in' V.> .L .'ji. ' J.I.I' ,1 ■.. si* 1 .'*i I (I V ' ■ , !.•■ ■ ■ •■ ' ' ^b / /o OJnrn^U ICam ^rl^oal Htbrarg K-c oon r.»2tr*" University Library KF 889.P27E4 1862 "The elements of mercantile law. 3 1924 018 825 111 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/cu31924018825111 A LIST OF LAW BOOKS, PUBLISHED BY LITTLE, BROWN AND COMPANY, 110 WASHINGTON STREET, BOSTON. D^" Any of the fdUowing boohs zdU he sent hy mail, free of postage, on receipt of the publication price. We invite the attention of the Frofessiou to our extensive and continually increasing stock of Law Books, both Foreign and Domestic, embracing every branch and de- partment of Jurisprudence, Catalogues will be sent on receipt of postage. ABBOTT (Charles, Lord Tenterden). — A Treatise of the Law relative to Merchant Ships and Seamen. The Eighth Eng- lish Edition, by William Shee. The Seventh American Edition, with the Notes of Mr. Justice Story, and additional Annotations, by Hon. J. C. Perkins. Royal 8vo. . . ... $7.50 ABBOTT BROTHERS. — He^oite of Cases in Admiralty, Argued and Determined in the District Court of the United States for the Southern District of New York. 8vo. . . . 5.50 ADMIRALTY REPORTS (English), complete series, com- mencing with Mariott and coming down to Eobinson, Vol. III., 10th Victoria. Edited, with References, etc., by George Minot, Esq. 9 vols. 8vo 45.00 ALLEN (Chas.). — Reports of Cases Argued and Determined in the Supreme Judicial Court of Massachusetts. Vols. I. II. and III. Svo. Per vol 5.00 AMERICAN RAILWAY OASES, a complete collection, with Notes and References to American Railway, Canal, and Turnpike Cases, by Chauncey Smith and Samuel W. Bates. 2 vols. Svo 9.00 ANDREWS (C. C.). — A Practical Treatise on the Revenue Laws of the United States. Svo. 3.50 ANGELL (Joseph K.). — A Treatise on the Law concerning the Liabilities and Rights of Common Carriers. Third edition. Svo 5.50 ANGELL (Joseph K.). — A Treatise on the Limitations of Actions at Law and Suits in Equity and Admiralty, with an Appendix containing the American and English Statutes of Limi- tations, and embracing the latest Acts on the subject. Fourth edi- tion, revised and greatly enlarged. By John Wilder May. 8vo. *5-50 A Treatise on the Right of Prop- erty in Tide Waters, and in the Soil and Shores thereof. Second edition. Kevised, corrected, and much enlarged. 8to. . • "-O" A Treatise on the Common Law in Relation to Watercourses. Fifth edition. 8vo. . ■ • 5.00 A Treatise on the Law of Life and Fire Insurance, with an Appendix, containing forms, tables, etc. Second edition. 8vo. 5.00 and AMES (Samuel). — A Trea- tise on the Law of Private Corporations Aggregate. Seventh edi- tion, enlarged, ^vo. ...... 5.50 and DURFEE (Thomas). Treatise on the Laws of Highways. 8vo 4.00 BENNETT (E. H.) and HEARD (F. F.). — A Collection of Leading Cases in the various branches of the Criminal Law. 2 vols. 8vo 10.00 BISHOP (Joel P.). — Commentaries on the Criminal Law. Second edition, enlarged. 2 vols. 8vo 11.00 Treatise on the Law of Marriage and Divorce, and Evidence in Matrimonial Suits. Third edition, en- larged. 8vo. , 5.50 BROWN (William). — Reports of Cases in the High Court of Chancery, during the Time of Lord Chancellor Thurlow, and of the several Commissioners of the Great Seal, and Lord Chan- cellor Loughborough, from 1778 to 1794, with the Annotations of Mr. Belt and Mr. Eden. Edited by J. C. Perkins. 4 vols. Svo. 10.00 BROWNE (Causten). — A Treatise on the Construction of the Statute of Frauds, as in force in England and the United States ; with an Appendix containing the existing English and American Statutes. 8vo 5.00 CHITTT (Edward). — Equity Digest: An Index to all the Reported Cases decided in the several Courts of Equity, in Eng land and Ireland, the Privy Council, and the House of Lords , and to the Statutes on or relating to the Principle, Pleading, and I'ractice of Equitjf and Bankruptcy, from the Earliest Period. New Revised Edition, brought down to the present time. 4 vols Svo .... CIRCUIT COURT REPORTS. First Circuit. 18 vols, 8vo. . Comprising : — Gallison's Reports. 2 vols. Svo Mason's " 5 " " Sumner's « 3 « « Story's .< 3 « .< _ ] _ Woodbury and Minot's Reports. 3 vols. Svo. . 16 50 Curtis's Reports. 2 vols. Svo. ... 11 00 25.00 99.00 11.00 27.50 16.50 16.50 COLLTER (John). — A Practical Treatise on the Law of Partnership; with an Appendix of Forms. Fifth American, from the second English Edition, with large additions to the Text and Notes, by Hon. J. C. Perkins. 8vo $5.50 CiB^iV"aH" (William). — Reports of Cases in the United States Circuit Court of the District of Columbia, from 1801 to 1841. 6 vols. 8vo 33.00 CRUISE (William). — A Digest of the Law of Real Prop- erty. Second American, from the fourth London Edition, re- vised and enlarged, with Notes and Illustrations from the Roman, Civil, and Foreign Law, and specially adapted to the American Practice, by Simon Greenleaf, LL. D. 3 vols. 8vo. . . . 16.50 CURTIS (George T.). — Precedents in Equity. Supplemen- tai-y to Story's Equity Pleading. Third edition. 8vo. . . 5.00 (Judge B. R.). — United States Circuit Court Re- ports. First Circuit, 1851-56. 2 vols. 8 vo 11.00 United States Supreme Court De- cisions, comprising the 58 volumes of cases reported by Dallas, Cranch, Wheaton, Peters, and Howard. With Notes and a Digest. 22 vols. 8vo. . 66.00 Digest of the Decisions of the Supreme Court of the United States from the Origin of the Court to the close of the December term, 1854. 8vo 5.50 CUSHING (Luther S.). — Reports of Cases Argued and Determined in the Supreme Judicial Court of Massachusetts. 12 vols. 8vo. Per vol 5.00 An Introduction to the Study of the Roman Law. 12mo. Cloth ...... 1.25 Law and Practice of Legislative As- semblies in the United States of America. Second edition. 8vo. 5.00 DANIELL (Edmund R.). — Pleading and Practice of the High Court of Chancery. Third American Edition. To which are added several entirely New Chapters, and Copious Notes, adapting the work to American Practice in Chancery. By Hon. J. C. Perkins. 3 vols. 8vo 12.00 DAVIS (Daniel). — A Practical Treatise upon the Author- ity and Duty of Justices of the Peace in Criminal Prosecutions, Third edition, revised and greatly enlarged. Edited by F. F, Heard. 8vo. . . 4-00 DOM AT (Jean). — The Civil Law in its Natural Order; together with the Public Law. Translated into English, by Wil- liam Strahan; with Remarks on some Differences between the Civil Law and the Law of England ; printed entire from the last London Edition. Edited by the Hon. Luther S. Cushing. Fourth edition. 2 vols. 8vo. 11.00 Z)i?J[X£J (Charles D.). — Treatise on the Law of Suits by Attachment in the United States. Second edition, enlarged. 8vo. 5.50 B TIER (W. A.). — Course of Lectures on the Constitutional Jurisprudence of the United States. Second edition. 12mo. Cloth . «l-75 EMERIGON (B.m.). — K Treatise on Insurances. Trans- lated from the French, with an Introduction and Notes, by Sam- uel Meredith, Esq. 8vo ... 5.50 ENGLISH REPORTS (DIGEST). — A Digest of the De- cisions of the Courts of England, contained in the English Law and Equity Reports, from the first volume to the thirty-first inclu- sive. By Chauncey Smith, Esq. Second edition. 8vo. . 5.50 ENGLISH RAILWAY AND CANAL GASES, Argued and Adjudged in the Courts of Law and Equity, from 1835 to 1852. From the London Edition. Edited by Chauncey Smith and Samuel W. Bates, Esqrs. 6 vols. 8vo. . . 24.00 FOSTER (William L.). — Reports of Cases Argued and Determined in the Superior Court of Judicature of New Hamp- shire. Vols. I. II. III. 8vo. Per vol 3.50 G ALLISON (John). — Reports of Cases Argued and De- termined in the Circuit Court of the United States for the First Circuit, from 1812 to 1815. Second edition, with additional Notes and References. 2 vols. 8vo. 11.00 GRAY (Horace, Jr.). — Reports of Cases Argued and De- termined in the Supreme Judicial Court of Massachusetts. Vols. I. to IX., XIII. and XIV. 8vo. Per vol 5.00 GREENLEAF (Simon). — Treatise on the Law of Evidence. 3 vols. 8vo. Eleventh edition 16.50 Maine Reports. New Edition. With Notes and References to Later Decisions. By E. H. Bennett. 9 vols, in 8. 8vo. 24.00 HEMPSTEAD (Samuel H.). — Circuit Court Reports, Ninth District, Arkansas. 8vo. ........ 5.50 HILLIARD (Francis). — A Treatise on the Law of Mort- gages of Real and Personal Property ; being a General View of the English and American Law upon that subject. Second edi- tion, enlarged. 2 vols. 8vo. ....... 10.00 A Treatise on Torts, being a Com- prehensive Summary of the Law relative to wrongs committed upon Real and Personal Property, upon the Person, Character, and all absolute and relative Rights ; including Disseisin of Lands, Trespasses to Real and Personal Estate, Slander, Mali- cious Prosecution, Negligence, and, in general, all acts or omis- sions which are made the subject of Actions of Tort. 2 vols. 8vo. Second edition . . . . . . _ _ 11 00 Treatise on the Law of Vendors and Purchasers of Real Property. 2vols.ini. 8vo. . g 00 HOBART (Sir Henry). — Reports of Cases Temp. Eliz. et Jac. I. Reviewed and corrected by Edward Chilton First American from the Fifth English Edition. With Notes bv Hon J. M. Williams. 8vo. ... ■''„-. d./D HOWARD (Benjamin C). — Eeports of Cases Argued and Adjudged in the Supreme Court of the United States. Vols. IV. to XVIII. inclusive. 8vo. Per vol. $5.50 J ARM AN (T.). — A Treatise on Wills, with a Copious Dis- sertation on the Construction of Devises. With Notes and Refer- ences to American Law, by Hon. J. C. Perkins. Fourth edition. 2 vols. 8vo. 10.00 KENT (James). — Commentaries on American Law. Tenth, and entirely Revised Edition. By Hon. William Kent. 4vols. 8vo. 16.00 Vol. I. sold separately, for the use of Schools and Colleges . . 4.00 MARVIN (William). —A Treatise on the Law of Wreck and Salvage. Svo . 3.00 MASON (William P.). — U. S. Circuit Court Reports, First Circuit. 5 vols. Svo 27.50 MASSA OHVSETTS REPORTS. Reports of Cases in the Supreme Judicial Court of Massachusetts. 80 vols. Svo. . 366.00 Comprising : — 51.00 120.00 65.00 60.00 55.00 15.00 Massachusetts Reports. 17 vols. Svo. . Pickering's 24 " Metcalf's 13 " " . Cushing's 12 " Gray's 11 " " . Allen's 3 " " . MASSA GHUSETTS REPORTS. Tyng's Reports of Cases in the Supreme Judicial Court of Massachusetts, from 1804 to 1822. With Notes by Benjamin Rand. Vol. I. by Ephraim Williams. 17 vols. Svo 51.00 MASSACHUSETTS DIGEST. — Being a Digest of the Decisions of the Supreme Judicial Court of Massachusetts, by E. H. Bennett and P. P. Heard. 2 vols. Royal Svo. . . 13.00 ME T GALF (Theron). — 'Reiports of Cases Argued and De- termined in the Supreme Judicial Court of Massachusetts. 13 vols. Svo. Per vol. ... 5.00 PARSONS (Theophilus). — The Law of Contracts. Fourth edition, carefully revised and considerably enlarged. 2 vols. Svo . . 11.00 „„ The Elements of Mercantile Law. Second edition, carefully revised and considerably enlarged. Svo. 5.50 ._ The Laws of Business for Business Men in all the States of the Union. Svo. Cloth, $2.50. Sheep 3.00 A Treatise on Maritime Law, in- cluding therein the Law of Shipping, the Law of Insurance, and the Law and Practice of Admiralty. 2 vols. Svo. . . . 11.00 PHILLIPS (Willard). — A Treatise on the Law of Insur- ance. Fourth edition. 2 vols. Svo 10.00 PICKERING (Octavius). — Reports of Cases in the Supreme Judicial Court of Massachusetts', from 1822 to 1840. 24 vols. Svo. Per vol 5.00 6 SA WLE (William Henry). — A Practical Treatise on the Law ^^ of Covenants for Title. Third edition. 8vo. • • RAT (Isaac). — The Medical Jurisprudence of Insanity. ^ ^^ Tourth edition, mucli enlarged. 8vo. REBFIELD (Isaac F.). — A Practical Treatise on the Law of Railways. Second edition, enlarged. 8vo °-^^ RHODE ISLAND REP OR TS. — Reports of Cases Argued and Determined in the Supreme Court of Rhode Island. By Hon. Samuel Ames, Cliief Justice and Reporter. Vols. 1. U. and III., being Vols. IV. V. and VI. of Rhode Island Reports. 8vo. Per vol. . . "•°° ROBE (James B.). — A Collection of the United States Patent Cases decided in the Supreme and Circuit Courts of the United States, from their Organization to the year 1850. With Notes, Index, etc. 2 vols. 8vo 10-00 STORY (.Joseph). — Commentaries on the Law of Agency, as a Branch of Commercial and Maritime Jurisprudence, with Occasional Illustrations from the Civil and Foreign Law. Sixth edition. 8vo ■ ■ 5.50 Commentaries on the Law of Bailments, with Illustrations from the Civil and Foreign Law. Seventh edi- tion. 8vo. ' . . • 5-50 Commentaries on the Law of Bills of Exchange, Foreign and Inland, as administered in England and America. Fourth edition. 8vo. . . . . ' • . 5.50 . Commentaries on the Conflict of Laws, Foreign and Domestig, in regard to Contracts, Rights, and Reme- dies, and especially in regard to Mamages, Divorces, Wills, Suc- cessions, and Judgments. Fifth edition, revised, corrected, and greatly enlarged. 8vo. ....... 6.50 ^ Commentaries on the Constitution of the United States ; with a Preliminary Review of the Constitutional History of the Colonies and States, before the Adoption of the Constitution. Third edition, revised. 2 vols. 8vo. . . 7.50 Commentaries on Equity Jurisprudence, as administered in England and America. Eighth edition, care- ftdly revised with extensive additions. Edited by Hon. I. F. Red- iield. 2 vols. 8vo 11.00 Commentaries on Equity Pleadings and the Incidents thereto, according to the Practice of the Courts of Equity of England and America. Sixth edition. 8vo. . . 6.00 . Commentaries on the Law of Partner- ship as a Branch of Commercial and Maritime Jurisprudence, with Occasional Illustrations from the Civil and Foreign Law. Fifth "edition, revised and enlarged, by E. H. Bennett, Esq. 8vo. 5.50 __ Commentaries on the Law of Promis- sory Notes, and Guaranties of Notes and Checks on Banks and Bankers, with Occasional Illustrations from the Commercial Law of the Nations of Continental Europe. Fifth edition, revised and enlarged, by E. H. Bennett, Esq. 8vo 5.50 STOUT (William W.). — A Treatise on the Law of Contracts. Fourth edition, revised and enlai-ged. 2 vols. 8vo. . . . $11.00 A Treatise on the Lave of Sales of Personal Property, witli Illustrations from the Foreign Law. Third edition, carefully revised and corrected by Hon. J. C. Per- kins. 8vo 5.50 .Reports of Cases Argued and De- termined in the Circuit Court of the United States for the First Circuit. 3 vols. 8yo. 16.50 SOMNER (Charles). — Reports of Cases Argued and Deter- mined in the Circuit Court of the United States for the First Circuit. Second edition. 3 vols. 8vo 16.50 TAYLOR (John N.). — A Treatise on the American Law of Landlord and Tenant, embracing the Statutory Provisions and Judicial Decisions of the several United States in reference there- to, with a selection of Precedents. Fourth edition, revised and enlarged. 8vo. ... .... 5.00 THORNTON (John N.). — Digest of the Conveyancing, Testamentary, and Registry Laws of all the States of the Union. Second edition, revised and enlarged. 8vo 4.50 TRAIN {Chaxles R.) and HEARD (F. F.). — Precedents of Indictments^ Special Pleas, etc., with Notes, containing the Law of Criminal Pleading. 8vo 4.00 UNITED STATES DIGEST TO I860. — Digest of the Decisions of the Courts of Common Law and Admiralty in the United States. 20 vols. Royal 8vo. 114.50 Comprising the following ; — Vol. I. By Theron Metcalf and J. C. Perkins . IL By George T. Curtis III. By George T. Curtis IV. Supplement to do. Vol. I. By John Phelps Putnam V. " " II. By John Phelps Putnam VI. Table of Cases to the above. By G. P. Sanger VII. to XIX. Annual Digest for 1847-1859. 13 vols. By J. P. Putnam and G. S. Hale " XX. Annual Digest for 1860. By H. Farnam Smith . UNITED STATES EQ UITT DIGEST, by J. P. Putnam (completing the above). 2 vols. Royal 8vo 12.00 UNITED STATES STATUTES AT LARGE. — 'Lsms of the United States of America, from the Organization of the Government in 1789 to the present time. Edited by Richard Peters, George Minot, and George P. Sanger. Published by direction and under the patronage of Congress. Complete to 1859, including Synoptical Index. 12 vols. Royal 8vo. . . 48.00 First Ses- sion of Thirty-sixth Congress, December, 1859, to June, 1860. Stitched 1-00 7.50 7.50 7.50 7.50 7.50 5.50 65.00 6.50 Second Session of the Thirty-sixth Congress, to March 2,1861. Stitched 1 .00 ^ First Ses- sion of the Thirty-seventh Congress, to August 7, 1861. Stitched .75 UNITED STA TES STA TUTES A T LAR GE. — Second Session of the United States Congress, Dee. 21 to July 25, 1862 $1.50 WALKER (James M.). — The Theory of Common Law. 8vo. ... . . . • ^'^^ WALKER (Timothy). — Introduction to American Law ; de- signed as a First Book for Students. Fourth edition, enlarged and revised. By Edward L. Pierce, Esq. 8vo. • • ■ ^-^^ WABE (Ashur). — Eeports of Cases in the U. S. District Court of Maine. Second edition, revised and con-ected by the Author. 8vo. . . . .... 5.50 WASHBURN i'Emovy). — A Treatise on the Law of Real Property. 2 vols. 8to. . .11.00 WHEATON (ReT^vj). — Elements of International Law, Seventh edition, revised, annotated, and brought down to the present time, with a Biographical Notice of Mr. Wheaton, and an Account of the Diplomatic Transactions in which he was concerned. By Hon. WUliam Beach Lawrence. Svo. . . 6.00 WOODBURY {C. L.) and MINOT (George). — Eeports of Cases Argued and Determined in the Circuit Court of the United States for the First Circuit. 3 vols. Svo. . . . 16.50 LITTLE, BROWN AND COMPANY Invite the attention of the Reading Public to the Completion of the ENCTCLOP.EDIA BRITANNICA. EIGHTH EDITION. A DICTIONARY OF ARTS, SCIENCES, AND GENERAL LITERATURE. In 22 vols. 4to. Illustrated with upwards of five thousand engrav- ings on wood and steel. Price, in cloth, $125.00; in half Russia, $175.00. " This is not a Book, but a Library ; pleasure. Learning there is in abun- wanting the Encyclopedia, the book-case dance in its pages ; but it is mingled with would be very imperfectly furnished ; hav- no small quantity' of amusement. We ing it, there is need for few volumes be- have a right to speak thus of it. For we sides to supply the requirements of the have done what perhaps few could as- student. It is not a work to be kept sert — we have read it right through merely for reference; it is- for reading from beginning to end, excepting only also; and not only for profit but for the mathematical papers." Critic. ^*^ Over sixteen hundred copies of this work have been disposed of, in the United States alone. "We have also on hand, and for distribution, a Catalogue of our Miscellaneous Stock, including many important works, imported in quantities, and sold at reduced prices. The above Catalogues sent by mail on receipt of postage. Boston, February, 1863. THE /^4e0^//^5 MERCANTILE LAW. BY THEOPHILUS PARSONS, LL. D., DANE PEOFESSOK OF LAW IN HAKVAED UHIVEESITY, AT CAMBKIDGE. SEOOWD EDITION. BO S T ON: LITTLE, BROWN AND COMPANY. 1862. Entered according to Act of Congress, in tlie year 1856, by THEOPHILUS PARSONS, In tlie Cleric's Office of tlie District Court of the District of Massachusetts. Entered according to Act of Congress, in the year 1861, by THEOPHILUS PARSONS, In the Clerk's Office of the District Court of the District of Massachusetts. CAMBKIDGE: Allen and Farnham, Printers. TO MY COLLEAGUE, HON. JOEL PARKER, LL. D., KOTAIL PROFESSOR OP LAW IN HARVARD UNIVERSITY, AND rOEKEELT CHIEF JUSTICE OP THE SUPERIOR COURT OF NEW HAMPSHIRE, I DEDICATE THIS VOLUME, IN ACKNOWLEDGMENT OF THE URBANITY AND DEVOTION TO DUTY WHICH HAVE MADE OUR COMMON SERVICE VERY AGREEABLE TO ME; AND IN TESTIMONY THAT THE LEARNING AND WISDOM THAT ILLUSTRATED THE HIGH JUDICIAL OFFICE FROM WHICH HE CAME HERE, HAVE MADE HIM MOST USEFUL AND MOST ACCEPTABLE TO ALL WHO ARE OR HAVE BEEN IN ANY- WAY CONNECTED WITH THE SCHOOL, AND HAVE IN- SPIRED AN EARNEST HOPE THAT HIS CONNEC- TION WITH IT MAY LONG CONTINUE. THEOPHILUS PARSONS. Cambeidge, July, 1856. PREFACE TO THE SECOND EDITION. In this edition I have endeavored not only to bring the statements and authorities down to the present time, but to supply some wants, and introduce some improvements, which should make this volume, more perfectly what I stated in the preface to the first edition I wished it to be ; "a full, condensed, and accurate epitome of Commer- cial Law." My publishers took the risk of making the first edition a large one ; and this early call for a second edition, jus- tifies a hope that my purpose has not wholly failed. If this be so, I may be permitted to say that the work, as it now appears, will be found by the profession, and by stu- dents, better adapted to be of use to them than it was be- fore. It is considerably enlarged, and no labor has been spared to ensure its presenting the Commercial Law of this country as it is at this day. T. p. Cambkidge, December, 1861. A* PREFACE TO THE FIRST EDITION. The title of this work indicates its purpose and char- acter j but as they are in some respects peculiar, a few remarks respecting them may make the volume more useful. When I accepted, seven years ago, the office of Dane Professor in the Law School of Harvard University, it was my' expectation that my official duties would leave me some leisure which I could usefully employ in making a series of texfrbooks on Commercial Law. I had for many years been much employed in examining questions belonging to that department of the law, and had formed the opinion that text-books might be made better suited to the wants of the profession than those we had. Their general merit, and the high excellence of some of them I knew ; but it seemed to me that they had faults which might be avoided, and deficiencies which might be sup- plied. The necessary basis for such a series was a work on the Law of Contracts generally. This I have made ; and I may perhaps be permitted to say, that the recep- tion it has met with, while it does not blind me to its viii PREFACE TO THE FIRST EDITION. deficiencies, encourages me to believe that further labors of the same character would not be useless or unaccept- able to my professional brethren. And it is my purpose and hope to execute fully my original plan. But the remarks that have reached me in relation to that work from various quarters, and some other circumstances, have suggested to me, or rather confirmed me in, an opinion that has led me to turn aside somewhat from my first design, and prepare this volume. I can hardly say indeed