v. Welch, 58 Vt. 683; Hovey v. Brown, 59 N. H. 114; Herring V. Skaggs, 73 Ala. 446; Roherts v. Rumley, 58 la. 301; Combs V. Scott, 12 Allen, 493; Manning v. Gasharie, 27 Ind. 399; Smith V. Kidd, 68 N. Y. 142; Dean v. Bassett, 57 Cal. 640. Knowledge of 444 AGENCY. Part VI. man may adopt and take the benefit and liabilities of a con- tract made by another person, on his behalf, but without his authority. The rules m^ay shortly be stated thus. Rules which gOTern it. — The agent must contract as agent, for a principal who is in contemplation, and who must also be in existence at the time, for such things as the principal can and lawfully may do. [*336] *(a) The agent must contract as agent.' He must not incur a liability on his own account and then assign it to some one else under colour of ratifica- tion. If he has a principal and contracts in his own name he cannot divest himself of the liability to have the contract enforced against him by the party with whom he dealt," who is entitled under such circumstances to the alternative liability of the agent and principal. If he has no principal and contracts in his own name he can only divest himself of his rights and liabilities in favour of another by assign- ment to that other ; subject to the rules laid down in Part ii, ch. ii, § 1. (b) The agent must act for a principal who is in contem- plation.^ He must not make a contract, as agent, with a vague ex- pectation that parties of whom he is not cognisant at the time will relieve him of its liabilities. The act must be " done for amother by a person not assuming to act for himself but for such other person." * This however would not prevent ratification in the case of a broker making contracts, as a. See post, p. 352. 6. Wilson V. Tumman, 6 M. & G. 236. 1 material facts may be inferred from circumstances, and the principal may by his conduct preclude himself from denying such knowledge. Scott V. Middleton, etc. E. E. Co. 86 N. Y. 200; Forbes v. Haymann, 75 Va. 158. 1 Collins V. Swan, 7 Eobt. (N. Y.) 623; Fellows v. Commissioners, 36 Barb. 655. 2 Vanderbilt v. Turnpike Co. 2 N. Y. 479; Eoby v. Cossett, 78 111. 688; Beveridge v. Eawson, 51 lU. 504. Chap. I. FORMATION OF AGENCY. 445 agent, in. the expectation that customers with whom he was in the habit of dealing would take them off his hands. Thus, in contracts of marine insurance, persons " who are not named or ascertained at the time the policy is effected are allowed to come in and take the benefit of the insurance. But then they must he persons who were contemplated at the time the policy was made." " And the principal may exist only in contemplation of law, as in the case of estates of deceased or bankrupt persons; an agent may contract on behalf of the estate, and the ad- ministrators or trustees may take advantage of the contract though they were not appointed or even ascertained at the time of its making. (o) The principal must be in existence.' This rule is important in its bearing on the liabilities of companies for contracts made by the promoters on their behalf before they are formed. In Kelner v. Baxter " the *promoters of a company as 3'et unformed en- [*337] tared into a contract on its behalf and the company when duly incorporated satisfied the contract. It became bankrupt and the defendant who had contracted as its agent was sued upon the contract. It was argued that the liabil- ity had passed, by ratification, to the company and no longer attached to the defendant, but the Court held that this could not be. " Could the ' company,' " said "Willes, J., " be- come liable by a mere ratification ? Clearly not. Eatifica- tion can only be by a person ascertained at the time of the act done, — by a person in existence either actually or in contemplation of law, as in the case of the assignees of bank- rupts, or administrators whose title for the protection of the estate vests by relation." {d) The agent must contract for such things as the prin- cipal can, and lawfully may do.^ o. Watson t. Swann, 11 C. B. N. S. 761. 6. L. E. 2 O. P. 17S. 1 Ewell's Evans' Agency, 57. ^McCraoken v. Sau Francisco, 16 Cal. 591; State v. Matthis, I Hill 446 AGENCT. Part VI. There can be no ratification of a void act. And so if an agent enter into a contract on behalf of a principal who is incapable of making it, or if he enter into an illegal con- tract, no ratification is possible. The transaction is void, in the one case from the incapacity of the principal, in the other from the illegality of the act. On this last ground it has been said that a forged signa- ture cannot be ratified, but it would seem that ratification is not here in question." For one who forges the signature of another does not possess the authority of an agent, act- ually or in contemplation. The forger does not act for another, he personates the man whose signature he forges. Subject to these rules " an act done for another, by a per- son not assuming to act for himself, but for such other per- son, though without any precedent authority whatever, becomes the act of the principal, if subsequently ratified by him. In that case the principal is bound by the act, whether it be for his detriment or his advantage, and whether it be in tort or in contract." * And the principal who accepts the contract made [*338] on his *behalf by one whom he thereby undertakes to regard as his agent, may, as in the acceptance of any other simple contract, signify his assent by words or by conduct. He may avow his responsibility for the act of his agent, or he may take the benefit of it, or otherwise by acquiescence in what is done create a presumption of author- ity given. Where conduct is relied upon as constituting ratification the relations of the parties and their ordinary course of dealing may create a greater or less presumption that the principal is liable. a. Brook v. Hook, L. B. 6 Ezch. 89. b. Wilson T. Tumman, 6 M. & G. SSS. (S. C), 37 ; Harrison v. McHenry, 9 Ga. 164 j Armitage v. Widoe, 36 Mich. 134; O'Conner v. Arnold, 53 Ind. 205. CHAPTEli II. Effect of the relation of Principal and Agent. Hating considered the various modes in which the rela- tion of Principal and Agent may be created, we now come to dealing with the effects of that relation. And this part of the subject may be conveniently arranged under three headings. 1. The rights and liabilities of Principal and Agent inter se. 2. The rights and liabilities of the parties where an agent contracts as agent for a named principal. 3. The rights and liabilities of the parties where an agent contracts for a principal whose name, or whose existence, he does not disclose. I. The Eights aitd Liabilities of Peiitoipal aitd Agent inter se. Relations of Principal and Agent. — The relations of Principal and Agent inter se are made up of the ordinary relations of employer and employed, and of those which spring from the special business of an agent to bring two parties together for the purpose of making a contract: — to establish privity of contract between his employer and third parties. Duty of Principal to indemnify or reward. — The Prin- cipal is bound to pay the agent such commission, or reward for the employment, as maybe agreed upon between them.' 1 Dexter V. Campbell, 137 Mass. 19S; Stewart v. Rogers, 19 Md. 198; Kentucky Bank v. Combs, 7 Pa. St. 543; Fuller v. Ellis, 89 Vt. 345. But fraud of the agent in the business intrusted to him, resulting in damage to his principal, may deprive the agent of his right to compen- 448 AGENCY. Part VI. He is also bound to indemnify the agent for acts lawfully " done in the execution of his authority.^ The agent is bound, like every person who enters [*340] into a *contract of employment, to account for the property of his employer which comes into his hands in the course of the employment;^ to use ordinary dili- gence in the discharge of his duties; or to display any special skill or capacity which he may profess for the work in hand.' ' Agent to make no profit other than commission. — He is further bound not to make any profit out of transactions into which he may enter oh behalf of his principal in the course of the employment other than the commission agreed upon between them. Such a failure by the agent to fulfill his obligations to his principal may take plac^ in two ways. He may accept reward from the other party to the transaction in which he is engaged, and thus may acquire a. It is not without hesitation that in view of the decisions in Read v. Anderson, and Seymour v. Bridge, ante, p. 203, discussed in an earlier chapter, I retain the word " lawfully." It may be hoped however that the law laid down, at any rate in the lat- ter of the two cases, may be subject to review, and that an agent may not be able to compel his principal to indemnify him against the consequences of not performing a contract which Parliament has said that it is a misdemeanour to make. 6. Jenkins v. Betham, 15 C. B. 168. sation. Vennum v. Gregory, 21 la. 336; Sea v. Carpenter, 16 Ohio, 413. 1 Mohawk & Hudson R. E. Co. v. Costigan, 2 Sandf. (N. Y.) Ch. 306 ; Moore v. Appleton, 26 Ala. 683; Howe v. Buflfalo, N. Y. &Erie E. E. Co. 37 N. Y. 297; Coventry v. Barton, 17 Johns. 142; Gower v. Emery, 18 Me. 79; Drummond v. Humphreys, 89 Me. 847; Chamberlain v. Beller, 18 N. Y. 115; Grace v. Mitchell, 31 Wis. 538; Maitland v. Mar- tin, 86 Pa. St. 120, 2 Placer County v. Astin, 8 Cal. 303; Clark v. Moody, 17 Mass. 145; Lilhe V. Hoyt, 5 Hill (N. Y.), 395; Cowing v. Green, 45 Barb. 585; Eich V. Austin, 40 Vt. 416; Collins v. Tilton, 26 Conn. 868. SEedfield v. Davis, 6 Conn. 439; Hall v. Junction E. E. Co. 15 Ind. 862; Sawyer v. May hew, 51 Me. 398; Babcock v. Orbison, 25 Ind. 75; Clark v. Bank of Wheeling, 17 Pa. St. 823; Bell v. Cunningham, 3 Pet. 69. Chap. IL RELATIONS OF PRINCIPAL AND AGENT. 449 an interest adverse to that of his employer. In other words, he may be bribed to make a bad bargain for his prin- cipal. Or he may depart from his character as agent and as- sume that of principal, becoming the buyer of that which he is employed to sell, or the seller of that which he is em- ployed to buy. (1) By taking reward from others.—: The one transac- tion is obviously fraudulent, the other need not necessarily be so ; in both cases the rules of law are strong for the pro- tection of the principal. Where an agent is promised a reward or makes a profit which might induce him to act disloyally to his employer he can neither recover nor retain the money promised to him. An engineer in the employ of a Kailway Company was promised by another Company a commission the con- sideration for which was, partly the superintendence of their work, partly the use of his influence with the Eailway Com- pany to obtain an acceptance by them of a tender made by his new employers. He did not appear in fact to have ad- vised his first employers to their prejudice, but it was held that he could not recover in an action brought for this com- mission. " It needs no authority to show that," even though the employers are not actually injured and the bribe fails to have the intended effect, a contract such as this is a cor- rupt one and cannot be enforced." *And further, the agent, if he obtain any profit by [*341] a transaction of this nature, is bound to account for it to his employer, " or if there is no account remaining to be taken and adjusted between him and his employer, to pay over the amount as money absolutely belonging to his employer." In Morison v. Thompson^ the defendant was emplojred as broker by the plaintiff to purchase a ship from X: X had promised his broker that he would allow him to keep a. Harrington v. Victoria Graving Dock Co. 8 Q. B. D. 548. 6. L. H. 9 Q. B. 480. 29 450 AGENCY. Part VI. any excess of the purchase money over £8,500. 'Tho defend- ant bought the ship for his employer for £9,250, and received by arrangement with the broker of Xthe sum of £225, a portion of the excess price. The plaintiff discovered this and sued his agent for £225 as money received to his use, and it was held that he' could recover the money. (2) By becoming principal as against his employer. — An agent may not depart from his character as agent and become principal party to the transaction even though this change of attitude do not result in injury to his employer. The Courts have been strict in holding that if a man is employed to buy or sell on behalf of another ' he may not sell to his employer or buy of him. And this is part of the fiduciary relation created by the contract of employment.^ Nor, again, if he is employed to bring his principal into contractual relations with others may he assume the position of the other contracting party. In illustrating these propositions we may usefully dis- tinguish simple employment from agency or representation in the strict sense of the word. Compare (1) sale. — A may agree with Xto purchase goods of X at a price fixed upon. This is a simple contract of sale and each party makes the best bargain for himself that he can. (2) Commission agency. — Or A may agree with X that X shall endeavour to procure certain goods and when pro- cured sell them to A, receiving not only the price at which the goods were purchased but a commission or reward for his exertions in procuring them. Here we have a [*34r2] contract of sale with 'a contract of *employment 1 Collins V. Rainey, 43 Ark. 531 ; Woodman v. Davis, 32 Kan. 344 ; Peck- ham Iron Co. V. Harper, 41 Ohio St. 100 ; Fountain Coal Co. v. Phelps, 95 Ind. 271 ; .Watson v. Union Iron & Steel Co. 15 111. App. 509 ; Ellsworth V. Cordray, 63 la., 675. An agent cannot rightfully assume any posi- tion in reference to the business intrusted to him, where his interest is adverse to that of his employer. Moore v. Moore, 5 N., Y. 256 ; Moore V. Mandlebaum, 8 Mich. 483; Mathews v. Light, 32 Me. 805; Smith v. Brotherline, 62 Pa. St. 461 ; Swell's Evans Agency, 263, n. Chap. n. RELATIONS OF PRINCIPAL AND AGENT. 451 added to it, such as is usually entered into by a com- mission agent or merchant, who supplies goods to a foreign correspondent. In such a case the seller sells the goods not at the highest but at the lowest price at which they are ob- tainable : what he gains by the transaction is not a profit on the price of the goods but a payment by way of commis- sion, which binds him to sujjply them according to the terms of the order or as cheaply as he can." If a seller of goods warranted them to, be of a certain quality he would be liable to the buyer, if the M'arranty were unfulfilled, for the difference in value between the goods promised and those actually supplied. If a commis- sion agent undertakes to procure goods of a certain quality and fails to do so, the measure of damages is the loss which his employer has actually sustained, not the profit which he might have made. A seller of goods with a warranty promises that they shall possess a certain quality.