whether my own experience suggested the idea of the present work, or only confirmed and illus- trated that which was presented by others. I am cer- tain, however, unless my experience differs altogether from that of others, that it would be a great con- venience for any lawyer to have at his elbow, or to carry with him on a circuit, a single volume which would at once refresh, or confirm, or correct his recol- lection, or otherwise supply the want of the moment in telling him simply and concisely whatever the law has settled upon the exact question before him, or the ques- tion that comes nearest to it. Such a book would deserve the old name of "The Lawyer's Manual," or "The Attorney's Vade Mecum." The books which for- merly bore these names were useful in their day. But that was a day in which it was not thought well that learning and labor should embody themselves in any other works than those of appropriate magnitude and dignity. This volume, however, contains the results of whatever learning I have been able to acquire from books or practice ; and of my own earnest and continued PREFACE TO THE FIRST EDITION. ix endeavors, as well as a large amount of skilled labor, which many young friends, new to the profession, but bringing to it clear, vigorous, and well-trained minds and enthusiastic industry, have permitted me to buy of them. My general purpose may be stated thus : I wished to make a full, condensed, and accurate epitome of Commer- cial Law. As to the execution of the work, I know that it has many faults; and there may be many more than I am aware of, and some of these may be important. But I also know that it is just as good as I am able to make it, with the very valuable assistance I have been able to procure. I venture to hope that it will be found that very few principles which can be gathered from authority, are omitted in the text ; and that the leading cases are so carefully selected, and grouped, and accurately cited in the notes, that the lawyer who consults it on any point, will find prepared for him a brief which will enable him to pursue his investigations to any extent. To the wants of the student, also, such a book should be exactly adapted. All who teach the law as a profes- sion soon become aware, that the , student should acquire a general and comprehensive view of the whole system of law, before he enters upon the special study of any of its parts. For that purpose we now use the Com- mentaries of Blackstone and of Kent; and for this pur- pose they will undoubtedly continue to be used. But if the student then proposes to enter upon the study of mercantile law, I am very certain that he would be greatly ^ided by such a book as I have above described. X PREFACE TO THE FIRST EDITION. I have dwelt in my own mind on this ideal, until it seemed to me certain that such a book could be made ; and that it would be useful if made tolerably well ; and possible that I could make it, or at least, by my own failure, suggest to another how to succeed. And in this volume I have done all that I could do to embody this ideal. It may be well, perhaps, that I should add a word con- cerning the order in which the topics of this work are arranged. All mercantile business begins with or termi- nates in contracts of some kind, either express or implied, executed or to be executed. And as the first and most obvious necessity for all contracts is parties, the law in respect to them is first presented. Then it is necessary that the parties should meet together by their assent to the same thing in the same sense ; and this is the subject of the second chapter. Then follows the further neces- sity, that the bargain should be founded upon a proper, a sufficient, and a legal cause, or consideration, and should propose a legal result; and the rules on this subject are presented in the third chapter. Every contract must have its own subject-matter; and those of the various contracts usually made by men in trade are considered in the subsequent chapters in that order, so far as I could discover it. in which each one would lead most naturally to the next, and facilitate the study of it. The Law of Shipping and the Law of Insurance are in the last chapters. They are especially distinct from the other topics, and are, as it seems to me, more closely connected with each other than is usually supposed ; for PREFACE TO THE FIRST EDITION. xi I believe the Law of Marine Insurance can only be understood as it is seen in its relation to the Law of Ship- ping. It might seem presumptuous to attempt to give, in the third part of a single volume, any useful views of topics so extensive as are Shipping and Insurance. But the large works which relate to them are, very properly, filled with cases, and with elaborate discussions of un- settled questions. And I believe the reader will find that I am justified in assuring him that these chapters contain — with due allowance for the inevitable failure in the execution of one's own plan — all the general princi- ples contained in the larger works on those subjects. Chapters on Fire Insurance and on Life Insurance fol- low that on Marine Insurance. That they should have this place if any, is obvious, because all the principles of the former grow out of those of Marine Insurance, modi- fied as the exigencies of the subject-matter require. If a reason is asked for treating of them at all in a work on the Elements of Mercantile Law, perhaps it may be found in the fact that a very large proportion of our men of business now enter into these most beneficial contracts for the preservation of their means, the payment of their debts, and the comfort of those for whom they should provide. And it may be permitted to add, that if, by placing these topics in this work and in this connection, I do any thing towards making these wise precautions more universal, this of itself would authorize my believ- ing that the book was not wholly useless. It will be noticed that many of the topics in this volume are treated of in my work on Contracts; and xii PREFACE TO THE FIRST EDITION. that many similar statements are made in relation to those topics. Of course, if there were a hundred works by different authors on the same subject, as on the Law of Sales, for example, there must be much matter com- mon to them all, because any book which did not contain it would be fatally defective. But the character and object of this book are very different from that of the other, and every word has been written with an effort to adapt it to its especial object. I now offer it to the Profession, with every reason to believe that they will receive it with kindness ; and will do full justice to any merit it may possess. T. P. Cambridge, July, 1856. CONTENTS. CHAPTEE I. OF THE PARTIES TO MERCANTILE CONTRACTS. SECTION I. Who may be parties to mercantile contracts 8 SECTION II. Of infants ........... 4 SECTION III. Of married women . 9 CHAPTER II. OF AGREEMENT AND ASSENT. SECTION I. Of the legal meaning of agreement ...... 14 SECTION II. What is an assent ......... 17 SECTION III. Contracts on time ......... 18 SECTION IV. Of a bargain by correspondence 19 SECTION V. What evidence may be received in reference to a written contract 21 B xiv CONTENTS. CHAPTER III. OF CONSIDERATION. SECTION I. Of the need of a consideration ....••• 25 SECTION II. What is a sufficient consideration ....... 27 SECTION m. Of illegal considerations ........ 34 SECTION IV. Of impossible considerations ....... 35 SECTION V. Of failure of consideration ........ 36 SECTION VI. Of the rights of one who is a stranger to the consideration . . 37 SECTION VII. Of the consideration arising from discharging the debt of another 38 CHAPTER IV. OF SALES OF PERSONAL PROPERTY. SECTION I. What constitutes a sale ........ 41 SECTION II. Of the rights of property and of possession ..... 43 SECTION III. Of dehvery and its incidents ....... 50 SECTION IV. Of contracts void for illegality or fraud ...... 54 SECTION V. Of sales with warranty ........ 57 CONTENTS. XV CHAPTER V. STOPPAGE IN TRANSITU . . . .60 CHAPTER VI. OP GUARANTY 65 CHAPTER VII. OF THE STATUTE OP FRAUDS. SECTION I. Of its purpose and general provisions 71 SECTION II. Of a promise to pay the debt of anotlier ..... 72 SECTION III. Of an agreement not to be performed within a year ... 74 SECTION IV. Of the acceptance of a thing sold .75 SECTION V. Of the form and subject-matter of the agreement .... 77 CHAPTER VIII. OP PAYMENT. SECTION I. How payment may be made 80 SECTION 11. Of appropriation of payment 82 xvi CONTENTS. CHAPTER IX. OF NEGOTIABLE PAPER. SECTION I. Of the purpose of and parties to bills and notes . . . .84 SECTION II. What is essential to a bill or note. 1. That the promise be absolute and definite . . . .86 2. The payee must be designated ..... 88 3. Of ambiguous and irregular instruments .... 89 4. Of bank-notes 90 6. Of checks on banks ........ 90 6. Of accommodation paper . . . . . . 93 7. Of foreign and inland bills ...... 93 8. Of the law of place 94 SECTION III. Of the consideration. 1. Of the exception to the common-law rule in the case of negotiable paper . . . . . . . .96 2. Of " value received " ....... 98 3. What the consideration may be ..... 98 SECTION IV. Of the rights and duties of the maker ..... 99 SECTION V. Of the rights and duties of the holder of negotiable paper. 1. What a holder may do with a bill or note . . . . 100 2. Of a transfer after dishonor of negotiable paper . . 101 3. Of presentment for acceptance ...... 103 4. Of presentment for and demand of payment . . . 105 5. Of protest and notice ....... 110 SECTION VI. Of the rights and duties of an indorser . . . . .120 SECTION VII. Of the rights and duties of an acceptor . . . , .128 SECTION VIII. Of acceptance for honor ........ 131 CONTENTS. XVll CHAPTER X. OF AGENCY. SECTION I. Of agency in general 134 SECTION II. How authority may be given to an agent 136 SECTION m. Extent and duration of authority ....... 140 SECTION IV. Of the execution of authority 145 SECTION V. Liability of an agent • . 147 SECTION VI. Rights of action growing out of agency . . . . .148 SECTION vn. How a principal is aifected by the acts of his agent . . . 152 SECTION VIII. Mutual rights and duties of principal and agent .... 154 SECTION IX. Of factors and brokers 158 CHAPTER XI. PARTNERSHIP. SECTION I. What a partnership is 164 SECTION II. How a partnership may be formed 165 xviii CONTENTS. SECTION III. How a partnership may be dissolved SECTION IV. 172 Of the property of the partnership SECTION V. Of the authority of each partner and the joint liability of the part- nership SECTION VI. Remedies of partners against each other 181 SECTION VII. Rights of the firm against third parties 184 SECTION vin. Rights of creditors in respect to funds 185 SECTION IX. Of the effects of dissolution l^*^ SECTION X. Of limited partnerships l^'l CHAPTER XII. OF THE CARRIAGE OF GOODS. SECTION I. Of a private carrier ......... 196 SECTION II. Of the common carrier ........ 198 SECTION III. Of the obligation of the common carrier to receive and carry goods or passengers ......... 204 SECTION IV. Of the lien of the common carrier 212 CONTENTS. XIX SECTION V- Of the liability of the common carrier 213 SECTION VI. Of the carrier of passengers 218 SECTION YII. Of a notice by the carrier respecting his liability .... 220 SECTION VIII. Of the carrier's liability for goods carried by passengers . . 225 CHAPTER XIII. OF LIMITATIONS. SECTION I. Of the statute of limitations ........ 230 SECTION II. Construction of the statute . . . . . . . .231 SECTION III. Of the new promise ......... 235 SECTION IV. Of part-payment 238 SECTION V. Of the promise of one of several joint debtors .... 240 SECTION VI. To whom the new promise should be made ..... 242 SECTION VII. Of accounts between merchants . . . . . . .243 SECTION VIII Of the other statutory exceptions 245 SECTION IX. When the period of limitation begins 247 SECTION X. That the statute does not affect collateral security .... 250 XX CONTENTS. CHAPTER XIV. OP INTEREST AND TJSURT. SECTION I. What interest is, and when it is due 251 SECTION II. Of interest and usury ....•••■• ^'^'^ SECTION in. Of a charge for risk or for service ...... 262 SECTION IV. Of the sale of notes ......... 265 SECTION V. Of compound interest . . . . . . . • .268 CHAPTER XV. OF BANKRUPTCY AND INSOLVENCY. SECTION I. Of the history of the law of bankruptcy ..... 270 SECTION II. Of the difference between bankruptcy and insolvency . . . 273 SECTION III. Of the tribunal and jurisdiction ....... 278 SECTION IV. Who may be insolvents ........ 283 SECTION V. Of the proof of debts 287 SECTION VI. Of creditors with security 294 CONTENTS. XXI SECTION VII. Of the assignee 296 SECTION vm. What property the assignee takes 302 SECTION IX. Of the discharge of the insolvent 307 SECTION X. Of foreign bankruptcy or insolvency ...... 309 CHAPTER XVI. OF THE LAW OF PLACE. SECTION I. What is embraced within the law of place ..... 317 SECTION II. Of the general principles of the law of place .... 317 SECTION ni. Of its effect upon the capacity of persons to contract . . 319 SECTION IV. Of the place of the contract 320 SECTION V. Of domicil ........... 323 CHAPTER XVII. OF THE LAW OP SHIPPING. SECTION I. Of the ownership and transfer of ships ..... 325 SECTION n. Of the transfer of property in a ship 328 XXll CONTENTS. SECTION III. Of part-owners 334 SECTION IV. Of the liabilities of mortgagees ....... 338 SECTION V. Of the contract of bottomry . . . • . . .339 SECTION VI. Of the" employment of a ship by the owner 343 SECTION VII. Of charter-parties 357 SECTION vni. Of general average .367 SECTION IX. Of the navigation of the ship 375 SECTION X. Of collision •••....... 382 SECTION XI. Of the seamen •■•....... 335 SECTION XII. Of pilots , 398 SECTION XIII. Of material-men •••......, 400 CHAPTER XVIII. OF MARINE INSURANCE. SECTION I. How the contract of insurance is made . . . aqq CONTENTS. xxiii SECTION II. Of the interest of the insured 408 SECTION III. Of the interest which may be insured 412 SECTION IV. Of prior insurance 419 SECTION V. Of double insurance and reinsurance 420 SECTION VI. Of the memorandum 421 SECTION VII. Of warranties 422 SECTION vin. Of implied warranties . 424 SECTION IX. Of representation and concealment ...... 429 SECTION X. What things should be communicated ...... 432 SECTION XI. Of the premium .......... 435 SECTION XII. Of the description of the property insured ..... 437 SECTION xm. Of the perils covered by the policy 440 SECTION XIV. Of the perils of the sea 443 SECTION XV. Of collision 445 xxiv CONTENTS. SECTION XVI. Of fire 4*^ SECTIOlSr XVII. Of piracy, robbery, or theft '*'^' SECTION XVIII. Of barratry 448 SECTION XIX. Of capture, arrest, and detention .....•• 450 SECTION XX. Of the general clause . . . • • ■ ■ • .451 SECTION XXI. Of prohibited trade 452 SECTION XXII. Of deviation 454 SECTION XXIII. Of the termini of the voyage, and of the risk .... 458 SECTION XXIV. Of total loss and abandonment ....... 462 1. Of the necessity of abandonment .... 464 2. Of the right of abandonment ...... 465 3. Of the exercise of the right of abandonment . . . 468 4. Of abandonment of the cargo . . . . . .472 5. Of abandonment of freight ...... 474 SECTION XXV. Of revocation of abandonment . . . . . . .476 SECTION XXVI. Of general average ......... 477 SECTION XXVII. Of partial loss .......... 484 SECTION XXVIII. Of adjustment .......... 486 CONTENTS. XXV CHAPTER XIX. THE LAW OE FIRE INSURANCE. SECTION I. Of the usual subject and form of this insui-ance .... 488 SECTION II. Of the construction of policies against fire 494 SECTION III. Of the interest of the insured 507 SECTION IV. Of reinsurance 514 SECTION V. Of double insurance . . . . . . . . .516 SECTION VI. Of warranty and representation . . . . . . .519 SECTION VII. Of the risk incurred by the insurers ...... 526 SECTION VIII. Of valuation 529 SECTION IX. Of alienation .......... 530 SECTION X. Of notice and proof 536 SECTION XI. Of adjustment and loss 537 c XXvi CONTENTS. CHAPTER XX. LIFE INSURANCE. SECTION I. Of the purpose and method of life insurance .... 540 SECTION II. Of the premium .......... 541 SECTION III. Of the restrictions and exceptions in life policies . . . .542 SECTION IV. Of the interest of the insured ....... 548 SECTION V. Of the assignment of a life policy ...... 553 SECTION VI. Of warranty, representation, and concealment .... 555 SECTION VII. Insurance against accident, disease, and dishonesty of servants . 561 INDEX TO CASES CITED. [The paging of the first edition is preserved at the top of the page in this edition, the new paging being at the bottom. But the notes are in some instances changed from one page to the next, and the oases cited from those notes will be found in the pages after (in a few instances before), that given in tlie table.] Abbey v. Chase 14,5, 148 V. The R. L. Stevens 202 Abbot V. Hermon 29 V. Smith 166 Abbott V. Broome 470 V. Burbage 281 V. Draper 72 V. Hendricks 98 V. Hicks 291, 292 V. Ins. Co. 533 V. Keith 238 V. Sebor 476 Abby, The 416, 453 Abel V. Sutton 191 Abell V. Warren 7 Aberfoyle, The 356 Abington v. North Bridgewater 324 Aborn v. Bosworth 106 Abrahams v. Bann 256 Acebal i\ Levy 50, 76 Acey V. Fernie 542 Acheson v. Fountain 120 Ackerman v. Emott 158 Ackland v. Pearce 257 Ackley v. Kellogg A'Court V. Cr^s 203, 217 234 Adam, Ex parte 285 V. Kerr 322 Adams v. Bankhart 176 V. Claxton 298 0. Cordis 412 V. HiU 30 V. Jones 66, 67, 85 V. Lindscll 19 V. Malkin 284 V. New Orleans Steam-Tow- Boat Co. 203 Adams v. Penn. Ins. Co. 412, 418, 419 o. Rockingham Mut. Fire Ins. Co. 408, 533 0. The Sophia 389, 390 V. Warren Ins. Co. 439 Adamson v. Jarvis 155 Addis V. Baker 332 Addison u. Gandasseqai 149, 162, 163,436 V. Ky. and Louis. Ins. Co. 512 Adonis, the 424 ./Etna Ins. Co. v. Tyler 414, 510, 518, 533 Aflalo V. Fourdrinier 292 Agnew V. Bank of Gettysburg 115 V. Ins. Co. 526 V. Piatt 315, 316 Agricola, The 400 Agricultural Bank v. Bissell 255 Aiken v. Benton 232 Airey v. Merrill 214 Albany Dutch Church v. Bradford 30 Albany Exchange Bank v. Johnson 287 Alcock V. Taylor 169 Alcott V. Strong 167 Alder v. Fouracre 184 Aldcrson v. Pope 178 Aldrich v. Equitable Safety Ins. Co. 405 V. Grimes 6 V. Reynolds 258 V. Wallace 189 Aldridge v. Bell 470 I/. Great Western Railway Co. 218 V. Johnson 48 Alexander, Ex parte 299 The 379 424 V. Alexander 145 V. Bank of Rutland 146 u. Barker 184 V. Burnet 246 247 XXVH] INDEX TO CASES CITED. Alexander v. Dowie 334 u. Gardner 48 V. Gibson 141, 142 V. Greene 202 V. Heriot 6 u. Hutcheson 5 V. Southey 150 Alfridson v. Ladd 395 Alger V. Scoville 73, 74 Aline, The 342 Aliwal, The 383 Allaire v. Ouland 155 Allan V. Gripper 62 AUegre v. Maryland Ins. Co. 439 Allen, In re 296 V. Center Valley Co. 185, 186, 187 V. Charlestown Mut. Fire Ins. Co. 406, 512, 525 ,.. Comm. Ins. Co. 465, 466, 468 (;, Davis 172 V. Mackay 382, 385 u. Merchants Bank 144 V. Mut. F. Ins. Co. 502, 504, 506, 508 V. Newberry 402 V. Sea, &c. Ins. Co. 86 V. Sewall 216 V. Suydani 144 V. Wells 171, 188 Alliance Mar. Ins. Co. v. La. St. Ins. Co. 493, 514 Almgren v. Dutilh 357 Alsager r. St. Katherine's Dock Co. 348, 497 Alsop V. Coit 434 V. Comm. Ins. Co. 409, 410, 433, 434 V. Mather 192 Alston V. Mechanics Mut. Ins. Co. 518 ('. State Bank 239 Alves V. Hodgson 318 Amer. Ins. Co. v. Bryan 447 V. Center377,380,466,475 V. Coster 380, 474 V. Francia 462, 464, 466 u. Griswold 420, 486 V. Button 461 V. Ogden 377, 423, 425, 426, 429, 466, 467 V. Robertshaw 548 Amery v. Kodgers 435 Ames V. Downing 170 V. Swett 402 Amiable Nancy, The 156 Amicable Ins. Co. v. BoUand 545, 553 Amies i'. Stevens 215 Amory v. Jones 481 u. Gil man 409 u. Hamilton 138 u. M'Gregor 356 Amos V. Temperley 353 Amstel, The 400 Ancher u. Bank of England 101,122 Ancrum ;■. Slone 252 Anderson v. Clark 60 135,136, 141 104 549 558, 566 73 167 435 175, 177 472 88 146, 155 437 414 333 Anderson v. Coonley V. Drake V. Edie V. Fitzgerald V. Hayman V. Levan V. Thornton V. Tompkins V. Wallis u. Weston Andover v. Grafton Andre v. Fletcher Andrews, Ex parte u. Durant V. Essex F. &Mar. Ins. Co. 406, 442, 452, 492 V. Franklin 86 o. Heriot 322 u. His Creditors 318 u. Kneeland 58, 142, 145 V. Mellish 457 I.. Pond 95, 203, 255, 259, 260, 318, 321 V. Schott 166 Angerstein i'. Bell 462 Ann C. Pratt, The 341, 343 Ann D. Richardson, The 370 Anne, The 398 Anonymous (12 JNfod.) 345 (3 Salk.) 41 (1 Johns.) 