* A com- mission agent only undertakes to use his best efforts to ob- tain goods of such a quality for his employer. And here the person employed has no authority to "pledge his employer's credit to other parties, but undertakes simply to obtain and supply the goods ordered on the best terms. Yet it would seem that he might not, without his employer's assent, supply the goods himself, even though they were the best obtainable and supplied at the lowest market price." This is an implied term in his contract of employment. And (3) Ibrokerago. — Or thirdly, A may agree with X that in consideration of a commissioh paid tp X he shall make a bargain for A with some third party. X is then an agent in the true sense of the word, a medium of com- munication to establish privity of contract between two other parties. Agent to make a contract mnst remain agent.— Under these circumstances it is imperative upon X that he should a. Ireland v. Livingston, L. E. 5 H. L. 407. h. Cassaboglou v. Gibbs, 9 Q. B. D. 222. C Botbscbild t. Brookman, 2 Dow. & C3. 18& 453 AGENCY. Part VI. not divest himself of his character of agent and become a principal party to the transaction. This may be said to arise from the fiduciary relation of agent and principal ; the agent is bound to do the best he can for his princi- [*343] pal ; if he put himself in a position in which he *has an interest in direct antagonism to this duty, it is difficult to suppose that the special knowledge, on the strength of which he was employed, is not exercised to the disadvantage of his emptoyer. Thus if a solicitor employed to effect a sale of property purchase it, nominally for an- other, but really for himself, the purchase cannot be en- forced." Eut we may put the rule on another ground. HA em- ploys X to make a bargain for, him with some third party, the contract of employment is not fulfilled if X make the bargain for himself. The employer may sustain no loss, but he has not got what he bargained for. Thus in Mollett v. Robinson ' the defendant gave an order to the plaintiff, a broker in the tallow trade, for the pur- chase bf a quantity of tallow. In accordance with the cus- tom of the market the broker did not establish privity of contract between the defendant and a seller, but simply ap- propriated to him an amount of tallow, corresponding to the order, which he had purchased from a selling broker.' It was held that the defendant could not be required to accept goods on these terms, and that he was not bound by a custom of the market of which he was not aware and which altered the "intrinsic character" of the contract. The broker was employed to make a contract on behalf of his principal, he had in fact made a sale to him, and the House of Lords held that such transaction could not be sup- ported." o. MoPherson v. Watt, 3 App. Ca. 254. 6. L. E. 7H. L. 802. c. Mollett T. Eobinson, L. E. 7 H. L. 802. iBeal V. MoKiernan, 6 La. (O. S.) 407. Chap. n. RELATIONS OF PEINCIPAL AND AGENT. 453 May not delegate authority. — An agent may not as a rule depute another person to do that which he has under- taken to do.^ The reason of this rule, and its limitations, are thus stated by Thesiger, L. J., in Be Bussche v. Alt."' " As a general rule, no doubt, the maxim delegatus non potest delegare ap- plies so as to prevent an agent from establishing the rela- tionship of principal and agent between his own principal and a third person; but this maxim when analysed merely imports that an agent cannot, without authority from his principal, devolve upon another an obligation to the principal where he has *himself undertaken person- [*344:] ally to fulfill; and that inasmuch as confidence in the particular person employed is at the root of the contract of agency, such authority cannot be implied as an ordinary incident to the contract." The Lord Justice points out that there are occasions when such an authority must needs be implied, occasions spring- ing from the conduct of the parties, tiae usage of a trade, , the nature of a business, or an unforeseen emergency, " and that when such implied authority exists and is duly exer- cised, privity of contract arises between the principal and the substitute, and the latter becomes as responsible to the former for the due discharge of the duties which his em- ployment casts on him, as if he had been appointed agent by the principal himself." But where there is no such implied authority * and the agent employs a sub-agent for his own convenience, no u. 8 Ch. D. 310. 6. New Zealand Co. v. Watson, 7 Q. B. D. (C. A.1 374. iLoeb V. Drakeford, 75 Ala. 464; Warner v. Martin, 11 How. 209; O'Conner v. Arnold, 53 Ind. 203; Bocock v. Pavey, 8 Ohio St. 370; Loomisv. Simpson, 13 la. 533; Emerson v. Providence Manuf. Co. 12 Mass. 337; Hunt v. Douglass, 23 Vt. 128; Lyon v. Jerome, 26 Wend. 485; Smith V. Sublett, 38 Tex. 163. Mere ministerial or executive au- thority may be delegated by an agent. Commercial Bank v. Norton, 1 Hill (N. Y.), 501 ; Eldridge v. Holway, 18 111. 445 ; Grinnell v. Buchanan, 1 Daly (N. Y,), 538. See EweU's Evans Agency, 40. 454 AGENCY. Part VL privity of contract arises between the principal and the sub- agent. On default of the agent the principal cannot inter- vene as an undisclosed principal to the contract between agent and sub-agent. Nor can he follow his property into the hands of the sub-agent as being his employer. II. Eights and Liabilities of the Parties wheee ak Agent conteacts eoe a named Peincipal. Agent for named principal. — Where an agent, duly au- thorised, contracts, as agent, for a named principal, or — to put the same statement in another form — where the other party to the contract looks through the agent to a principal whose name is disclosed, the agent drops out of the trans- action, if he keeps within his authority, so soon as the con- tract is made.' Where the transaction takes this form only two matters arise for discussion : the nature and extent of the agent's authority ; and the rights of the parties where an agent en- ters into contracts without or beyond the authority which is necessary to make them binding. Much trouble has been taken to distinguish general from special agents as having two sorts of authority dif- [*34:5] ferent in *kind from one another. But one may safely say that such a diiference is one of degree only.* Whetlier authority is general or special. — If A con- tracts with M on behalf of X who is named as the prin- cipal, so that Jf looks to JTand gives credit to him; then, 1 Seery v. Socks, 29 111. 313 ; Eathbon v. Budlong, 15 Johns. 1 ; Hall V. Huntoon, 17 Vt. 244; Ogden v. Eayraond, 22 Conn. 379; Chase v. Paltberg, 12 Daly (N. Y.), 171; Woodbridge v. Hall, 47 N; J. L. 388; Frazier v. Hendren, 80 Va. 265 ; Michael v. Jones, 84 Mo. 578. 2 The scope of an agent's authority is to be measured by ihe. nature and necessities of the thing to be accomplished, but it is the duty of a party dealing with a special agent to inquire into the extent of his au- thority, and act accordingly. Geylin v. De Villeroy, 2 Houst. (Del.) 311 ; Towle V. Leavitt, 23 N. H. 360; Sanford v. Handy, 23 Wend. 260; Ruppe V. Edwards, 52 Mich. 411 ; Western Union Tel. Co. v. Rains, 63 Tex. 27. Chap. n. AGENT COJITRACTING FOR NAMED PRINCIPAL. 455 whatever may be the extent of ^'s authority, so soon as.the contract is made, he drops, out; Jf and Xare left face to face, and the only questions that can arise in regard to A are, firstly, what was the extent of authority given, and secondly, what is the remedy of Jf if J. had no authority or exceeded his powers? For instance, Xsends A to offer £100 for J/'s horse Eobin Hood, or to buy the horse for as low a price under £100 as he can, or for as low a price as he can, or to buy the best horse in M's stable at the lowest price, or X sends A to London to get the best horse he can at the lowest price, or X agrees with A that A shall keep him supplied v/ith horses of a certain sort and provide for their keep: all these cases differ from one another in nothing but the extent of the au- thority given, there is no difference in kind between any one of the cases and any other : in none of them' does A incur any personal liability to Mor any one with whom he contracts on behalf of Xso long as he acts as agent, names his principal, and keeps within the limits of his authority. But it should be observed, and indeed it follows from what has already been said," that X cannot by private com- munications with A limit the authority which he has al- lowed A to assume. "There are two cases in which a principal becomes liable for the acts of his agent — one where the agent acts within the limits of his authority, the other where he transgresses the actual limits but acts within the apparent limits, where those apparent limits have been sanctioned by the principal." * ' It may be convenient here to note the amount of author- ity with which certain kinds of agents are invested in the ordinary course of their employment. a. Ante, p. 327. 6. Maddiok v. Marshall, 16 0. B. N. S. 393. 1 London, etc. v. Hagerstown, etc. Bank, 36 Pa. St. 491 ; Williams v. Mitchell, 17 Mass. 98; Williams v. Getty, 31 Pa. St. 461; Talmage v. Bierhause, 103 Ind. 370, 456 AGENCY. Part VI, [*346] *(«) Auctioneer. — An auctioneer is an agent to sell goods at a public auction. He is primarily an 'agent for the seller, but, upon the goods being knocked down, he becomes also the agent of the buyer; and he is so for the purpose of the signatures of both parties within the meaning of the 4th and ITtli sections of the Statute of Frauds. He has not merely an authority to sell, but actual possession of the goods, and a lien upon them for his charges. He may sue the purchaser in bis own name, and even where he contracts avowedly as agent, and for a known principal, he may introduce terms into the contract which he makes with the buyer, so as to render himself personally liable." (5) Factor. — A factor by the rules of Common Law and of mercantile usage is an agent to whom goods are con- signed for the purpose of sale, and he has possession of the goods, authority to sell them in his own name, and a gen- eral discretion as to their sale. He may sell on the usual terms of credit,^ may receive the price, and give a good dis- charge to the buyer. , He further has a lien upon the goods for the balance of account as between himself and his principal, and an insur- able interest in them.^ Such is the authority of a factor at Common Law, an authority which the principal cannot restrict, as against third parties, by instructions privately given to his agent.* a. Woolfe V. Home, 3 Q. B. D. 355. b. Pickering v. Busk, 15 East, 4S. iPinkham V. Crocker, 77 Me. 563; Hutchinson v. Bower, 6 Cal. 383; Emerson v. Providence Manuf . Co. 13 Mass. 237 ; Dwight v. Whitney, 15 Pick. 179 ; Given v. Leuioine, 85 Mo. 110. 2 To constitute a valid lien the factor must have possession of the goods and the right of property in them must be in his principal. When the factor voluntarily relinquishes control of the property his lien is lost and cannot be reasserted. Writer v. Coit, 7 N. Y. 288 ; Brown v. Wiggin, 16 N. H. 313; Elliott V. Bradley, 33 Vt. 217; Winne v. Hammond, 37 IlL 96; Gragg v. Brown, 44 Me. 157; Ewell's Evans Agency, 368. C!hap. II. AGENT CONTRACTING FOR NAMED PRINCIPAL. 457 By the Factor's Acts" the presumed authority of the factor is extended to the pledging of goods, and persons ■who advance money on the security of goods or documents of title are thereby given assurance that the possession of the goods, or of the documents of title to them, carries with it an authority to pledge them. (c) Broker. — A broker is an agent primarily to establish privity of contract betv^een two parties. Where he is a broker for sale he has not possession of the goods, and so he has not the *authority thence arising [*34Y] which a factor enjoys. Nor has he authority to sue in his own name on contracts made by him.' The forms of a broker's notes of sale may be useful as illustrating what has hereafter to be said with reference to the liabilities of parties where an agent contracts ■ for a principal whose name or whose existence he does not dis- close. Forms of bought and sold notes. — "When a broker makes a contract he puts the terms into writing and deliv- ers to each Y)a.vty a copy signed by him. The copy deliv- ered to the seller is called the sold note, that delivered to the buyer is called the bought note. The sold note begins " Sold for A to X" and is signed " Jf broker," the bought note begins " Bought for X of A" and is signed "JIf broker." But the forms may vary and with them the bro- ker's liability. We will follow these in the sold note. (i) " Sold for A to X" (signed) " M broker." * Here the broker cannot be made liable or acquire rights upon the contract : he acts as agent for a named principal. (ii) "Sold for you to our principals" (signed) " if broker." Here the broker .acts as agent," but for a principal whom he does not name. He can only be made liable by the usage of the trade, if such can be proved to exist. o. 5 & 6 Vict. c. 39; 40 & 41 Vict. c. 39. 6. Fairlie v. Fenton, L. R. 5 Ex. 169. c. Southwell V. Bowditch, 1 C. P. D. (C. A.) 374; Fleet v. Murton, L. E. 7 Q. B. 128. 1 White V. Chouteau, 10 Bai'b. 303. 458 AGENCY, * Part VL (iii) " Sold by you to me " (signed) M. Here we suppose that the broker has a principal, though his, existence is not disclosed, nor does the broker sign as agent. He is person- ally liable, though the seller may prefer to take and may take the liability of the principal when disclosed;" and the principal may intervene and take the benefit of the con- tract. (<^) CommissioH agent. — A commission agent is, as was described above, a person employed, not to establish privity of contract between his employer and other parties, but to buy or sell goods for him on the best possible terms, re- ceiving a commission as the reward of his exertions.