412 (1 Ld. Raym.) 105 (2 Kay & J.) 170 (1 Hall Am. Law J.) 387 Antram v. Chace 33 Apollo, The 335, 417 Appleby V. Dods 388 Appleton V. Binks 70, 147 Arbouin v. Anderson 151 Archer v. Hale 67 V. Putnam 259 Archibald v. JNIcrcantile Ins. Co. 409, 452 Arden v. Sharpe 180 Arey v. Stephenson 236 Argall V. Bryant 248 Arina L', (i. Brig Exchange 381 Armani v. Castrique 93, 315 Armroyd v. Union Ins. Co. 334, 351 Armstrong I'. Robinson 176 V. Smith 157 V. Toler 34 Arnold t). Brown ^ 174,295 V. Downing 239 u. Hamer 187 V. Maynard 281, 283 Arnott V. Huglies 57 V. Redfern 252 Arrogante Barcelones, The 415 Arrott V. Brown ] 44 Arthur, The 424 V. Barton 379 V. Schooner Cassius 360, 361 Ash V. Putnam 64 INDEX TO CASES CITED. XXIX Ashbnrner v. BalcUen 357, 358 Ashby V, James 240 Ashley v. Ashley 553 _ V. Pratt 456, 457 Associated Firemen's Ins, Co. v. Assum 517 Astley V. Reynolds 81 Aston V. Heaven 218 Astor V. Price 260 V. Union Ins. Co. 421, 431 V. Wells 149 Atkin V. Barwick 42, 64 Atkins V. Burrows 395 V. Boylsion F. & M. Ins. Co. 437 V. Tredgold 241 Atkinson, Ex parte 284 V. Bayntun 27 V. Bell 48, 333 V. Brindall 281 t'. Jordan 277 V. Maling 331 V. Monks 87 Atkyns v. Amber 139, 161 Atlantic Ins. Co. v. Storrow 414,443,447 Tlie 341,392,393,394 Atlas, The 341 Atleo V. Backhouse 28 Attorney-General v. Ansted 152 V. Dunn 323 V. Norstedt 333 V. Riddle 136 V. Siddon 154 Attwood V. Banks 193 u. Griffin 89 V. Mannings 143, 146, 155 Atty V. Parish 362 Atwater v. Townsend 323 Atwood V. Cobb 23, 1 97 V. Crowdie 102 V. Partridge 291 u. Williams 402 Aubert u. Walsh 437 Augusta, The 341 Auriol V. Thomas 263 Aurora, The 378, 401 Austin V. Bostwick 241 n. Burns 87 V. Charlestown Female Sem'ry 9 V. Drew 526 V. M. S. & L. Railway 225 u. Vandermark 176 Ayerill v. Hedge 1 9 v. Loueks 174 Avery i'. Bowden 358 V. Halsey 155 V. Stewart 107 Aveson v. Kinniard 556 Awde V. Dixon 126 Ayer v. Brastow 305 V. Hawkins 83, 239 Ayer v. Hutchins 102 Ayers v. Hewett 16 Aymar v. Astor 444 u. Beers 103 C' Ayrey v. Fearnsides Ayton V. Bolt 87 234, 236, 237 B. Babb V. Clemson 52 Babcock v. Bryant 70 t. May 347 u. Montgomery Co. Mut. Ins. Co. 491, 526, 527 V. Weston 315, 316 Backhouse v. Sneed 214 Backhurst t). Olinkard 189 Backman v. Wright 35 Backus V. Shipherd 118 Bacon, Ex parte 302 V. Dyer 109 V. Searles 127 Badger v. Bank of Cumberland 329 0. Phinney 8 Badlam v. Tucker 331, 332 Bage, Ex parte 299 Baglehole v. Walters 56 Bailey v. Adams 69 u. Bamberger 8 V. Bidwell 97 V. Clark 166, 168 V. Steamboat Concordia 402 V. Damon 349, 358 V. Freeman 26 V. Porter 109 V. Quint 2 Bainbridge v. Neilson 469, 471, 476,477,550 V. Wade 66 Baines v. Holland 424 Baker v. Barney 285 V. Gray 332, 333 V. I^udlow 421, 498 u. Towry 422 V. Walker 98 V. Wheaton 316 V. Whiting 157 Bakewell v. Un. Ins. Co: 421 Balcom v. Richards 241 Baldey v. Parker 53, 76 Baldwin v. Williams 77 Balfe V. West 156, 158 Ball K. Dunsterville 177 Ballantine v. Golding 315 Ballard v. Merch. Ins. Co. 437 V. Oddey 256 Bailey v. De Arroyave 362 Ballinger v. Edwards 267 Ballou i: Spenser 164 V. Talbot 148 Balmain v. Shore 170 Baltic Merchant, The 398 Baltimore, &c., R. R. Co. e. Woodruff 218 Bamford «. lies 68 u. Shuttleworth 150 Bancher v. Cilley 168 Bancroft J>. Hall 114 Bangor v. Warren 82 INDEX TO CASES CITED. Bank of Augusta v. Earle 318 Barnard v. Bartholomew 232 236 Australasia v. Bank of Aus- V. Wheeler 345 tralasia 35 V. Yates 57 Columbia u. Lawrence 114 V. Young 261 England v. Newman 125 Barnes v. Cole 228 382 Ireland v. Beresford 291 u. Freeland 64 Kentucky v. Garly 111 V. Hedley 257 o. Pursley 111 V. Perine 33 V. Schuylkill Bank 140 V. Worlich 265 Metropolis v. Jones 140 Barney y. Carrier 178 Mobile V. King 142 V, Smith 190 Monroe v. Strong 258 Barnewall v. Church 458 Pittsburgh v. Whitehead 150 Barns v. Reynolds 116 E. f. Monteath 177 Baroagh v. White 102 St. Albans v. F. & M. Bank 92 Barr v. Myers 50 V. Scott 255 Barret v. Dutton 364 St. Marys v. Mumford 150 Ban-etti). Allen 107 U. S. «. Davis 144, 146, 150, 152 V. Jermy 502 u. Donally 95,318 , 322, 323 V. Rogers 347 V. Dunn 140 V. Union Mut. P. Ins. Co. 511 517 V, Owens 255, 259 Barrick v. Buba 358 V. Wagener 259 Barringer v. Snccd 23 Utica V. Philips 264 Barrow v. Bell 422 V. Smedes 107 Barry v. La. Ins. Co. 449 V. Wagar 255, 264 V. Nesham 168 Vergennes v. Cameron 105 V. Ransom 23 Banorgee v. Hovey 138 Bartholcmew v. Leech 157 Barbara, The 342 Bartholomew v. Pinnemore 8 Barber r. Barber 244 c. Jackson 29 V. Butcher 553 Bartlet v. Van Zandt 10 u. Fletcher 432 V. Walter 439 u. Gingell 137 Bartlett v. Carnley 349 V. Morris 551 .,•. Pentland 146, 153 161 V. Taylor 51 V. Vinor 415 Barclay, Ex parte 116 V. Williams 263 V. Bailey 107, 108 V. Wyman 388 u. Cousins 410 Barton v. Baker 119 u. Lucas 60, 185 V, Tower 286 V. Stirling 439 u. Williams 164 Bardwell v. Lydall 65 V. Wolliford, 448 V. Perry 188 V. Wookey 184 Bargett v. Orient Mnt. Ins. Co. 497 Bartram v. JlcKce 356 Baring v. Corrie 139 148, 161 Bartrum v. Caddy 127 Barker v. Blake 194 Barwell v. Cawood 170 V. Blakcs 470 Bass V. Bass 245 V. Burgess 180 u. Clivc 129 r. Cheriot 361 i: Smith 231 u. Greenwood 153 Basten v. Butter 53 c. Havens 352 Bastow V. Bennett 68 r. Hodgson 364, 366 Batavier, The 385 i!. Parker 68 Bate V. I5urr 252 I). Phcenix Ins. Co. 372, 422, Bateman v. Joseph 104 119 423, 478 Bates, Ex parte 285 V. Vansommer 259 V. Coo 273 u. Wallis 70 r. Dandy 10 Earklie v. Scott 178 u. Stanton 212 Barksdale v. Brown 141 V. Todd 347 Barlow v. Bishop 12, 128 Bath, E.r parte 284 «. Leclde 405 Batson v. Donovan 223 , 224 V. Ocean Ins. Co. 27 Battersby v. Gale 333 V. Reno 177 Battley v. Paulkner 248 Barnaby v. Eigalt 3 V. Lewis 165 Barnard v. Adams 367, 368 373, 478 Batty V. Carswell 142 , 145 INDEX TO CASES CITED. XXXI Batty V. M'Cundie 166 Beers v. Reynolds 195 Baxter v. Duien 149 Beete v. Bridgood 259 V. Earl of Portsmouth 286 Beirne v. Doid 58 V. Pritchard 281, 283 Belcher v. Capper 359, 360 V. Rodmaa 386 V. Lloyd 292 Bayw. Church •• 93 V. Prittie 281 V. Coddington 151 Belchier, Ex parte 298 299 I'. Cook 148 V. Parsons 297, 298 V. Freazer 89 Belden j;. Davics 26 V. Gunn 4 Beldon v. Campbell 378 Bayard v. Mass. F. & M. Ins Co 423 Bell I'. Bell 23, 431, 439 Bayley v. Gouldsmith 54 V, Beveridge 470 Bayhes v. Fettyplace 865, 366 V. Broomfield 423 Baylis v. Dinelev 4, 5 V, Bruen 321 Bayly v. Schofield 61 u. Carstairs 432 Beach v. Hayward 191 u. Cunningham 137 156 V. Hotchkiss 181 u. Franlds 119 V. State Bank 176, 180 V. Hobson 459 Beal V. Morels 178 V. Humphries 337 V. M'Kiernan 161 V. Kellar 66 Beale v. Nind 232 V. Locke 191 V. Thompson 397, 590 V. Mar. Ins. Co. 433 Beals V. Guernsey 232 V. Morrison 180, 230, 235, 238 241 Bealy v. Greenslade 239 i^. Moss 60 Bean v. Burbank 25 V. Newman 185, 186 188 V. Green 223, 224 V. Nixon 463 V. Stupart 406, 422 V. Puller 358 II. Sturtevant 201, 216 V. Smith 373 Beane v. The Mayurka 385 V. Thompson 276 Beard v. Kimball 278 V. Welch 66 0. Kirk 134, 140, 143 o. Western M. & F. Ins . Co. 408, Beardesley v. Baldwin 86 414, 439, 443 454 Bearse v. Ropes 356 Bellairs v. Ebsworth 60 185 Beaston v. Farmers Bank of Delaware 296 Bellemire v. Bank of U. S. 144 Beatson v. Haworth 457 Bellows V. Lovell 69 Beatty v. Marine Ins. Co. 491 Bellows & Peck, In re 296 Beaumont, Ex parte 299 Belote V. Wynne 180 , 241 V. Boultbee 158 Belton, Ex parte 288 ,289 V. Bramley 16 V. Hodges 285 V. Meredith 164 Bement v. Smith 48 Beaver, The 391, 396 Bench v. Sheldon 57 Bebee v. Robert 14 Bend v. Hoyt 151 Beck V. Evans 197 Benedict v. Smith 138 V. Robley 127 Benham v. Bishop 5 Beckford v. Wade 96 V. United G. & F. Ins. Co. 561 Beckham v. Drake 145 , 149, 179 Benjamin v. Benjamin 137 V. Knight 179 V. McConnell 15 Beckman v. Shouse 197,201 22C , 224, 226 V. Sinclair 347 Beckwith v. Baldwin 399 Bennet v. Paine 28 V. Baxter 138 Bennett, Ex parte 289 ,294 V. Cheever 17, 18 u. Dutton 205 V. Sydebotham 430 V. Farnell 89 Bedell v. Janney 252 V. Hull 78 V. Loomis 27 V. M'Gaughy 124 Bedford v. Brutton 300 V. Pratt 77 Bedford Com. Ins. Co. c. Parker 369, 370 Benson v. Blunt 364 Beebe v. Dudley 10 II. Chapman 475 Beech v. Jones 93 V. Thompson 335 Beekman v. Wilson 281 Bent V. Hartshorn 68 Beeler v. Young 7 V. Manning 7 Beeman v. Duck 129, 130 Bentall v. Burn 45, 76 Beers v. Crowell 77 Benthall v. Judkins 121 V. Haughton 316 Bentinck v. Dorrien 131 XXXll INPEX TO CASES CITED. Bentley v. Bustard V. Columbia Ins. Co. Benyon v. Nettlefold Ber};strom c. Mills Berkley v. Watling Bcrksliiie Bank i'. Jones Bernal v. Fim Berthotid v. Atlantic Ins. Co. Bcsch y. Frolicli Bessey v. Evans i\ Windliam Betsey, The Betterbee v. Davis Betts V. Barley u. Gibbius Bevan v. Lewis t. Bank of U. S. Bevans v. Rees r. Sullivan Beveridge ;;. Burgis Beverly v. Lincoln, &c.. Cape Co. Bevin v. Conn. Ins. Co. 543, ! Bholen v. Cleveland Bickeidike v. BoUman Bickford i\ Gibbs Biddel V. Dowse Biddlecornb v. Bond Bidwell V. N. VV. Ins. Co. Bigelow V. Benton u. Colton V. Davis V. Denison V. Grannis V. Heaton Biggs V. Barry u. Lawrence 99, V. Wisking Bignold V. Waterhouse Bilbie v. Lumley Bill V. Bament V. Mason V. Porter Billings V. Tolland Co. Mut. Fire : Co. 501, i Bingham v. Rogers Birch, Ex parte Vi Jervis V. Earl of Liverpool Bird I'. Adams V. Appleton V. Brown V. Cavitat V. Gammon V. Hamilton V. Picrpont Birge v. Gardiner Birkett v. WiUan Birkley v. Presgrave Birkmyr v. Darnell Bisel V. Hobhs Bishop )'. Breckles V. Hayward u. Pentland 372 Bishop V. Shepherd 385 386 526 Bishop of Chester v. Freeland 34 34 Bissel V. Price 347 390 Bitzer V. Shunk 177 144 347 Bixby V. Franklin Ins. Co. 329 417 109 118 Bize V. Fletcher 406 495 345 Black V. The Louisiana 395 404 493 V. Marine Ins. Co. 451 171 V. Smith 81 364 V. Webb 51 16 Blackett v. Roy. Exch. Ass. Co. 438 491 342 418 Blackhurst v. Cockell 422 81 Blackmore, Ex parte 285 315 Blagden, Ex parte 292 155 Blaine v. The Charles Carter 339, 342, 179 343 370 Blair v. Bromley 175 186 81 u. Drew 238 244 183 Blaireau, The 394 119 Blake v. Dorgan 171 54 V. Williams 34 311 549 552 Blakely v. Grant 113 312 Blakes, Ex parte 3 118 Blanchard v. Bucknam 361, 389 6f , 70 ... Dyer 405 32, 33 V. Russel 316, 318 61 V. Waite 403 , 490 492 424 Blanckenhagen i\Blundell 89 65 Bland, Ex parte 401 121 Blane i\ Drurnmond 311 38 Blaney v. Hendrick 232 137 V. Jackson 200 4,5 V. Harrison 143 2 V. Westmore 454 62 Bleeker v. Hyde 66 184 318 Blcnkinsop r. Clayton 76 44, 76 Blennerhassett v. Monsell 11 178 Blight V. Page 36, 364 366, 367 539 Block r. Bannerman 206 76 Blood V. Goodrich 136 138 462 V. Howard las. Co. 519 82 Bloodgood V. Bruen 237, 242 Ins Blore V. Sutton 155 502 506 Bloss V. Bloomer 35 222 227 V. Kittridge 57 284 Blossom, The Pilot Boat 383 308 Blot y. Boiceau 161, 162 75 Bloxam v. Sanders 42, 44, 63 242 Bloxham,"£,r parte 291, 292 416 V. Hubbard 301 138 V. Pell 168 311 Blow V. Russell 81 '!i. 236 Blue Wing, Steamboat, v. Buckner 383 166 Bluett V. Osborne 59 311 Blunt V. Bestland 10 228 I'. Boyd 38 223 Blydenburg v. Welsh 56 369, 372 Boardman v. Goro 166, 180 73 u. Keeler 167 179 V. Merrimac Mut. Fire Ins 170, 171 Co. 529 100 Boddington v. Schlencher 91, 108 422 Bodenham v. Bennett 223, 224 INDEX TO CASES CITED. xxxm Bodenhani v. Purchas Bodle V. Chenango County Mut. ' Co. Boehm v. Garcias V. Sterling Bcehtlinck v. Schneider Bogart V. De Bussy Bogert V. Vermilya Boggs V. Martin V. Teackle Bohtlingk v. Inglis Boind V. Dale Bold V. Rotheram Bolin V. Huffnagle BoUand v. Nash Bolton V. American Ins. Co. V. Hillersden V. Puller v. Sowerby Boraar v. Maxwell Bonar v. MacDonald u. Mitchell Bond V. Aitkin V. Brig Cora V. Pitzpatrick V. Gibson V. Nutt V. Pittard V. Storrs Bondrett «. Hentigg BonnafFe v. Penner Bonsey v. Amee Boody V. Lunt Bool V. Mix Boon V. The Hornet Boone v. Eyre Boorman v. Jenldns V. Nash Booth V. Jacobs Borden v. Hiern u. Hingham Mutual Pire Co. Bordes v. Hallett Bordman v. The Elizabeth Bork V. Norton Borradaile v. Hunter Borthwiek v. Carruthers Bosanquet v. Wray Bosford V. Saunders Bosley i>. Ches. Ins. Co. Boss V. Litton Boston, The &c. R. Co. 0. Bartlett Botsford V. Sanford Bouehelle i'. Clary Boucher v. Lawson Boultbeo V. Stubbs Boulton V. Jones V. Welsh Bound V. Lathrop Bourcier v. The Schooner Ann Bourdillon v. Dalton Bourne v. Mason 68 Bousfield V. Barnes 410, 421 Ins Boutflowcr V. Wilmer 449 534 Bouton V. Am. Ins. Co. 542, 543 109 , 131 Bovill V. Hammond 181 101 Bowden v. Vaughan 431 62 Bowdre v. Hampton 241 145 Bowen v. Argall 195 241 V. Burk 42,46 345 V. Hope Ins. Co. 424, 461 315 V. Morris 147 62 V. Newell 91 197 BowerbaTik v. Morris 143 461 Bowers, Ex parte 284, 285 62 Bowes V. Howe 105 292 545 Bowker v, Hoyt 53 399 Bowling V. Harrison 114 137 Bowman v. Hilton 21 151 V. Teall 202, 351 284 285 Bowring v. Elmslie 422 225 226 Boyce v. Anderson 36, 219 67 V. Edwards 128, 322 110 Boyd V. Brotherson 88 176 V. Dubois 434, 442 456 o. Emmerson 103 97 101 V. Mangles 292 180 V. Mynatt 166 424 V. Vanderkemp 150 168 Boydell v. Drummond 75 101 Boyden v. Boyden 6 443 Boyle V. M'Laughlin 208 182 V. Zacharie 316 333 Boynton v. Clinton & Essex Mut. Ins. 235 Co. 532, 533 , 534, 536 4 V. Veazie 44, 50 401 Boys V. Prink 227 31 Boyson v. Coles 159 58 Bracegirdle v. Heald 75 291 Bracken v. Miller 149, 150 119 Brackett v. The Hercules 390 397 V. Norton 29 Ins Bradbury v. Smith 189, 195 530 Braden v. Gardner 338 469 477 Bradfield v. Tupper 239 389 Bradford v. Busli 141 350, 365 u. Farrand 316 544 u. Kimberly 183 4 V. Manly 58 . ^^ 183 V. Russell 274 5 Bradhurst v. Col. Ins. Co. 350, 368, 369, 471 371,474 227 Bradley v. Bolles 400 456 V. Pratt 7 18 u. Richardson 159 258 0. Waterhouse 223 7 ;;. White 168 318, 382 Bradlie v. Maryland Ins. Co. 466, 467 119 Bradstreet v. Baldwin 347 43 V. Clark 246 112 V. Heron 356 241 Brady v. Calhoun 164 401 Bragdon ;;. Appleton Ins. Co. 492 2 Bragg V. Anderson 457 37 V. N. E. Mut. P. Ins. Co 533 INDEX TO CJISES CITED. Brainard v. Buck 2.15 Bromage v. Lloyd 128 I'. Burton 49 Bronde v. Haven 389 Braithwaite v. Britain 192 Bronson v. Kinxie 315 V. Gardiner 129 21. Newberry 316 Bramhall v. Beckett 151 Brooke v. Gaily 5 Brandon v. Brandon 289 V. La. State Ins. Co 410 V. Wharton 241 V. Pickwick 223, 225 Brasier v. Hudson 193 V. Washington 173 Braxton v. Wood 237 Brookline, The, 387 Bray v. Ship Atalanta 397 Brooks, Ex parte. 288 V. Bates 340 341 V. Bondsey 339 V. Hadwen 115 V. Dorr 387 390, 396 Braynard v. Marshall 315,316 321 V. Marbury 276 Brealey v. Andrew 27 V. Minturn 362 Breasted v. Farmers Loan & Trust Co 545 V. Mitchell 102 Breckenridge v. Ormsby 4, 9 V. Oriental Ins. Co. 371, 372, 410, Bredcn v. Dubarry 138 466, 485 Breed v. Judd 8 Brookshire v. Brookshire 143 Brenchley, Ex parte 289 Broom v. Batchelor 68 Brenermen, Ex parte 287 V. Broom 173 Brenzer v. Wightman 85 Brough V. Whitmore 438, 447 Brereton v. Chapman 362 Brouniker v. Scott 362 V. Hall 281 Brown, Ex parte 171 284 289, 292 Brett V. Levett 119 In re 91, 309 Brettel v. Williams 77 175 V. Arrott 141 Brewer v. Dyer 38 V. Bellows 49 V. Salisbury 44 V. Bridge 237 V. Sparrow 138 V. Clark 172, 191 Brewster v. Hammett 186 190 V. Davies 101 V. Hobart 155 0. Denison 203 V. Kitchell 423 u. Dewey 256 Breyfogle v. Beckley 253 u. De Winton 125 Brichta v. N. Y. iLafayetfe V. Eastern E. E. Co 223 Ins. Co. 408, 513 531 V. Edgington 59 Bridge v. Grand Junction Railway Co 218 V. Harrison 263 u. Hubbard 257 258 r. Heathcote 300 V. Niagara Ins. Co. 391 V. Howard 248, 360 Bridges.!;. Berry 117 V. Hunt 361 V. Hunter 430 432 V. The Independence 394 Briggs, Ex parte, 168 u. Jackson 151 V. Strange, 332 c. Johnson 362 V. Vanderbilt 168 u. Jones 387 V. Wilkinson 339 r. Langford 34 Brigham r. Peters 138 i;. Leonard 167 Bright V. Cowper 334 348 V. Litton 157, 191 Brind v. Dale 200 226 V. Lonard 171 o, Hampshire 85 y. Lull 387, 388 389, 391 Brine v. Featherstone 431 V. Maxwell 228 Brink v. Dolsen 157 V. McClure 3 Brinley v. Mann 14.? u. McGran 159, 161, 162 V. National Ins. Co. 539 V. M'Dermot 105 V. Spring 50, 332 V. ]Mott 291 Brisban v. Boyd 19, 160 V. Neilson 445, 464 Bristol r. Wilsmore 44 u. North, 354 British Linen Co. v. Drummond 9.'j,322,323 V. Peoples Mut. Ins. Co. 406 Brittan v. Bamaby 345, 347, 352 V. Quilter 539 Britten v. Webb 100 I'. Ralston 363 Britton v. Turner 30 V. Royal Ins. Co. 539 Broad v. Thomas 162 D. Sm"ith 447 Brock V. Thompson 257, 267 f. Southouse 157 Brocldebank u. Sugrue 137 V. Tapscott 181, 338 Brockway v. Clark 257 u. Toells 256 Brodie «. St. Paul 77 V. Union Ins. Co. 450 INDEX TO CASES CITED. Brown v. Vip:ne V. Waters V. Williams 17. Wood Brown's Appeal Browne v. Delano Brownell v. Bonney V. Flagler Browning v. Magill Bruce v. Bruce V. Hunter V. Pearson !;. Schuyler Bruen v. Marquand Brundrett, Ex parte Bruni, In re Brutton v. Burton Brutus, The Bryan v. Horseman V. Lewis V. N. Y. Ins Co. 460 255, 258 412, 512 304 187 366 119 228 47 318, 324 269 14, 17 316 176 284 397 138, 177 387 232, 233, 236 55 473 Bryant v. Commonwealth Ins. Co. 349, 380, 472, 474 V. Moore 135, 137, 142 V. Ocean Ins. Co. 431 V. Poughkeepsie Ins. Co. 498 Bryce v. Brooks 139 Bryden t). Taylor 110,111 Brydges v. BranfiU 175 Brynes v. Alexander , 432 Buchan v. Sumner 173 Buchanan «. Curry 176 V. Marshall 118 V. Ocean Ins. Co. 413 Buck V. Evans 223 V. Fisher 252 V. Winn 174 Buckbee v. Brown 139, 161 Bnckee v. United States Ins. Ann. & T. Co. 541 Bucker v. Hannay 232 Buckingham v. Burgess 167 V. McLean 263, 295 Buckley v. Barber 191, 335 V. Buckley 173 V. Farniss 61, 62 V. Guildbank 255 c. Hann ' 85 Buckman v. Barnum 164 ^. Levi .51, 226 Buckmyr v. Darnall 65 Buckner v. Finley 93 V. Smith 1 1 Bnddington v. Stewart 334, 335, 401 Bufe V. Turner 430, 523, 524 Buffum V. Graen 276 Bulger V. Roche 95, 323 Bulgin V. Sloop Rainbow 381 Bulkley v. Derby Fishing Co. 134 Bull V. Parker 81 II. Robison 51 BuUard v. Roger Williams Ins. Co. 425, 427, 441, 462, 468 BuUard v. Randall 91 Buller V. Harrison 150 Bullock V. Babcock 9 V. Boyd 263, 268 V. Campbell 249 V. Steamboat Lamar 383 Bulmer, The 397 Bumgardner w. Circuit Court 316 Bumpess v. Webb 182 Bunn V. Guy 26 Bunney v. Poyntz 82 Burbank v. Rockingham M. F. Ins. Co. 408, 518, 533 Burchard v. Tapscott 332 Burekle v. Echart 168 Burden v. M'Elhenny 232 Burdett v. Willett 302 Burdick v. Green 82 Burgess, Ex parte 285 V. Atkins 189 V. Gunn 349 Burgh V. Legge 112, 118 Burk y. M'Clain 311 Burke v. McKay 110 Burleigh v. Stott 241 Burlcy v. Harris 183 V. Russell 8 Burlington County Bank v. Miller 92 Burraester v. Hodgson 363 Burnet v. Biscoe 25 Burnett v. Kensington 422 Burnham v. Allen 88 V. Bennett 10 V. Gentrys 259 V, Rangeley 324 V. Webster 102 V. Wood 102 Burnside v. Merrick 173 Burr V. Sim 548 Burrall v. Rice 316 Burrell v. Jones 70 V. North 216 Burridge v. Manners 127 V. Row 635 Burrill v. Cleeman 361 Burritt v. Saratoga Co. Mut. F. Ins. Co. 422, 430, 431, 496, 520, 521, 522, 523, 524, 525 Burrough v. Moss 101 Burroughs v. Bloomer 246 Burrows v. Jemino 318 Burton's Case 254, 256 Burtus V. Tisdale 186 Bush V. Livingston 256 Busk V. Davis 48 ,/. Fearon 342 V. Roy. Exch. Ass. Co. 442 Bussard v. Levering 107 Bussy y. Donaldson 381, 400 Butcher v. Forman 293 Butler V. AUnutt 416 V. Basing 216 V. Breck 11 XXXVl INDEX TO CASES CITED. Butler V. Heane V. Hildreth V. Howe V. Wildman V. Winters 224 283 245 369, 440, 451 235 Bntman v. Monmouth Tire Ins. Co. 527 Butt, Ex pmte 309 Butterfield v. Forrester 228 V. Jacobs ' 237 V. Kidder 261 Butts V. Denn 82 Buxton V. Jones 110 Byers v. Fowler 295 Byrne v, Crowninshield 95, 246, 323 V. Doughty 137 V. Louisiana State Ins. Co. 454 o. Pattinson 361 u. Schwing 160 Byrnes v. Nat. Ins. Co. 485 C. 33 23 62 38, 77 323 397 276 167, 176 263 Caballero v. Slater Cabarga i'. Seeyer Cabeen v. Campbell Cabot V. Haskins Cadawalader v. Howell Cadmus, Brig, v. Matthews Cadogan v. Kennet Cady V. Shepherd Caffrey v. Darby Cabin V. Bigelow 78 Calbreath v. Gracy 423, 468, 469, 470 Caldwell V. Cassidy 109 Caldwell v. Leiber 183 (/.Murphy 219 u. St. Louis Perpet. Ins. Co. 440, 451 V. Stileman 192 Califf V. Danvers 197, 203 Caliot V. Walker 265 Calisto, The 400,401,402 Calkins v. Lockwood 50 Call V. Scott 257 Callaghan v. Atlantic Ins. Co. 424, 431 Callahan v. Boazman 83 Callender v. Ins. Co. of N. A. 474 Callett V. Morrison 495, 561 Callow V. Lawrence 127 Calvert v. Gordon 68 Camberling v. M'Call 464 Cambridge v. Anderton 462, 464 Camden v. Anderson 416 Camden and Amboy R. R. Co. v. Bal- dauf 222, 223, 224, 225 and Amboy R. R. Co. v. Burke 219,226 &c., Transp. Co. r. Belknap 203 Camidge v. Allenby 126 Cammack II. Johnson 189,190 Camp V. Grant 188, 192 V. Tompkins 97 V. Scott 102 Campbell, Ex parte 289 V. Carter 16 ti. Cliristie 4a6 V. Cothoun 172 V. Hall 318 V. Hassell ,161 V. Innes 433 V. Knapp 66 V. Morse 215 u. Shields 257 V. Stein 338 V. Webster 111, 119 Canal Bank v. Bank of Albany 129 Candy, Ex parte 297 Cannan v. Denew 284 u. Meabum 380 Cannon v. Alsbury 9 Cape Fear Steamboat Co. o. Conner 330 Capel w. Thornton 152 Capon V. Washington Ins. Co. 426, 429 Cappock V. Bower 29 Capron v. Johnson 316 Card V. Hope 335 CargiU !;. Corby 166 Carleton r. Sumner 45 Carley !). Vance 81,109 V. Wilkins 57 Carlis v. M'Laughlin 255 Carlisle v. The Eudora 336 Carlos i:. Fancourt 87 Carmichael o. The Bank of Penn. Ill Carnegie v. Morrison 38, 94 Carolus, The 384 Carpe v. Overton 8 Carpenter v. Am. Ins. Co. 152, 522 V. Marnell 302 V. Mutual Safety Ins. Co. 492 (/.Providence Wash. Ins. Co. 413, 414, 439, 509, 510, 517, 525, 532, 534 Carpue v. The L. & R. Railway Co. 206, 220 Carr v. Burdiss 281, 283 V. Clough 48 u. Hilton 434 V. Hinchliff 148, 149 u. L. & Y. Railway 225 V. Jackson 147 Carrere v. Union Ins. Co. 423 Carrington, Ex parte 285 ('. Manning 237 V. Pratt 343 Carroll ;;. Boston Mar. Ins. Co. 407, 531, 534 Carruthers v. Gray 451 V. Sheddon 406 X'. Sydebotham 422 r. West 291 Carsley v. White 383 Carson v. Mar. Ins. Co. 411, 412 Carstairs v. Stein 260 Carter v. Boehm 430, 433, 560 u. Champion 295 INDEX TO CASES CITED. XXXVll Cartel- v. Dean 284 u. Flower 118 V. Hamilton 21 V. Rockett 511 V. Smith 109 V. Toussaint 76 V. Union Bank 110, 111 V. WiUard 45, 52 Carteret v. Paschal 10 Cartland v. Morrison 47 Cartwright v. Cooke 32 V. Hateley 157 V. Williams 103 Carvick v. Vickery 124 Cary v. Curtis 151 «. Gruman 58 Casco, The 344 Case V. Boughton 26 u. Davidson 476 u. Hartford Ins. Co. 447, 526 u. Wooley 381 Casey v. Brush 181 Cash V. Giles 53 Cassedy v. Louisiana State Ins. Co. 468 Cassens, Ex parte 279 Cassiday v. M'Kenzie 143 Caster v. Burley 93 V. Murray 244 V. Tompkins County Bank 150 Castilia, The 391 Castling, u. Auhert 139 Cathcart v. Potterfield 295 Catherine, The 377 Sch., V. Dickenson 382 of Dover, The 383 Catlett V. PaciBc Ins. Co. 514 Catlin V. Bell 155 V. Springfield Fire Ins. Co. 503, 521, 527, 535 Catling V. Skoulding 232, 238, 244 Cato, The 390, 391 Caton V. Kumney 202 Catron v. Tenn. Ins. Co. 409, 525 Gaunt V. Thompson 112 Causten v. Burke 1 83 Cave t>. Colman 57 Cayuga Bank v. Bennett 116 Co. Bank v. Hunt 104, 107, 263 Gaze V. Baltimore Ins. Co. 351 V. Reilly 368 V. Richards 368 Centre v. Am. Ins. Co. 467 Central Bank of Brooklyn !). Lang 125 Certain Logs of Mahogany 345, 347, 348, 359, 360 Ghadbourn v. Watts 257, 258 Chamberlain v. Chandler 206 V. Parr 44 V. Harrod 495 V. Hopps. 85 V. Reed 372, 374 V. Ward 383, 385 Chamberlin v. Cuyler 238 Chambers v. Griffiths 54 Champion v. Short 53 Champlin v. Butler 339 V. Lay ton 150 Chandler v. Belden 346, 348 V. Sprague 346 V. Worcester Pire Ins. Co. 527 Channell v. Ditchburn 241 Chanoine v. Fowler 116 Chanter v. Hopkins 59 Chapel V. Hickes 37 Chaplin v. Hawes 218 V. Moore 11 V. Rowley 30 Chapman v. Black 258 V. Derby 292 V. Durant 335, 337 u. Forsyth 309 u. Keane 116 V. Koops 189, 190 V. Lamphire 284 V. Morton 144, 154 V. Robertson 95, 322 V. Walton 156 u. White 91 Chappel V. Hicks 53 V. Marvin 45, 62, 76 Chappie V. Cooper 7 Charles v. Marsden 97, 291 Charlotte, The 417 Charlton v. Lay 36 Charnley v. Winstanley 143 Charter v. Trevelyan 157 Chase v. Burkholder 35 V. Eagle Ins. Co. 427, 456 V. Goble 283 V. Maberry 198 V. Stevens 168 V. Taylor 111 V. Wash. Mut. Ins. Co. 513 V. Westmore 348 Chaters v. Bell in; 125 Chattock V. Shawe 560 Chazournes v. Edwards 180 Cheap V. Cramond 168 Chedworth v. Edwards 157 Cheek v. Roper 104 Cheever u. Smith 338 Clienot V. Lefevre 240 Chenowith v. Chamberlain 111 V. Dickinson 203 Ches. Ins. Co. v. Stark 469, 470 Cheshire v. Barrett 6 Chesraer D. Noyes 111 Chester, The 383 Chesterfield v. Janser 262 Manuf. Co. v. Dehon 303 Ohevallier v. Straham 200, 213, 214 Chick V. Trevett 26 Chickering v. Fowler 209, 210 Chicopee Bank v. Chapin 151 Child V. Sun Mut. Ins. Co. 491 V. Steamboat Brunette 402 xxxvm INDEX TO CASES CITED. 219, 359, 360, [361, 418, 237, Childe Harold, The Childers v. Deane 255, 268, Chiles V. Nelson Chion, Ex parte 302, Chippendale v. L. & Y. Railway Co. V. Thurston Chissum V. Dewes Chomqna v. Mason Chouteau v. Steamboat St. Anthony Cliristiansberg, The Christie v. Griggs V, Lewis V. Secretan Christina, The Maria, The Christophers v. Sparke Christy v. Flemington V. Row Church V. Barlow I'. Bedient c. Hubbart V. Knox V. Landers V. Sparrow V. Sterling 137, Churchill v. Eosebeck V. Suter Chusan, The 336, 345, Cincinnati Ins. Co. v. Bakewell 469,471 V. Duffield Citizens Bark v. Nantucket Steamboat Co. , 199, 205, City Fire Ins. Co. v. Corlies of Loudon, The Glamorgan u.'Lane Clapham v. Cologan 423, Clapp V. Rice 185, 215,341,344,346, 201, 231, 232, 233, V. Young Clark V, AUee V. Badgley V. Barlow V. Barnwell V. Deshon V. Dibble V. Dutcher V. Faxton u. Hougham V. Hundred of Blything 0. Hutchins V. King V. Leslie V. McDonald V. Manuf. Ins. Co. 406, 521, 522, 524, V. Mass. E. & M. Ins. Co. 350, V. Manson (,•. Moody 157, v. N. Eng. Mut. E. Ins. Co. 414, V. Ocean Ins. Co. 344, 409, 418. V. Protection Ins. Co. 415, u. Sigourney 26, 128. 391 269 24 303 225 261 191 247 216 424 220 449 431 399 417 234 242 353 144 470 406 189 137 179 157 218 266 401 ,477 471 216 526 384 5 4;37 121 383 187 261 252 355 24 181 236 222 242 414 51 87 7 219 523, 538 475 60 248 408, 5.33 410, 440 416 241 Clark V. Spence 197, 227 „. "Unit. Mar. & F. Ins. Co. 478 u. U. S. F. & M. Ins. Co. 483 V. Van Eiemsdyk 137 Clarke v. Bradshaw 232 V. Cock 129 V. Courtney 1*5 V. Crabtree 35^* „. Dutcher 236 V. Firemen's Ins. Co. 495 V. Percival 86 !■. Perrier 155 V. Spence 333 Clarkson v. Edes 360 V. Garland 255 V. Phoenix Ins. Co. 465 Clary v. Protection Ins. Co. 495 Clason V. Bailey 77 V. Smith 434 Clay V. Cottrell 180 V. Smith 316 V. Wood 218, 227 Clayton v. Gosling 87, -98 V. The Harmony 390 V. Hunt 223 V. Nngent 22 V. Phipps 119 Clealand v. Walker 149 Cleave v. Jones 240 Clegg ti. Levy 318 Clegliornu. Ins. Bank of Columbus 186,188 Clement, The 383, 384 V. Foster Clemson v. Davidson Clendaniel v. Tuckerman 362, 363 Cleveland v. Union Ins. Co. Clifford V. Burton V. Hunter Clift V. Schwabe Clinan v. Cooke Clode V. Bagley Cloutman v. Tunison Clugas V. Penaluna Coalter v. Coalter Coate V. Williams Coates V. Lewis V. Railton 0. Sangston Cobb V. Becke 77, 397, New Eng. Mut. M. Ins. Co V. Symonds Cobden v. Bolton Coblet V. Bachey Coburn v. Ware Cochran v. Fisher V. Perry V. Retberg V. Wheeler Cock V. Goodfellow V. Taylor Cocke V. Bank of Tennessee Cockell V. Taylor 186 349 364 442 12 427 545 136 115 398 318 245 164 161 62 24 156 458 66 285 224 22 37 424 170 362, 406 127 11 353 117 27 INDEX TO CASES CITED. XXX]J£ Cockerill v. Cincinnati Mut. Ins. Co. 404 Cocking V. Frazer 473 V. Ward 79 Cocks V. Borradaile 124 Cocoran v. Gurney 422 Cocran v. Irlam 155 Coddington v. Davis 118 Codman v. Rogers 244 V. Lubbock 81 Codwise v. Gelston 295 Coernine, The 401 Cofer V. Flanegan 548 Coffee V. Brian 181 Coffin V. Coffin 248 V. Jenkins 397, 398 V. Newburyport Mar. Ins. Co. 412, 442, 455 V. Storer 352, 361 Coffman v. Hampton 54 Coggeshall v. Am. Ins. Co. 460 Coggs V. Barnard 196, 198, 199, 213, 214 Cogswell V. DoUiver 238 Cohea v. Hunt 108 Colien V. Hinckley 445 <•. Hume 202 Coit V. Comm. Ins. Co. 421 V. Smith 433 V. Tracy 241 Colby V. Hunter 424 V. Ledden 296 Cole V. Blake 81 V. Cole 5 V. Goodwin 220, 222, 223, 227 i;. Jessup 246 V. Lockhart 265 V. Pennoyer 4 V. Sackett 82, 193 V. Taylor 23 Coleman v. Collins 212 V. Brig Hai-riet 391 V. Lambert 353 V. Riches 142, 346 Coles V. Bell 138 V. Mar. Ins. Co. 441 V. Trecothick 27, 136 Colgin V. Cummins 190 Coliot V. Walker 263 Colis V. Davis 12 CoUedge v. Hartz 424 Collier v. Nevill 256 CoUinge v. Heywood 249 Collins, Ex parte 93 V. Blantern 34 V. Butler 104 V. Martin 97, 151 V. Secreh 259 0. Union Transp. Co. 353 Collis V. Emett 126 CoUycr v. Dudley 157 Cologan V. London Ass. Co. 469, 476 Colombier v. Slim 127 Colombo, The 347 Colt V . M'Mechon 2 1 5 Colt V. Nettervill 285 0. Noble 144 Columbian Ins. Co. v. Ashby 367, 368, 369, 372,414, 466, 472 V. Catlett 411,455,471 y. Lawrence 412,443, 508, 511, 522, 523, 525, 527, 535 V. Lynch 419, 420 Columbine, The 383 Colville V. Besley 36 Colvin V. Holbrook 150, 151 V. Newberry 360 V. Williams 77, 161 Combe's case 155 Combs II. Boswell 193 Comfort V. Eisenbeis 293 Commerce, The 384, 385 Commercial Bank v. Cunningham 150 V. French 148 a. Nolan 263 V. Wilkins 185, 186 Com. Bank of Albany tT. Hughes 106 Buffalo V. Kortright 135 Lake Erie v. Norton 135, 155 Penn. v. Union Bank of N. J. 155 Com. & R. Bank v. Hamer 108 Commercial Mut. Mar. Ins. Co. v. Union Mut. Ins. Co. 404 Commonwealth v, Nichols 1 54 V. Power 206 V. Ricketson 399 Compton «. Bearcroft 318 u. Bedford 281 Comstock V. Grout 291, 309 Conant v. Seneca County Bank 150 Conard v. Atlantic Ins. Co. 295, 332 Concord Bank v. Gregg 152 Congregational Society v. Perry 33 Conly w. Grant 101 Conn V. Coburn 7, 65 Connecticut v. Jackson 268, 269 Conn. Mut. L. Ins. Co. v. N. Y. & N. H. Railroad Co. 552 Conner v. Martin 128 Connor v. Smythe 364 Conover v. Mut. Ins. Co. of Albany 408, 533 Conro V. Port Henry Iron Co. 137, 149, 150, 172 Conroe v. Birdsall 8 Const V. Harris 166, 177 Constable v. Noble 460, 495 Constantia, The 60 Converse v. Citizens Mut. Ins. Co. 508 Conway v. Eorbes 365 V. Gray 365 Conyers v, Ennis 60, 61 Cook, In re 295 V. Black 553 V. Bradley 25 xl INDEX TO CASES CITED. Cook V. Caldecott 280, 283 u. Gartner 167 r. Champlain Transp. Co. 218, 227 V. CoUingridge 171 V. Comm. Ins. Co. 449 V. Field 549 u. Ins. Co. 449 iy. Moffat 316 Cooke V. Callaway 138 V. Colehan 86 V. Seeley 179 Cooley V. Betts 157 V. Board of Wardens of Phila. 398 Coolidge V. Brigham 58 u. Gloucester Mar. Ins. Co. 409, 414, 472, 475, 476 I'. Gray 466 V. N. Y. Firem. Ins. Co. 423 V, Payson 128 Coope V. Erre 164 Cooper V. Elston 78 u. Meyer 130 I/. Rankin 136 V. Turner 234 Coosa, The 418 Cope V. Albinson 17 V. Smith 69 Copeland v. Mercantile Ins. Co. 146, 157 V. N. Eng. Mar. Ins. Co. 423, 425, 426, 442, 443, 527 V. Stephens 298 Copeman v. Gallant 302 Copin V. "Walker 148 Copis V. Middleton 65, 66 Coppin V. Braithwaite 206 (I. Coppin 319 V. Craig 161 Cordray v. Mordecai 339 Corlies v. Cumming 141, 160 Cormack v. Gladstone 456 Cornell v. Green 81 V. Le Roy 535 Cornfoot V. Fowke 14-'3 Corning u. Southland 138 Cornish v. Murphy 34-2 Cornwal v. Wilson 155, 160 Cornwall v. Haight 44 Cort V. Del. Ins. Co. 425 Cory V. Scott 1 1 8 Cossens, Ex parte 279 Coster V. Murray 044 t. Phoenix Ins. Co. 497 Costigan v. Ncwland 150, 151 Cotel V. Hilliard 311 Cothay V. Fermell 1 48, 1 84 1). Tute 51 Cottara V. Partridge 238, 243 Cottercl V. Harrington 263 Cotterill v. Starkey 227, 228 Cottin V. Blane 66 Cotton, In re 285 Couch V. Steele 391 Coulon V. Eowne 434 Coulter V. Robertson 34 Countess of Harcourt, The 387 Courcier v. Ritter 15* Court V. Martineau 432, 434 Courtnay v. Miss. F. & M. Ins. Co. 404, 437, 460 Cousins V. Paddon 53 Coutts V. Walker 295 Couturier v. Hastie 159 Covell V. Hitchcock 62 Coventry v. Atherton 245 !'. Barton 155 Covil V. Hill 46 Covington v. Roberts 370 Cowas-jee v. Thompson 62 Cowden v. Elliot 191 Cowell V. Simpson 139 Cowen V. Simpson * 149 Cowie V. Harris 281 V. Remfry 77 Cowperthwaite v. Sheffield 87 Cox ?•. Murray 400 i\ Prentice 150 1-. Rcid 336 V. Troy 85 V. United States 321 Coxe V. State Bank 81 Coye V. Leach 547 V. Fowler 26 Crabtree v. Clark 358 V. May 7 Crafts V. Mott 293 Craig V. Childress 199 u. Hewitt 250 V. Kittredge 16 V. Murgatroyd 420, 552 Craighead v. The Bank 238 Cram v. Aiken 370, 371 V. Hendricks 266, 267 Cramlington v. Evans 122 Crane v. Dygert 252 V. French 177 i^. Gough 78 V. Huhbel 256 Cranmer v. Gcrnon 389 Cranston ;•. Philadelphia Ins. Co. 139 Crawford v. Barkley 138 c. Branch Bank at Mobile 113 V. Cully 87 V. Smith 42 48 V. Wilson 324 Crawfords v. Taylor 276 Crawshay u. Coflins 171, 191, 306 u. Eades 62 t . Homfray 348 V. Maule 169, 170, J 90 Craythorne v. Swinburne 65 Creed, In re 548 «. Stevens 257 Cremer v. Higginson 68 82 Cripps V. Davis 102, 237, 242 Critchlow V. Parry 124 Crocker v. Higgins 33 INDEX TO CASES CITED. xli Crocker v. Jackson Crockett v. Dodge V. Newton Crockford v. Winter Crofts V. Waterhouse 456 369 385 154 219 Croker v. People's Mut. Fire Ins, Co. 520 Cromie v. Kent. & L. Ins. Co. 420 Cromwell, Ex parte 285 Cropper o. Coburn 186 Crooks V. Moore 46 Crosby v. Franklin Ins. Co. 495 Cross V. Cheshire 182 V. Peters 55 Crosse v. Smith 116 Crossley v. Ham 126 Crouch V. London, &c. Railway Co. 205 Crow V. Rogers 37 Crowley v. Cohen 411, 412, 413, 513 Crozier v. Smith 361 Cruchley v. Clarence 89 Cruder v. Phil. Ins. Co. 427, 461 Cruikshank v. Janson 424, 460 Crusader, The 386, 387, 388 Crutchley v. Mann 89 Culbertson v. Shaw 383, 385 CuUen V. Butler 440, 451 Culver V. Ashley 137 Cumberland Valley Mut. Ins. Co. v. Schell 523, 530 Cummings v. Powell * 4 Cummins v. Wire 257, 258 Cunliffe v. Harrison 76 Cunningham v. Hall 401 Cureier v. Phil. Ins. Co. 472 Curling v. Long ' 349 Curry v. Commonwealth Ins. Co. 430, 504, 511, 523, 535 Curtin V. Patton 5 Curtis V. Brown 74 V. Hutton 313 V. Pugh 76 Cushing V. The John Fraser 383 V. Thompson 510 Cushman v. Bailey '168 V. Holyoke 48 V. N. W. Ins. Co. 497, 530 Cuthbart v. Haley 258 Cutler V. Close 37 V. How 257 «. Rae 368 V. Rand 552 V. Thnrio 339, 360 V. Windsor 360 Cutter V. Davenport 319 V. Powell 356, 388 Cnyler v. Sanford 263 V. Stevens 107, 112, 115 Cynosure, Brig 384 D. Dabney v. Stidger 117 D Da Costa v. Jones 99 V. Newham 372 Dadmun Manuf. Co. v. Worcester Mut. Fire Ins. Co. 408, 508, 533 Dafter v. Cresswell 388 Dahlgreen v. Duncan 193 Dalby v. Ind. & Lon. Life Ass. Co. 551 Dale V. Hall 441 V. Hamilton 165 V. Roosevelt 26 V. Stimpsou 76 V. Young 70 Dalgleish v. Hodgson 424 Dalglish V. Davidson 486 I'. Jarvie 560 Dally V. Smith 284 Dalton V. Irvin 162 Dame v. Baldwin 47 Damon v. Granby 146 Dana ;;. Fiedler 252 V. Lull 175 V, Stearns 6 Danforth v. Allen 166 Daniel v. Cartony 256 V. Mitchel 55, 57 Daniell, Ex parte 284 Daniels«. Hudson River F.Ins.Co. 521,523 D'Anjou V. Deagle 216 Danson v. Cawley 425 Darbishire v. Parker 114 Darby v. Baines 335 V. Mayer 319 D'Arcy v. Lyle 155 Darling u. March 180 Darsey v. Packwood 32, 33 Dartnall v. Howard 156 Davenport v. Mason 79 V. Runlett 180 V. Tilton 296 Davey v. Mason 216 David V. ElUce 193 David Howes, In re 282 Davidson v. Case 476 V. Gwynne 356 V. Stanley 137, 138 Davies v. Edwards 239 V. Humphreys 39, 249 <>. Mann 228, 383 Davis V. A New Brig 402 u. Boardman 405 V. Child 401, 402 V. C(arke 131 Estate of 191, 194 V. Francisco 106 y. Garett 163 V. Garr 262 II. Garrett 156 V. Hardacre 260 V. Higford 268 V. Huggins 69 V. Jacquin 4 V. Johnston 335 V. Lane 134, 171 xlii INDEX TO CASES CITED. Davis V. Maxwell 29 V. Moore 44 ,76 V. Morgan 27 V. The Seneca 335 u. Shields 77 V. Simpson 299 V. Smith 5 V. Stciner 236 V. "Waterman 154 Davoue v. Fanning 299 Davy V. Plaliett 410 Dawes V. Boylston 311 V. Cope 52 Dawkcs V. De Loraine 87 Dawn, The 390, 394, 395 Dawson v. Atty 152 V. Collis 58 V. Lawes 69 Day V. Cummings 258 V. Crawford 154 Dean v. Angus 381 V. Hall 120 V. Hewitt 236 242 V. Hogg 360 V. Hornby 447 V. James 81 V. Mason 36 Dearborn v. Turner 54 Dease v. Jones 246 Deason v. Boyd 6 De Begnis v. Armistead 415 Do Berdt v. Atkinson 91 Deblois v. Ocean Ins. Co. 427, 457, 460, 465 466 De BoUe v. Penn. Ins. Co. 493 514 De Caters v. Le Ray De Chaumont 157, 299 Decbapeaurouge, Kx parte 297 Deckard v. Case 175 De Costa v. Scandret 430 Decouche v. Savetier 323 Decreet v. Burt 183 Dedcrir v. Del. Ins. Co. 472 Dedham Inst, for Savings i . Slack 140 Deering, Ec parte 284 V. Chapman 34 Deford i'. Reynolds 172 Do Jforest v. Fire Ins. Co. 160 V. Frary 86 V. Fulton F. Ins. Co. 405, 413, 439 493 , 512 , 513 u. Hunt 232 f. Strong 263 De Gaillon v. Aigle 162 De Hahn v. Hartley 406 , 422 Dcidcricks v. Com. Ins. Co 468 DchiHdd V. Illinois 141 ,146 , 155 Delahay v. Memphis Ins. Co. 525 Dclamanier v. Winteringham 390 Deliimatre v. Miller 107 Delano v. Bartlett 97 V. Bedford Ina. Co. 443 V. Blake 6 255, 96, Delano v. Rood Dalauney v. Strickland De La Vega v. Vianna Delaware, Barque, v. Steamer Osprey Dclraada v. Motteux Delmonico v. Guillaume Deloach v. Turner Delonguemare v. Tradesmens' Ins. Co. ^ 496, De Longuemere v. New York Fire Ins, ^ Co. 0. Phcenix Ins. Co. Demarest v. Wynkoop Demeritt v. Exchange Bank Doming v. Colt Demoss v. Brewster Denew v. Daverell Denison u, Seymour Dennett v. Wyman Dennis v. Ludlow Dennison v. Lee V. Thomaston Mut. Ins. Co. 430, Denniston v. Imbrie Denny v. Cabot V. New York Central R. R. Co. Denston v. Henderson u. Perkins Denton v. EniRury Depau V. Humphreys u. Ocean Ins. Co 174, 156, 406, 95 374, 467, 483 De Pan v. Jones De Peau r.' Russell Depeystcr r. Col. Ins. Co. v. Sun Mut. Ins. Co. De Riddcr v. M'Knight De Rothschild v. Royal Mail Steam Packet Co. Derwort v. Loomer DescadiUas v. Harris Desha v. Holland V. Smith Deshon v. Merchants Ins. Co. 24, De Silvale v. Kendall De Sobry v. De Laistre De Tasstett v. Crousillat De Tasted, Es parte De Tastet v. Baring De Vaux v. J'Auson t'. Salvador Devaux v. Steele Devayncs v. Noble Devercux v. Barclay Dewar v. Span Dewecs v. Morgan De Wolf V. Harris V. Johnson Dexter v. Bark Richmond Dey V. Dunham o. Poughkeepsie Ins. Co, Diana, The 294, 418, 440, 372, 443, 258, 259 164 322 383 452 173 235 521 433 419 246 316 175 178 162 399 102 424 252 431 269 168 515 94 303 248 321 468, 486 421 451 466 473 41 447 219 337 167 183 416 419 318 156 , 297 94 451 ,446 412 192 207 322 57 332 262 398 268 408 399 INDEX TO CASES CITED. xliii Dias 17. The Revenge 382 Dicken, Ex parte 289 Dickenson i>. Com. Ins. Co. 434 V. Haslet 356 Dickerson v. Seelye 347 Dickey v. Am. Ins. Co. 46.5 !i. Baltimore Ins. Co. 460 V. Linscott 36, 162 V. New York Ins. Co. 465, 466, 469 V. Unit. Ins. Co. 462 Dickins v. Beal 106 Dickinson v. Granger 181 u. Hatfield 236 o. Legare 175 V. Lilwall 146 V. Valpy 167, 175 Dickson, Ex parte 294 u. Alexander 179 u. Dickson 318 u. Jordan 50, 59 V. Thomson 231 Didier v. Davison 243, 244, 246 Dilk V. Keighley 7 Dilworth y. Sinderling 252 Dinsmore v. Bradley 316 V. Dinsmore 236, 241 Diplock u. Blackburn 157 Dispatch Line, &c. c, Bellamy Manuf. Co. 134, 137, 146, 155 Dispatch, The ■ 424 Ditchburn v. Goldsmith 99 Dixon V. Baldwen 62 V. Clark 81 V. The Cyrus 391, 392 V. Dunham 210 V. Johnson 119 V. Myers 48 V. Nuttall 103 u. Sadler 425, 426, 442 V. Stansfeld 139 V. Yates 42 Doane v. Keating 370 D'Obree,£ar parte 282,311 Dobree v. Eastwood 113 V. Mullett 116 Dobson V. Bolton 422 V. Collis 75 V. Droop 364 u. Land 413, 510 V. Sotheby 494, 502, 503, 506 Dod V. Herring 299 Dodge V. Adams 98 0. Bartol 370, 371 0. Burdell 25 V. Perkins 157, 251 V. Tileston 162 V. Union Ins. Co. 373, 380 Dodgson V. Bell 1 1 Dodington v. Hallet 338 Dodson V. Wentworth 62 Doe d. Caldwell v. Thorp 246 d. Davidson v. Barnard 259 V. Goldwin 138 Doe V. Gooch 263 D. Greening 22 V. Jesson 548 V. Lyford 22 d. Mann v. "Walters 138 V. Martin 152 d. Mctcalfu. Browne 255,260 V. Monsou 402 V. Oxenden 22 d. Pitt V. Laming 490 d. Rhodes v. Robinson 156 u. Smyth 304 V. Warren 268 Doggett V. Emerson 55, 57, 138 V. Vowell 29 Doig V. Barkley 268 Dolman t). Orchard 171 Domett V. Beckford 353 Dommett v. Bedford 306 Don V. Lippman 95, 322, 323 Donaldson v. Benton 81 V. Puller 399 Donallen v. Lenox 34 Donath v. Broorahead 60 Donelson v. Posey 165 Doner v. Stauffer 188, 190 Donnelly v. Clark 316 Donnington v. Mitchell 11 Doorman v. Jenkins 156, 198 Dorchester and Milton Bank v. New England Bank 144,155 Dorr V. New Jersey Steam Navigation Co. 214, 221, 222, 225 V. Pacific Ins. Co. 334 V. Swartwout 246 Doty V. Bates 175 Dougal V. Kemble 353 Dougherty K. Van Nostrand 191 u. Western Bank of Geor- gia 235 Douglas V. Browne 298 V. Moody 364, 369, 373 V. Oldham 322 V. Patrick 81 V. Winslow 190 Douglass V. Eyre 387 V. Howland 67, 70 V. McChesney 253, 259 V. Winslow 186, 189 Doaville v. Sun Mnt. Ins. Co. 406 Dow V. Drew 269 V. Hope Ins. Co. 438 V. Say ward 166, 189, 190 V. Whitten 406, 407, 438, 495 Dowdall y. Lenox 255 Dowdle V. Camp 78 Dowell V. Gen. Steam Navigation Co. 382, 383 Down V. Hailing 103 Downer v. Brackets 296 Downs V. Collins 170 V. Ross 78 Dows V. Cobb 50, 208, 346 xliv INDEX TO CASES CITED. Dows V. Greene 137 Dowtliwaite v. Tibbut 232 Dox V. Dey 252 Draco, The 340 ,342 , 343 Drake v. Manyatt 140 V. Ranney 168 Drayton v. Dale 129 Dreher v. Jitna Ins. Co. 408 ,532 Dresser i\ Ainsworth 58 Dresser Man. Co. v. Waterson 40 Drew V. Long; 11 [ . I'ower 255 Driggs V. Albany Ins. Co. 495 Driiikwater v. The Brig Spartan 345, 360, 381 388 V. Corp. of London Ass. Co 528 t". Goodwin 139 152 161 0. Tebbetts 118 Druid, The 382 Drummond v. Wood 144 Drury v. Vannevar 235 Dry V. Boswell 168 386 V. Davy 185 Dryden v. Krost 150 Drv Dock Bank v. Life Ins . & Trust Co. 259 268 Dublin V. Wicklow E. E. Co. 6 Dubois, Ex parte 287 u. Delaware and Hudson Ca- nal Co. 30,32 Dubose V. Whedon 7 Duckett V. Williams 559 Dudley V. Smith 206 V. Steamboat Superior 381 Duerhagen v. U. S. Ins. Co. 456 Dufaur v. Oxenden 128 V. Professional Life Ass. Co. 545, 546 Duff V. Bayard 339 V. Budd 208, 223, 224 Duffie V. Hayes 357 Dnffield v. Creed 234 Dugan V. Gittings 245 V. United States 100 Dusijgins u. Watson 382 Duke of Bedford, The 341 Manchester, The 399 Norfolk V. Worthy 53 148 Duly V. Perkins 252 Dumas v. Jones 409, 439 Dumont v. Pope 104 111 Dunbar v. Buck 359 Duncan v. Koch 468, 470, 471 V. Lowndes 176' u. Maryland Savings Institu- tion 255, 264 V. M'CuUough 105 V. Sun Fire Ins. Co. 422, 497, 502 V. Tindal 329 V. Topham 20, 404 Duncuft V. Albrecht 77 Duudas V. Dundas 319 Dundas v. Gallagher Dundee, The Dunham v. Conn. Ins. Co. V. Dodge I). Gould V. Murdock V. Rogers Dunklee v. Pales Dunlap V. Hales Dunlop V. Higgins 19; Dunn V. Comstock V. Sparks Dunnel v. Mason Dunnett v. Tomhagen Dunning v. Chamberlin Dupeyre v. Western M. & F. Ins. Dupin V. Mut. Ins. Co. Dupleix V. De Roven Dupont de Nemours v. Vance Dupre V. Thompson Durand !>. Thouron Durham v. Wadlington Durrell v. Bederley Dusar v. Murgatroyd V. Perit Dusenbury v. Ellis Dutton V. Hutchinson V. Solomonson ... Tilden V. Woodman Duvall I'. Craig V. Farmers Bank Dwight V. Brewster 199, V. Newell 127 Dwyer v. Edie 549 Dyer v. Burnham 146 u. Clark 172, 173 V. Hunt 318 Dykes v. Leather Manuf. Bank 103 E. 191 332 372, 484 241 268 186 168 295 20, 404 388 293 159 391 247 Co. 441 528 323 372 16 514 27 432 381 154 147, 148 244 48 23 167 147 255 201, 226 Eager v. Atlas Ins. Co. 485 V. Commonwealth 246 Eagle, The 401 V. White 207, 208 Eagle Bank v. Chapin 115 Eaglochilde's case 3 Eagle Ins. Co. o. Lafayette las. Co. 515 Eagleson v. Shotwell 259 Eaken v. Thom 391 Fames, Jix parte Earbee v. Wolfe 275 101 Earl (>. Shaw 454 Earl of Salisbury v. Newton 10 Earle, Ex parte 292 V. Harris 424 V. Reed 7,234 V. Rowcroft 448, 449 East Haddam Bank v. Scovil 144 East V. Smith 112 East India Co. v. Hensley 147 INDEX TO CASES CITED. xlv East India Co. v. Prince V. Sands Eastman v. Wright Easton v. "Worthington Eastwood V. Kenyon Eaton V. Bell V. Mcliown V. Taylor Ebenezer, The E. Carver Co. v. Manuf. Ins. Co. 140, 406 Eckford v. Wood 374 Edelen v. Gough 77 Edgell V. Stanford 256 Edgerly v. Shaw 5 Edick V. Crim 58 Edie D. East India Co. 101,120,122 Edis V. Bury 89 Edmond v. Caldwell 162 Edmonson v. Davis 180 Edson V. EuUer 129 Edward, The 418 Edwards, Ex parte 284, 297 V. Baltimore Fire Ins. Co. 535, 536 V. Barron 560 V. Brewer 60, 62 V. Burt 27 V. Childs 389 V. Golding 148 V. Goldsmith 24 V. Hodding 151 V. Perpetual Ins. Co. of St. Louis 406, 438 V. Ronald 315 V. Sherratt 205 V. Skirving 258 V. Ship Susan 389 V. Todd 356 Eeles, In re 285 Egan V. Mut. Ins. Co. 497, 512, 521 Egberts v. Wood 175 Egerton v. Mathews 77 Egg V. Barnett 92 Egleston v. Knickerbocker 23 Ehle V. Judson 98 Ehrlnghaus v. Eord 259 Eicke V. Nokes 237 Elder, Ex parte 289 V. Warfield 73 Eldridge v. Eowe 29 Elford V. Zeed 108 Elgie V. Webster 182 Eliason v. Henshaw 14 Eliza, The 342, 367, 387 Elizabeth, Brig 395 Elizabeth Frith, The 391 Elizabeth, Ship, v. Rickers 391 Elkin V. Moore 252 Elkins V. Boston & Me. R. Co. 199 Elkinton v. Fennimore 85 EUershaw v. Magniac 62 Ellery v. Merch. Ins. Co. 422 V. N. Eng. Ins. Co. 440, 451 232 Elliot V, Collier 11 415 Elliott V. Cooper 88 183 c. Gicso 66, 77 47 V. Minot 252 25, 73 V. Pybus 48 265 V. Swartwout 151 101, 127 V. Thomas 44, 53, 76 192 V. Wilson 456 382 Ellis, Ex parte 289 w. Com. Bank of Natches 106,110 V. Hunt 62 Ellis V. James 2 V. Lafone 419 u. Turner 222, 473 u. Warnes 258 V. Willard 347 Ellison V. Chapman 182 V. CoUingridge 86 EUmaker v. Franklin F. Ins. Co. 495, 537 Elsee V. Gatward 158 Elsworth ti. Tartt 168 Biting V. Brinkerhoff 104 V. Vanderlyn 27 Elton, £a; parte 187 u. Larkins 433 Ehvell V. Shaw 145 Ely V. Hallett 433 V. Peck 387 Emancipation, The 340, 341 Emanuel v. Bird 187 Emerson v. Harmon 175 u. Rowland 389, 394, 396 u. Knower 176 V. Murray 406 V. Proceeds of the Pandora 400 «. Providence Manuf. Co. 155 Emblin v. Dartnell 108 Emery v. Day 247 !;. Hersey 360 Emily, Brig 383 Emly t). Lye 126, 179 Emmerson v. Heelis 54 Emmctt V. Tottenham 85 Emory v. Greenough 315 Enderby v. Gilpin 264 Endraught, The 417 England v. Curling 166 Ensign v. Wands 166 Entwisle v. Ellis 406 Eppes V. Tucker 368 Ereskine v. Murray 88 Erie Bank v. Gibson 69 Erskine v. Steamboat Thames 208 Escopiniche v. Stewart 351 Esdaile v. La Mauze 142 V. Sowerby 119 Essex Co. V. Edmands 121 Esterly w. Cole 251, 252 Esti^ V. Rawlins 247 Estwick V. Cailland 276 Etheridge v. Binney 175 Eubank v. Peak 6 Europa, The 384, 385 xlvi INDEX TO CASES CITED. Evans v. Collins 148 V. Druramond 194 V. Evans 147 171 (,-. Forster 302 36.3 V. Harris 44 V. Huttou 366 V. Kymer 101 V. Mann 301 V. Megley 255 V. Montgomery 316 V. Nichol 60 ,v. Root 154 163 V. Soule 222 B. Twecdey 237 V. Underwood 86 V. Whylo 67 Eveleigh v. Sylvester 202 Everard v. Watson 112 Everett v. Desboroagh 5.59 560 V. Saltus 46 Everit v. Strong 177 Everitt V. Chapman 164 Everson v. Carpenter 5 Evert, The 417 Everth v. Smith 444 Evertson v. Tappen 269 Ewart V. Street 214 Ewer v. Washington Ins. Co. 495 Ewin, 111 re 318 Ewing V. Tees 136 Exall V. Patridge 38 Exeter Bank v. Rogers 68 V. Sullivan 180 241 Eyre, Ex parte 29 u. Bartrop 67 V. Glover 410 V. Marine Ins. Co. 461 F. Fabens v. Mercantile Bank 144 Fairchild i\ Slocum 217 Fairclough v. Pavia 100 Fairlee, £x parte 291 Fairlie v. Christie 406 V. Hastings 152 Fairthorne v. Weston 182 Faith V. East India Co. 357, 360, 361 Falkland v. Cheney 177 Fallowes u. Taylor 26 Fall River Wharf Co. v. Borden 172 Falls V. Gaither 14, 20 Fanning v. Consequa 95, 321, 322 V. Dunham 