* (e) Del credere agent. — A del credere agent is an agent for the purpose of sale, and in addition to this gives [*348] an undertaking to his employer *that the parties with whom he is brought into contractual relations will perform the engagements into which they enter. He does not guarantee the solvency of these parties or promise to answer for their default : his undertaking does not fall under 29 Car. II. c. 3, § 4, but is rather a promise of indemnity to his employer against his own inadvertence or ill-fortune in making contracts for him with persons who cannot or will not perform them. Agent cannot sue. — It remains to consider whether under any circumstances an agent acting as such for a named principal can acquire rights or liabilities on a con- tract so made. An agent contracting as such, for a named principal, can- not sue upon a contract so made." ' a. Higgins v. Senior, 8 M. & W. 834. 6. Ireland v. Livingston, L. E. 5 H. L. 407; ante, p. 335. c. Bickerton v. Burrell, 5 M. & S. 383. 1 Kent V. Bornstein, 12 Allen, 342; Sharp v. Jones, 18 Ind. 314; Gunn V. Cantine, 10 Johns. 887 ; Doe v. Thompson, 22 N. H. 217 ; Garland v. -Eeypiolds, 20 Me. 45 ; Gilmore v. Pope, 5 Mass. 491. A factor, broker, or one who has a beneficial intei'est in the performance of his contract, for Chap. n. AGENT CONTRACTING FOR NAMED PRINCIPAL. 459 The party with whom he contracted has presumably looked to the named principal, and cannot, unless he so choose, be made liable to one with whom he dealt merely as a means of communication. Nor be sued unless he be party to contract under seal. Nor except in a few cases ^ can he be sued." An agent who makes himself a party to a contract under seal is bound thereby though he is described as agent.* This arises from the formal character of the contract; the rule is best expressed in the words of Parke, B., in Beok- ham V. Dralce," " those only can sue or be sued upon an in- denture who are named or described in it as parties." ^ Or act for a foreign "principal. — An agent who con- tracts on behalf of a foreign principal is held, by the usage of merchants, to have no authority to pledge his employer's credit, and becomes personally liable on the contract."* ' a. Parol contracts have been framed so as to leave it uncertain whether the agent meant to make himself personally liable. But these do not affect the rule. Lennard V. Robinson, 6 E. & B. 185. b. Lewis v. Nicholson, 18 Q. B. 603. c. 9 M. & W. 95. d. Armstrong v. Stokes, L. R. 7 Q. B. 605. commissions, etc., may sustain an action in his own name. Whitehead T. Potter, 4 Ired. (N. 0.) L. 357 ; Steamboat Co. v. Atliins, 33 Pa. St. 532 ; Ewell's Evans Agency, p. 505. 1 An agent is prima facie liable on a contract entered into in his own name, but whether, in a given case, he binds himself personally or not is a question of intention and understanding of the parties. Simonds V. Heard, 33 Pick. 130; Worthington v. Cowles, 113 Mass. 30 ; Wood- bridge V. Hall, 47 N. J. 1,. 388; Michael v. Jones, 84 Mo. 578; Avery v. Dougherty, 103 Ind. 443 ; Bean v. Pioneer Mining Co. 66 Cat. 451 ; Simp- son V. Garland, 76 Me. 203; Bradstreet v. Baker, 14 R. I. 546. The fact that an agent signs a contract, "A. B. , agent," does not relieve him from personal liability, unless the instrument contains apt words indi- cating that the principal is to be bound. Davis v. England, 141 Mass. 587. See Farmers' & Mechanics' Bank v. Colby, 64 Cal. 353. 2Lutz V. Linthicum, 8 Pet. 165; Kiersted v. Orange & A. R. R. Co. 69 N. Y. 343; Hancock v. Yunker, 83 111. 308; Willis v. Bellamy, 53 N. Y. (Superior Ct) 373; Ewell's Evans Agency, 171. 'This principle is recognized in Rogers v. March, 33 Me. 106; McKen- Bie V. Nevins, 23 Me. 138; Merrick's Estate, 5 W. & S. 9. The states of 460 AGENCY. Part VI. Or for a non-existent principal. — If an agent contracts on behalf of a principal who does not exist or cannot contract, he is liable on a contract so made. The case of Kelner v. Baxter" was cited above to show that a [*34:9] *corapany cannot ratify contracts made on its behalf before it was incorporated: the same dase establishes the rule that the agent so contracting incurs the liabilities which the company cannot by ratification assume. " Both on principle and authority," said "Willes, J., "it seems to me that the company never could be liable upon this contract, and construing this document ut res magis valeat quam pereat, we must assume that the parties contemplated that the persons signing it would be personally liable." Remedy against agent wlio contracts without author- ity. — Since the agent is only in these exceptional cases liable upon a contract which he makes as agent, it be- comes important to inquire what is the remedy for one who enters into a contract with a professed agent devoid of au- thority. The remedy is in contract or in tort according as the pro- fessed agent acted hona fide or mala fide in his assumption of authority. On warranty of authority. — If he believed that he had an authority which he did not in fact possess he may be sued upon a warranty of authority. This is an implied or feigned promise to the other party that in consideration of his making the contract the pro- fessed agent undertakes that he has authority to bind his principal. Where directors of a building society borrowed o. L.E.2C.P. 175. the Union are not foreign to each other to such an extent as calls for the application of any such rule. Vawter v. Baker, 23 Ind. 63 ; Taintor v. Pendergast, 8 Hill, 73 ; Oelrich v. Ford, 28 How. 49 : Bray v. Kettell, 1 Allen, 80 ; Barry v. Page, 10 Gray, 398. And in Kirkpatrick v. Strainer, 22 Wend. 361, it is held that this principle cannot be regarded as being necessarily a part of our commercial law. The material question is, to whom was credit given? Ewell's Evans Agency, *198. Caiap. n. AGENT CONTEACTING FOR NAMED PRINCIPAL. 461 money on its behalf, which the society had no power to bor- row, the lender, being unable to recover the loan from the society, sued the directors. They were held liable ex con- tractu as having impliedly undertaken that they had the authority which they did not really possess." " By the law of England, persons who induce others to act on the suppo- sition that they have authority to enter into a binding con- tract on behalf of third persons, on it turning out that they have no such authority, may be sued for damages for the ireach of an implied warranty of authoril/y. This was de- cided in Gollen v. Wright,^ and other cases." ^ The unreality of this warranty of authority makes it open to criticism, since the promise therein involved was probably *never present to the minds of either of [*350] the parties affected by it. But it may not have been easy to find another remedy short of holding the agent per- sonally liable upon the contract. In action of deceit. — If the professed agent knew that he had not the authority which he assumed to possess, he may be sued by the injured party in the action of deceit. a. Richardson v. Williamson, L. E. 6 Q. B. ^i% 6. 8 E. & B. 647. iSee Bigelow's Leading Cases on Torts, 20-43 ; Bartlett v. Tucker, 104 Mass..336 ; Noyes v. Loring, 55 Me. 408 ; Baltzen v. NicoJay, 53 N. Y. 467 ; Taylor v. Shelton, 30 Conn. 133; Hall v. Lauderdale, 46 N. Y. 75; Ewell's Evans Agency, 303. While the agent may be liable upon an impUed warrant of authority, under a declaration framed on such lia- bility, stiU it is a disputed question whether an action may be main- tained against the agen); upon a contract made with him for a named principal, which cannot be enforced against the principal because of the want of authority in the agent to make it. As a rule, contract relations require that the parties must be consenting bargainers, personally or by delegation. Woods v. Ayers,'39 Mich. 351 ; Michigan College v. Charles- worth, 54 Mich. 533. In Simpson v. Garland, 76 Me. 306, Danforth, J., said : " An agent acting without authority may be liable m an action for deceit, but certainly not in a suit upon a contract into which he never entered. This seems to be clear upon principle, and is supported by a decided preponderance of authority. It may be considered as well settled law in this state and Massachusetts. In New York, while the earlier decisions were opposed, the later are in favor." 463 AGENCY. Part VI. The case of Polhill v. Walter" is an illustration of this. The defendant accepted a bill as agent for another who had not given him authority to do so. He knew that he had not the authority but expected that his act would be ratified. It was not ratified, the bill was dishonoured, and the defend- ant was held liable to an indorsee of the bill as having made a representation of authority false to his knowledge, and falling under the definition of Fraud given in a previous chapter. III. Eights and Liabilities of the Parties where the Principal is undisclosed. Where the name of the Principal is not disclosed. Where Principal is unnamed. — A man " has a right to the character, credit and substance of the person with whom he contracts ; " * if therefore he enters into a contract with an agent who does not give his principal's name, the pre- sumption is that he is invited to give credit to the agent. Still more if the agent do not disclose his principal's exist- ence. In the last case invariably, in the former case within certain limits, the party who contracts with an agent on these terms gets an alternative liability and may elect to sue agent or principal upon the contract. Agent not liable if he contract as agent. — Wherfe an agent contracts as agent but does not disclose the name of his principal, the rights and liabilities of agent and prin- cipal as regards the other party to the contract must depend on the construction of its terms." The law on this part of the subject is made difficult by the existence of a general rule imposing liability on the agent, if the other part}'- choose to enforce it, while the exceptions are wide and the applications of the rule in reported cases are few. [*351] *Perhaps it is safe to state, in the light of the most recent authorities, that an agent who describes him- o. B. & Ad. 114. 6. Per Demnan, C. J., in Humble v. Hunter, 12 Q. B. 317. c. Thomson v. Davenport, 9 B. & 0. 78. Chap. n. THK UNNAMED PRINCIPAL. 46a self as such in the contract, and signs himself as such, if the contract be in writing, protects himself against liability. " There is no doubt at all in principle," said Blackburn, J., in Fleet v. Murtonf' " that a broker as such, merely deal- ing as broker and not as purchaser, makes a contract, from the very nature of things, between the buyer- and seller and is not himself either buyer or seller, and that consequently where the contract says ' sold to AB ' or ' sold to my prin- cipals ' and the broker signs himself simply as broker he does not make himself by that either the buyer or the seller of the goods." * Unless credit be giTcn to him. — But it may appear, on the face of the contract, or from the conduct of the parties, that credit is given to the agent, and that he is intended to be made liable upon the contract. It may be assumed, in the absence of words strongly and distinctly expressive of agency," that one who .deals with an agent for an unnamed principal intends to take the alternative liability of the principal and the agent.^ Or usage make him liable. — But even where the agent is distinctly described to be such, the usage of particular trades, as in Fleet v. Murton,^ or the general rule that an agent acting for a foreign principal has no authority to pledge his credit, may make the agent liable." Where a man has under these circumstances contracted as agent, he may as against the party with whom the con- tract is made declare himself to be the real principal. The other party to the contract does no doubt lose the alter- o. L. E. 7 Q. B. 126. 6. Southwell V. Bowditch, 1 C. P. D. (C. A.) 374. c. Thompson v. Davenport, 9 B. & C. 78. d. L. E. 7 Q. B. 126. e. Armstrong v. Stokes, L. E. 7 Q. B.'605. 1 If the agent would avoid being bound personally, he should, at the time of making the conti-act, disclose the name of his principal and de- clare that he acted for him. Murphy v. Helmrich, 66 Cal. 69 ; Texas Land and Cattle Co. v. Carroll, 63 Tex. 48; Kean v. Davis, 20 N. J. L. 435; Wheeler v. Reed, 36 lU. 83. 464 AGENCY. Part VI. native liability of the agent or the unnamed principal. Yet, if he was willing to take the liability of an unknown per- son, it is hard to suppose that the agent was the one man in the world with whom he was unwilling to contract ; and at any rate the character or solvency of the unnamed priacipal could not have induced the contract. Thus in Schmalz v. Avery, ^ the plaintiff sued on a contract of charter-party into which he had entered " on behalf of another party," with the defendant. No, principal [*352] was named and it *was held that the plaintiff might repudiate the character of agent and adopt that of principal. Where the existence of the Principal is undisclosed. Alternative liability where principal is nndisclosed. — If the agent acts on behalf of a principal whose existence he does not disclose, the other contracting party is entitled to elect whether he will treat principal or agent as the party with whom he dealt.^ The reason of this rule is plain. If A enters into a contract with X he is entitled at all events to the liability of the party with whom he supposes him- self to be contracting. If he subsequently discovers that X is in fact the representative of M he is entitled to choose whether he will accept the actual state of things, and sue M as principal, or whether he will adhere to the supposed state of things upon which he entered into the contract, and continue to treat X as the principal party to it. A difficulty of evidence was suggested in some of the earlier cases in which it was desired to prove that the parties who appeared on the face of a written contract were not the only parties; that one was only an agent though contracting in his own name. a. 16 Q. B. 655. iMalone V. Morton, 84 Mo. 436; Bartlett v. Raymond, 139 Mass. 275; Merrill v. Wilson, 6 Ind. 426; Eoyce v. Allen, 28 Vt. 234; Pierce v. John- son, 34 Conn. 274; Beymer v. Bonsall, 79 Pa. St. 298; dobbv. Knapp, 71 N. Y. 348; Welch v. Goodwin, 123 Mas?. 171. Chap. II. THE UNDISCLOSED PRINCIPAL. 465 Defense against agent available against principal.— But the law may be thus stated where a contract is osten- sibly made between A and X" A may prove that X is agent for M with a view of fixing M with the liabilities of the contract. But X may not prove that M is his prin- cipal with a view to escaping the liabihties of a contract' into which he induced A to enter under the supposition thatjie (X) was the real contracting party. A is entitled under these circumstances to be maintained in the same position which he would have occupied if X had been the real contracting party; and though the real principal is en- titled to sue upon such a contract, A may set .up as against him any defence which he might have used against the agent. Thus where a principal sells goods through a factor who has authority to effect sales in his own name : if he inter- vene and sue a purchaser for the price he may be met by any *set-ofl which the purchaser may have [*353] against the factor in the course of his transactions with him.* Alternative liability, how concluded. — But the right of the other contracting party to sue agent or principal — to avail himself of an alternative liability — may, in various ways, be so determined that he is limited to one of the two and has no longer the choice of either liability. (a) The agent may contract in such terms that the idea of agency is compatible with the construction of the con- tract.' a. Higgins v. Senior, 8 M. & W. 834; Trueman v. Loder, 11 Ad. & E. 587. 6. Borries v. Imperial Ottoman Bank, L. R. 9 0- P. 38. 1 While parol evidence, as a general rule, may be received to charge an undisclosed j)rincipal under a written contract, still bills of exchange and promissory notes, under the law merchant and the statute of Anne, are exceptions to this rule. The agent cannot escape personal liability unless it appear from the face of the bill or note that he intended to bind his principal. A promissory note containing no words to charge the ■ principal, signed "A. B., agent," binds A. B. only. WiUiams v. Bob- bins, 16 Gray, 77; De Witt v. Walton, 9 N. Y. 571; American Ins. Co. 30 468 AGENCY. Part VI. Thus where an agent in making a charter-party described himself therein as owner of the ship it was held that he could not be regarded as agent, that his principal could not intervene, nor could, by parity of reasoning, be sued." (5) If the other party to the contract, after having dis- covered the existence of the undisclosed principal, do any- thing unequivocally indicating that he adopts either principal or agent as the party liable to him, his election is deter- mined and he cannot afterwards sue the other.^ So too if, before he ascertain the fact of agency,' he sue the agent and obtain judgment, he cannot afterwards re- cover against the principal. But the mere bringing of an action while in ignorance of the agency would not thus determine his rights. " For it may be that an action against one might be discontinued and fresh proceedings be well taken against the other." " ^ (o) Again, if, while exclusive credit is given to the agent, the undisclosed principal pays the agent for the price of goods sold to him, he cknnot be sued when he is discovered to be the purchaser. If A buys goods from X on behalf of M, whose existence he does not disclose, and M before he is known to be principal pays the price to A, ilf cannot be sued by X"* But the case is different where the existence of a principal is known though his name is not disclosed. There the other contracting party presumably looks beyond the agent to the credit of the principal. " The essence of such a trans- action," said Bo wen, J., in Irvine v. Watson,' "is that the o. Humble v. Hunter, 12 Q. B. 310. 6. Per Lord Cairns, Hamilton v. Kendall, 4 App. Ca. 514. 0. Priestly v. Fernie, 3 H. & 0. 984. d. Armstrong v. Stokes, L. E. 7 Q. B. 599. e. 5 Q. B. D. 107; (C. A.) 414. V. Stratton, 59 la. 696. See Ewell's Evans Agency, 177, where the American cases are collected, 1 Coleman v. First Nat. Bk. 53 N. Y. 388; Kinsley v. Davis, 104 Mass. 178. Contra, Beymer v. Bonsall, 79 Pa. St. 298; Sohepflin v. Dessar, 30 Mo. App. 569. 2 Cobb V. Knapp, 71 N. Y. 348; Ferry v. Moore, 18 ffl. App, 135. Chap. II. LIABILITY FOR AGENT'S FRAUD. 467 seller as an ultimate resource looks to the credit of some one to pay him if *the agent does not. Till the [*354] agent fails in payment the seller does not want to have recourse to this additional credit. It remains in the background : but if before the time comes for payment, or before on non-payment by the agent recourse can fairly be bad to the principal whose credit still remains pledged, the principal can pay or settle his account with his own agent he will be depriving the seller behind the seller's back of his credit." Liability of Principal for Fraud of Agent. Is that of an employer for that of his servant. — It has been settled after some division of opinion in the Courts that the principal is liable to an action for Deceit for the fraud of his agent, if the fraud was committed in the ordi- nary course of his employment. The liability of the prin- cipal is in no wise different from that of an employer who is responsible for wrongful acts done by those in his service, within the scope of their employment." A man is equally liable for the negligence of his coachman who runs over a foot passenger in driving his master's carriage from the house to the stables, and for the fraud of his agent who, being instructed to obtain a purchaser for certain goods, obtains one by false statements as to the quality of the goods.' But if 'the person employed act beyond the scope of his employment he no longer represents his employer to bind him by tort or contract. In Udell v. Atherton * the defend- ant's agent was employed to sell a log of mahogany; he was not authorised to warrant its soundness^ but he did so knowing it to be unsound. Bramwell and Martin, B. B., a. Barwick v. English Joint Stock Bank, L. K. 3 Ex. 259. 6. 7H. &N. 173. 1 Wolfe V. Pugh, 101 Ind. 393; Stroher v. Elting, 97 N. Y. 103; John- son V. Barber, 10 lU. 435; Smith v. Tracy, 36 N. Y. 79; Jeffreys v. Bige- low, 18 Wend. 518; Henderson v. Railroad Co. 17 Tex. 560. 468 AGENCY, Part VL held that the employer was not liable for deceit: nor could the contract be avoided, because the parties could no longer be replaced in their previous positions, for the log had been sawn up and partly used. The rights of the parties may be stated to be as follows : If the agent commits a fraud in the course of his em- ployment, he is liable, and so is his principal. [*355] *If he commits a fraud outside the scope of his authority, he would be liable, but not his principal. In either case the other party would be entitled to avoid the contract upon the conditions described at the conclusion of the chapter on Fraud. But the law is by no means clear where a principal allows his agent to make a statement which he knows, but which the agent does not know, to be false. It might be difficult to sue either principal or agent for deceit ; for the one did not make the statement, and the other honestly believed it to be true. But there is reason to suppose that a contract would be vitiated by a fraud of this nature in the absence of any technical point in its favour." a. Benjamin on Sales, p. 370; National Exchange Co, of Glasgow v. Drew, 2 Macq. H. L. C. 103. OHAPTEE III. Determination of Agent's Authority. An agent's authority may be determined in any one of three ways: by agreement; by change of status; or by death. (i) Agreement. Agreement. — Since the relation of principal and agent is that of employer and employed, a relation founded on mutual consent, it follows that the relation may be brought to a close by the same process which originated it, the agreement of the parties. Where this agreement is expressed by both parties, or where, at the time the authority was given, its duration was fixed, the matter is obvious and needs no discussion. Revocation a condition subsequent. — Where authority is determined by revocation it must be borne in mind that the right of either party to bring the relation to an end by notice given to the other is a term in the original contract' of employment.' Limits of right to revoke. — But the right of revocation together with the right of limitation of the agent's author- ity is affected by a rule laid down earlier. A principal may not privately limit or revoke an authority which he has al- lowed his agent publicly to assume. He will be bound by the acts of the agent which he has given other persons rea- son to suppose are done by his authority. 1 Providence Gas Burner Co. v. Barney, 14 R. I. 18 ; Tucker v. Law- rence, 56 Vt. 467 ; Baudouine v. Grimes, 64 la. 370 ; Simpson v. Carson, 11 Or. 561; Darrow v. St. George, 8 Col. 593; Pickler v. State, 18 Ind, 470 AGENCY. Part VI. The case of Debenham v. Mellon " is a good illustration of the nature and limits of this right of revocation. Illustration from case of husband and wife. — A hus- band who supplied his wife with such things as might be considered necessaries for her forbade her to pledge his credit ; any authority she might ever have enjoyed for [*357] *that purpose! was thereby determined. She dealt with a tradesman who had not before supplied her with goods on her husband's credit and had no notice of his refusal to authorize her dealings. He supplied these goods on the husband's credit and sued him for their price. It was held that the husband was not liable, and the following rules were laid down in the judgments given. (a) Marriage no authority. — Marriage does not of itself create by implication an authority from the husband to the wife to pledge the husband's credit; except in such cases of necessity as we have described above.** The wife therefore can only be constituted her husband's agent by express authority or by a course o| conduct amounting to an estoppel. (5) But may raise a presumption from conduct. — "Where the husband has habitually ratified the acts of his wife in pledging his credit, he cannot, as regards those whom he has induced to look to him for payment, revoke her authority without notice. The law is thus stated by Thesiger, L. J. : « " If a tradesman has had dealings with the wife upon the credit of the husband, and the husband has paid him without demur in respect of such dealings, the tradesman has a right to assume, in the absence of notice to the contrary, that the authority of the wife which the husband has recognised continues. The husband's quiescence in such a case amounts to acquiescence, and forbids his denying an a. B Q. B. D. 394; 6 App. Ca. M. b. See p. 336. c. 5 Q. B. D. 403. 1 Sawyer v. Cutting, 23 Vt. 486 ; Savage v. Davis, 18 Wis. 608; Guilick V. Grover, 31 N. J. L. 182. Chap. III. TERMINATION OF AUTHORITY —BY AGREEMENT. 471 authority which his own conduct has invited the tradesman to assume." ^ (c) Otherwise wife's authority reTOcahle without no- tice. — But in the absence of such authority arising from conduct the husband is entitled as against persons dealing with his wife to revoke any express or implied authority which he may have given her, and to do so without notice to persons so dealing. " The tradesman must be taken to know the law; he knows that the wife has no authority in fact or in law to pledge the husband's credit even for neces- saries, unless he expressly or impliedly gives it her, and that, what the husband gives he may take away." " *The case of husband and wife is perhaps the best, [*358] as it is the strongest, illustration of the limits within Avhich the principal may revoke an authority consistently with the rights of third parties. Authority coupled with interest is irrevocable. — But there is a further limitation, in favour of the agent, of the principal's right of revocation. It is laid down as a gen- eral rule that " an authority coupled with an interest is irrevocable." The cases which illustrate this rule seem to make it clear that we must not understand by such an interest as is here meant the advantage which the agent may derive from a continuance of the authority, or the inconvenience, or even the loss which he may suffer by its revocation.^ What is an interest ? — An authority given to an agent to pay to a third party a debt which he owes to his princi- pal, or to sell lands and pay himself a debt due to him out of the proceeds, are instances in which an interest has been held to be coupled with the authority so as to make it irrev- a. Per Xhesiger, L. J., 5 Q. B. D. 403. 1 Gates V. Brown, 9 N. Y. 205. 2 Wheeler v. Knaggs, 8 Ohio, 169; Guthrie v. Wahash R. E. Co. 40 111. 109; Kindig v. March, 15 Ind. 348; Barrv. Schroeder, 33 Cal. 609; Hutohins v. Hebbard, 34 N. Y. 34; Chambers v. Seay, 73 Ala. 373; Simpson v. Carson, 11 Or. 361. 473 AGENCY. Part VI. ocable. The " result appears to be," said "Wilde, 0. J., in Smart V. Sandars,'* "that where an agreement is entered into on sufficient consideration, whereby an authority is given for the purpose of conferring some benefit on the donee of that authority, such an authority is irrevocable; That is what is usually meant by an authority coupled with an in- terest." A more extended interpretation has been given to the term in a recent case, which for purposes of illustration we will compare with Smart v. Sandars? In Smart v. Sandars a factor who had made advances on account of his principal sold goods of the latter, contrary to his orders, in order to repay himself. He alleged an authority to sell; an interest in the proceeds, arising from the advances ; and so, an irrevocable authority. It was held that such a contention could not be sup- ported. In Bead v. Anderson" an agent who had made bets on account of his principal paid the bets of the latter, contrary to his orders, to avoid being noted as a defaulter at [*359] *Tattersairs. He alleged an authority to make and pay bets, an interest arising from his liability in- curred at Tattersall's ; and so, an irrevocable authority. It was held by Hawkins, J., that the liability incurred was an " interest " which made the authority irrevocable. It is difficult to reconcile the two decisions, and unless Bead v. Anderson can be admitted to have altered the law on this subject, one may venture to say that, in so far as the decision in that case rests on the irrevocability of the agent's authority, it could not be sustained. It is true enough to say that a principal must indemnify his agent for any loss sustained or liability incurred in the course of the agency : it can hardly be true to say that such loss or liability in- curred deprives the principal of his power of revocation. The Court of Appeal in dealing with this case did not rest o. B 0. B. 917. b. 5 C. B. 895. c. 10 Q, B. D. 100. (Dhap. m. TERMINATION OF AUTHORITY— BY AGREEMENT. 