268 Fanny & Elmira, The 333 Farina v. Home 45, 76 Faris ». Ifing 257 Farmer v. Davies 100 V. F>ancis 32 V. Legg 415 V. Sewall 266 Fanners Ins. Co. v. Snyder 434, 470, 497 Farmers & Mechanics Bank v. Cham- plain Transportation Co. 209, 211, 216, ' 218, 222, 223 Farmers & Mechanics Bank v. Plant- ers Bank ^^'^ Farmers & Mechanics Bank v. Kerch- eval 67 Farmers & Mechanics Bank v. Troy City Bank 140 & Mechanics Bank v. Wilson 242 & Merchants Bank v. Batte 114 Farmin v. Anderson 247 Farnsworth v. Garrard 53 Farnum v. Perry 42 Farquhar, Ex parte 282 Farr v. Pearce 191 r. Sumner 8 Farrah v. Beswick Farral v. McClea FaiTar v. Adams Farrow v. Turner Fash V. Ross Fashion v. Wards Faulkner v. Augusta Ins. Co. V. Wright Favenc v. Bennett Favor v. Philbrick Fawcett v. Whitehouso Fawcus V. Sarsfield Fay V. Noble Peaks, In re Featherstonhaugh v. Fenwick 165 385 215 38 147 383 481 215 161 207 184 428 178 280 169, 171, 184, 191 147 177 409 432 60 164 12, 137 68 143 149 125, 142, 146, 147 257 Feeter v. Heath Feigley v. Sponeberger Feise v. Aguilar V. Parkinson V. Wray Felichy v. Hamilton Fellier v. Emerson Fellows V. Prentiss Fendall v. May Fenly v. Stewart Fenn v. Harrison Fcnno v. Sayre Fenton v. Clark 36, 162 u. Dublin S. P. Co. 360 V. Emblers 75, 248 V. Folger 110 h. White 7 Fcntum v. Pocock 97, 291 Fenwick v. Robinson 484 Ferax, The 401 Fcreday v. Hordera 264 Ferguson ;;. Bell 6 Ferguson ;;. Carrington 56 Ferrall v. Shaen 256 Fcrrara v. The Talent 391 Ferris r. Paris 157 Ferriss v. N. A. Ins. Co. 408 Ferry v. Ferry 268 Person v. Monroe I86 INDEX TO CASES CITED. xlvii Fettyplace v. Dutch 295 Fidgeon v. Sharpe 281, 283 Fiedler v. New York Ins. Co, 465, 466, 475 Field V. Chase 362 V. Holland 83 V. Ennk 76 Fielder u. Hanger H Filbery v. Lawford 291 Fillegan v. Laverty 192 Filley w. Phelps 188 Filson V. Himes 34 Finch V. Stacy 164 Findon, Ex parte 292 Finley v. Lycoming Ins. Co. 408 Finney v. Bedford Com. Ins. Co. 491 V. Fairhaven Ins. Co. 436 V. "Warren Ins. Co. 405 Firemens' Ins. Co. v. Lawrence 434, 458 First Baptist Church v. Brooklyn F. Ins. Co. 404, 493 First Parish in Sutton v. Cole 146 Firth u. Thrush 115,119 Fish V. Chapman 200, 213, 214, 220, 222 Fisher w. Clisbee 202 V. Cochran 424 V. Cumer 309 V. Lacky 316 V. May 27 V. Seltzer 19 V. Taylor 179 V. Willing 339, 381 Fisk V. Com. Ins. Co. 484 o. Masterman 420, 436 V. Newton 207 Fiske u. Foster 315 V. N. Eng. Mar. Ins. Co. 433 Fitch V. Hamlin 261 V. Jones 97 V. Livingston 383 V. Newberry 2 u. Stamps 178 V. Sutton 336 Fitchburne v. White 224 Fitchton v. Boyer 177 Fitts V. Hall 8 Fitzherbert v. Mather 149, 152, 430, 431 Fitzsimmons v. Joslin 138, 143, 152 Flanagan v. Camden Ins. Co. 407 Flanders v. Crolin 73 Flanigen v. Washington Ins. Co. 399 Fleckner v. United States Bank 137, 139, 257, 265 Fleetor v. Heath 147 Fleming v. Brook 90 KM'Clure 115 V. Smith 463, 470 Flemming v. Marine Ins. Co. 441 Flemyng v. Hector 137, 164 Fletcher v. Braddick 360, 361 V. Commonwealth Ins. Co. 507, 611, 512, .522,525 Fletcher v. Grover 39 V. Howard 52 V. Manning 92 V. Morey 300 Flight V. Booth 53 V. Maclean 123 Flint V. Day 121 V. Flemyng 344, 419 439 V. Ohio Ins. Co. 404 493 u. Rogers 108 Flook V. Jones 281 Florence, The 391 Floyer v. Edwards 256 260 V. Sherard 27 263 Foard v. Womack 91 106 Fobes V. Cantfield 269 Foden v. Sharp 322 Fogg V. Middlesex M. F. Ins. Co. 407 V. Sawyer 90 Foley V. Eobards 171, 179 Folger V. Chase 139 Folsom V. Belknap Co. Ins. Co. 407 V. Merch. Ins. Co. 413, 455, 458 Fonda v. Van Home 4 Fontaine v. Beers 329, 330 V. Col. Ins. Co. 378, 380, 412 V. Phoenix Ins. Co. 377,466,470 Foot!). Sabin 176 Foote V. Ston-s 197, 203 Forbes v. Aspinwall 410, 418, 419, 438 V. Manufacturers Ins. Co. 466, 473, 481 V. Skelton 244 Ford V. Aikin 16 V. Babcock 246 V. Beck 15 V. Phillips 5, 7 V. Williams 148 Forest, The 392, 393 Forgarties v. The State Bank 91 Forrest v. Elwes 261 Forrestier v. Bordman 137, 141, 144 FoTshaw V. Chabert .i 406 Forster v. Fnller 26, 147 V. Hale 77 V. Wilson 292 Fort V. Lee 434 Fortescue v. Bamett 555 Forth V. Simpson 2 Fortitude, The 377, 378 Fortuna, The 424 Forward v. Pittard 213, 214 Foster, Ex parte 278, 295 In re 291 u. Bates 137 V. Essex Bank 198 u. Equitable Ins. Co. 413 V. Frampton 64 V. Hall 179 V. Hodgson 244 V. Hoyt 416 V. McO'Blenis 75 V. Mentor L. Ins. Co. 540 xlviii INDEX TO CASES CITED. Foster V. Sell. Miranda 383 V. Faulk 103 V. Eemick 287 V. Swasey 152 V. United States Ins. Co. 337, 40.5, 435, 514 Fountain v. Grymes 263 Fowle V. Harrington 192 Fowler v. iEtna Fire Ins. Co. 406, 490, 529 V. Down 298 V. Hendon 114 V. Hunt 246 V. Ludwig 82 V. M'Taggart 62 o. Palmer 414 Fowles ?'. Great Westei-n Eailway Co. 218 Fox V. Adams 311 V. Clifton 167, 170, 178 V. Fisk 244 V. Frith 98 V. Hanbary 188 u. McGregor 21 Foy V. Bell 435 Fragano v. Long 48 Fraley ;'. Bispham 57 Frank v. Edwards. 68 Franklin Bank v. Cooper 66 u. Hosier 401 V. Miller 31 Franklin F. Ins. Co. v. Drake 495, 511 V. Findlay 415 V. Hamill 491, 538 V. Hewitt 407 Franklyn v. Lamond 147 Franks, Ex parte 285 Fraternal Ins. Co. v. Applegatc 552 Frazer v. Hilliard 42 V. Marsh 360 Frazier r. Thompson 34 Freake v. Cranefeldt 237 Frear v. Hardenburgh 29 Free v. Hakins « 124 Freeland v. Glover 432 Freeman v. Baker 393 V. Bireh 197 V. Boynton 105 V. Brittico 267 V. East India Co. 380 Sch. V. Buckingham 142, 346 French V. Andrade 191 V. Backhouse 337, 405 i: Chase 187 V. Grindle 266, 267 c. Hope Ins. Co. 413 u. Price 149, 334, 337 V. Stj'ring 181 Frentress v. Marklo 19.3 Frichette v. State Mut. Ins. Co. 451 Fridge v. The State 4 Friedlandcr v. London Ass. Co. 494 Friend v. Woods 213, 215 Friends, The 385, 390 Friere v. Woodhouse 433 Frink v. Branch 174 Frisbie v. Earned 82 Frith V. Barker 355 Fremont v. Coupland 181 217 Frontier Bank v. Morse 90 Frost V. Bengough 232 236 V. Brisbin 323 u. Lowry 55 V. Saratoga Mut. Ins. Co. 520 Frothingham v. Everton 161 V. Prince 391 ,472 Fry V. Hill * 103 V. Rousseau 87 Frye v. Barker 241 Fryer v. Roe 248 Fuller, Ex parte 304 V. Benett 150 V. Boston Mut. F. Ins. Co. 530 V. Bradley 202 345 c. Brown 36 162 V. Crittenden 23 u. Kennebec M. Ins Co. 464 486 I'. Naugatuck R. R. Co. 219 V. "Wilson 142 1.52 Fuller's case 263 FuUerton v. Sturges 126 Fulton Bank v. New York & Sli aron Canal Co. 150 Furber v. Carter 167 Furman i'. Haskins 102 107 Furze v. Sharwood 112 Fusell V. Daniel 263 Fussil V. Brookes 257 G. Gahn v. Broome Gaillard v. Le Seigneur Gainsford v. Grammar Gairdner v. Senhouse Gaither v. F. & M. Bank V. Myrick Gale V. BurneU V. Capern V. Eastman o. Halfknight u. Laurie V. Leekie u. Tappan ;■. Walsh Gall V. Comber Gallagher v. Waring Gallini v. Laborie Galloway v. Morris Gallway v. Mathew Gait V. Galloway Galway v. Mathew Gamble v. Grimes Gambril v. Rose Gamraell v. Skinner Gammon v. SchmoU 412 257 232 457 230 460 42 242 262 285 332 182 143 110 159 58 415 389, 416 177 143 167 34 257 252 131 166, 109, INDEX TO CASES CITED. xlix Gannett v. Cunningham Gansevoort v. Williams Garbett v. Veale Garbutt v. Watson Gardiner v. Childs V. Davis u. Gray V. Hopkins V. Smith Gardner, Ex parte u. Allen V, Baillie u. Col. Ins. Co u. Gardner V. Grout u. Hooper r. Howland V, Joy V. M'Cuteheon b. M'Mahon V. The New Jer.sey V. Bowe V. Salvador Garforth v. Bradley Garland, Ex parte Garnett v. Willan V. Woodcock Garrard v. Cottrell Garret v. Foot Garrett v. Handley Garrigues v. Coxe Garrison v. Memphis Ins. Co. Garside v. Trent & Mersey Navigation Co. 203, 217 Gates V. Madison Co. Mut. Ins. Co. 497, 503, 520, 522, 523, 524, 525, 527 192 180 189 78 179 162 57 73 418, 465, 472, 473 289 148 142 409 256 136 76 306 50, 331 78 162 236 381, 391 302 472 10, 11 170 223, 224 108 93 256 148, 185 425, 444 214, 471 Gatliff V. Bourne Gaunt V. Hill Gaarsen v. Morton Gay V. Lander Gazelle, The Geach v. Ingall Geary v. Physic Geer v. Archer Geill V. Jeremy Gellar, Ex parte Gem, Ex parte Gen. Mut. Ins. Co. v. Ruggles 210 66 143 120, 125 384, 385 557 87 98, 235 1, 115 174 284 376, 431, 442 Gen. M. Ins. Co. v. Sherwood 443, 445 General Smith, The 401 Genesee Chief, The, u. Pitzfaugh 384 George, The, 392, 393 Home, The 387 u. Clagett 148, 185 w. Harris 33 L'. Skeates 402 u. Surrey 88 Geortner v. Trustees of Canajoharic 190, Geraldes o. Donison Gerbier v. Emery 191 354 141 Gerrish v. Johnson 399 Getchell v. Heald 241 Gether v. Capper 17 Gibbens v. Buisson 362 V. Phillips 281 Gibbon v. Boynton 224 V. Coggon 111 « V. Mendez 361 Gibbons v. Ogden 398 Gibbs V. Bryant 252 u. Cannon 70, 119 V. Chisholm 268 Gibson v. Bell 292 V. Carruthers 60, 63 V. Colt 142 V. Cooke 554 V. Culver 207, 209 V. Hurst 199 V. King 284 V. Lupton 164, 178 V. Minet 15, 88, 89, 130 V. Moore 181 V. Overbury 555 V. Phil. Ins. Co. 412 V. Stearns 255 V. Stevens 50, 189 Gilford V. KoUock 387 Gilbert v. Dennis 105, 112 V. North Am. F. Ins. Co. 535 Giles V. Cynthia 389, 390 V. Eagle Ins. Co. 372 Gilfert v. Hallet 473 Gilkison v. Middletown 357 Gilkyson v. Larne 236 Gill V. Cubitt 123 V. Dunlop 416 V. Kuhn 166 Gillan V. Simpkin 354 Gillespie v. Cresswell 249 V. Hamilton 170 V. Hannahan 104 Gillett, Ex parte 302 V. Hill 48 Gillighan v. Boardman 77 Gillingham v. Gillingham 242 Gillis V. Bailey 155 Gillispy V. Coutts 332 Gilman v. Cutts 246 Gilmore v. Black 164 V. Carman 214 Gilpin V. Enderby 168, 264 V. Temple 167 Gilpins V. Consequa 36 Girard v. Taggart 148 V. The Wave 390 Girarday v. Richardson 99 Girolamo, The 399 Gladstone v. King 431, 434 Glasgow u. Pratt 112 Glascott V. Day 81 Glassford v. Laing 255 Glassington v. Thwaites 184 Gleason v. Dodd 143 E INDEX TO CASES CITED. Gledstanes v. Allen 357 Glen V. Lewis 502 Glendale Mauuf. Co. v. Protection Ins. Co. 422, 520 Glen V. McCulIough 232 Glocester, The 396 Glover V. Austin 333, 334 V. Dnfour 356 Goddard v. Cox 83 (. Hodges 183 V. Pratt 166, 172 Godfrey v. Farzo 302 V. Saunders 146 Godin V. London Ass. Co. 421 Godon V. Buchannan 202 Godsall V. Boldero 550 V. Webb 553 Godts V. Rose 76 Goff V. Clinkard 197 w. Rehoboth 81, 252 Goggerley w. Cuthbert 101 Goicochea v. La. State Ins. Co. 423 Goit V. National Prot. Ins. Co. 408, 497 Goix V. Knox 451 Golden v. Manning 207 Golder V. Ogden 48 Goldschmidt v. Whitmore 449 Goldthwaite v. M'Wliorter 160 Golubchick, The 388 Gompertz v. Bartlett 126 V. Denton 58 Gonzales v. Sladen 162 Goodale v. Wheeler 136 Goodall V. N. E. M. P. Ins. Co. 512, 51 7 Goodburn v. Stevens 170, 173, 191 Goode V. Harrison 7 V. Langley 48 Goodenow w. Tyler 141,160 Goodhue v. Butman ."jS Goodman, Ex parte 294 o. Chase 74 V. Harvey 123, 151 u. Whitcomb 171 Goodridge v. Ross 5 Goodsell V. Myers S Goodspeed i\ East Haddam Bank 140 Goodtitle v. North 290, 309 Goodwin I'. Holbrook 50 V. Jones 311 Goodyear v. Watson 66 Gookin V. N. Eng. Mut. M. Ins. Co. 461 Goold V. Shaw 441 V. United Ins. Co. 423 Goostrey v. Mead 1 1 1 Gordon i'. Am. Ins. Co. of N. Y. 418 (J. Bowne 464 I/. Buchanan 145 V. Bulkoley 136 !'. Preeman 193 V. Hutchinson 196, 197, 199, 200 V. Mass. P. & M. Ins. Co. 377, 408, 464, 468 o. Rimmington 446, 526 Gore V. Buzzard 1.M V. Gibson 286 Gorgier v. Mieville 122 Goshen Turnpike Co. v. Hnrtin 97 Goss V. Nelson 86 V. Nugent 406 V. Quinton 332 Goudy V. Gebhart 16 V. Gillan 241 Gould V. Armstrong 28 V. Gould 165 ^. Hill 214 , 220, 221 V. Oliver 371 V. Rich 144 V. Stanton 335, 338 Goupy V. Harden 104 124, 161 Gourdine v. Graham 247 Gourdon v. Ins. Co. of N. A. 408 Governor, The 384 Raffles, The 391 V. Daily 134 V. Gordon 248 &c. of Cop. Min. u. Po X 32 &c. V. Fetch 17 Gowan v. Capper 32 V. Emery 155 V. Jeffries 171 o. Moore 105 Grace v. Smith 168 Gracie v. New York Ins. Co. 414, 443, 463, 471 ■u. Palmer 357 Graeffv. Hitchman 179 Graham v. Ackroyd 161 V. Barras 424 V. Chapman 283 V. Com. Ins. Co. 454 a. Musson 136 V. O'Ncil 66, 73 Gram v. Seton 176 Granby v. Amherst 323 Grand Bank v. Blanchard 114 Turk, The 381 Granger, Ex parte 289 V. George 248 V. How. Ins. Co. 531 Grant, In re 12, 303, 304 V. Baily 385 c. Da Costa 98 o. ElUcott 291 r. Hcaley 412 V. Howard Ins. Co. 504, 506, 522 V. King 454 V. M'Lachlin 333 !'. Norway 142, 345, 346, 376 V. Ridsdale 68 V. Vaughan 47, 89, 122 V. Wood 353 Gratitudine, The 370, 378, 380 Gratz V. Bayard ' '170 Graves v. Ashlin 46 t'. Boston Mar. Ins. Co. 406, 495 V. Dash 94 INDEX TO CASES CITED. Graves v. Harwood 23 Grindley v. Barker 146 V. Marine Ins. Co. 458, 460 Grissell v. Robinson 38 V. Sawcer 335 Griswold v. N. Y. Ins. Co, 350, 354, 474 V. Weeks 247 V. Pratt 275 Gray v. Beldon 255 V. Sharpe 383, 385 V. Brown 261 V. Waddington 170 V. Chiswell 192 Grome, Ex parte 289 V. Clark 15 Groning v. Mendham 53 V. Cox 59 Groom v. West 292 V. Donahoe 87 Grosvenor v. Flax & Hemp Manuf. V. Fowler 256 Co. 254 260 V. Gardner 462 V. Gold 295 V. Handkinson 26 V. Lloyd 172 V. Mendez 245 Groton v. Dallheim 105 V. Munroe 316 Grout V. Hill 64 V. Wain 368 373 Grove v. Dubois 139, 159 161 Great Northern E. R. Co. V. Shep- Grover v. Wakeman 277 herd 226 Groves v. Graves 256 Greeley v. Bartlett 140 160 Grozier v. Atwood 386 V. Waterhouse 340 Grugeon v. Smith 112 i^. Wyeth 184 Grysill V. Whichcott 265 Greely v. Tremont Ins. Co. 369, 372, 466, Guerlain v. Col. Ins. Co. 406 467 481 483 Guidon V. Robson 167 Gregory v. Walcup 132 GuUett V. Laraberton 9 Greignier, Ex parte 297 Gulliver v. Drinkwater 309 Green v. Barrett 171 Gurney v. Behrend 63 V. Bicknell 291 t. Crockett 400 V. Biddle 315 V. Wormesley 126 V. Brown 445 ,464 Gustavia, The 400 V. Davies 88 Gute Gesellschaft Michael, The 417 ii. Deakin 180 Guthrie v. Armstrong 146 V. Elmslie 453 Gwinn v. Whitaker 252 u. Goings 109 Gwyne, Ex parte 63 263 ,415 V. Jackson 101 V. Kemp 259 H. V. Kopke 163 V. Merchants Ins. Co 433 Haabet, The 417 V. Miller 146 Haas V. Flint 264 V. N. K. Co. 156 Hackley v. Sprague 257 V. Rivett 233 Hackwood v. Lyall 339 u. Sperry 137 Hadley v. Clarke 208 ,365 ,366 V. Tanner 149 Hagedorn v. Oliverson 436 V. Thomas 26 Hahn v. Corbett 453 V. Young 451 Haigh V. Brooks 27 Greene v. Bateman 14 V. De La Cour 409 V. Mowry 311 Hain v. Stea^iboat North America 383 Greenhow v. Harris 259 Haine v. Terrant 7 Greenleafw. Quincy 241 Haines v. Busk 162 ,416 Greening, Ex parte 100 Hainess v. Corliss 11 Greenslade v. Dower 175 Hakes v. Hotchkiss 21 Greenwald «. Ins. Co. 526 Haldeman v. Michael 281 Greenway v. Hindley 111 Hale V. Gerrish 5 Greenwood v. Brodhead 186 V. Mercantile Ins. Co. 457 Grey, Ex parte 277 V. N. J. Steam Navigation Co. 214 Gridley v. Dole 182 V. Small 284 Griffith V. Buffum lee , 179 V. Washington Ins. Co. 445 • V. Griffith 150 u. Woods 145 V. Ins. Co. of N. A. 423 Halford v. Kymer 549 V. Young 72 Halhead v. Young 410 Grigsby v. Nance Griggs V. Austin 182 Haliday, Ex parte 297 351, 354 ,356 Hall, Ex parte 284 , 309 Grim V. Phcenix Ins. Co. 527 V. Ashurst 70 Grimshaw v. Bender 94 V. Boardman ' 312 lii INDEX TO CASES CITED. Hall ;;. The Buffalo 383 Hanson, Ex parte 300 V. Conn. Kivcr Steamboat Co. 219 V. Armitage 76 V. Cashing 301 Hapgood V. Batcheller 141 160 V. Daggett 263 Happy Return, The 388 u. Dyson 34 Harbach v. Elder 39 u. Franklin Ins. Co. 377 467 Harbald v. Kuntz 237 V. Fuller 92 Hard v. Prendergast 235 V. Leigh 164 Hardacre v. Stewart 151 V. Mollineaux 437 Harden v. Gordon 387, 392 393 V. Ocean Ins. Co. 332, 369 438 466 Harding v. Foxcraft 164 334 V. Newcomb 120 121 122 h. Souther 361 V. Pecke 157 Hardison, In re 309 V. People's Mut. F. In s. Co. 525 Hardman v. Wiilcork 150 1/. Heed 16 Hardwicke v. Vernon 157 V. Robinson 47 Hardy v. Sproule 335 V. Wilson 85 Hare v. Travis 458 Hallet V. Col. Ins. Co. 360 361 Hagous V. Stone 58 Hallett V. Wigram 372 Hargreaves v. Hutchinson 260 Halliday v. lIcDougall 93 u. Parson 73 ... Ward 242 V. Rothwell 150 Halifax v. Lyle 129 Harker v. Anderson 91 Hallock V. Ins. Co. .526 Harley v. Jlilward 371 Hallowell v. Saco 323 Harman v. Anderson 45, 76 Halsey v. Whitman 277 u. Clarke 362 V. Whitney 177 V. Fisher 64 Halwerson v. Cole 348 V. Gandolph 364 Hamilton r. Cunningham 160 V. Kingston 438 V. Lycoming Mut. Ins Co. 20, V. Vanhatton 413 404 492 II. Vaux 422 V. Mendes 463, 469, 476 550 Harmer v. Bell 345 V. Seaman 191 V. Killing 5 V. Summers 179 Harmony v. Bingham 36 V. Terry 14 Harn v. Fuller 97 V. Warfield 361 Harney v. Owen 8 Hammatt v. Emerson 37, 55 Harnor v. Groves 21 Hammett v. Yea 254 263 Harper v. Albany Mut. Ins Co. 498 Hammond, Ex parte 284 V. Little 143 148 V. Allen 414 V. The New Brig 400 402 V. Anderson 44, 76 V. Phcenix Ins. Co. 546 V. Blake 399 Harrell ;;. Owens 208 V. Douglas 191 Harrington v. Snyder 197 V, Hopping 257 261 V. M'Shane 214 V. Reid 461 r. Stratton 37 V. Smith 257 Harris v. Boston 263 V. Toulman 289 V. Clark 110 Hamond v. Holiday 162 V. Columbiana Mut. Ins. Co. 503 Hamper, Ex parte 168 V. Costar 219 Hampton v. Brig Thaddeus 370 V. Dreesman 362 Hamson v. Harrison 284 V. Eagle Fire Co. 406 530 Hancock r. Entwisle 289 y. Farwell 193 194 V. Fishing Ins. Co. 412 416 u. Huntbaeh 65. 73 !>. Hodgson 255 V. Lindsay 193 194 Hand v. Baynes 208 ( . Ohio Ins. Co. 517 Hands v. Slaney 7 u. Packwood 205, 223 224 Haney K. Balt.S. P. Co. 385 V. Rand 351 Hanford r. McNair 136 138 V. Ransom 16 5, 6 Hankey v. Garratt 192 V. Wall V. Jones 284 285 Harrison, Ex parte V. Armitage V. Clifton 238 284 291 Hanks v. McKee Hannah, The 57 378 182 4 447 7 42 Hannay v. Stewart 152 r. EUis Hansbrough v. Baylor 266 V. Fane Hanse v. N. 0. Mar. & F. Ii s. C 0. 481 V. Luke INDEX TO CASES CITED. liii Harrison v. McConkey 553 Hawkins v. Hoffman 225, 225 V. McHenry 157 V. Twizell 389 (.'. Ruscoe 113 , 116 Hawley v. Cramer 157 u. Sterry 175 , 311 Hawtayne v. Bourne 144 Harshman v. Lowe 277 Hawks V. Deal 1 Hart V. Alexander 193 Haxall II. Shippeu 408 u. Delaware Ins. Co. 419 439 Haxtnn v. Bishop 109 V. The Little John 390 Hay I'. Fairbairn 330 u. Nash 80 238 Haydock v. Lynch 86, 87 V. Prend^rgast 234 Haydon o. Williams 235, 237 <^. Stephen 10 Hayes v, Warren 29 V. Ten Eyck 157 Hayman v. Molton 377 V. Tomlinson 178 Haynes v. Birks 107, 114 V. Western E. R. Co. 218 ,414 , !535 V. Rowe 405 Hartfield v. Roper 228 V. Stewart 171 Hartford v. Jones 472 Hays V. Lynn 153 Hartley v. Case 112 I'. Mouille 60, 61 V. Wharton 4, 5 V. Stone 153, 156 157, 163 Havtman v. Keystone Ins. Co. .545 559 Hayward v. Leonard 30 Hartshorn v. Ins. Co. 406 V, Middleton 353 V. Slodden 281 Haywood v. Rodgers 430, 560 Harvard College v. Gore 323 Hazard v. Hazard 166 Harvey, The 388 u. N. E. Mar. Ins. Co. 14, 426, £Jx parte 284 444, 468 V. Archbold 262 V. Smith 258 t;. Richards 318 Hazlebakcr v. Reeves 230 V. Towers 97 Head v. Providence Ins Co. 404, 491 V. Turner 144 Heald v. Kenworthy 163 Hasbrook v. Palmer 87 Heane v. Rogers 285 Haskell v. Adams 181 183 Heanny v. Birch 284 V. Rice 44 Heard v. Stamford 11 Haskins v. Hamilton Ins. Co. 525 539 Hearne v. Edmunds 422 Hasleham v. Young 176 Hearsey v. Pruyn 150, 151 Hassell v. Long 68 Heath, Ex parte 118 Hassels v. Simpson 283 In re 280 Hassam v. St. Louis Perpet. Ins Co. 371 V. Franklin Ins. Co. 495 Hastie v. Be Peyster 515 V. Percival 193 Hastings v. Levering 57 V. Sansom 169, 170 I'. The Happy Return 392 393 Heathcote v. Hulme 191 V. Pepper 205 347 Heckscher v. McCrea 358 v.'Wiswall 268 Hedger i'. Steavenson 112 Hatch V. Bayley .■iO Hedley v. Bainbridge 175 V. Lincoln 50 Hcgeman v. Western R R. Corp 220 u. Searles 126 Heinecky v. Earle 64 u. Smith 136 Helena, The 333 V. Taylor 135 Helme v. Smith 338 V. Trayes 98 Helps V. Winterbottom 248 Hatchett v. Gibson 203 Helsby v. Mears 217 Hathaway v. Trenton Ins. Co. 543 Helyear v. Hawke 141, 142 Haughton v. Ewbank 137 Hemphill v. Chenie 208 V. Mathews 159 Henbach v. MoUman 159 Hause v. Judson 62 Henchman v. Offley 438 Havelock v. Goddes 361 Henderson v. Barbee 177 Haven v. Poster 16 V. Barnewall 155, 161 V. Gray 410, 438 V. Blanchard 253 Havens v. Hussy 175 V. Clarke 4 Hawcroft v. Great No. Railway Co. 204 V. Hudson 165 Hawkes v. Phillips 121 V. Lauck 44 u. Salter 115 f. Western M. &F. Ins. Co. 527 Hawkins, Ex parte 297 Hendricks v. Com. Ins. Co. 436 V. Appleby 180 V. Judah 102 u. Cardy 127 Hcnn V. Walsh 171 V. Cooper 227 Hennequin v. Sands 46 liv INDEX TO CASES CITED. 551 284' 152, Henop V. Tucker Henry Ewbank, The V. Lee V. Means Henshaw r. Mar. Ins. Co. V. Robbins Henson, Ex -parte B. Blackwell Herbert, Ex parte u. Champion V. Hallett Hcrckenrath v. Am. Mut. Ins. Co- HericUa v. Ayres Hermann v. Western Ins. Co. Hern v. Nichols Hernaman v. Bawden Herrick v. Borst V. Carman V. Kingsley Herrin v. Butters Herring v. Boston Iron Co. u. Mornin Hersey v. Menimack Co. Ins. Co. Heseltine v. Siggers Hesketh r. Blanchard 166 V. Stevens Hesse v. Sterenson Hetherly v. Record Hewett V. Buck 3.37 Hewison v. Guthrie Heydon v. Heydon Heyliger v. N. Y. Piremans' Ins. Co. Heyman v. Parish Hibbert v. Carter Hibblewhite v. McMorine Hickley v. Farmers and Merchants Bank 276 Hickman v. Hall Hickok V. Hickok Hicks V. Duke of Beaufort u. Foster V. Hotchkiss Heilyer v. Bennett Hiern v. Mill Higden v. Williamson Livermor , I'aekard u. Scott V. Senior 147, 148, Higginson v. Dall 406, 410, Highmore v. Molloy V. Primrose Hight V. Ripley Higinbotham v. Holme Hill, Ex parte u. Bellows V. The Golden Gate r. Gray V. Halford V. Heap 104, V. Henry V. Hooper 394 456 108 247 458 57 263 552 , 300 539 474 515 400 456 154 389 69 121 55 75 21 42 409 77 168 339 306 24 381 292 189 369, 373 449 408 55 277 7 248 119 176 31G 8 150 306 423 336 250 149 468 284 98 78 289 289 246 330 57 86 118 248 75 Hill V. Humphries V. Kendall V. Kitching V. Lafayette Ins. Co. V. McPherson V. Packard V. Patten Hillier v. Alleghany Co. Mut. Ins. Co. 447, 208 237 162 523 183 155 438 Hilliker v. Loop Hills V. M'Rae Hilton V. Fairchild V. Smith Himely v. Stewart Hindman v. Shaw Hinde v. Whitehouse Hine v. Allely Hincly i\ Margaritz Hinesburgh v. Sumner Hinkley v. Fowler u. Moreau Hinman v. Moulton Hinsdale v. Miles Hinsdell v. Weed Ilinton ;;. Acraman Hiram, The Hitchcock V. Coker V. Humphrey i\ St. Johns Hoadly v. JI'Laine Hoafsmith v. Cope Hoag V. Hunt Hoard i\ Garner Hoare v. Cazenove V. Clement I'. Dawes Hobart v. Drogan V. Norton Hobbs V. Memphis Ins. Co. Hobby V. Dana Hodgdon v. Hodgdon Hodge i\ Manley Hodges r. lloleman !'. Saunders Hodgson, Ex parte V. Blackiston V. Butts V. Davies r. Glover V. Loy u. Mar. Ins. andria t . Sliaw i\ Temple Hodkinson v. Fernie Hodnett v. Tatum Hoffman v. Carow V. Marshall !'