473 its decision on the ground of an authority coupled with an interest, but on the view expressed by Bowen, L. J., that "there is a contract of employment between the principal and the agent which expressly or by implication regulates their relations ; and if as part of this contract the principal has expressly or impliedly bargained not to revoke the au- thority and to indemnify the agent for acting in the ordi- nary course of his trade and business, he cannot be allowed CO break his contract." " We may safely therefore limit the principle of the "au- thority coupled with an interest " in its application to the circumstances described by Wilde, 0. J., in Smart v. San- dars? The peculiar results flowing from the decision in Read, v. Anderson have been noted elsewhere. (ii) Change of Status. Bankruptcy of the principal determines, and before 1883 marriage of the principal determined authority given while the principal was solvent, or sole." Insanity. — It is still open to question whether insanity annuls an authority properly created while the prin- cipal was yet sane. *The latest case on this point [*360] is Drew v. Nunn.^ The defendant there, being at the time sane, gave an authority to his wife to deal with the plaintiff; he then became insane; the wife continued to deal with the plaintiff and gave no notice of the insanity of her husband; the defendant recovered and resisted pay- ment for goods supplied to his wife while he was insane.^ a. I3Q. B. D. 782. 6. 5 C. B. 917; ante, p. 203. e. Oliamley v. Winstanley^ 5 East, 266; Mlnett v. Forester, 4 Taunt. 54. d. 4 Q. B. D. 689. 1 Insanity of the principal revokes or suspends for the time being the agent's authority ; but if the principal has enabled the agent to hold himself out as having authority, and the after-occurring incapacity of the principal is not known to those who deal with the agent, within the scope of the authority he appears to possess, the transaction may be held binding upon the principal. Davis v. Lane, 10 N. H. 156 ; Mathie- son, etc. Refining Co. v. McMahon, 38 N. J. L. 536 ; Motley v. Head, 48 474 AGENCY. Part VI. The Court did not expressly decide how insanity afifected the continuance of an authority, but held that " the defend- ant, by holding out his wife as agent, entered into a con- tract with the plaintiff that she had authority to act on his behalf, and that until the plaintiff had notice that this au- thority was revoked he was entitled to act upon the defend- ant's representations." But Brett, L. J., expressed his opinion "that insanity does put an end to the agent's au- thority;" and Bramwell, L. J., considered it a question of degree, whether the insanity affected the authority or not ; " in order to annul the authority of an agent insanity must amount to dementia." Cotton, L. J., expressed no opinion on this point. The law therefore is so far unsettled, but it would seem that knowledge of the defendant's insanity might have dis- entitled the plaintiff to rely on the authority of the wife ; for the decision in his favour rested mainly on the ground that the authority had been made known to him, but not the insanity which might have annulled it. In fact the de- fendant seems to have been held liable rather on the ground of his own representations than on the agency of his wife. It is possible that, since 1883, the wife who knowing that her husband was insane continued to exercise an authority once given by him, might be sued on a warranty of au- thority." Death of Principal. Death. — The death of the principal determines at once the authority of the agent, leaving the third party with- out a remedy upon contracts entered into by the agent when ignorant of the death of his principal. * ' The agent a. Collen v. Wright, 8 E. & B. 601. 6. Smout V. nbeiy, 10 M. & W. 1. Vt. 633. This rule does not apply where the power is coupled with an interest. In such case the incapacity of the principal does not suspend the agent's authority. Id. ^ iGalt V. Galloway, 4 Pet. 333; Harper v. Little, 2 Me. 14; Gale v. Tappan, 13 N. H. 175; Davis v. Windsor Bank, 46 Vt. 738; Lewis v. Kerr, 17 Iowa, 73. Chap. ni. TERMINATION OF AUTHORITY. 475 is not personally liable, *as in Kelner v. Baxter,'* [*361] as leaving contracted on behalf of a non-existent principal ; for the agent had once received an authority to contract. JSTor is he liable on a warranty of authority as in Collen v. Wright; for he had no means of knowing that his authority had determined. Nor is the estate of the de- . ceased liable ; for the authority was given for the purpose of representing the principal and not his estate.* The case seems a hard one, but so the law stands at present. It wouLl appear probable however, from some expressions of Brett, L. J., in Drew v. Nunn," that the Court of Appeal might be disposed to attach liability to the estate of the deceased principal, should the question again arise. o. L. K. a C. p. 184. 6. Blades v. Free, 9 B. & C. 167 c. 4 Q. B. D. 661. ■* CONTEAOT AND QUASI CONTEACT. It is necessary to touch briefly upon, certain, kinds of legal obligation which, for want of a better name, we call Quasi Contract, and which have been invested with the form of a fictitious or implied agreement. In dealing with Form and Consideration we mentioned that an informal acquisi- tion of benefit hy one party at the expense of another, cre- ating a liability to make a return, seemed to be at the root of the contract He in Koman law, and the contract arising upon executed consideration in English law. It is not improbable that the relation which we call quasi contract, or *' contract implied in law," " and the genuine contract arising upon consideration executed, sprang alike from this notion of the readjustment of proprietary rights.' It may well be that the idea of Agreement expressed in offer and acceptance was not applied at first to that which we now call contract arising upon consideration executed, and that such genuine contracts were only by degrees dis- entangled from quasi contract. A passage in Gains points to the blending of the two conceptions. After illustrating the nature of the contract He, by the instance of Mutuum or loan for consumption, he goes on to say, " is qui non debitum accepit ab eo qui per errorem solvit, re oUigatury " It is true that he immediately points out the difference in character between the two obligations ; but it is significant that they were regarded as so nearly allied. And the ap- plication in English law of the action of Debt indicates a similar connexion, in early law, of the two sources of lia- bility. a. Leake on Contract, p. 75. b. By the time of Justinian this legal relation had been definitely assigned to the province of Quasi Contract. Institutes, ill, 27. 6; Gaius, 3, § 91. CONTRACT AND QUASI CONTRACT. 477 Debt.— *But it is the change of remedy in English [*363] law from Debt to Assumpsit, more than this possible community of origin with certain forms of true contract, which has invested the "contract implied in law" with so much of the outward aspect of Agreement. Debt was the remedy for cases of breach of a promise made upon consideration executed, where such a breach resulted in a liquidated or ascertained money claim: and later, this action came to be applied to any breach of contract result- ing in a similar claim." And Debt was also the remedy in cases where statute, common law, or custom laid a duty upon one to pay an ascertained sura to another. Assnmpsit. — The action of Assumpsit was primarily an action to recover an unliquidated sum, or such damages as the breach of a promise had occasioned to the promisee, and it was in the first instance inapplicable to legal liabilities arising otherwise than upon a contract springing from mut- ual promises. Wager of law. — ; But there were certain inconveniences attaching to the action of Debt. It admitted of the em- ployment by the defendant of a mode of defence termed " "Wager of law." * This determined the result of the action, not upon the merits, but by a process of compurgation, in which the defendant came into Court and declared upon oath that he did not owe the debt, and eleven respectable neighbors also declared upon oath that they believed him to speak the truth. Again, the technical rules of pleading made it impossible to include in the same suit an action of debt and an action of assumpsit, an action for liquidated and one for unliquidated damages, inasmuch as the one was based upon contract real or feigned, the other upon a form of wrong, the non-feasance of an undertaking. And so the history of pleading in relation to contract is in great part the history of the encroachment of the action of Assumpsit upon the field of the action of Deht. a. See authorities collected in Pollock on Contract, pp. 139, UO; Comyn'B Digest, title Debt. 6. Blackstone, Comm. iii, 311. 478 CONTRACT AND QUASI CONTRACT. It was for some time doubtful whether assumpsit would lie where the action was brought upon a breach of [*364] contract ^resulting in a liquidated claim; for a debt rather than for damages. But it was decided in Blade's case'^ that an action of assumpsit would lie though the contract resulted in a liquidated claim. Indebitatus counts. — The next step was this : where the breach of a contract resulted in a liquidated claim, the plead- ings in the action of assumpsit were reduced to a short state- ment of a debt originating in a request by the defendant, and a promise by him to pay. This was still almost a nov- elty in the reign of Anne. Henceforth the action of as- sumpsit possessed great practical convenience.* It enabled claims arising from contract to be variously stated in the same suit, in the form of a special agreement which had been broken, and in the form of a debt resulting from an agreement and consequently importing a promise to pay it. Such a mode of pleading was called an indebitatus count, or count in indebitatus assumpsit; the remedy upon a special contract which resulted in a liquidated claim was now capable of being reduced to the shape of an action for debt with the addition of a promise to pay it. In this form it came to be applied to those kinds of legal liability which had given rise to the action of Debt,'' though devoid of the element of agreement, and thence to all cases where A was liable to make good to X a sum gained at X's expense. The legal liability thus clothed in the form of contract, cannot be omitted from the treatment of our subject if only for the sake of distinguishing feigned from true Offer and Acceptance. For the convenience of the remedy certain legal liabilities have been made to figure as though they sprang from contract, and have appropriated the form of Agreement. It is enough to say, as regards the later history of the subject, that the Common Law Procedure Act of a. 4 Co. Eep. 92. 6. See expressions of Holt, C. J., quoted ia Hayea v. Warren, 3 Str. 938. c. Moses T. Macf erlan, % Burr. 1008. CONTRACT AND QUASI CONTEACT. , 479 1852 " practically abolished the distinction between Assump- sit and Debt, by making it no longer needful that a plaintiff should specify the form in which his action is brought, by allowing the joinder of various forms of action in the same *suit, and by providing for the omission of [*365] the feigned promise from the statement of the cause of action. The form of pleading, in such cases as resolved themselves into a simple money claim, was reduced to a short statement of a debt due for money paid or received ; and now the Judicature Act has abolished formal plead- ings, and has substituted for the indebitatus counts a simple indorsement upon the writ of summons. Nevertheless, although the form no longer exists, the legal relations of the parties remain unchanged, and the ob- ligation to which the action of Assumpsit conveyed a faJse air of agreement continues to furnish a cause of action, though that cause of action is now to be stated as it really exists. f It is rather in deference to its historical connexion with contract, than to actual propriety of arrangement, that we briefly notice the kinds of legal relation which once, in the pleader's hands, wore the semblance of proposal and ac- ceptance. The liability of which we speak may arise either' from the judgment of a court of competent jurisdiction, or from the acts of the parties. Judgment. — As to the former, it is enough to say that the judgment of a court of competent jurisdiction, order- ing a sum of money to be paid by one of two parties toi another, is not merely enforceable by the process of the court, but can be sued upon as creating a debt between the parties, whether or no the Court be a Court of Record.* Acts of parties.— The acts of the parties may bring about this obligation either (1) from the admission by one of a claim due to the other upon an account stated, or (2) a. 15 & 16 Vlot. c. 76, §§ 3, 41. 6. Williams t. Jones, 13 M. & W. 628. 480 CONTEACT AND QUASI CONTRACT. from the payment by one of a sum whicli the other ought to have paid, or (3) from the acquisition by one of money which should belong to the other. (1) Account stated. — An account stated is an admission by one party who is in account with another that there is a balance due from him." The admission that a [*366] balance is due imports a promise *to pay upon re- quest, which may be sued upon as though it created a liability ex contractu} (2) Money paid by A for the use of X. — It is a rule of English law that no man " can make himself the creditor of another by paying that other's debt against his will or without his consent." " But if A requests or allows Xto assume such a position that X may be compelled by the law to discharge ^'s legal liabilities, the law imports a request and promise made by J. to X, a request to make the payment, and a promise to repay. The payment by one of several co-debtors of the entirety of the debt will entitle him to recover from each of the others his proportionate share. In such a case a request to pay and a promise to repay were feigned in Order to bring plaintiff within the remedy of assumpsit, and he could re- cover his payment from his co-debtors as money paid to their use." And in like manner a lodger, who has paid the rent of his landlord under a threatened distress of his goods, may recover the amount which he has thus been compelled to pay-' But legal liability incurred by X on behalf of A without any concurrence or privity on the part of A, will not entitle Xto recover for money which under such circumstances he may pay to A's use. The liability must have been in some a. Irving v. Veitoh, 13 M. & W. 106. 