. Noble 184, 526 185 192 114 97 432 389 42,43,76, 161 110 5 34 38 96, 316 27 103 356 291 365 27 117 175 50 52 312 144 132 400 164 391 458 407, 408 504 252 238, 239 295 27 2S9 464 381 80 410 60, 62 Co. of Alex- 409 65, 66 99 361 138, 152 47 422 56 V. Western Mar. & Fire Ins. Co. 529, 530 Hoffnung, TIio 350, 374, 424 Hogan V. Delaware Ins. Co. 406, 407 INDEX TO CASES CITED. Iv Hoge V. Hoge Hogg V. Horner V. Snaith Hoghton, The Hoit V. Hodge V. Underbill Hoitt V. Holcomb Holbrook v. Am. Ins. Co. V. Brown V. Foss I'. Wight Holbrow V. Wilkins Holden v. Dakin Holderness v. Sbackels Holdsworth v. Wise Holford V. Blatcbford V. Hatch Holland v. Palmer o. Pelham V. Turner HoUis V. Morris HoUister v. Nowlen 27 458 142 387 409 5 16 408,518, 532 416, 438 293 139 117 57 338 476 263, 266 298 309 549 105 16 205, 219, 222, 223, 224 318 126 Holman v. Johnson Holme V. Barry Holmes v. Blogg V. Broughton 96 V. Charlestown Mut. Fire Ins. Co. 496, 522, 529 o: Higgins 183 V. Hoskins 76 u. Hutchinson 392 v. Kerrison 163, 248 u. Misroon 252 V. Pavenstedt 360 V. Porter 168 V. Remesen 311, 312, 318 V. Williams 266 V. United Ins. Co. 164, 435 Hoist w. Pownal • 61,64 Holt W.Ely 151 V. Ward Clarenoieux 9, 33 Home V. Redfearn 86 Homer v. Ashford 26 V. Dorr 435 Homes V. Smith 107 Hone V. Mutual Safety Ins. Co. 491, 515 Hooban v. Bidwell 42 Hood K. Fahnestock 150 V. Manhattan Fire Ins. Co. 488, 495 V. New York & New Haven R. R. Co. 140,218 Hooe V. Groverman 360 Hooper, Ex parte 291 V. Accidental Death Ins. Co. 561 u. Hudson R. Fire Ins. Co. 495, 534 D. Lusby 337, 405 V. Perley 389, 390 V. Stephens 80, 238 V. Williams 125 Hope, Ex parte 291 V. Booth 291 Hope V. Cust Hopkins v. Appleby V. Forsyth u. Mehaffy V. MoUinieux V. Tanqueray Hopewell i'. De Pinna Hore V. Whitmore Horford v. Wilson Horn V. Bensusan Hornby v. Lacy Horncastle v, Farran Hornoyer v. Lushington Horsfall v. Fauntleroy c. Handly Horton's Appeal Hosack V. Weaver Hosea v. McCrory Hosford V. Nichols Hoskins v. Pickersgill Hosmer v. Beebe Hough V. Richardson V. Warr Houghton V. Enstis 180 53 381 148 134 57 548 423, 424 119 362 162 348 423, 460 149 150 170 47 216 319 332 141, 160 57, 152 68 296 V. Man. Mut. Fire Ins. Co. 520, 522 V. Matthews 141 V. Maynard 316 V. Page 262, 318 Houlditch w. Cauty 112 Housatonic Bank v. Martin 1 50 House V. The Schooner Lexington 210 Housego V. Cowne 113, 116 Houser v. Reynolds 5 Houstman v. Thornton 445, 464 Houston V. Darling 360 V. New Eng. Ins. Co. 434, 456, 457, 458 Hovey v, American Mut. Ins. Co. 520, 535 V. Blanchard 149 Hovil V. Pack 138 Howard v. Albany Ins. Co. 407, 408, 532 V. Baile 142 V. Chapman 153 V. Ives 115, 144 V. Jemmet 303 V. K. & L. M. Ins. Co. 316 V. Macondray 348 V. Miner 50 V. Priest 173 V. Shepherd 346, 407 V. Tucker 347 Howard Ins. Co. of N. Y. v. Scribner 419, 420 Howe V. Bowes 105 V. O'Mally 32 u. Nickels 67 17. Palmer 76 u. Thayer 172 V. Thompson 242 Howell V. Burnet 246 ii. Cincinnati Ins. Co. 522 V. Fountain 162 Ivi INDEX TO CASES CITED. Howell V. Harvey V. Young Howes V. Bigelow Howland v. Lavinia Hoxie V. Can- u. Lincoln Hoyle V. Stowe Hoyt V. Bridgewater Co. V. Byrnes u. Oilman 169, 171 248 11, 12 356 173, 174 8 5 264 81, 9() 430, 432 V. Wildfire 389, 391, 396 Hubbard v. Charlestown Branch R. R. Co. 252 V. Coolidge 26 u. Cummings 8 v. Elmer 152 V. Glover 431 V. Hamilton Bank 296 V. Jackson 127 HubbcU !'. Denison 402 Hubbersty v. AVard 142, 346 Hubble r. Perrin 192 Huber v. Steiner 95, 323 Huckman v. Fernio 12, 136, 152, 559 Hucks V. Thornton 414, 427 Hudson V. Bilton 424 V. Clementson 21, 362 V. Granger 139, 161 V. Harrison 469, 470, 472, 476 V. Tenny 252 Huffman v. Hulbert 69 Hugg V. Augusta Ins. & Banking Co. 349, 410, 473, 474, 475 Hughes i-. Ellison 175 V. Union Ins. Co. 410, 439, 456 V. Wheeler 82, 256 Huguenin v. Rayley 560 Huling V. Craig 36 Hull V. Caldwell 252 V. Jeffrey 276 V. Pickersgill 137 Hull of a New Ship 342, 402 Hulmc V. JIugglcstone 292 liumberston, In re 62 Humble v. Hunter 148 V. Mitchell 77 Humphrey v. Arabin 551, 552 Humphreys v. Blight 300 b: Jones 237 1^. Reed 202, 356 u. Union Ins. Co. 373, 421, 467, 481 Humphries v. Chastaiu 191 Humphry v. Douglass 9 Hunt I'. Adams 22 V. Bate 29 V. Bridgham 241 o. Carlisle 399 u. Chamberlin 143 u. Douglass 155 !>. Fish 114 V. Haskell 351 B. Hecht 76 Hunt V. Maybee V. Mickey V. Morris V. Nevers V. Roy. Exch. Ass. Co. V. Simonds Hunter, The V. Fry u. Jameson V. Leathley V. Miller 119 399 214 253 9, 33 470, 472 402 341, 378 357, 358 142 437 15, 145 V. Parker 137, 138, 377 c. Potts 315, 444 u. Prinsep 333 V. Wilson 97 Hunters v. The Morning Star 214 Huntingdon v. Hall 58 Huntington v. Knox 148 Huntley v. Sanderson 249 Huntress, The 204, 207 Hurd V. Brydges 284 Hurlbert v. Pacific Ins. Co. 487 Hurlburt v. Simpson 42, 43 Hurry v. Hurry 378 V. The John and Alice 342 V. Royal Exch. Ass. Co. 460 Hurst V. Holding 162 Hurtin v. Phcenix Ins. Co. 470 V. Union Ins. Co. 348, 351 Hussey v. Christie 380 V. Jewett 9 V. Thornton 44 Huston V. Cantrill 143 r. Moorhead 264 Hutchins v. Bank of Tenn. 172 V. Oilman 157 V. Hudson 172 V. Turner 180 Hutchinson v. Coombs 395, 396 V. Oascoigne 284 V. Hosmer 263 u. Smith 179 Hutchison v. Bowker 14, 17 Hutton D. Am. Ins. Co. 461 V. Bragg 360, 449 Hyde v. Paige 149 V. Trent & Mersey Navigation Co. 207 V- Willis 358 u. Wolf 149 Hyder v. Stone . 252 Hynds v. Schenectady Co. Mut. Ins. Co. 502, 527 Hysmger v. Baltzelle 246 I. Icard V. Ooold Ide V. Ingraham V. Stanton Idle V. Royal Exch. Ass. Co. 389 192 77 377, 470, 474 INDEX TO CASES CITED. Ivii Illidge V. Goodwin 227 Illinois Mat. Fire Ins. Co. i>. O'Neile 491 lUsley V. Stubbs 62 Ilsley w. Jewett 82 Imina, The 453 Imlay v. EUefsen -96, 323 Independent Mut. Ins. Co. v. Agnew .526 Indiana, The 383, 384 Indianapolis Ins. Co. v. Brown 256 Ind. M. F. Ins. Co. v. Coquillard 490, 533 Ingalls V. Lee 266 Ingersoll v. Van Bokkelin 381 Ingham v. Agnew 415 Inglis V. Haigh 243, 244 V. Usherwood 62 V. Vaux 461 Ingraham v. Geyer 311 V. Wheeler 277, 331 Ingram v. Forster 104 Ingrate v. Christie 201 Inman i'. Western Fire Ins. Co. 535 Innis V. Steamer Senator • 383 Ins. Co. V. Jarvis 452, 490 Ins. Co. of N. A. V. Jones 372 Insurance Co. v. Southard 496, 521, 522 Ins. Co. of Penn. v. Smith 404, 435, 436 Ins. Co. u. Updegraff 507, 510 Ireland f. Kip 105,114 V. Thompson 377 Iron Duke, The 883, 385 Irvine v. Kirkpatrick 57 Irving V. Crockett 9 V. J Canning 409, 462 V. Motley 152 V. Ricliardson 408 (7. Thomas 57 V. Veitch 248 Isabella, The 388 Jacobina, The 365 Isler V. Baker 1 7 1 J. Jackson, Ex parte 178 V. Alexander 167 I,-. Baker 141 u. Bossonette 161 V. Bowen 258 dem Caldwell v. King 286 V. Charnock 371 V. Cornell 186, 187 V. Covert 78 V. Duchaire 66 V. Forster 546 V. Henry 258 V. Hudson 130 u. Johnson 245 V. Jones 258 V. King 192 u. Mayo 9 u. Mass. Mut. F. Ins. Co. 408, 509, 517, 533 V. NichoU 64 Jackson v. Packard 258 V. Pigott 131 V. Robinson 164, 168, 334 V. Eogers 204 V. Sedgwick 166 u. Stopherd 181 u. Union Bank 144 V. Warwick 97 V. Wheat 246 Jacky V. Butler 189 Jacobs II. Adams 253 Jacomb v. Harwood 192 James, Ex parte 299 V. Bixby 336, 378 V. Catherwood 318 u. Griffin 62, 64 u. Patten 77 u. Shore 54 V. Stull 316 Jameson v. Drinkald 382 Jamieson v. Laurie 364 Jane, The 341 Jane & Matilda, The 385 Janes v. Whitbread 164 Janney v. Columbian Ins. Co. 334 Jansen v. The Heinrich 387 Jaques v. Marquand 179 Jarvis v. Brooks 188 V. Rogers 151 Jefferies v. Austin 97 Jeiferson v. Washington 324 Jefferson Co. Ins. Co. v. Cotheal 496, 504, 521 Jeffery v. Wolton 23 Jefferys v. Gurr 39 Jeffrey v. Bigelow 142, 152 Jcfts V. York 148 Jellinghaus v. New York Ins. Co. 140 Jencks v. Coleman 206 Jenkins v. Atkins 143 V. Blizard 172 V. Heycock 428 V. Hutchinson 148 v. Quincy Mut. F. Ins. Co. 512 Jenkyns v. Brown 63 u. Usborne 60 Jenney i\ Herle 87 Jennings v. Chenango Co. Mut. Ins. Co. 422, 497, 520, 525 V. Camp 29 I'. Estcs 167 V. Griffiths 339 V. Ins. Co. of Penn. 340, 341 V. Roberts 119 V. Whitaker 8 Jenys v. Fawler 129 Jeremy v. G'oochman 29 Jerome v. Whitney 87 Jerusalem, The 342, 401 Jessel V. Williamsbnrgh Ins. Co. 407 Jessey v. Roy 388 Jeune v. Ward 4 Jewett V. Warren 50 Iviii INDEX TO CASES CITED. Job V. Langton 370 Jones V. Ward 269 Joel V. Morrison 227 n. Woodbury 31 John, The 401 V. Wreck of the Massasoit 391 Johns V. Simons 379 V. Yates 16, 184 Johnson, Ex parte 105 Jones Man. Co. v. Man F. Ins Co. 504, V. Barber 152 520 u. Blasdale H."), 147 Jonge Margaretha, The 418 V. Broderick 390 Tobias, The 417 V. Dodgson 27, 77 Jordan v. Fall Biver E. E. Co. 225 V. Doubty 392 V. James 63, 139 u. Evans 189 ;;. Norton 17, 53 V. Foster 38 V. Warren Ins. Co. 350, 380, 442, V. Greaves 340 474, 475 V. Harth 106 Joseph Cunard, The 400 V, Hucliins 393 Harvey, The 399 u. Hunt 311, 333 V. Pebrer 162 u. Johnson 10, 39, 256 Joslyn V. Smith 69, 241 V. Jones 135, 138 Josselyn v. Ames 122 V. Lines 7 Journu V. Bordieu 421 V. McLane 54 Joy V. Campbell 302 V. Midland Railway Co. 204, 205 0. Sears 331 a. Miln 358, 359 Joyce V. Adams 48 u. O'Hara 160 Judah V. Dyott 157 V. Ogilby 147 V. Harris 87 V. Phoenix Ins. Co. 433 V. Randal 473 V. Shippen 339, 341 Judd V. Ives 275 V. Smith 76 Judge V. Wilkins 27 V. Stone 225, 227 Judson V. Sturges 144 u, Titus 27 Juhel V. Church 409, 437 u. Totten 172 Julian V. Schobrooke 129 V. The Walterstor£P 387, 388, Juliana, The 387 , 388 389,416 389 V. Wingate 137 Johnston v. Cope 57 V. Crane 370 V. Fessler 17 Johnstone v. Usborne 146, 155 Jollett V. Depontbien 310, 311 Jolly V. Baltimore Eq. So. 506 Jones, Ex parte 263 p. Ashburnham 28 V. Barkley 309 , V. Boston Mill Corp. 27 V. Bowden 57 V. Brooke 93 V. Cooper 73 V. Downman 147, 148 >^- Farley ' 15,3 V. Foxall 269 V. Hibbert 97, 291 V. Hook 322 V. Howland 281 V. Ins. Co. 428 V. Ins. Co. of N. A. 372 V. Jones 64, 183 V. Lane 127 u. Littledall 147^ 148 V. Nicholson 449, 451 V. Noy 171, 191 V. Brig Phcenix 398 1'. Robinson 37 I--. Rydc 126 a. Voorhees 201, 220 225 Jumel V. Mar. Ins. Co. 477, 481, 484, 487 Jupiter, The 384 Justin V. Ballam 400 K. Kain v. Old V. Comm. Ins. Co. 410, 421, Kaines v. Knightly Kammerhevie Eosenkrants, The Karasan, The Karthaus v. Ferrer Kase V. John Kasson, In re Kay !<. Allen Kaye v. Brett Keane v. Boycott Keavsarge, The Keate v'. Temple Keates v. Kadogan Keeler v. Fireman's Ins. Co. Keene v. Lizardi V. Thompson Keir v. Andrade V. Leeman Keith V. Jones Kelt V. Anderson Kelley v. Greenleaf V. Hurlburt V. Merrill 1/. Munson 21 456,457, 530 495 342 381 176 58 303 ■ 67 153 4 401 73 57, 59 399 206 90 416 29 87 362 174, 184 167 381 148 INDEX TO CASES CITED. lix Kelley v. Sanborn 180, 241 Kellogg V. Denslow 53 V. Hickok 268 Kelly V. Cunningham 383 384 V. Kelly 181 V. Webster 79 Kemble v. Atkins 161 0. Bowne 411 431 Kemp V. Finden 39 V. Pryor 155 160 Kendrick v. Delafield 449 Kennard v. Burton 218 Kennebec Co. v. Augusta Ins. & Bank- ing Co. 174, 406 Kennedy v. Bait. Ins. Co. 476 0. St. Lawrence Co. Mut. Ins. Co. 497, 520, 521, 522, 525 r. Whitwell 252 Kennett v. Chambers 35 V. Milbank 237 Kenniston v. Mer. Co. Mut. Ins. Co. 527 Kennon v. Dickens 268 Kenny v. Clarkson 413 Kenrig v. Eggleston 224 Kensington v. Inglis 498 Kent V. Manufacturers Ins. Co. 420 V. Phelps 263 Kentucky Mutual Ins. Co. v. Jenks 493, 540 Kenyon v. Berthon 406, 424 Ker V. Osborne 476 Kernochan v. N. Y. Bowery Ins. Co. 413, 414 Kerns v. Schoonmaker 248 Kerper v. Hoch 295 Kerri'. Moon 319 V. "Willan 223 Kerrison v. Cole 34 Kershaw v. Cox 122 V. Matthews 170 Kerswill v. Bishop 354 Kotchell V. Burns 65 Ketchum v. Barber 268 V. Catlin 15 V. Durkee 179 Kettell V. Alliance Ins. Co. 422, 473 Kewley V. Ryan 438 Key V. Cotesworth 62 Keyser v. Harbeck 47, 349 V. Scott 424 Kidd V. King 160 Kiersage, The 402 Kiester v. Miller 32 Kiggil V. Player 301 Kilborn v. Lyman 296 Kilburn v. Bennett 324 Kilgore v. Bulkley 90, 107 Kilgour V. Finlyson 142 Killam u. Preston 181 Killerease v. Killcrease 10 Kilsby V. Williams 103 Kimball v. Brown 238 c. Cunningham 56 V. Morris 280 Kimball v. Proprietors of the Boston Athenseum 257 V. But. & Bur. R. R. Co. 200 V. Tucker 363 Kimberly v. Ely 316 Kirabro v. Bullitt 166 Kime v. Brooks 136 King, Ex parte 289, 291 V. Baldwin 69 V. Beeston 146 u. Bickley 112 V. Corporation of the Bedford Level 143 V. Delaware Ins. Co. 469 V. Diehl 252 V. Dodd 166 V. Drury 263 V. Glover 416 V. Holmes 105 V. Johnson 266 V. Laindon 24 V. Lane 247 V. Lenox 216, 382 V. Manning 189 i;. Middletown Ins. Co. 461, 476 V. Paddock 285 V. Richards 211 V. Simmonds 284 V. Smith 193 V. State Mut. F. Ins. Co. 413, 414, 508, 510 V. Twyning 548 V. Dall 409, 549, V. Ferguson V. Hall V. Neptune Ins. Co. V. Brig Watchman V. Wheeler Lorent v. S. Car. Ins. Co. Loring v. lUsley ti. Neptune Ins. Co. 374, 483, V. Proctor u. Stineman Loiymer v. Smith Loscombe v. Russell Losee v. Dunkin Louis, Le Louisa Bertha, The Louisiana, Steamer, v. Fisher 383, Louisiana Bank v. Kenner Louisiana State Bank v. Senecal Louisville M. & F. Ins. Co. v. Bland Lounsbury v. Prot. Ins. Co. 501, Lovelace's case Lovelock V. King Lovering v. Mercantile Ins. Co. 435, Lovett V. Hobbs 201, 204, Low, In re V. Barchard V. Commissioners of Pilotage V. Perkins Lowe V. Moss V. Peers u. Waller 257, V. Weatherley Lowell V. Johnson V. Middlesex M. F. Ins. Co. Loweth V. Fothergill Lowry v. Adams V. Bourdieu Loyd V. Archbowle V. Freshfield Lubbock I'. Potts Lucas V. Beach u. Darrien u. Goodwin V. Groning V. Jefferson Ins. Co. 419, 420, V. Nockells V. Steamboat Swan Lucena v. Craufnrd 137, 412, 415, 507, Luciani v. Am. Fire Ins. Co. Lucy, Ex parte Ludlow V. Col. Ins. Co. V. Van Rensselaer Luf kin V. Mayall Luke V. Lyde 348, 349, 350, 351 , 352, Lumley v. Palmer Lupton V. White Lush V. Druse Lusk V. Smith Lutwidgo V. Gray 350, 436 187 560 339 136 475 277 36 450 335 486 403 548 55 182 102 318 342 385 170 150 441 506 177 31 471 226 309 27 398 146 208 99 259 28 258 512 232 67 437 167 179 437 182 45 37 159 518 360 383 439, 512 507 28 473 318 8 ,476 129 157 252 191 , 351 "INDEX TO CASES CITED. Ixiii Luxford b. Large 382 Lyde v. Mynn 291 Lyle V. Murray 248 Lyman v. Redman 361, 381 u. Boston & Worcester U. R. Co. 218 Lynch v. Dakell 407, 531, 534 V. Dunsford 430 V. Hamilton 430, 432 V. Nurdin 228 Lyon V. Commercial Ins. Co. 523 V. Jerome 155 V. King 75 V. Mells 222 V. State Bank 255 V. Tams 156 V. Williams 147, 148 Ly saght v. Bryant 1 1 6 Lysney v. Selby ' 57 Lyster v. Payn 417 M. Maberley v. Sheppard 76 Macarty v. Com. Ins. Co. 408 Macbeath v. Haldimand 70 Mace V. Wells 293 Mackay v. Bloodgood 177 V. Roberts 383 Mackenzie v. Cox 197 V. Scott 159 V. Shedden 418 Mackie v. Pleasants 423 Mackinley v. McGregor 136 Mackrell v. Simond 361 Maclean v. Dunn 46, 136 Macleed v. Snee 87 Macomber v. Com. Mut. Fire Ins. Co. 509 0. Dunham 261 u. Howard F. Ins. Co. 498, 503, 522 V. Parker 42, 48 Mactier !). Frith 19,404,492 Macy V. De Wolf 334, 336, 338 V. Whaling Ins. Co. 469 Madderford v. Austwick 184 Madison Co. Bank v. Gould 195 Madonna d'Idra, The 342, 389 Mad River & Lake Erie R. E. Co. v. Fulton 226, 227 Magee v. Atkinson 147 V. The Ship Moss 387 Mager v. Jadis 125 Magill t). Merrie 172 Maggrath v. Church 370, 373, 473, 481 Maggs V. Ames 65 Magoun v. New Eng. Mar. Ins. Co, 448 Magrath v. Robertson 285 Maguire v. Card 402 Mahoney v. KekaM 1 63 Mahoon v. The Glocester 396 Maine Bank v. Butts 265 Mainwaring v. Brandon 156 Mainwaring v. Newman 183 Mair v. Glennie 168, 332 Major V. Hawkes 193 Malbon v. Southard 127 Malcolm v. Loveridge 47 Maiden Bank v. Baldwin 109 Mallough V. Barber 156 Malone^y. The Brig Mary 398 Malta, The 388, 389 Maltby, Ex parte 288 Manchester Iron Manuf. Co. o. Sweet- ing 69 Mandorston v. Robertson 241 Mandeville v. Welch 97 V. Wilson 245 MancUa v. Barry 1 54 Manfield v. Maitland 419 Mangerton, The 385 Manhattan Co. v. Osgood 264 Manly r. United M. & F. Ins. Co. 458, 459 Mann v. Huston 278, 286 V. Moors 113 V. Shiffner 139 Manning v. Newnham 472 Manro v. Almeida 381 Mansfield v. Ogle 254 Manter v. Holmes 360 Manuf. & Mech. Bank w. Gore 179 V. Winahip 175, 177 Marbury v. Brooks 276 Marcardier v. Chesapeake Ins. Co. 360, 449, 465, 473 March v. Pigot 414 Marchant v. Dodgin 259 Marchetti v. Williams 130 Marcy v. Sun Mut, Ins. Co. 451 Mare, Ex parte 289 Marfield v. Douglass 139, 159 V.Goodhue 159,161,162 Maria, The 399, 400, 417 Marine Dock & M. Ins. Co. v. Good- man 466 Marine Ins. Co. v. Tucker 434, 470 V. Turner 474 V. United Ins. Co. 351 Marion, The 401, 402 Markham v. Jones 167 Marks v. Hamilton 508 Marley v. Boothby 66 Marlow v. Pitfield 7 Marquand v. Banner 359 V. New York Manuf. Co. 169, 170 Marr v. Southwick 192 Marriott!;. Shaw 189 Marryatts v. White 83 Mars, The 415 Marsden v. Reid 432, 457 Marseilles v. Kenton 244 Marsh, Ex parte 288 V. Barr 114 V. Blythe 384 Ixiv INDEX TO CASES CITED. Marsh u. Home 223, 224 e. Martindalc 254, 258 c. .Maxwell 116 ,-. Newell 127 a. Predder 353 c. Putnam 316 ;;. Robinson 416 V. Eulesson 29 Marshi ill. Ex parte 291 . Baltimore & Ohio E. R. Co. 29 o. Dudley 252 o. Garner 368, 369 u. Lynn 77 V. Montgomery 390 V. Nashville M. & F. Ins. Co. 447 V. Union Ins. Co. 431 Marsteller v. M'Clean 247 Marston i>. Allen 85 Marten v. Mayo 9 Martha, The 350 Martin, Ex parte 302 0. Boyd 121 V. Brecknell 292 V. Broach 236 V. Chauntry 87 V. Crokatt 463 V. Cronipo 191 o, Delaware Ins. Co. 455 V. Fishing Ins. Co. 423, 429, 459 V. Franklin 412 w. Heatheote 244 V. Hilton 399 V. Mayo 5, 6 u. Nightingale 284 V. Salem Ins. Co. 444, 447 V. Temperly 360 Martindale v. Smith 46, 63 Marvin v. Wallis 76 Marvine v. Hymers 255, 263, 264 Mary, The (1 Paine, C. C.) 262, 340, 341, 342, 388 (1 Mason) 381 (Ware) 389, 391 Mary Ann, The 342 Maryland Ins. Co. v. Bathurst 431 V. Le Roy 454, 455 Marzetti v. Williams 154 Mason v. Barff 129 u. Ship Blaireau 456 V. Connell 170 V. Crosby 152 V. Denison 285 V. Franklin F. Ins. Co. 488, 491 , 495 c. Haile 316 o. Harvey 535 V. Joseph 155, 156 V. Mason 547 V. Morgan 10, 128 V. Sainsbury 414 V. Skurray 421, 473 Mason v. Wickersham Massey v. Davies Massiter v. Cooper Masson v. Bovet Master v. jSIiller Masterman v. Cowrie Masters v. Barretto 194 157 206 56 406 263 110 V. Madison Co. Mut. Ins. Co. 408, 512, 532 V. JIasters 23 Mather v. Bush 316 Mathews v. Aikin 65 Mathewson v. Johnson 4 Mathie v. Potts 460 Matson v. Wharom 73 Matthews, Ex parte 331 V. Bliss 57 u. Fekh 168 u. Howard Ins. Co. 443, 445, 527 u. Lowther 358 1-. Milton "3 V. Offley 396 Maury v. Talmadge 219 Maving v. Todd 222, 226 Mavor v. Pyne 250 Mawson i'. Blane 5 Maxey v. Averill 193 Maxwell v. Robinson 460 May V, Babeock 23 w. Breed 311,315,316 a. Campbell 267 V. Prineeton 228 Mayall v. Mitford 503 Mayell v. Potter 208 Mayfield v. Wadsley 74 May hew v. Boyce 218 V. Fames 149 Maynard v. Rhodes 559 Mayo V. Archer 285 V. Harding 385 V. Maine F. & M. Ins. Co. 409, 410 V. Snow 361 Mayor, The, u. Wilks 243 Mayor v. Humphries 206 Mayor of Berwick, &c. v. Oswald 68 Mazozon v. Foot 246 McAllister v. Reab 251 M'Andrew v. Bell 433 McArthur v. Ladd 177 y. Sears 204, 213, 214 McBride v. Gray 237 M'Bride v. Marine Ins. Co. 365, 366, 372, 450, 487 McCalmont v. Kankin 329 M'Cargo v. Merch. Ins. Co. 437 McCargo ;•. New Orieans Ins. Co. 447, 459 M'Cartee v. Camel 543 M'Carter ;•. Huntington 339 M'Clarin v. Nesbit gl M'Clung V. Spotswood 135 M'Clure v. Richardson 199 'V. Williams 258 INDEX TO CASES CITED. Ixv M'Clures v. Hammond 199 M'Comb V. Wriglit 136 M'Combie «. Davies 159 McConicke v. McMann 35 McCormick v. Connoly 32 M'Cormick u. SulUvant 319 u. Trotter 87 M'Cortliy v. Abel 469, 476 McCoy V. Artcher 58 V. Huffman 8 McCrackon v. Haywavd 315 McCready v. Goldsmith 385 M'Cready« South Carolina E. Co. 218, 229 McCriUis v. Bartlett 286 V. How 7 M'CuUoch V. Eagle Ins. Co. 403, 404, 492 o. Indiana M. F. Ins. Co. 533 v. Eoy 435 M'CuIIoh V. Dashieir 187 McCullough ti. Henderson 239 M'CuUough V. Sommerville 177, 276 McDaniel v. King 324 M'Dermott v. The S. G. Owens 400 M'Doal V. Yeomans 65 M'Donald v. Beach 186 McDonald u. Black 143,511 V. Napier 150, 151 McDonnell v. Branch Bank 248 M'Donnell v. Carr 542 M'Dougal f. Baton 293 M'Dougle V. R. Exch. Ass. Co. 422 McDowell V. Cook 133 M'Elmoyle v. Cohen 323 McElroy v. N. & L. R. R. Co. 207 M'Elwee v. Collins 267 McEwan v. Smith 60 McEwen v. Montgomery Co. Ins. Co. 149, 517 McGan v. Marshall 4 M'Gaw V. Eagle Ins. Co. 475 V. Ocean Ins. Co. 350, 355, 474, 475 McGhee v. Morgan 27 McGill V. Rowand 225, 226, 227 V. Ware 257, 265 McGilvery v. Capen 360, 361 McGinn v. Shaeffer 9 McGivnov v. Phcenix Eire Ins. Co. 412, 507 McGraw v. Pulling 166 McGrew v. Browder 47 M'Gruder v. Bank of Washington 164 M'Guire v. Warder 262 McHenry v. Railway Co. 207 Mcllvaine v. Wilkins 252 M'Intyre v. Bowne 360, 449 c. Parks 320 V. Scott 339 Mclver v. Richardson 17, 66 McKenzie w. Nevius 156,163 M'Kesson v. M'Dowell 263 M'Kim t). Phoenix Ins. Co. 410,419 McKinly v. Watkins 32 McKinney v. Noil 207, 219, 220 McKinster v. Bank of Utica 144 McKinstry u. Pearsall 141 McKnight v. Danlop 30 M'Lanahan v. Universal Ins. Co. 427,433, 440 M'Lane v. Sharpe 218 McLaren v. Hartford Eire Ins. Co. 533 McLellan, In re 300 u. Maine Eire & M. Ins. Co. 469 V. Reed 361 McMahon o. Portsmouth M. F. Ins. Co. 496, 518 V. Sloan 46 McMasters v. Westchester Co. Mut. Ins. Co. 408, 532 M'Mechen v. Grundy 281 McMenomy v. Roosevelt 276 M'Millan v. M'Neil 315, 316 V. Union Ins. Co. 399, 425 V. Vanderlip 29 McMinn v. Eichmonds 4 McNeil V. Colquhoon 31 1 McNiell V. Reid 32 McPherson v. Rathbone 167 M'Queen v. Burns 262 M'Quirk v. The Penelope 389 Mead v, Davison 458 V. Degolyer 30 V. Engs 144 V. North Western Ins. Co. 503 V, Tomlinson 179 V. Young 88 Meader v. Scott 191 Mechanics Bank v. Bank of Columbia 139, 145 V. Edwards 259 V. Merchants Bank 144 V. N. Y. & N. H. E. Co. 142 Mecorney v. Stanley 66, 121 Medbury v. Hopkins 318, 323 V. Watrous 8 Medway v. Needham 318 Meech v. Philadelphia F. & Inland Nav. Ins. Co. 411 V. Eobinson 368, 479 V. Smith 147, 148, 251 Meigs V. Mut. Mar. Ins. Co. 462 Melancon v. Eobichaux 57 Melledge v. Boston Iron Co. 137 MellcQ V. Hamilton F. Ins. Co. 408 V. Nat. Ins. Co. 440, 495 V. Smith 384 V. Whipple 38 Mellish V. AUnutt 460 V. Andrews 470 V. Rowdon 103 V. Simeon 94 Mentor, The 397 Mercantile Mut. Ins. Co. u. Chase 214, 221 Ixvi INDEX TO CASES CITED. Mercer v. Lancaster 114 Miller v. Hackley ss V. Selden 10, 246 V. Hull^ 258 179 V. Southwell 105 V. Manico Merch. Ins. Co. r. Clapp 425 V. Miller 249, 250 Merch. & Manuf. Ins. Co. V. Duf- V. Race 47, 90, 122 field 471 V. Stewart 67 Merchants Bank v. Birch 126 u. Travers 22 «. Marine Bank 140 Millet V. Stephens 389 Merchants F. Ins. Co. u. Grant 5 Millikin ;■. Brandon 285 Meredith v. Hinsdale 322 Mills V. Argal 195 Meres v. Ansell 21 V. Ball 62, 64 Merian v. Funck 353 V. Barber 175 Meritt v. Clason 77, 136 u. Fowkes 83, 238, 239 Merle v. Wells 68 V. Hunt 44, 76 Merriam v. Hartford, &c., R R. Co. 204 V. Lee 28 V. Willdns 5 V. Long 385 Merrick v. Bank of the Metropo is 140 u. Roebuck 425 Merrick's Estate 162, 301 311, 313 Miln V. Spinola 339 Merrill v. Bartlett 334, 338 Milne v. Bartlett 170 V. Smith 12 V. Hubcr 35 u. Wilson 195 V. Moreton 311,312,318 Merrills v. Law 256, 261 Milner v. Tuckei- 53 Merritt v. Benton 263 Milnes v. Cowley 27 V. Johnson 333 Miltenberger v. Beacom 509, 514 Merry v. Prince 406, 412 Milton V. Mosher 136, 137, 174 Mcrshon v. Hobensack 199, 213 Milward v. Hallett 378 Mervin v. Shailer 381 u. Hibberfc 371 Merwin v. Butler 201, 208 Minard v. Mead 12 Messenger v. Clarke 12 Mine v. Richmonds 7 V. Southey 112 Miner v. Bradley 53 Messer v. Woodman 48, 54 V. Downer 177 Messier v. Amory 141, 160 V. Harbeck 394 Metcalf V. Bruin 185 V. Tagert 409 V. Pilcher 260, 267 Minerva, The 387 v. Koyal Exch. Ass Co 174 Minet, Ex parte 289, 293 Metcalfe v. Parry 456 Methuen Co. v. Hayes 135 Meymot, i?r parte 279,285 Meynell v. Surtees 17 Michael v. Tredwin 428 Michenson v. Begbie 358 Michigan Central R, Co. u. Hale 211, 221 u. Ward 210, 221 Middlebury v. Case 97 Middlebury College v. Chandler 7 Middlewood v. Blakes 434, 455, 458 Miers v. Brown 112 Mifflin V. Smith 177 Milburn v. Guyther 334 Mildmay v. Folgham 408 Miles V. Conn. Ins. Co. 556 V. Gorton 44, 60, 82 V. Thomas 182 Millar v. Craig 183 Millaudon v. Atlantic Ins. Co. 495, 513 u. N. 0. Ins. Co. 527 u. Western M. & F. Ins. Co. 420, 530 Miller v. Berkey 69 V. Brant 397 V. Drake 26, 32, 38 V. Eagle L. Ins. Co. 549, 552 V. Gaston 65 Minor v. Mechanics Bank of Alexan- dria 139 Minturn v. Columbian Ins. Co. 410, 412, 421 V. JIaynard 400 Miser v. Trovinger 117 Missroon v. Waldo 57 Jlitchel V. Ede 62 !'. Reynolds 26, 99 Mitchell V. Baring 132 c. Degrand 106 (.. Eddie 470 0. Fuller 133 V. Gazzam 281 V. Gile 42 V. Scaife 360 V. Sellman 235 V. Union L. Ins. Co. 549 V. Winslow 300 Mitford V. Jlitford 300 u. Walcott 132 Mixer v. Coburn 37, 57 V. Cook 46 V. Howarth 78 Moadinger v. Mech. Fire Ins. Co. 494 Moehring v. Mitchel 547 Moffat V. East India Co. 563 Mohawk Bank r. Broderiek 107 INDEX TO CASES CITED. Ixvii Moies V. Bird 121 Morgan v. Richardson 177 Moir V. Eoyal Exch. Ass. Co. 424 V. Schermcrhoi n 259 Moliere u. Noe 295 V. Stell 140, 143 V. Penn. Fire Ins. Co 495 V. Walton 236, 242 MoUer v. Young 345 Morisset v. King 264 Molson V. Hawley 291 Morley v. Atenborough 59 Molton V. Camroax 286 V. Boothby 26 Moncure v, Dermott 258 266 V. Culverwell 128 Mondel v. Steel 37 Morrall V. Mann 136 Monell V. Burns 29 Morrell v. Erith 235 236, 238 Moneypenny v. Hartland 162 V. Trenton Ins. Co. 549 Monk V. Clayton 143 Morridge v. Jones 37 V. Whittenbiirg 153 Morris, Ex parte 278 Monkhouse v. Hay 330 Morris v. Cleasby 152 158, 161 Monroe v. Conner 177 V. Kearsley 173 0. Linch 218 V. Lee 86 Montague v. Perkins 126 V. Morris 188 Montefiori v. Montefiori 289 V. Norfolk 11 Montgomery County Bank o. Albany V. Robinson 333, 380 City Bank 144 V. Summerl 156 Montgomery Railroad Co. v. Hurst 137 V. Walker 100 Monticello, Propeller, v. MoUison 384 Morrison ;;. Blodgett 189, 190 Montoya v. London Ass. Co. 443 V. Davis 515 Moody, Ex parte 289 V. Gen. Steam Nav. Co 383 V. Brown 48, 49 333 V. Munpratt 559, 560 V. Buck 335 V. Parsons 354, 476 V. Mahurin 81 V. Tenn. M. & F Ins . Co. V. Payne 188 190 408, 507, 510 531, 533 V. Surridge 421 Morse v. Bellows 176 V. Trelkeld 145 u. Green 145 V. Webster 139 u. Hovey 293, 309 Moon V. Guardians of Witney Union 155 V. Eoyal 157 Moore, Ex parte 284 y. Slue 224 u. Am. Transp.Co. 382 V. Williams 93 V. Campbell 17 V. Wilson 168, 264 V. City of Lowell 309 Mortimore v. Wright 29 V. Clementson 148, 152 162 Morton v. Burn 27 V. Evans 221 u. Naylor 87 V. Eitzwater 28 V. Tibbett 76 V. Hendrick 247 Moses V. Boston & Me. E. Co. 203, 204, V. Hylton 257 211, 222 V. Hyman 237 o. Col. Ins. Co. 466, 473, 481 c Jones 389 o. Delaware Ins. Co. 433 V. Moore 157 u. Macferlaa 36 ti. Protection Ins. Co. 500 537 V. Mead 57,58 V. Sample 189 V. Norris 199 V. Taylor 461 V. Pratt 436 V. Vance 259 268 V. Stevens 8 V. Warren 126 u. Sun Mut. Ins. Co. 440, 451 u. Wilson 148 155 Moslem, The 391 V. Woolsey 553 Moseley v. Tinckler 66 Moorsom v. Bell 363 Moss V. Rossie Lead Mining Co. 137, 138 V. Kymer 353 V. Smith 463, 475 Moran v. Jones 370 V. Sweet 54 More V. Howland 268 Mothe V. Erome 306 V. Manning 120 Motley V. Man. Ins. Co 509 V. Mayhow 149 Motteux V. London Ass . Co. 461, 495 Morean v, U. S. Ins. Co. 473 Mottram v. Heyer 61, 62 Moreton v. Harden 180 Moule, Ex parte 285 Morewood v. Pollok 214 V. Brown 91, 108 Morey v. Homan 15 Moult, Ex parte 187, 188 Morgan v. Brundrett 281 Mount V. Harrison 474 V. Davison 107 108 u. Waite 409 ixviii INDEX TO CASES CITED. 48, Mountford v. Harper 92 V. Scott 150 Mouton V. Noble 26 Mountsteplien v. Brooke 233, 242 Mowiitt V. Howliind 172 Mowbrav, f^x parte 299 Mowrv r. BMiop 265, 268, 269 " ,.. Shedden 365 Mozley i: Tinckler Mucklow I'. Mangles Muggridge v. Eveloth Muhler v. Bohlens Muilman v. D'Eguino Miiir V. United Ins. Co. Muirhead v. Kiikpatrick JIuldon V. Whitlock Mullen v. Gilkinsou MiiUer V. Genon V. Thompson Miilloy V. Backer Mulry u. iloliawk Valley Ins. Co Mumford v. Commercial Ins. Co. V. Hallett V. NicoU c. Phoenix Ins. Co. Hunger v. Tonawanda R. R Munn V. Baker V. Commission Co. V. WarraU Munroe v. Cooper Murdock v. Chenango Mut. Ins. Co. 408, 495, 4'96, 512, 519, 521 Murmester v. Barron Murray v, Alsop V. Garret V. Columbian Ins. Co. 17 333 357 159 103, 104, 115 471 27, 28 335, 336 29 354 416 356 525 349 410 338 451 228 224 2G6 16 97 406, 532 113 434 36 Co. 409, 437, 439, 460 142 263 462 419, 421 389 117 237 190 190 277 185, 187 V. East India Co. V. Harding V. Hatch V. Ins. Co. of Penn. V. Kellogg V. King u. Mechanics Bank u. Mumford V. Murray V. Riggs Murrill u. NeiU Musehamp v. L. & P. June. Rail'y 217, 218 Muse V. Donelson 180, 241 Musgrove v. Gibbs 266 Musier v. Trurapbour 164 Mussey v. Rayner 67 ('. Scott 145 Mu.sson V. Lake 105 Mnt. Ass. Co. V. Mahon 512 Society v. Stanard 295 Mut. Benefit Life Ins. Co. i'. Ruse 542 Mut. M. Ins. Co. V. Munro 410, 462 V. Swift 436 Mut. Safety Ins. Co. v. Cargo of Ship George 369, 373 Mut. Safety Ins. Co. v. Cohen 464 Mut. Safety Ins. Co. v. Hone Mutford V. Walcot Mycoff V. Longhead Myer v. Vander Deyl Myers, Ex parte V. Baymore u. Edge u. Entriken u. Girard Ins. Co. 518 131 266 370 291 373 185 141, 160 . _. 425 t. Keystone Mut. L. Ins. Co. 404 V. Willis 339 Mytton 0. Cock 198 Nash V. Brown u. Hodgson c. Skinner V. Tupper Natchez Ins. Co. i N. Stanton 9.5, 322 425, Nathaniel Hooper, The 348, 350, 351 361,*365^ National Bank v. Eliot Bank r. Norton Natterstrom r. The Ship Hazard Nautilus, The Navone v. Haddon Nayade, The Nayler v. Palmer Naylor v. Dennie 6 V. Taylor 469, Neal V. Cottingham V. Saunderson Neate v. Ball Neel V. Deens Neely v. Onondaga Co. Mut. Ins. Co. Neilson v. Col. Ins. Co. V. De La Cour Neirinckx, Ex parte Nellis V. Clark Nelson, The i\ Belmont V. Boynton r. Cartmel V. Cowing V. Dubois u. Hill u. Hopkins u. La. Ins. Co. V. Leland V. Salvador V. Stephenson I'. Suffolk Ins. Co. 443, Neptune, The 327, 388, 389, 391, 393^ 341, 343 369, 370 142, Neptunus, The Nerot V. Bnrnand V. Wallace Nesbit V. Bury Nesbitt V. Lushington V. Tredennick Nestor, The Netherlands Steamboat Co. 4i; 447, 450 V. Styles 384, 385, 97 83 121 ,323 , 456 360, , 373 91 150 387 383 473 418 447 1, 64 476 311 213 54 36 534 473 460 284 16 378 371 74 253 152 121 192 22 421 385 424 355 445 400 424 169 26 48 451 157 401 399 INDEX TO CASES CITED. Ixij Neville V. Merchants & Manuf. Ins. Co. Nevison i\ Whitley Nfvitt c. Cliirke 393, Nevius V. Hockingham Fire Ins. Co. New i: Swain Newall, Ex parte u. Hussey Newberry v. Colvin Newcastle Pire Ins. Co. k. Macmorran 422, 477, 498 Manuf. Co. v. Red River R. R. Co. 162 492 25.T •394 511, 534 44 284 337 360 Newdigate v. Lee Newel V. Keith Newell V. Hurlburt New Eng. Ins. Co. i Mut. F. Newhall, Ex parte V. Dunlap Vargas 295 29 138 .Brig Sarah Ann 377 , Ins. Co. V. Butler 489 300, 304 381 60,61,62,63,138,415 New Hampshire Mut. Ins. Co. v. Rand 490, 539 Savings Bank v. Col- cord 69 New Haven County Bank v. Mitchell, 66, 68, 185 Steamboat Co. v. Vander- bilt 383 New Hope & Delaware Bridge Co. u. Phoenix Bank 150 New Jersey Steam Navigation Co. v. Merchants Bank 214, 220, 222, 225 Newlin v. Ins. Co. 406 Newman v. Bagley 188 o. Bean 189 u. Cazalet 483, 486 V. Kettelle 248 Newmarch v. Clay 82 Newnliam v. Stevenson 283 Newsome v. Coles 172, 178 Newson v. Douglass 405 Newton v. Chantler 281, 283 V. Stebbins 384 ". Trigg 285 New World, Steamboat, u. King 228 New York, Steamboat, v. Rea 384, 385 Bowery Ins. Co. v. New York Fire Ins. Co. 412, 430, 515, .523, 524, 535 Eq. Ins. Co. v. Langdon 498, 501 Fire Ins. Co. u. Bennett 166 u. Delevan 539 Firemen's Ins. Co. v. Ely 257, 265 t/. Walden 429 Fire M. Ins. Co. v. Roberts 406, 435 Gaslight Co. v. Mechanics Fire Ins. Co. 406 New York Ins. Co. v. Protection Ins. Co. 515 Ins. Co. u. Thomas 406 Life Ins. Co. u. Flaek 553, 555, 557 & Bait. Trans. Co. v. Philad. &c. Nav. Co. 384 & Liverpool U. S. Mail S. Co. V. Rumball 384 & New Haven R. R. Co. v. Pixley 321 & Virginia Steamship Co. V. Calderwood 383 Niagara, Propeller, v. Cordes 375 Nias V. Adamson 298 Niblo V. North Am. Fire Ins. Co. 495, 511, 525, 529, 530, 537 Nichole v. Allen 29 Nicholls u. Webb 111 Nichols V. Cosset 262 V. Fearson 256, 266 V. Jewett 362 V. Johnson 406 V. Lee 256 1^. Patten 16 u. Raynbred 32 V. Tremlett 362 Nicholson v. Willan 223 Nickels v. Maine Ins. Co. 484 Nickerson v. Mason 399 V. Tyson 370 Nickson v. Birham 146 Nicolet V. Ins. Co. 495 Nicoll V. Am. Ins. Co. 432, 521 v. Mumford 170, 171, 334, 338 Niell V. Morelay 286 Nimick v. Holmes 367, 369, 372 Nimrod, The 372, 393 Ninetta, The 356 Niphon, The 390 Nixon V. Hyserott 145 Noble V. Adams 62 (J. M'Clintock 180 Noe V. Hodges 90 Norcross, In re 190 0. Ins. Co. 507 Norman v. Morrell 23 0. Phillips 76 Norris v. Harrison 408 V. Ins. Co, of North America 406 V. Wind.sor 30 North y. Forest 77 Northampton Bank v. Pepoon 140 Northern Indiana, The 385 Northey v. Field 61 North River Bank v. Aymar 145, 150 North Western R. Co. v. Whinray 68 Norton v. Cook 316 V. EUam 248 V. Marden 16 V. Pickering 118 V. Rensselaer & S. Ins. Co. 535 V. Simmes 34 Ixx INDEX TO CASES CITED. Norway Pliiins v. B. & JI. R. R. 204 211 Norwich Bank r. llyAt^ 88 Nostra iSi^nora dc ({(■f.'ona, The 417 de los Dolores 381 Noiirsc V. Prime 263 Novclli c. Kossi 124 Nowlan, Ex parte 279 Noyes v. Cushmau 164 Nutt V. Bordieu 448 Nutting ;;. Conn. R. E. Co 218 Nutz V. Better 11 0. Oakeley v. Pasheller 194 Oakley v. Aspinwall 168 V. Bennett 313 V. Morton 36 Oaste V. Taylor 3 O'Brien v. Currie 28 V. Gilehrist 23 347 Ocean, The 424 Ins. Co. V. Carrington 493 u. Fields 409 u. Francis 469 V. PoUeys 415, 416 417 Odiorne i'. Maxcy 137, 175 179 Odlin V. Greenleaf 247 u. Ins. Co. of Penn. 365, 366 450 Odwin V. Forbes 311 315 Ohl V. Eagle Ins. Co. 329 334 Ogden V. Astor 184 V. Barker 365 V. Col. Ins. Co. 410 11. Fire Ins. Co. 476 u. Gen. Mut. Ins. Co. 474, 475 , . N. Y. F. Ins. Co. 450 V. Orr 394 V. Saunders 275, 31.5, 316 O'Keefe v. Dunn 126 Okell V. Smith 53 O'Keson v. Barclay 27, 28 Oldham v. Turner 266 Ollivant v. Baylcy 58 Oliver, Ex parte 279 V. Comm. Mut. M. Ins. C 0. 407 V. Gray 242 u. Greene 412, 439 L. Hcnidlot 9 u. Maryl. Ins. Co. 454 Olivera v. Union Ins. Co. 450 451 Oliverson v. Briglitman 461 Olmstead v. Beale 29 Olmsted v. Hotailing 152 Olyphant v. Barker 42 Oneida Manuf. Co. v. Lawi ence 58 O'Niel V. Buffalo Fire Ins. Co. 501 ,503 506 Onondaga Co. Bank u. De Ptiy 179 Ontario Bank v. Schcrraerhorti 263 Oom V. Bruce 437 Oppenheim v. Russell 6 2, 64 Oppenheiraer v. Edney 227 Orange Co. Bank v. Brown 223 225 226 Orcutt V. Nelson 51 320 Ordinary v. Wherry 5 Orr^ion, Steamer, v. Eocca 384 385 Orient Mut. Ins. Co. v. Wriglit 406 Oriental Bank v. Blake 116 Orleans, Steamboat, v. Phoebus 335 381 Ormond v. Hutchinson 157 Ormrod v. Huth 58 Orne v. Townsend 394 395 Orr V. Amory 311 u. Maginnis 110 111 V. Union Bank of Scotland 92 Orrell v. Hampden F. Ins. Co. 408 Orrok i: Commonwealth Ins. Co 466 467 Orvis V. Kimball 5 Osborne v. Homer 136 Osceola, The 386 Osprey, The 384 Ossulston V. Yarmouth 268 269 Ostrander v. Brown 208 Oswald V. Mayor of Berwick, &c 68 Otis V. Lindsey 268 V. Brig Whitaker 402 Otttnan v. Moak 8 Otts V. Alderson 57 Oulds V. Harrison 102 Ouston V. Hebden 335 Cutwater v. Dodge 48 Owen, Ex parte 165 !>. Thomas 22 Owens V. Denton 80 Owings V. Hull 137 Owsley V. Woolhopter 138, 185 Oxford Bank v. Haynes 70 Oxnard v. Dean 3S9 P. Pacific, The Pack V. Thomas Packard v. Dunsmore V. Getman u. The Louisa V. Richardson Packet, The Paddock v. Franklin Ins. Padelford v. Boardman Page, Ex parte IK Baner V. Brant V. Carpenter o. Trufant Paige V. Ott V. Stone Pain V. Packard Paine i\ Thacher Paine's case Palm V. Medina Fire Ins. Palmer v. Penning V. Oracle !'■ Lorillard 356 103, 117 44 226 345, 385 77 378, 380, 381 Co. 414, 425, 426, 427, 429 371 279 301 172 189 26 30 142, 149 69 183 10 492 454 360 347, 365, 366 Co INDEX TO CASES CITED. Ixxi Palmer v. Marshall V. Merrill V. Pratt V. Stephens Palo Alto, The Palyart v. Leckie Panger v. Gary Panther, The Paper v. Birkbeck 454 554 86 147, 148, 169 19 437 102 383 124, 131 Paradise v. Sun Mut. Ins. Co. 439, 449 Parage v. Dale 465 Pardee v. Drew 226 Parfitt V. Thompson 425 Pai-k V. Hammond 156, 459 Parker v. Adams 228 V. Baker 9 u. Barker 66 V. Branker 161 u. Cousins 191, 194 V. Crole 290, 309 I. ITlagg 214 V. Gordon 108, 109 V. Macomber 184, 191 V. Manning 300 V. Muggridge 305 V. Norton 290, 309 y. Piston 189,190 u. Ramsbottom 255, 256, 260 0. Wells 284 Parkhurst u. Smith 15 V. Van Cortlandt 77 Parkin v. Dick 416 V. Moon 102 Parkinson v. Lee 57, 58 Parkist v. Alexander 155 Parks V. Gen. Int. Ass. Co. 512 (,. Hall 44, 60 Parish v. Crawford 360 Parmeter v. Todhunter 468 V. Cousins 459 Parr, £x parte 294 V. Eliason 256 PaiTy V. Ashley 408 Parslow V. Dearlove 289 Parson v. Sexton 58 Parsonage Pnnd v. Osgood 239 Parsons v. Briddock 65 I. Hardy 202, 208, 351 u. Mass. Eire & Mar. Ins. Co. 460 V. Monteath 214, 221, 224 V. Webb 141 V. Woodward 49 Partridge v. Davis 65 Passenger Cases 330 Patapsco Ins. Co. v. Biscoe 410 u. Coulter 410, 442, 448, 449, 527 V. Smith 149, 404, 436 V. Southgate 377, 464, 468 Pate V. Henry 205 Paterson v. Gandasequi 149, 162, 163, 436 Patience v. Townley Patman v. Vaughan Patrick, Ex parte 106 285 263 Patron v. Silva 365 366 Patten v. Browne 284 V. PuUerton 162 Patterson v. Becher 111 V. Black 445 548 V. Brown 244 245 V. Chalmers 334 336 337 V. Eitchie 469 Pattison v. Blanchard 168 181 Patton V. Calhoun 190 V. Magrath V. Schooner Randolph Paul V. Birch 360 214 338 361 V. Dowling V. Jones 284 309 Pawling V. Pawling 268 Pawson V. Barnevelt 406, 495 V. Watson 422, 429, 431, 432, 434 Payne v. Cave 19 V. Cutler 151 V. Hutchinson 459 V. Trezevant 257 Paynter v. Williams 39 Payson v. Whitcomb 109 Peacock v. Peacock 169 0. Ehodes 47 Peake v. Carrington 399 Pearce, In re 281 V. Blagrave 73 V. Chamberlain 170 V. Davis 92 Pearl, The 397 Pearpoint v. Graham 169, 174, 277 Pearsall v. Dwight 318, 323 Pearse i.'. Green 157 Pearson v. Garrett 86 V. Graham 158 V. Keedy 185, 186 V. Eockiiill 276 Pease v. Dwight 124 !). Hirst 68,98,185,241 Peck V. Evans 224 V. Hazier 96, 322, 323 V. Jenness 296 V. Neil 207 V. New London Co. Mut. Ins. Co. 521 V. Eequa 27 Peeks V. Mayo 95, 321 Peebles v. Stephens 26 Peele, Ex parte 1 78 V. Merchants Ins. Co. 469, 470, 476 V. Northcote 159 Peirce v. Ocean Ins. Co. 377, 469 W.Pender 114 V. Howe 268 Pelayo v. Fox 354 Pelly V. Eoyal Bxch. Ass. Co. 447 Peltier tJ. Collins 17 Penn v. Lord Baltimore 27 Ixxii INDEX TO CASES CITED. Pennock v. Swavne 183 Philadelphia L. Ins. Co. v Am. L Pennoyer v. Hallet 361 Ins. Co. 540 Pennsylvania v. Ravenel 324 Philadelphia & Reading K. Co. y Penn. Del. & Md. Nay. Co. a. Dan- Derby 227, 228 ,382 dridge 202 Philbrook v, Belknap 72 Penny v. N. Y. Ins. Co. 372 470 Phile V . The Anna 382 Penobscot Boom Co. v. Baker 196 Philips V. Astling 117 Penoyer v. Watson 185 Phillip V. Barber 440 ,451 Pentz V. Receiyers of iEtna Fire Ins. V. Bateman 27 Co. 510 526 V. BistoUi 76 People V. Baker 92 V. Bridge 186 V. Gasherie 157 252 V. Clagett 176 V. Shall 25 V. Cockayne 256 People's Perry Co. v. Beers 400 401 u. Cook 189 190 Peoria Ins. Co. v. Lewis 495 V. Eastwood 551 Percival v. Blake 53 u. Gould 112 V. Hickey 389 V. Headlam 399 V. Frampton 98 V. Knox Co. Mut. In . Co. 508 512 V. Maine M. M. Ins. Co 522 V. Ledley 326 339 Perez v. Miranda 154 V. Merrimack Ins. C 0. 530 Perham v. Raynal 241 V. Nairne 425 Perkins v. Augusta Ins. & Banking c. Phillips 173 Co. 456 535 u. Purington 334 V. Bradley 139 V. Rodie 345 V. Burbank 233 V. The Scattergood 381 402 ,.. Eastern & B. & M. R . R. V. St. Louis Perpet. Ins. Co. 471 Co. 228 V. Williams 252 u. Hill 345 357 Philpott V. Jones 83 V. Kempland 289 Phipps Ex parte 284 V. New Eng. Mar. Ins. Co. 419, Phipson V. Kneller 118 420 451 Phoebe , The 344 V. Washington Ins. Co. 492 The, V. Dignum 398 Perle v. Merch. Ins. Co. 466 Phoenix v. Assignees of Ingraham 281 Perley v. Balch 37 Bank v. Hussey 93 Perrin v. Protection Ins. Co. 451 527 Fire Ins. Co. v. Gurnee 407 Perring jj. Hone 177 Phyn V Roy. Exch. Ass. Co 442, 448 455 Perry v. Hudson 137 138 Pickard v. Valentine 248 a. Jackson 176 247 Pickering v. Banks 258 u. Ohio Ins. Co. 372 V. Barclay 448 V. Osborne 360 361 V. Busk 135, 136, 141, 142 Perry Co. Ins. Co. v. Stewart 504 ,507 532 V. Dawson 21 Perth Amhoy Manuf. Co. v. Condit 149 V. Fisk 322 Peru V. Turner 18 V. Pickering 136 Peter v. Beverly 82 Pickford v. Grand Junction Railway V. Compton 75 Co. 204 205 Peters v. Anderson 83 Pickin \). Graham 120 V. Ballistier 76 141, 381 Pickman v. Woods 348, 360 V. Brown 242 Pidcock V. Bishop 66 V. Del Ins. Co. 419, 516 Piehl V Balcheu 386, 387, 391 u. Farnsworth 141 Pierce v. Gate 105 115 c. Fleming 7 ). Jackson 185 186 V. Warren Ins. Co. 374 446 V. Patten 392, 393 Peterson v. Gibson 387 V. Tobey 241 Petley v. Catto 399 ;. Trigc 171 Peto V. lingue 152 V. Whitney 119 Petrel, Tlie 335 Pierson V. Hooker 22, 176 Pettegrew v. Pringle 424 Pigott ;. Bagley 170 Pcyroux v. Howard 401 402 Pike V. Bacon 176 Pezant v. Nat. Ins. Co. 465 466 V. Balch 377 Phebe, The 357 360 V. Irwin 66 Phelps V. Townsend 32 V. McDonald 293 V. Williamson 347 354 V. Street 124 V. Worcester 7 V, Warren 241 INDEX TO CASES CITED. JXXlll Pillans V. Van Mierop Pillow V. Hardeman Pjndall V. Northwestern Bank Pine V. Smith Pinkerton v. Bailey Pinkham v. Macy Pinkney v. Hagadorn V. Hall Pinney v. Wells Pipon V. Cope V. Pipon Pitcher v. Barrows Pitkin V. Brainerd V. Pitkin t'. Thompson Pitman v. Hooper 354, 385, 388, V. Kintner Pitt, The Pitts V. Mower Pittsburgh v. Whitehead Place V. Sweetzer Plaisted v. Boston & Kennebec S Co. Planch^ V. Fletcher Planters Bank v. Sharp V. Snodgrass V. White Piatt V. Hibbard Pleasants v. Maryland II^s. Co Plestoro V. Abraham Plets V. Johnson Plimmer v. Sells Plomer v. Long Pluckwell V. Wilson Plummer v. Russell V. Wildman Poe V. Duck Poindexter v. Waddy Poland V. Glyn Polglass V. Oliver Polhill V. Walter Pollard V. Baylors V. Cocke V. Somerset Ins. Co. V. Stanton Pollock V. Babcock V. Stables Pollok V. McAlpin Pomeroy v. Donaldson Pomroy v. Kingsley Pond V. Smith V. Underwood V. Williams Ponder v. Carter Pool V. Pratt V. Welsh Poole V. Protection Ins. Co. Pope V. Bavidge V. Nickerson V. Onslow Poplewell V. Wilson Pordage v. Cole 26, 132 116 90 101 102 112 146 175 348 448, 450 311 172 360 170 11 389, 390, 391 147 333 159 150 190 . Nav. 214 318, 458 316 255 116 197, 205 421 311, 313 89 12, 136 83 218 136 371, 372 316 178 281 81, 90 131, 147 256, 257 295 407, 533 166 409, 452 155 399 202 295 418 150 83 249 9 395 473 362 380, 382 299, 300 98 44 G Port I'. Tnrton 284 Porter v. Andrews 389, 392 u. Bank of Rutland 150 V. Cocke 295 V. Judson 119 V. Hildebrand 226 V. Langhorn 73 V. M'Clure 164 V. Munger 252 V. Patterson 161 V. Taylor 193 Porthouse v. Parker 1 1 7 Portland Bank v. Hyde 183 V. Stacey 331 V. Stubbs 332, 351 Post V. Hampshire Mut. Fire Ins. Co. 530 V. Jones 377 V. Kimberly 164 V. Phoenix Ins. Co. 409 V. Robertson 348 Postlewait v. Garrett 258, 261 Postmaster-General v. Reeder 67 Pott V. Bevan V. Clegg V. Eyton V. Turner Potter V. Brown f. Coward u. Irish V. Mar. Ins. Co. V. Moses V. Ocean Ins. Co. V. Ontario Ins. Co. V. Prov. Wash. Ins. Co V. Sanders V. Sturges V. Suffolk Ins. Co. V. Washington Ins. Co. V. Yale College Poulton V. Lattimoro Powell V. Brown V. Hoyland V. Hyde V. Jones V. Monnier u. Myers u. Trustees of Newburg V. Tuttle V. Waters Power V. Whitmore Powers V. Fowler Powles V. Innes V. Page Pownall V. Ferrand Pratt V. Adams V. Chase V. Cuff V. Humphrey V. Parkman V. Willey Pratt's case Pray v. Maine 138 237 167, 168, 386 284 311, 315 42 330 420 169 372, 483 517 369, 481, 483, 487 20 157 443 373 261 53 26 56 450, 451 129 128, 129 207, 226 155 155 258, 266 372, 483 77 408 149, 150 38 255, 259, 262 76 390 73 50 259 279 66 370, INDEX TO CASES CITED. Pray v. Stinson 392 Prebble v. Boyherst 27 Preble V. Baldwin • 73 Prendergrast v. Foley 245 Prentis3 v. Savage 321 V. Sinclair 172 Prescott, Ex parte 294 V. Flinn 142 V. Parker 252 Preston v. Finney 30 u. Jackson 258 V. Merceaii 21 Prestwick v. Marshall 12, 136 Price V. Alexander 176 V. Easton 37 V. Hewitt 8 ti. Lea 76 V. Neale 129 V. Noble 369 V. Powell 210,211 V. Ralston 302 V. Sharp 127 V. TJpshaw 244 Priddey, Ex parte 286 Prideaux v. Collier 118 Primrose v. Bromley 298 Prince v. Clark 155 Prince Frederick, The 387 Prince George, The 388 Prince v. Ocean Ins. Co. 464 Princessa, The 423 Pringle v. Phillips 123 Pritchard v. Draper 193 Pritchet v. Ins. Co. of N. A. 409 Proctor V. Moore 315 Profert V. Parker 77 Protection Ins. Co. v. Hall 409 V. Wilson 406 Protector, The 400 Providence, The 388 Pudor V. Boston & Me. K. 227 Paget De Bras v. Forbes 97 Pugh V, Bussell 316 V. Leeds 4.'