6. Hopkins v. Logan, 5 M. & W. 241. c. Per Willes, J., in Johnson t. Bojal Mail Steam Packet Co. L. B. 8 C. P. 43. d. Kemp vTFindon, 18 M. & W. 423. 0. Ezall T. Fartridge, 8 T. B. 308. , ^ CONTRACT AND QUASI CONTRACT. 481 manner cast upon X by ^. Otherwise the mere fact that X has paidwxvilQv compulsion of law Avhat A might have ieen compelled to pay, will give to Xno right of action against^. X may have been acting for his own benefit and not in consequence of any request or act of A. For instance, X was entitled under a bill of sale to seize A's goods ; he did so, but left them on J.'s premises till rent fell due to A's landlord. The landlord distrained the goods. X paid the rent and then sued A for the amount paid as having been paid to his use. It was held that the facts gave X no right of action. " Having seized the goods under the *bill of sale, they were his ab- [*367] solute property. He had a right to take them away ; indeed it was his duty to take them away. He probably left them on the premises for his own purposes, ... at all events t/iey were not left there at the request or for the henefit of the defendant." " The right to an indemnity which is possessed by one whom circumstances make an agent of necessity for another may be classed among these forms of quasi-contractual ob- ligation. A places X in a certain relation to himself with- out giving him authority to do acts which their relations may necessitate. Xis compelled to act as though he pos- sessed such authority, and the law will then presume that its exercise was requested by A and agreed to by X. (3) Money received Iby X for the use of A. — There are a number of cases in which A may be called upon to repay to X money which has come into his possession under cir- cumstances which disentitle him to retain it. This class of cases, though at one time in the hands of Lord Mansfield it threatened to expand into the vagueness of " moral obligation," is practically reducible to two groups of circumstances now pretty cleaiiy defined." The first of these are cases of money obtained by wrong, of which payments under contracts induced by fraud, or o. England v. Marsden, L. R. 1 C. P. 529. See p. 338. 6. Moses V. Macferlan, 2 Burr. 1010. 31 483 CONTRACT AND QUASI CONTRACT. duress, have afforded us some illustrations ; the second are cases of money paid under such mistake of fact as creates a belief that a legal liability rests on the payer " to make the payment.* It would not fall within the limits of our subject to deal with cases of this nature. a. Harriot t. Hampton, 2 Sm. L. C. 356, and notes thereto. 6. To these is sometimes added the liability arising to repay money paid upon a con- sideration which has wholly failed, but this it would seem is based upon genuine con- tract, the breach of which with its consequences was thus, shortly stated in an irtdebitatrts count ADDENDA. Page 20. The case of Canning v. Farquhar decided in the Court of Appeal and reported in the Times of March 8, 1886, may serve as an illus- tration of the lapse of an offer from a change of the circumstances under ■which the offer was made. But the case is interesting from various aspects. A wished to insure his life with an insurance company X. Xassented to an insurance on the basis of A'a proposal, but with a condition that there was to be no insurance made until the first premium was paid. Before the first premium was paid A met with an accident from the effects of which he shortly died : but after the accident and before his death the premium was tendered on his behalf. X having learned the altered character of the risk, refused to grant a policy, and the Court held that X was not bound to do so. At first sight it would seem as though, a contract having been made by offer and acceptance with a condition that A was not to be entitled to performance until a particular event — the payment of the premium — had taken place, X was relieved from performance upon the happening of quite another event, the occurrence of the accident. But in truth there was no contract, the seeming promise of the company to insure upon certain terms was no more than an expression of willingness to enter into a contract if certain conditions were fulfilled. This becomes plain if it is borne in mind that X would have had no cause of action if A had changed his mind and never tendered the premium. The promise to insure, if one may call it a promise, was without consideration, X had made an offer, and the tender of the premium, circumstances re- maining the same, would have constituted an acceptance of the offer and turned it into a promise. Circumstances changed, and it was open to X to say that, as it was no longer possible for the offer to be accepted under the conditions in which it was made, the offer lapsed, and he was entitled to refuse the tendered premium as amounting to a new offer to insure. Page 47, line 3 from foot, after the words real estate read the words whether named in the specialty or not (Conveyancing Act 1881, s. 59, sub-s. 1). [ANSON, Law of Contract.] INDEX. PACnJO BKFEBS TO STAR PAGES. A. Acceptance of ofiEer of contract, 4, 13-16. must be absolute and uncondi- tional, 19. its effect in concluding contract, 4,33. communication of it, requisite to constitute agreement, 4, 14-18. may be made by conduct, 14. rules as to contracts made by correspondence, 30-24. motive of acceptance immaterial, 33. Accord and Satisfaction: a form of discharge of right of action, 315. accord without satisfaction may affect measure of damages, 263. what constitutes accord and sat- isfaction, 85, 315. Account stated : creates an obligation quasi ex contractu, 365. Acquiescence: how far equivalent to accept- ance, 15. in fraud, affirms contract, 163. in breach of condition turns it into a warranty, 143, 306. in act of agent amounts to rati- fication, 388, 357. Act of God: a form of condition subsequent, 266. an accepted risk in charter-party and carrier's contract, 366. definition of, 366, 367, 367, n. Act of Parliament: see Statute. Action : of assumpsit, 39, 40, 364, 365. of covenant, 38. of debt, 38, 39, 364, 365. of detinue, 39. of deceit, 139, 153, 163. Action; effect on contractual rights of bringing action, 319. right of action, as a form of obligation, 7. arises upon every breach of con- tract, 266, 308. how discharged, 814-819. Adequacy: of consideration not regarded in courts of law, 70-83. of consideration how regarded in equity, 73, 164. Admission : of written contract how made, 340. Advertisement: offer made by, 13, 33, 34. acceptance of by act, a consider- ation executed on request, 91. Agency: a form of contract of employ- ment, 317, 330. to sign contract under 29 Car. II, c. 3, § 4, 57. to make payment or acknowl- edgment of debt barred by lapse of time, 54. personal capacity to contract not needed in agent, 333. mode of giving authority, 333- 338. ratification, rules as to, 336, 337. special and general agency, 345. kinds of professional agency, 346, 847. agency from course of conduct, 333, 384. agent's authority how far capable of restriction, 334, 345, 356. agent's authority how far revo- cable, 856-861. rule .as to delegation of authority, 343, 344. rights and liabilities of agent and principal inter se, 339-344. INDEX. Agency: agent when personally liable, 351-354. liability of principal for agent's fraud, 354. rules as to unnamed principal, 350-353. rules as to undisclosed principal, 353, 353. rules as to warranty of authority, 349. Agent: to sign contract under 39 Car. 11. c. 3, § 4, 57, 58, 346. Agreement: the origin of contract, 1, 7, 9. its analysis, 2, 3. its definition, 3. a source of obligation, 7. informal, 18, n. to be reduced to writing, 18. assignmentof contract by, 330,331 discharge of contract by, 258. waiver, or agreement to cancel a contract, 358. substituted contract discharg- ing a previous one, 361. provisions for discbarge, 264- 268. forms needed for discharge by agreement, 368. determination of agency by, 856- 359. Alien: his capacity to contract, 104. alien enemy, contract with such illegal, 181. Alteration of instrument: circumstances under which it effects dischai-ge, 327. eflfects of spoliation, 337, n. Ambiguity: latent and patent, 348. Arbitration : agreements to refer to, 185. Arliflciality of construction: as limiting powers of corporate bodies to contract, 114, 115. Assignment: a form of operation of contract, 307. of liabilities can only take place by new agreement, 319. or on transfer of interests in land, 319, 333-335. of rights at common law can only take place by new agree- ment or by custom of mer- chants, 230, 831. Assignment: in equity subject to rules as to notice and title, 321 sqq. by statute in certain cases, 234, 325. of covenants on transfer of in- terests in land, 332-335. of contracts of deceased to his representatives, 235. of contracts of bankrupt to his representatives, 386. Assignment under American Stat- utes: what is assignable, 334, n. form of assignment, 334, n. notice, 334, n. equities, 334, n. Assumpsit: a form of trespass on the case, 39, 40. history of its encroachment on sphereof action of debt, 368, 364. history of its application to rights quasi ex contractu, 365. Attestation: if necessary to the validity of a deed, witness' evidence is needed to prove the deed, 340. Auctioneer: his liabilities on advertisement, 34, 35. his riglits and duties as a general agent, 347. his memorandum, 68, n. Autliority: see Agency. warranty of, 304, 349. general and special, 345. coupled with an interest, 359. B. Bailment: may give rise to action of det- inue, 39. nature of consideration for, 78. Bankrnptcy: bankrupt's promise after dis- charge to pay debt in full, 100. its effect in assigning contract, 336. its effect in discharging contract, 338. Barrister: his professional status, 105. Bill of excliange: must be in writing together with acceptance, 53. burden of proving consideration for it does not lie on the holder, 70. INDEX. 487 Bill of exchange: may be discharged by waiver, 84, 260, 315. is negotiable by custom, 226. how drawn, accepted, and in- dorsed, 227. Bill of lading: consideration for its indorsement, _ 76. is negotiable within certain lim- its, 230. its assignment confers proprie- tary rights by custom, 230. and conti-actual rights by 18 and 19 Vict. c. Ill, 230. Bond: nature of, 50, 51. an illustration of conditions sub- sequent, 265. Breach of Contract: see Condi- tion, Warranty, Independent Promise. consideration for waiver of, 85. as a form of discharge, 276. -rights conferred by it, 277, 308. modes in which it may take place, 280. renunciation of contract before performance, 280. must be treatfed as a discharge by the other party, 282. renunciation in the course of per- formance, 284. impossibility arising from act of ' party before performance, 283. impossibility arising from act of pai'ty during performance, 285. failure in performance; when a discharge, 286 sqq. Broker: nature of broker's rights and lia- bilities as agent, 846, 347, 351. C. Carrier: extent of his promise as to safety of goods, 266, 305. Champerty : is unlawful consideration for a promise, 186, 187. liow regarded, 186, n. Charter party: construction of, 139, 249, 265, 290, 303, 307. excepted risks in, 265. Chose in action: cannot be assigned at Common Law, 219. Chose in action: but may be in Equity, 221. , and in certain cases by Statute, 234. Civil death: meaning of term, 117. Cognovit actionem: to confess right of action and empower to sign judgment, 44. attestation necessary to its valid- ity, 240. Cohafiitation: illicit, is null as a consideration, 187. does not necessarily create agency, 334. Collateral promise : see Warranty. Commission Agent: deals personally with his princi- pals, 849, 347. Composition with creditors: consideration for the promise of each creditor, 86, 87, 315. fraudulent preference, 181, 199. Compromise of suit: when a good consideration for a promise, 74, 85. Concealment: how different from non-disclos- ure, 154. Condition : see Breach of Con- tract. a statement or promise vital to the contract, 143, 144, 159, 393. used sometimes as convertible with Warranty, 142-144, 304. condition precedent expressly pro- viding for discharge, 263, 364. condition subsequent, a form of discharge by agreement, 365. kinds of condition, subsequent, concurrent, precedent, 395. conditions precedent which are only suspensory, 396. conditions concurrent, 398, 299. condition broken by virtual fail- ure of consideration, 399-308. condition precedent distinguished fi-om warranty, 303-305. Consideration : an element in the formation of contract, 13. essential where contract is not under seal, 13, 41, 53, 68, 259, 314. executed and executory consider- ations, 13, 72, 89, 334. its origin as the basis of simple contract, 40, 41. INDEX. Consideration: must appear in writing required by 29 Car. II. c. 3, § 4, 53. though not in case of guarantee, 57, 60, 63. definition of, 68. ^ is universally necessary, 69. negotiable instrument no excep- tion except as to burden of proof, 70. need not be adequate, 70, 71. but must be real, 73, 163. promise or executory considera- tion, 73, 73, 89. forbearance a consideration, 74, 75. bailment a consideration, 77. motive no real consideration, 77, 78. distinction between good and valuable consideration, 78. discharge of moral duty no con- sideration, 80. French law, and Indian Contract Act, 80. promise to do an obvious im- possibility is no consideration, 81. nor is a promise too vague to be enforced, 81, 83. discharge of existing obligation or duty no consideration, 83, 83, 165. except by substituted agree- ment, 83, n. promise to perform a contract with a third party, 87, 88. composition with creditors, con- sideration for it, 86, 87. executed consideration, forms of it, 12, 13, 89, 333. past consideration is null, 93. consideration "moved by previ- ous request," 93-97. revived promise for which con- sideration has been given, 100, 101. voluntary discharge of another's legal obligation, 97-99. consideration probably neces- sary to a valid waiver, 358, 359. except in case of bills of ex- change, 84, 260, 814. absence of consideration is evi- dence of invalidity of written contract, 243. failure of considerationa form of discharge, 399-303. Constrnclion : rules as to construction of docu- ments, 339, 353. Contract in writing: when writing is required, 63, 54. See Statute. the writing is only evidence of the contract, 55, 339, 340. how proved, 340. admissibility of evidence to show that it depends for its operation upon a condition, 343. of evidence that the writing is not the whole agreement, 344. of evidence as to terms, 245. rectification of, in Equity, 350. how it may be discharged by, agreement, 268. Contract of Kecord: see Judg- ment, a form of obligation, 7, 8. its forms and characteristics, 44, 45. is not a true contract, 45. Contract under Seal: offer under seal irrevocable, 13, ' 18, 30, 35. mode of execution, 46. characteristics, 47-51. consideration not necessary at Common Law, 49. how its absence is regarded in Equity, 50, 51, 166. what contracts must be made un- der seal, 51, 53. statutory seal and its efEects, 46, 49, n. how affected by illegality of consideration, 301. cannot be negotiable, 339. the instrument is the contract and not the evidence of it, 239. how it is proved, 340. can only be discharged by in- strument under seal, 268. otherwise in the United States, 368, n. effect of subsequent parol con- tract, 368, n. agent being a party to it con- tracts personally, 348. Convtyance: in what respects different from contract, 3. executed contract of sale is a con- veyance, 65. conveyance not the origin of all contracts, 34. INDEX. 489 ConTict: his incapacity to contract, 104. Copyholder: liable, though an infant, to pay- fine, 107. Corporation: their contracts must be under seal, 51. not so in United States, 51, n. hence cannot usually make ne- gotiable instruments, 114. exceptions to general rule, 53. necessai-y limits to their power to contract, 113. express limits, 114. Correspondence : contracts made by, 23, 34, 36- 80. Covenant: action of, 88, 39. assignment of covenant affecting leasehold interest, 233, 283. assignment of covenant affecting freehold interest, 234. Coverture: see MaiTiage. Custom: see Usage. Custom of merchants, as to ne- gotiable instruments, 336, 329. as to bills of lading, 230. as to agent's liability where prin- cipal is unnamed, 350. Custom of City of London as to contract of married women, 117. D. Damages: rules relating to, 309-313. Damages: liquidated and unliquidated dam- ages, 250, n. penalty and liquidated damages, 355, 256. interest by way of damages, 312. prospective profits by way of, 312, n. Death: its effect in assigning contract of deceased, 235, 336. in determining authority of agent, 360. civil death, in what it consists, 117. Debt: action of, 38, 89. why supplanted by action of As- sumpsit, 363, 364. assignment of, 321, 234 Deceit: action of, 137, 163. what amounts to cause of action, 153. Deed : see Contract under Seal. Del credere agent: liabilities to his employer, 347, 348. Delivery: of deed, 46, 47. of negotiable instrument trans- ferable by delivery, 227. of goods, a form of tender, or performance, 374. Detinue: action of, whether in contract or tovt, 39. Discharge: see Agreement, Breach, Impossioility, Opera- tion of Law, Performance. Divisible perfoi'mance: partial failure, where perform- ance is divisible, not a dis- charge, 390-392. Divorce: its effect on a woman's capacity to contract, 118. Drunken person; contract made with one drunken is voidable at his option, 115. Duress: to person, 164. ' to goods, 164. Duty: as distinct from obligation, 6. may be imposed by contract, 310, 311. E. Equity: refuses specific performance of gratuitous promise not under seal, 49. how it regards adequacy of con- sideration, 72. different from Common Law in its treatment (?f bonds, 50. and its view of the effect of rep- resentation, 145, 146. breadth of meaning which it at- taches to fraud, 158, 165. rules within which it permits as- signment of rights, 221. enforces covenants restricting en- joyment of freehold, 234. its rules as to admissibility of evidence, 348. its rules as to rectification of in- struments, 350. 400 INDEX. Equity: its rules as to specific perform- ance, 313, 313. ' certain equitable remedies appli- cable only by Chancery Divis- ion, 49, 350, 314. Escrow: a deed delivered under condition, 47. evidence as to deed being an escrow, 389, 3i3. Estate: specialty creditor's remedies against estate of debtor, 48. represented by executor or trustee in bankruptcy, 336. ratification of contract made on behalf of, 336. Estoppel: as to statements made in a deed, 47. effect of judgment, by vray of estoppel, 316. agency created by, 334, 835. Evidence: parol, inadmissible to connect documents, under 39 Car. II. c. 8, § 4, 56, 341. or to supplement its terms, 57. rules I'elating to evidence, 338. extrinsic evidence admissible to prove document, 340. to prove or disprove agreement, 341. secondary evidence of contents of document when admissible, 241. of condition suspending opera- tion of contract, 343. of supplementary terms, 344. explanatory of latent ambiguity, 348. of usage, 348, 249. evidence admissible in equity for purpose of resisting specific performance or obtaining rec- tification or avoidance, 349. Execution: of a deed, 46. upon judgment, 45, 316. Executor: his duties and liabilities, 58, 235. effect on them of 39 Car. II. c. 3, § 4, 58. Executory contract: how formed, 13. how it became actionable though not made under seal, 38, 39. Execntorjr contract: consists in mutual promises, 73, 89. can be discharged by waiver of mutual rights, 358, 359. Expectant heir: protected by doctrine of undue influence, 169. Factor: his rights and liabilities, 846, 353, 358. Failure of consideration : differs from absence of consider- ation, 343. a form of discharge, 299, 300. sometimes confused with mis- take, 136-138, 203. or with fraud, 158. money paid for consideration which has failed is recoverable, 367. Forboar.nnce: to sue or exercise a right is con- sideration for a promise, 74, 76. Foreign State: its ministers exempt from juris- diction, 104. its bonds negotiable, 336. Form : its importance in early history of a legal system, 36, 37. contracts valid by reason of their form, 43-46. in case of Statute of Frauds, s. 4, is merely evidentiary, 55. how far necessary to discharge by agreement, 368. Fraud: suggested by absence of consid- eration of contract under seal, 50. relates to formation of contract, 131. gives rise to action ex delicto, 136. may exist without dishonest mo- tive, 137, 188. may exist without certainty of falsehood, 138, 158. legal and equitable fraud, 146, 158. definition of, 153. representation an essential ele- ment, 154. character of representation, 156. must be intended to deceive party complaining, 159. INDEX. 491 Fraud: and must deceive him, 161. its effects on rights ex contractu, 163, 163. how different from undue influ- ence, 165. distinct from illegality as a viti- ating element in contract, 183. burden of proof lies on him who asserts fraud, 839. affects limitation of actions, 318. Fraudnlent preference: promise in consideration of, il- legal at Common Law, 181. money so paid recoverable if paid under pressure, 199. Frnclns industriales: not an interest in land under 39 Car. IL c. 3, § 4, 61. Futures: legality of, 119, n. G. Gift: requires assent of donee, 13. when suggestive of undue influ- ence, 'l 66. Goods: see Sale. Goods, Wares, and Merchandise: what are, under 39 Car. II. c. 3, 55 17, 61. 67. stocks, under § 17, 65, n. work and labor, under § 17, 65, n. Gratuitous promise: void unless made under seal, 13, 49, 70. Guarantee: within meaning of 39 Car. II. c. 3, § 4, 59. exception to rule as to considera- tion appearing in writing, 60. not in its inception a contract uberrimae fidei, 151. but becomes so when made, 153. H. Heir: expectant heir how protected by doctrine of undue influence, 169. Husband and Wife: see Marriage. I. Ignorance of Law: its effect in case of mistake, 139. its effect in case of fraud, 157. Illegality: as an element in the formation of contract, 171. created by statute, 173. created by rules of common law, 181. distinct from fraud as vitiating formation of contract, 183. arising from rules relating to public policy, 183. contracts injurious to public service, 183. to pi'ocure administrative ac- tion, 184, n. to procure legislative action, 184, n.- to induce corporate action, 184, n. affecting course of justice, 184. encouraging litigation, 185. contrary to good morals, 187. affecting marriage, 187. in restraint of trade, 188. its effect on contract, 189-303. when parties are not in pari de- licto, 199. when there is a locus poeniten- tiae, 300. Immorality: effect upon contract of immoral object, 187, 192. Implied promise: of seaworthiness in contract of marine insurance, 246, 247. of indemnity in contract of em- ployment, 91, 94, 95, 333, 339, 359. of quality in executory sale of goods, 399, 301. of possibility, 304, n. of authority, 304, n., 349. Impossibility: of fact or law on face of the con- tract, 80, 81, 330. antecedent, unknown to the parties, a form of mistake, 129, 330. created by act of one party, a form of breach, 380. created before performance is due, 383. created in the course of perform- ance, 285. subsequent, arising from act of neither party, sometimes a form of discharge, 331-335. Imprisonment: a form of duress, 164. 493 INDEX. Inadequacy of consideration: how regarded in equity, 72, 166. Indebitatus counts: their history, 364, 365. their object, 277, 278, 364. when appHcable to special con- tract, 277, 278. Indemnity: as distinct from guarantee under 29 Car. II. c. 3, § 4, 59. marine and fire insurance are contracts of, 180. Indenture: as distinct from deed poll, 47. Independent promises: what are independent promises, 287. absolute promises, 288-290. promises divisible in respect of performance, 290-292. subsidiary promises, 292-295. warranty a subsidiary promise, 304. Indorsee: rights of, 327. where bona fide and for value, 238, Indorsement: special. 227. in blank, 227. of bill of lading, 76, 230. Infants : their contracts voidable at com- mon law, 105, 106. Ratification at common law of two kinds, implied and ex- press, 106. implied in case of infant share- holder or partner, 107. as affected by Geo. IV. c. 14, § 5, 100, 109. Batification at common law^ as affected by 37 & 38 Vict, c. 62, § 2, 108, 110. certain contracts of infants made void by 37 & 38 Vict. c. 63, § 1, 110. liability for necessaries. 111, 113. for wrong, 113. for breach of contract resulting in a wrong, 113. , cannot obtain specific perform- ance, HI, 312. infancy affects limitation of ac- tion, 817. Insanity: see Lunatics. Instalment contracts: rules relating to them, 393, n. effect of breach, 393, ik. Insurance; Fire insurance how affected by innocent mis- representation, 148. dealt with by 14 Geo. III. c. 48, 180. Life insurance is not a contract iiJjerrimae fldei, 149. is a form of wager, 175. how dealt with by 14 Geo. III. c. 48, 179. how different from fire and marine insurance, 180. policy of, assignable, 325. Marine insurance is ijequired to be in writing in the form, of a policy, 54. how affected by innocent mis- representation, 141, 148. not affected by expression of opinion, 153. is a form of wager, 174, 175. made binding by insurable in- terest. 179. how dealt with by Geo. II. c. 37, 179. how different from life insur- ance, 180. policy of, assignable, 235. contains implied warranty of seaworthiness, 346-348. Intention: distinctness of, necessary to agreement, 3. communication of, 3, 14, 15. when important in cases of con- tract for unlawful purposes, 191, 193. of the parties to be gathered from construction of whole of con- tract, 353. when ascertained, all technicali- ties of expression give way to it, 144, 306. Interest : insurable interest, when requi- site, 179. interest on debt, when it may be given by way of damages, 309, 310. J. Judgment: a form of contract of record, 7. its nature and characteristics, 44, 45. consideration for, may be in- quired into by Court of Bank- ruptcy, 110. INDEX. 493 Judgment. a discharge of right of action, 315. its operation by way of merger, 316. its operation by way of estoppel, 316. how discharged, 316. creates a debt, which might have been sued on in assumpsit, 365. Judicature Act: see Statute. Land: what is an interest in land within meaning of 29 Car. II. c. 3, § 4, 61. contract for sale of interest in land is uberrimae fidei, 150. assignment of obligations on transfer of interest in, 282- 235. distinction between contracts for sale of land and goods as re- gards specific performance, 313. Lease : assignment of, its effects on cov- enants, 233. Lex fori: determines procedure, 63, 63. Lex loci : determines vaUdity of contract, 62. License: Ucense to break contract, a bad plea, 259. Lien: of auctioneer, 846. of factor, 346, 358. Limitation of actions: in case of contract under seal, 48. writing required for acknowl- edgment of barred debt, 54, 318, 819. barred debt a consideration for promise to repay, 100. effect of the act 21 Jao. I. c. 16, on right of action arising from simple contract, 317. of 3 & 4 Will. IV. c. 42, § 4, on specialty, 317. disability to sue, how far a bar to operation of statutes, 317, 318. modes of reviving ban-ed debt, 318, 819. effect of acknowledgment, 319, n. effect of part payment, 319, n. Liquidated damages: as distinguished from penalty, 255, 256, 311. Lobbying contracts: to procure legislative action, .184, n. to procure administrative action, 184, n. to induce corporate action, 184, n. Locus poeuitentiae: in case of illegal contracts, 200. limitations of rule, 201-303. Loss of written instrument: only affects rights in case of biU of exchange and promissory note, 27. Lunatics: their contracts voidable while executory, 115, 116. not so, when executed in part, 115. where so found by commission, invalidity of contract is pre- sumed, il6. insanity affects limitation of ac- tions, 317. contracts while under guardian- ship, 116, n. M. Maintenance: its effect on the lawfulness of contract, 186. Marriage: a form of agreement differing from contract, 3. promise in consideration of, 60. mutual promises to marry, 73. married woman could not bind herself by contract before 1883, 117. common law exceptions, 117. statutory exceptions, 118. equitable doctrine of sepaa:ate es- tate, 118, 119. agreements affecting freedom of choice in marriage, 187, 188. agreements providing for sepa- ration of husband and wife, 188. effect of marriage on contract made by wife dum sola, 235. can be agent for her husband of necessity, 335. by authority express or im- Ped, 334, 357, 358. Master and servant: law of, how far an exception to general rules of contract, 211. 494 INDEX. Merchants, Cnstom of: as to consideration for written contract, 41. as creating negotiability, 336, 329, 330. Merger: of lesser security in a greater, 44,48. a discharge of contract, 336. a discharge of right of action arising fi-om contract, 316. Misrepresentation: relates to formation of contract, 131. how distinguished from fraud, 136, 137. when it afflects contract, 136, 145. how regarded in equity, 145, 146. afiEects contracts of marine and fire insurance, 148. affects contracts for purchase of interest in land, 150. affects contracts for purchase of shares, 151. does not affect life insurance, 149. or suretyship, 151, 153. what are contracts uberrimae fidei, 151, n. Mistake: relates to formation of contract, 133. of intention as distinct from mis- taiie of expression, 123. as to nature of transaction, 133, 134. , as to person with whom contract is made, 135. ' as to subject-matter of contract generally inoperative, 126, 137. as to existence of thing con- tracted for, 138, 330, 331. as to existence of a right, 139. as to identity of subject of con- tract, 130. as to quality of subject of con- tract, 130. its effect upon contract, 135, 205, 306. Money paid : under mistake, recoverable, 135. for an illegal object, when recov- erable, 193, 194, 300, 301. to the use of another, when a cause of action, 366, 367. Money received : to the use of another, when a cause of action, 367, Moral obligation: once thought to be consideration for a promise, 79. 80, 101. settled not to be so, 83, 103. Motive: is no real consideration for a promise, 77, 78. its effect where the object of con- tract is illegal, 191, 193. Mutual promises: are consideration for one another, 72. performance of one does not dis- charge the contract, 271, subscriptions, 73, n. N. Necessaries: for an infant, 105, 111. province of judge and jury in de- ciding what are r necessaries, 111,113. Necessity: agent by, 335, 367. Negligence: 'affects rights of party setting up mistake, 125. Negotiable instrument: see Bill of Exchange. cannot be made under seal, 114, 339. cannot be made by corporation unless part of the business of a trading corporation, 51, 114. as security for payment due on illegal or void contract, 177, 178, 197, 338. how distinct from assignable con- tract, 238. negotiability by custom and stat- ute, 336-330. effect of giving a negotiable /in- strument as payment, 373. Notice : needed in assimment of contract, 333, 335. Nudum pactum: meaning of term in English law, 69. 0. Obligation; its definition, 4, 5, 7, 33, distinguished from duty, 6, 210. sources of, 7. limits of, when arising from agreement, 308, 809. INDEX, 495 Offer: must be communicated, 14-18. must refer to legal relations, 18. by way of business circulars, 18, n. how far revocable, 80, 35-31, how it may lapse, 30, 21. may be made to unascertained persons, 31-35. Offer and acceptance: a necessary element . in agree- ment, 11, 15. must take the form of question and answei", 11. forms which it may assume, 13, 18, 335, 336. Office: sale of, 183. Operation of law: discharge of contract by, '336, 327. Options: when illegal, 179, n. Orders for goods, 14, n. Par delictum : when it does not exist in cases of illegal contract, 199. Parent: how far bound to support of child, 80. Part performance: when it takes contract out of op- eration of Statute of Frauds, 63, 64. Parties: see Assignment. in contracts within 39 Car. II. c. 3, §§ 4, 17, their names must ap- pear in writing, 55, 56. only parties to a contract are lia- ble under it, 307-310. who entitled at Common Law, 313. who entitled in Equity, 313-315. third parties when allowed to sue, 315. substitution of new for former parties rescinds a contract by creation of a new one, 363. Partner: infant partner, his rights in Law and Equity, 107. change of partners, its effect on contracts made with partner- ship, 363. as creating a general agency, 334. Patent ambignity: may not be corrected by p^ol evidence, 848. Payment; of a smaller sum no good dis- charge of a greater, 83, 84. a form of discharge by perform- ance, 373. negotiable instrument as pay- ment, 373. of precedent debt, 373, n. of contemporaneous debt, 373, n. Penalty: rules of Law and Equity as to, 354. penalty and liquidated damages, 855, 311. Pension: assignment of, 184. Performance: see Payment, Ten- der. postponement of, at request of one party, is no{ a discharge of contract by agreement, 361, 363. discharge of one party by per- formance distinguished from discharge of contract by per- formance, 371. Personal contract: does not pass to representatives of deceased or bankrupt, 235, 336. Physician: his professional status, 105. Principal and agent: see Agency. Promise: under seal : see Contract under Seal, essential to contract, 4. part executed, when a cause of action, 38. implied: see Implied promise and Warranty. Promissory note: consideration for it presumed un- til the contrary is shown, 70, 338. negotiable by statute, 235, 236. rights of payee and indorsee, 338. Public policy: contracts in breach of it illegal, 171, 183. possible origin of rules respect- ing, 183. limits of its operation, 183. kinds of contract affected by it, 183-189. Q. Quasi Contract: a source of obligation, 8. 498 INDEX. Qnasi contract: kinds of quasi contract assimi- lated to true contract in plead- ing, 365, 366. Quantum meruit: when it may be sued upon, 278, 279. B. Bail way company: nature of its offer to carry, 33. how far liable on its time-table, 33, 305. and for passenger'sjuggage, 305. Batiilcation: of infant's contract required to be in writing, 108. and signed, 108. a promise based on past consider- ation, 100. by suffering judgment, 110. of agent's act, rules respecting, 336-338. Keal estate : covenants restricting its enjoy- ment when assignable, 232-335. Kecog'nizance: a form of contract of record, 45. Bectification: of instrument in case of mutual mistake, 123, 250. Befusals, 28, n. Belease: a mode of discharge of right of action, 314. Benuncintion of Contract: before performance, 280-283. during performance, 284. Bepreseiitation: inoperative unless a term of con- tract, 136, 187. 142, 143. effect of in Equity, 145, 146. or unless it occurs in contract uberrimae fidei, 145, 148-153. differs from expression of opin- ion, 153. dififers from mere commendation, 153. differs from promise, 4, 146. of fact essential to fraud, 153, 154. of law, its effect if fraudulent, 156. is fraudulent if known to be false, 137, 157, 158, 159. or made in reckless disregard of truth, 138, 139, 158, 159. Bequest: when it implies a promise, 94, 95, 96, 335, 386. Bescission: see Agreement as a form of discharge. Bestraint of trade: see Public policy, consideration required though contract be under seal, 49. 188. by corners in the market, 188, n. rules respecting, 188, 189. Eeversion : sale of, how regarded in Equity, 169. Bevocation: of proposal, when possible, 25-31. of acceptance, impossible in English law, 32-24. not so by Indian Contract Act, 24. Sale: , of goods, if executed operates as a conveyance, 65. executed and executory, 18, 65, 66, 394, 295. Lord Tenterden's Act brings executory contract of sale within 29 Cai". II. c. 3, g 17, 66. contracts of sale, how different frojn contract for work and labour, 67. how affected by Infant's Relief Act, 109. how affected by mistake as to party contracted with, 135, 164, 205. vendor not bound to inform purchaser of defects, 131- 138, 154, 155. not voidable in case of fraud if third parties have acquired rights, 163, 205. specific performance of, not granted in Equity, 313. but by 19 and 20 Vict. c. 97, § 2, 314. of land, agreement for sale of land a contract uberrimae fidei, 150. specific performance of agree- ment to sell, 313. Satisfaction: payment of a smaller sum for a larger, no discharge, 88-85. reasons for this rule, 84, 85. what satisfaction amounts to a discharge of right of action, 315. Seal: of corporation, why necessary to i its contracts, 51. INDEX. 497 Seaworthiness: implied warranty of, in contract of marine insurance, 246, 247. Separate estate: of married woman under 33 and 34 Vict. c. 93, 118. of married woman in Equity, 118, 119. under 45 and 46 Vict. c. 75, 119, 120. Separation: agreement between husband and wife, with a view to their sep- aration, when valid, 187. Shares: transfer of, form required, 51, 54, 225. in railway company, not an in- terest in land under 29 Oar. II. c. 3, §4, 61. infant shareholder, 106, 107. contract to purchase, is one uber- rimaefidei, 151. Ship. British: transfer of British ship, 51. alien cannot acquire property in, 104. Signatnre: uoubtful if requisite to contract under seal, 46. of party charged under 29 Car. II. c. 3, § 4, 57. Simple Contract or Parol Con- tract: always requires consideration, 41, 53, 69. when writing required: see Statute of Frauds, 54. Solicitor and Client: a relation which may suggest undue influence, 168. Sovereignty: power to contract, 104, n. remedy against, 104, n. Specialty: see Contract under Specitlc performance: of gratuitous promise under seal, not granted, 50. of part-performed contract under 29 Car. II. c. 3, not in writing, 63, 64. not granted in case of infant's contract. 111. may be resisted in case of fraud, 163. sometimes withheld in case of mistake, 131, 249. general rules relating to it, 313. 32 Specific performance: of contract for sale of goods, 813. of contract for sale of land, 313. Statute : Bankruptcy, 46 and 47 Vict. c. 52, 236. 328. Bills of Exchange : definition of 45 and 46 Viet. c. 61, 227. acceptance must be in writ- ing, 53. Bills of Lading Act, 18 and 19 Vict. c. Ill, 230. Common Law Procedure Acts, 15 and 16 Vict. c. 76, and 17 and 18 Vict. c. 125: as to agreements to refer to ar- bitration, 185. as to attesting witnesses, 240. as to pleading, 364. Divorce and Matrimonial Causes Act, 20 and 21 Vict. c. 85, 118. Factors' Acts, 5 and 6 Vict. c. 34, 40 and 41 Vict. c. 39, 346. Frauds, Statute of, 29 Car. H. c. 3: affects simple contracts, 54. rules as to form required by § 4, 55-58. kinds of contract specified in § 4, 58-62. position of parties where § 4 not complied with, 62-64. form required by § 17, 64. nature of contract specified in § 17, 65. effect of non-compliance with § 17, 66, 67. connection of documents how to be shown under § 4, 56, 57, 241. contracts under g§ 4 and 17, how discharged by agree- ment, .269, 270. Gaming : 16 Car. II. c. 7, 176. 9 Anne, c. 14, 176, 177. 5 & 6 Will. IV. c. 41, 177. 8 & 9 Vict. c. 109, 177, 198. Infant's Relief Act, 37 and 38 Vict. c. 72, 100, 108, 110. Insurance, 19 Geo. II. c. 37: 14 Geo. III. c. 48, 179, 180. Judicature Act, 36 and 87 Vict, c. 66: as to right of parties interested in one action to sue or bb sued in name of one, 216. INDEX. Statute: Judiciary Act as to assignment of contract, 334, 335. as to admission of documents, 340. as to rectification of docu- ments, 351. as to provisions regarding time, 354. as to specific performance of contracts for sale of land and as to pleading, 377, 379, 365. Limitation, Statutes of, 31 Jac. I. c. 16; 3and4Will.IV. c. 43: as to extinction of remedy, 317, 318. as to revival of claim, 100, 318. Lord Tenterden's Act, 9 Geo. IV. c. 14: as to executory contract of sale, 65. as to ratification of infant's contract, 108. as to acknowledgment of barred debt, 54, 318. Married Women's Property Acts, 33 and 34 Vict. c. 93 ; 37 and 38 Vict. c. 50, 116; 45 and 46 Vict. c. 75, 118, 119, 130, 335. Mercantile Law Amendment Act, 19 and 30 Vict. c. 97. as to consideration for guar- anty, 57, 60. as to specific performance of sale of goods, 314. as to disabilities to sue in re- spect of limitations of ac- tions, 317. as to agent's signature of promise to pay barred debt, 318. Stock-jobbing: wagers on price of stocls; dealt with by Sir J. Barnard's Act, ' 178. sale of shares under Leeman's Act, 303. Stoppage in transitu: vendor's rights, 76, 240. Subscriptions: V as mutual promises, 73, n. T. Tender: a form of performance, 374. of goods, 374. of money, 374, 375, Time: of the essence of the contract at Common Law, 353. rules of Equity as to, 353, 254. rules of Judicature Act, 354. Title: of assignee of contract, 233. See Parties. Trust: how distinct from contract, 3, 8. no exception to rule, that con- tract only binds parties to it, 208, 209. U. Ultra vires: contracts ultra vires relate to ca- pacity of parties, 114, 118, 190. cannot be ratified, 337, 338. Uncertainty: in proposal or acceptance pre- vents the formation of con- tract, 19. of consideration avoids promise, . 81, 83. Undue influence: prevents reality of consent, 133. how distinct from fraud, 165. cases in which it may be pre- sumed, 166, 167. rules as to rescission of contracts affected by it, 169. Usage: evidence of, when admissible, 348, 349. Usury laws: promise after their repeal, to re- pay money lent at usury, 100. their place suppled by doctrine of undue influence, 169. Toid and voidable: meaning of the terms, 204, 305. W. Wager: definition of, 173, 174. history of legislation respecting, 176-179. in relation to contracts of insur- ance, 175. '• agreements to pay differences, 178, 179. money advanced for gambling not recoverable, 193, 194. money advanced to pay lost bets when recoverable, 194, 300. INDEX. 499 WaiTcr: of rights under bill of exchange or promissory note, 84, 260. of statutory exemption from per- formance of contract, 100. of continuing interest in perma- nent property by infant, 106, 107. as a form of discharge, 258. of executed as distinct from ex- ecutory contract, 84, 258, 259. Warranty: of quality not implied in sale of a chattel, 92, 131, 132. extent of implied warranty, 132, 133. warranty as distinct from condi- tion, 143, 304. warranty ex post facto arises on acquiescence in breach of con- dition, 143. Warranty: is a subsidiary or collateral prom- ise, 293, 294, 303, 304. effect of, in executed contract of sale, 295. effect of, in executory contract of sale, 294. various uses of term, 304, n. how distinguishable from condi- tion, 304. of authority, 304, 349. Wrong: a source of obligation, 7. included under " miscarriage " in 28 Car. II. c. 3, § 4, 60. infant not liable for wrong aris- ing out of contract, 113. but for wrong independent of contract, 113. fraud as a wrong gives rise to ac- tion of deceit, 136, 137, 153, 182. KSS^asL¥«wi£^ " *?«B»»®|■'^ KP 801 A86 1#87 c.l Author Vol. Anson, Sir William Reynell Title Copy Principles of the English law of qnotraot Date Borrower's Name