>9 Pulling V. Tucker 281 Pulsifer v. Hotchkiss 37 Pultncy V. Keymer 159 Purdy V. Powers 184 Purington v. The Hull of a New Ship 402 Purviance v. Angus 473 Purvis V. Tunno 363 Putnam v. Dutch 331 u. Mercantile Mar. Ins. Co. 413, 439, 513 u. Sullivan 105 V. "Wood 426 Pyle V. Cravens 4 Q- Quackcnbush v. Sanks Quantock v. England Quarles v. Brannon 316 250 257 Quebec Fire Ins. Co. v. St. Louis 414, 510 Queen v. Un. Ins. Co. 465 Quelin V. Morrison 311 Qaimby v. Putnam 241 Quinsigamond Bank v. Hobbs 265 E. Racehorse, The 350 Radley v. Manning 256 Raiferty v. New Brnnsw. F. Ins. Co. 502, 503 Kagg V. King 385 Railroad Co. v. Yeiser 218 Raino v. Bell 456 Raleigh v. Atkinson 162 Ralli V. Johnson 406 Ralph V. Harvy ' 165 Ralston v. The State Rights 382 Ramsay w. Gardner 155 Ramsbottom v. Lewis 191 Ramsdale v. Horton 90 Ramsdell v. Sigerson 277 Rand v. Hubbard 127 V. Mather 74 Randall v. Lynch 364 V. Sweet 7 V. Van Vechten 148 V. Wilkins 246 Randolph, The 378 V. Ware 405 Ranger v. Gary 102 Ransom v. Mack 107, 114 Rapelye v. Anderson 266, 267 V. Bailey 68 u. Mackie 48 Raphael v. Bank of England 123 V. Pickford 208 Rapp V. Latham 180 Rappahannock, Ship, v. Woodruff 356 Rathbnn v. Ingalls 157 V. Payne 227, 228, 383 Raw V. Alderson 143 V. Cutten 298 Rawlinson v. Clarke 168 u. Pearson 284 V. Stone 127 Ray V. Thompson 54 Rayliffe v. Butterworth 155 Raymond v. Crown & Eagle Mills 149 V. Loyl 7 V. Tyson 348 Rayner v. Godmond 422 Read, & parte 292,299 V. Bonham 377, 468, 470 V. The Hull of a New Brig 401, 402 V. Rann 162 V. Taft 35 Rcade v. Com. Ins. Co. 378, 481 Real Estate Mut. Fire Ins. Co. v. Roessle 404, 493 Rebecca, The 343, 344, 382, 383, 384 INDEX TO CASES CITED. Ixxv Redhead v. Cator 70 Rice V. N. Eng. Mar. Ins. Co. 431 433 Redmond v. Smith 409 V. The Polly & Kitty 391 396 Reed v. Canfield 392, 393 V. Shute* 166 V. Cole 408 V. Tower 408 533 V. Evans 77 V. Welling 256 V. Howard 189 Rich V. Coe 360 V. Royal Ex. Ass. Co. 549 V. Lambert 344 355 V. Shepai-dson 187, 189 u. Parker 423 V. Smith 258 V. Topping 260 V. White 194, 336, 338 Richard Busteed, The 400 401 Eees V. Warwick 129 Richards v. Brown 254 263 Eeeside, The 15, 444, 491 V. Davies 182 V. Knox 87 V. London, &c., Railway Co. 211, Reeve v. Davis 360, 361 226 Regina v. Birch 85 V. Marine Ins. Co. 458 Reid V. Darby 333, 377 V, Maryland Ins. Co. 301 V. Fairbanks 333 V. Merriam 299 V. HoUingshead 168, 174 V. Prot. Ins. Co. 477 V. McNaughton . 241 V. Richards 11 V. Morrison 104 V. Sears 29 V. Rensselaer Glass Eactory 251, 252 Richardson, Ex parte 288 Reimer v. Ringrose 473 In re 282 Eelfi). The Maria 395 V. Anderson 146 Reliance, The 391 V. Bank of England 183 Renard v. Sampson 21 V. Clark 332 Renaux v. Teakle 136 V. Fen 232 Reno V. Hogan 225 V. French 179 Renteria v. Ruding 345 V. Gooding 306 Renwick v. Williams 291 :;. Hastings 182 Repplier v. Orrich 277 V. Jackson 81 Retty V. Anderson 12 V. Jones 299 Revens v. Lewis 381 V. Kimball 50 Revenue Cutt«r No. 1, The 401 V, Lincoln 124 Rex V. Allen 256 V. Maine Ins. Co. 365, 366, u. Almon 154 409, 417, 449 452 453 V. Elliott 88 V. Martyr 86 V. Gutch 154 V. Mellish 28 V. Hay 547 V. Strong 286 V. Haggins 154 V. Whiting 381 V. Maggott 129 Richmond, The 417 Reybold v. Jeiferson 183 Richmond Turnpike Co. u. Vanderbilt 682 Reynolds, Ex parte 297 ,299 Rickards v. Murdock 430 V. Cleaveland 179 Ricker v. Cross 331 V. Doyle 249 Rickford v. Ridge 91 , 108 V. Magness 24 Rickman v. Carstairs 410 437 460 V. Ocean Ins. Co. 368, 369, 371, Rider v. Ocean Ins. Co. 412 466 ,484 Riddle v. Vamum 48 V. Toppan 216, 360 ,382 Ridge V. Prather 295 Rhadamanthe, The 342 Ridgeley v. Crandall 4 Rhind v. Wilkinson 412 Ridgeway v. Day 119 Rhinelander v. Ins. Co. of Penn. 450, 469, Ridley v. Gyde 281 477 Ridout V. Brongh 292 Rhode Island, The 384 Rigden v. Pierce 171 Rhode V. Thwaites 48 Riggs V. Dooley 247 Rhodes, Ex parte 100 .;. Murray 276 ,277 Riby Grove, The 388 Right V. Cuthell 138 Rice V. Barnard 186 Riley v. Delafield 440 V. Bixler 27 u. Hartford Ins. Co. 409 o. Cobb 471 V. Home 205 223 V. Gove 146 Ring V. Franklin 339 V. Haylett 387 388 Ringold V. Crocker 393 V. Homer 453 ,468 Ripley v. Colby 164 V. Mather 266 V. Gelston 150 Ixxvi INDEX TO CASES CITED. Eisdale v. Newnham 424 Robson V. Bennett 91 Risley, Succession of Kison V. Wilkerson 555 552 V. Calze 309 299 Ritchie v. Atkinson 358 Rocher v. Busher 378 Roach V. Chapman 401 Rochford v. Ilackman 285 V. Quick 11 Rockwell V. Hiibbell 316 u. Thompson 93 V. "Wilder 181, 182 Roads V. Symmes 295 Rockwood V. Browne , 235 Robarts v. Tucker 129 Rodes V. Blythe 268 Robb V. Stevens 186 Rodick V. Hinckley 335 Eobbins v. Bacon 554 Roelandts «. ^Harrison 424 V. Cooper 186 Roff v. Miller 85 V. Eaton 5 Rogers v. Bachelor 180 V. Farley 236 V. Boehm 158 V. N. Y: Ins. Co. 419 V. Bumpass 10 V. Willard 167 V. Earl 16 Robert Eulton, The 402 V. Forresters 363 Morris, The, b. Williamson 344 V. Head 197 Roberts v. Chenango Co. Mut. Ins. V. Hunter 364 Co. 495, 521 u. Hurd 4,5 V. Filler 183 V. Kneeland 155 V. Havelock 37 V. March 163 V. Holt 353 II. Mechanics Ins. Co. 15 u. Peake 86 ?;. Steamer St. Charles 382, 383, (J. Tremayne 226, 256 385 V. Tremoille 263 V. Stephens no, 119 V. Turner 203 V. Thomas 61,63 Robertson v. Bethune 362 V. Traders Ins. Co. 405 V. Clarke 377 V. White 160 V. Ewer 438 Rohl V. Parr 444 a. French 458, 497 Roland v. Gawdy 47 I/. Kennedy 199, 200 Rolin V. Steward 130 V. Kensington 124 Rollins V. Columbian Fire Ins. Co. ,531, V. Ketchum 137, 141 533, 534 V. Marjoribanks 432 V. Stevens 176 0. Stewart 295 Rondeau i'. Wyatt 78 u. Vaughn 78 Roof V. Stafford 4 Eobinett v. Ship Exeter 396 Roosevelt v. Kellogg 324 Robinson v. Alexander 244 Rooth V. Wilson 198 V. Ames 103 Roots V. Lord Dormer 53 V. Baker 212 Roscorla v. Thomas 29, 57 V. Bland 95, 318, 319 ,321, 322 Rose, The 383, 385 Ui Commonwealth Ins. Co. 377, V. Daniel 9 421 , 466, 473 V. Dickson 259 V. Cook 81 u. Hart 292 V. Cone 228 V. Sims 100, 292 V. Crowder 175, 311 Rosetto V. Gurney 349, 473 u. Dunmore 197, 227 Ross V. Ship Active 371, 380 V. Gleadow 337 V. Bradshaw 556 u. Hawksford 91, 103 V. Hill 196, 197 i!. Lyail 379 V. Hunter 448, 455 V. Macdonnell 330 V. Ross 235 V. Mansfield 295 V. Thwaite 438 V. Manuf. Ins. Co 409, 411, V. Walker 378 418 Rossiter v. Chester 351, 367 V. Marine Ins. Co 352 , 357, 454 V. Rossiter 142 V. Musgrove 53 Rotch V. Edie 450 V. Nahon 137 Rothschild v. Cume 95 V. Reynolds 97, 129 Eothwell ;•, Humphreys 179 u. Taylor 191 Routh ;;. Thompson 436 u. Thompson 177 Routledge v. Burrell 406, 422 V. Tobin 406 !'. Grant 19 V. Yarrow 129, 142 V. Ramsay 236 INDEX TO CASES CITED. Ixxvii Roiix V. Salvador 462, 464, 469, 473 Rovena, The 397 Row V. Pulvcr 69 Rowe V. Pickford 62 t. Tipper 116 V. Young 108 Rowland v. Bull 263 Rowlands v. Springett 113 Rowlandson, £x parfe 168 Rowley ». Bigelow 62,63,346,415 V. Gibbs 252 Rowton, Ex parte 302 Royal Bank of Scotland, &c. v. Cuth- bert (Steins's case) 311 Ruan V. Gardner 437 Rucher v. Conyngliam 340 Rucker v. AUnutt 461 c. Camoneyer 161 V. London Ass. Co. 460 Ruckman v. Merch. L. Ins. Co. 467, 472 Ruding V. Smith 318 Ruft' V. Bull 245 Ruffin,£x parte 186,191 Rufford, Ex parte 294 Ruggles V. Bucknor 360 V. Gen. Int. Ins. Co. 430, 431 u. Keeler 95, 247, 323 Rundell v. Keeler 7 Rundle v. Moore 154 Runyan v. Caldwell 1 97 Rusby V. Scarlett 137 Ruse V. Mut. Benefit Ins. Co. 541, 552 Russel V. LangstafFe 105, 126 Russell V. Austwick 184 V. Bangley 146, 153, 161 V. Bell 292 V. Be Grand 415, 452 V. N. E. Mar. Ins. Co. 405 V. Perkins 65, 68 0. Union Ins. Co. 414, 443 V. Wiggin 129 Ryberry v. Snell 50 Ryan v. Hall 23, 107 V. Trustees 65 V. Sams 137 Sacrider v. Brown HI Sadler v. Evans 150, 151 u. Leigh 148, 282 V. Nixon 183 Sadler's Co. v. Babcock 408, 531 Sage V. Middletown Ins. Co. 461 V. Wilcox 77 Sager v. Portsmouth, &c.. Railroad Co. 205, 222; 225 Sainsbury v. Parkinson 85 St. Amand v. Lizardi 206 Jago de Cuba, The 401 John V. Am. Mut. Ins. Co. 527, 549, 553 John V. Paine 384, 385 Louis Ins. Co. v. Glasgow 527 a* Salem Bank v. Gloucester Bank 140 Salisbury, Ex parte 299 Salkeld, Ex parte 284 Sally V. Capps 157 Salmon Falls Manuf. Co. v. Goddard 77 Salte V. Field 64, 143 Salter v. Burt 107 Salters v. Everett 136 Saltmarsh i.'. Planters & Mechanics Bank 266 Saltus V. Everett 135 V. Ocean Ins. Co. 349, 380, 473,474 Samins v. Stewart 200 Sampson i;. Swift 27 Samuel v. Roy. Exch. Ass. Co. 462 Sanborn v. Firem. Ins. Co. 403 V. French 27 Sanders v. Vanzeller ■ 353 Sanderson v. Bell 153 V. Bowes 108 u. Griffiths 137 u. M'Cullom 406 V. Symonds 406 Sandford v. Dodd 36 V. Trust Fire Ins. Co. 404, 493 Sandilands v. Marsh 175 Sands v. Church 259 V. Taylor 46 Sanford v. Handy 142, 152 V. Hayes 239 V. Mickles 102 V. Raikes 22 Sanger v. Stimpson 105 San Jose, The 423 Sangston v, Maitland 153 Sansom v. Ball 369 Santa Claus, The 383 Sarah Ann, The 47, 377 Christina, The 417 Saratoga, The 389, 390, 394, 395 R. R. V. Row ' 56 Sarchet v. Sloop Davis 402 Sari V. Bourdillon 77 Satterlee v. Grant 200 V. Groat 197 Satterthwaite v. Mut. Beneficial Ins. Association 523 Saufley v. Howard 166 Saul V. His Creditors 319, 320 Saunders v. Filley 38 u. Williams 311,312 Saunderson v. Jackson 77 V. Judge 109 V. Piper 88 V. Rowles 285 Saurez v. Sun. Mut. Ins. Co. 465, 467 Savage v. Best 296 V. Carter 183 V. Pleasants 470 V. Rix 148 Manuf. Co. v. Armstrong 50 Saville v. Campion 360 V. Robertson 178 Ixxviii INDJiX TO CASES CITED. Savoye !;. Marsh 315 Sawyer i'. Coaster's Mut. Ins. Co. 422, 430 V. Fisher 212 V. Gilmer 47 V. Joslin 61 V. Maine F. & M. Ins. Co. 4.53 Sayre v. Friek 117 Saywarcl v. Stevens 348 Scaife V. Tobin 353, 374 | Scarpellini v. Atchison 10 Schacht j;. Otter 418 Sehermerhorn v. Loynes 179, 335 SchieflFelin v. Harvev 473 V. N. Y. Ins. Co. 453, 470, 487 Schinamelpenich v. Bayard 128, 146, 155 Sehmaling r. Thomlinson 155 Schmaltz ;;. Avery 147 Schmidt v. Blood 197 u. N. Y. Union Mut. Fire Ins. Co. 529 Schneider v. Geiss 227 ... Heath 143 V. Norris 77 Scholefleld i\ Eichelberger 170 Sehondler v. Wace 307 SchultK V. Astley 126 Schuyler v. Hoyle 10 Scioto, The 382, 383 Scofield V. Day 412 Scriba v. Ins. Co. of N. H. 460 Scribner i). Fisher 316 Scrimshirl v. Alderton 303 Scripture v. Lowell Ins. Co. 526, 527 Scott V. Buchanan 4 V. Colmesnil 172, 177 V. Eastern Counties R. Co. 44, 76 V. Haddock 245, 246 V. Irving 146, 153, 161 V. Lewis 258 V. Libbv 361, 366 r. Liffoi-d 114 V. Lloyd 254 a. Surman 141, 300, 302 V. Wells 48, 141 Scotthorn v. South Staffordshire R. R. Co. 218 Seottin v. Stanley 336 Scottish Mar. Ins. Co. v. Turner 465, 475 Scudder v. Andrews 37 V. Bradford 369 Scull i;. Briddlo 377 Sea Ins. Co. v. Fowler 437 Seabrook v. Rose 334, 338 Seabury v. HnuKcrford 120, 122 Seacord v. Burling 86 Seaman v. Fonereau 152, 430 Seamans v. Loring 405, 454 Searle v. Keeves 76 V. Scovell 349, 373, 380, 474 Scares v. Lincoln 107 Soars V. Brink 77 u. Certain Bags of Linseed 345 u. City of Boston 324 Seaver v. Coburn 147 V. Morse 36, 162 Seawell v. Henry 90 Sebag I'. Abitbol 109, 131 Secomb v. Nutt 61, 64 Seidcnbender v. Charles 35 Seignior & Wolmer's case 142 Scixas u. Woods 57 Selden v. Hendrickson 341, 379 Selfridge v. Gill 309 Selina, The 342 Selkrig v. Davis 3U Selleck v. French 251 Selser v. Brock 66 Selway v. Fogg 56 V. Holoway 226 Seneca County Bank v. Sehermerhorn 255 Sessions v. Richmond 264 Seton V. Del. Ins. Co. 473 I'. Low 433 Settle V. St. Louis Perpet. M. & F. Ins. Co. 456 Sewall V. Allen 205 V. Fitch 98 0. The Hull of a New Ship 402 V. U. S. Ins. Co. 466, 467, 484 Sexton V. Montgomery Co. Mut. Ins. Co. -495, 497, 517, 521, 522, 525, 535, 5.36 Seymour v. Davis 76 V. Marvin 263 V. Strong 255 Shackleford v. Moriss 266 Shaffer v. McMakin 296 Shakeshaft, Ex parte 289 Shank, Ex parte 400 Shannon v. Comstock 358 V. Owen 332 Sharington v. Stratton 25 Sharp V, Bailey 119 V. Gibbs 424 V. Gladstone 476 Sharplcy v. Hurrel 262 Shaver v. White 189 Shaw, Ex parte 288, 297 V. Allen 237 V. Arden 162 V. Gookin 381 V. Jakeman 289 V. Mitchell 306 V. Nudd 136 V. Picton 82, 161 u. Reed 105 u. Robberds 502, 503, 527 1. Stone 160 V. Turnip 29 Shawe v. Felton 411 Shawhan v. Whcrritt 296 Shee V. Hale 285 Sheehy v. Mandeville 194 Shcels V. Davies 356 Sheffield Can. Co. u, Shef. & R. R. Co. 21 Sheftall V. Clay 232 Shelby v. Guy 96 INDEX TO CASES CITED. Ixxix 23, 497, 197 Co Shelden ti. Benham u. Hartford F. Ins. Co. Sheldon v. Conn. Ins. Co. u. Newton u. Robinson Shelton v. Braithwaite V. Bruce u. Pendleton V. Tiffin Shepard v. Be Bernales u. Hawley Shepley v. Donis V. Waterhouse Sheppard v. Taylor Sheppards v. Turpin Sherman v. Clark V. Fair V. Wakeman V. Withers Sherrill v. Hopkins Sherwood v. Marwick V. Mcintosh ti. Ruggles ShiefFelin v. New York Ins V. Stewart Shiells V. Blackbnrne Shiff u. La. State Ins. Co. Shilling V. Accidental Death Ins. Co, Shindler v. Houston Ship Carpenter, The Sbipman v. Horton V. Thompson Shipton V. Thornton ShirrefF v. Wilks Shober v. Hauser Shoemaker i'. Benedict V. Keely Shone v. Lucas Shoolbred v. Nutt Shore v. Bentall V. Wilson Short V. M'Carthy V. Skipwith Shotwell V. Murray Shubrick v. Salmond Shuck V. Wight Shultz I'. Ohio Ins. Co. Shumway v. Reed Shurlds V. Tilson Shute V. Robins Shutford V. Borough Shuttleworth, Ex parte V. Stephens Sibbald v. Hill Sibley v. Lumbert Sice V. Cunningham Sickles V. Mather 107 520 542 7 201 114 Sidney Cove, The Siebert v. Spooner Siegel V. Chidsey •Sievewright'w. Archibald Siffken ;;. Wray Sigourney v. Drury 137 324 352, 353 117 47 241 388, 390 277 114 534 235, 236, 237 243 96, 315 152 395 370 499 269 147, 156 483, 486 549 76 417 4 143 349 178, 180 255, 257 180, 236, 241 290, 309 61 430 426 23 248 156 16 26 256 349 82 172 103 248 126 89 430, 434 240 107 238 342, 388, 391 283 171 17 64 241 Sigourney v, Lloyd V. Mnnn Sill V. Worswick Sillom V. Thornton Sillick V. Booth Sills V, Brown Simmons, Iti re V. North (.'. Smith V. Swift Simms v. Clarke 151 171, 173 310 403, 496, 497, 504 547 384 288 16 42 44, 48 90 Simonds v. Union Ins. Co. 476 V. White 374, 486 Simons (,'. Walter 252 Simpkins v. Norwich & New London S. Co. 218 Simpson, Ex parte 291 V. Charleston F. & M. Ins. Co. 450 V. Fnllenwider 258 I). Hand 382, 383 V. Henderson 23 V. Ingham 83 V. Swan 161 Sims V. Bond 148, 149 V. Brittain 157 V. Gondelock 249 V. Gurney 368, 369, 372 0. Jaclcson 387 V. Marryatt 59 !;. Willing 164,252 Simson v. Cooke 185 Sinclair, In re 382 Sinders v. Bradwell 12 Singleton v. Hilliard 214 V. Lewis 268 Singstrom v. The Hazard 390 Siordet v. Hall 442 Sir Robert Howard's case 459 Sisters, The 329, 384 Siter K. Morrs 512 Sitler V. Walker 189, 190 Sjoerds v. Luscombe 366, 367 Skeate v. Beale 27 Skidmore v. Desdoity 440, 451 Skiffken v. Wray 60 Skillings v. Coolidge 176 Skinner v. Brighton & Southcoast Railway Co. 220 V. Dayton 170 V. Gunn 141 V. Somes 407 V. Stocks 148, 184 V. Upshaw 212 Skipwith V. Cunningham 276 Skolefield v. Potter 360, 388 Skrine v. The Hope 335 Slade V. Van Vetchen 157 Slatterw. Carroll 192 Slaymaker v. Irwin 17 Sleat V. Fagg 223, 224 Sleath V. Wilson 227 Sleght V. Hartshorn 423 Ixxx INDEX TO CASES CITED. Sleigh V. Sleigh 118 Smith V. Langdon 191 Slipper V. Stidstone 191 V. Lascelles 51, 156,413 Sloan V. Sommers 256 V. Leard 385 Slocum I'. Fairchild 225 V. Little 112 V. Hooker 9 0. Loyd 83 Slosson V. Duff 259 V. Lynes 45 Slubey ;;. Heyward 76 V. Manuf. Ins. Co. 462, 463, 464 Sluby I'. Champlin 232 y. JIarsack 100, 129 Small V. Attwood 57 V. Martin 380 V. Gibson 425, 427, 428 440 V. Mayo 5 V. Moates 360 361 V. SI'Clure 85, 89 V. Otidlcy 277 o. Mead 318 Smallpiece v. Dawes 12 a. Mercer 92, 129 Smart v. Sandars 143, 161 162 u, MuUett 114 Smedes v. Utica Bank 144 u. Newburyport Ins. Co. 470 Smothurst v. Taylor 135 V. Odlin 404 Smith, Ex parte 289 V. Oriell 305 In re 186, 188, 189, 280 V. Algar 28 V. Argall 195 f. Atkins 49 0. Baily 175 V. Barrow 182, 191 V. Bell 466 V. Bond 246 V. Bowditch Mut. Fire Ins. Co. 496, 512 V. Bowles 60 a. Braine 97 u. Bromley 309 V. Brown 23, 315 V. Brush 260 V. Buchanan 311 V. Burnham 165 f. Chester 124, 129 V. Clarke 123 L-. Columbia Ins. Co. 413, 510, 512 V. Condry 156 V. Dann 67 V. Dawson 238, 244 V. Del. Ins. Co. 470 u. Dennie 46 V. Duncanson 333 V. Steamer Eastern Railroad 402 V. Empire Ins. Co. 525 V. Evans 8 V. Field 64 V. Forty 240 u. Godfrey 35 u. Gordon 2 0. Healy 323 0. Hill 245 V. Hodson 138 t'. Home 223 V. Hubbs 16 V. Ins. Co. 509 V. Jameson 193 V. Jeyes 171 o. Kelly 6 V. Kerr 176 u. Kittridge 99 V. Knowlton 548 u. Knox 97, 291 V. Parsons 316 V. Pickering 100 17. Pierce 203 u. Robertson 469, 477 v. Saratoga Co. Mut. Fire Ins. Co. 531, 532, 534 V. Scott 284 V. Seward 202 V. Shaw 412 V. Shepherd 215 V. Sieveking 353 t'. Sleap 150 u. Smith 315 V. Spinolla 96, 322, 323 u. The Stewart 387, 388 0. Stokes 305 V. Surman 76, 78 V. Surridge 455 V. Swift 398, 399 V. Tarlton 165 V. Thorn 236 c. Treat 395 .V. Watson 168 V. Weed 27 V. Westmoreland 239 u. White 143 t. Wilson 23, 361 V. Winter 192 f. Wright 168,370 Smout V. Ilbery 143, 147, 148 Smyrl v. Niolon 215 Smyth V. Anderson 149, 162 Snaith v. Burridge 174 V. Mingay 93 Snee v. Prescot 60, 101 Snell V. Delaware Ins. Co. 411, 412 V. Brig Independence 398 V. Rich 399 Snellgrove v. Hunt 301 Snelling v. Lord Huntingfield 75 Snoddy i'. Cage 247 Snodgrass's Appeal 186 Snow V. Carrutu 356 u. Eastern R. R. Co. 227 V. Perry 81, 90 V. Wope 387 INDEX TO CASES CITED. Ixxxi Snowball v. Goodricke Snowdon v. Diivis Snyder v. Farmers Ins. Co. Soares v. Thornton Sodergren v. Flight Solarte v. Palmer Sellers, Ex parte Solly V. Eathbone Solomon v. Kimmel Solomons v. Dawes V. Eoss Somerville v. Somerville Somes V. Sugruo Soome V. Gleen Sophia, The Sorbe v. Merchants Ins. Co. Sortwell V. Hughes Soucli V. Strawbridge Soulden v. Van Eensselaer Soule V. Dougherty Southampton v. Brown Southard v. Steele South Carolina Bank v. Case Sonthcombe v. Merriman Sonthwick v. Estes V. Packet Boat Clyde SpafiFord v. Dodge 365, 369, 372, Spalding v. Preston V. Ruding V. Vandercook Sparbawk v. Buell V. Russell Spai-kes v. Marshall Sparks v. Kittredge Sparow V. Caruthers Sparr v. Wollman Spear v. Ladd V. Travers Spears v. Hartley Speed V. Phillips Speiglits V. Peters Spencer v. Cone w. Daggett V. Eustis V. White V. Wilson Sperry's estate, In re Spies V. Gilmore V. Newberry Spindler v. Grellett Spindles v. Atkinson Spitta V. Woodman 458, ' Spitzer V. St. Marks Ins. Co. Spring V. Gray 233, u. Haskell V. South Carolina Ins. Co. Springer v. Hutchinson d. Shirley Sproat V. Donnell V. Mathews Sprowl V. Kellar Spruill V. N. C. Mut. Life Ins. Co. Staats u. Howlett 152 Stables v. Eley 227 150 Stacey r. Franklin F. Ins. Co. 491 495,517 496 Stackpolo V. Simon 556 448 Staadt Embdcn, The 417 345 Stadt V. Lill 26 112 Stafford v. Bryan 236 302 V. Richardson 248 155, 159 Stainback v. Rae 382 26 Stainbank v. Penning 340, 341 138 V, Shepard 144, 341 310, 311 Staines v. Planck 291 318 Stalker v. M'Donald 151 377 Stanley v. Gaylord 46 262 V. Kempton 257 390 Stanton v. Bell 197 437 V. Eager 415 35, 320 V. Small 55 75, 78 Stapilton v. Stapilton 28 422 Starbuck v. N. E. Mar. Ins. ::o. 426 141 Stark V. Parker 29 38 Stark Co. Mut. Ins. Co. v. Hurd 518 176 Starr v. Goodwin 332 169, 177 V. Knox 339 559 V. Robinson 316 152 State V. Gaillard 26, 57 402 V. Hallett 323 373, 390 u. Eichmond 4 35 V. Sugg 157 63 State Bank v. Cowan 255 37 V. Hunter 264 4 V. Seawell 246 193 V. Slaughter 117 408 V. Wooddv 239 370, 371 State of Illinois v. Delafield 123, 141 460 Stead V. Salt 176 227 Steadman v. Duhomel 93 140 Stearns v. Haven 167 45 Stebbins v. Globe Ins. Co. 491 ,496 ,520,521 2.iO u. Smith 27 27 Stedman v. Martinnant 292 171 Steele v. Harmer 128 78 !,'. Ins. Co. 512 202 V. Thacher 395 397, 398 !'. Whipple 258 353 Steiglitz V. Egginton 138 143 Stein I'. Yglesias 102 188 Stcinmetz o. U. S. Ins. Co. 334 121 Stephens v. Badcock 150, 156, 157 112 V. Beal 10 108 V. Foster 151 16 V. Ward 402 459, 467 Stephenson v. Hart 208 404 Steptoe V. Harvey 255 243, 244 Stetson V. Mass. Mnt. Fire Ins. Co 408, 382 409, 439, 504, .507, 508 139 ■u. Patten 138, 148 65 Stevens, Ex parte 284 194 V. Bell 276 360 V. Blanchard 151 129, 131 V. Comm. Mut. Ins . Co 456 203 V. Davis 260, 263 . 528, 546 V. Eno 48 68, 77 ... Hill 140 Ixxxii INDEX TO CASES CITED. Stevens v. Jackson 285 V. Robins 139 V. Steamboat S. W. Downs 382 Stevenson v. Af^ry 277 u. Mortimer 151 V. Newnham 56 V. Snow 435 Stewart, Ex parte 284 u. Aberdein 153 V. Ball 285 V. Bell 433, 460 V. Dunlop 431 u. Frazier 156, 163 V. Greenock Mar. Ins. Co. 476, 485 V. Hall 336 V. Kennett 116 V. Steele 487 u. Trustees of Ham. Col. 33 Stillwell V. Staples 512 Stinson v. Wyman 382 Stoallings v. Baker 168 Stockdale v. Dunlop 412, 508 Stockenv. Collin 19, 113 V. Dawson 190 Stocker v. Brockelbank 168 V. Harris 467 Stocking V. Fairchild 406 u. Hunt 316 Stockton V. Frey 219, 220 Stoddard v. Kimball 97 V. Long Island Railway Co. 221, 222 Stokes V. Moore 77 u. Salstonstall 206, 207, 219, 220 Stone V. Chamberlin 191 V. Compton 66 V. Dennison 79 V. Ketland 381, 473 u. National Ins. Co. 448 u. Nichols 235 V. Peacock 48 V. Seymour 82 V. Vance 23 V. Waitt 208 V. Wood 147 Stoney v. Amer. Life Ins. Co. 259 Stoolfoos V. Jenkins 8 Stopilton V. Stopilton 27 Storm V. Stirling 88 Storr V. Crowley 207, 208 V. Scott ' 73 Storrs V. Barker 16 Stort V. Clements 400 Story V. Livingston 269 t>. Windsor 149 Stouffer V. Coleman 300 Stoughton V. Baker 155 V. Lynch 269 V. Rappalo 365 Stoveld V. Hughes 62 Stracy v. Bank of England 28 Stracey v. Deey 148 Strader v. Lambeth 24 Strahecker i: Farmers Bank 15 Strain v. Wright 8 Straker v. Graham 103 Strange v. Price 112 Straton v. Rostall 23 Stratton v. Babbage 387 u. Hale 289 V. Mathews 93 Street v. Blay 58 Stribbling v. Bank of the Valley 259, 264 Strickland v. Turner 49 Strithoret v. Graeme 247 Strong V. N. Y. Firemen's Ins. Co. 373, 374, 483', 486 a. Foster 69 u. Manufacturers Ins. Co. 408, 414, 509, 525 V. Martin 449 V. Natally 207 Strother v. Lucas 321 Strout V. Foster 385 Stuart V. Marquis of Bute 90 V. Sloper 284 u. Wilkins 57 Stubbs V. Lund 62 Sturges V. Crowningshield 274, 316 V. Murphy 382 Sturgess v. Cary 367, 368, 371, 471 Sturgis V. Clough 382 Sturt V. Mellish 244 Styan, In re 553 Suckley v. Delafield 434 V. Furse 498 Sullivan v. Morgan 396 Summersett v. Jarvis 284 Sumner v. Brady 308 V. Hamlet 44, 333 V. Williams 26, 70 Sun Mut. Ins. Co. v. Wright 406 Surtees, Ex parte 297 Susquehanna Ins. Co. v. Perrine 496 Sutcliffe V. Dohrman 189 Sutton V. Dillaye 149 V. Irwine 176 V. Tatham 146, 154 V. Weeley 284 Suydam v. Bartle 263 V. Clark 17 V. Columbus Ins. Co. 492 V. Jenldns 252 u. Marine Ins. Co. 455, 469 u. Vance 69 V. Westfield 263 Swamscott Mach. Co. v. Partridge 439, 490, 491 Swan V. Nesmith 159 V. Stedman 176 V. Steele 175 Swanson u. White 259 Swanton v. Reed 360 Swartwout v. Payne 261 Swasey v. Vanderheyden 7 INDEX TO CASES CITED. Ixxxiii Sweeny v. Franklin F. Ins. Co. 507 Taylod V. Merch. F. Ins. Co. 20 403 404, Sweeting v. Darthez 362 492 V. Fowler 88 V. Sandiford 82 V. Halse 131 Taylor v. Mtna L. Ins. Co. 543 , 548 Sweotser v. French 176 0. Baldwin 24 Swete V. Fairlie 556, 559 V. Bates 157 Swetland v. Creigh 87 u. Binney 65 Swift V. Clark 387, 389 v. Clay 362 V. Hawkins 26 V. Coryell 176 V. Tyson 151 V. Croker 129 V. Vt. Mut. Fire Ins. Co. 507 V. Curtis 370 Swindler v. Hilliard 214 V. Davies 182 Swinyard v. Bowes 117 V. Diplock 547 Syers v. Bridge 455 V. Dobbins 88 Sykes v. Dixon 32 V. Geary 311 V. Giles 142, 154 V. Green 152 Sylvester v. Crapo 102 V. Henderson 167 V. Smith 179 V. Hillyer 180 Symington v. M'Lin 141 u. Jones 29 Symonds v. Oarr 53 1). Kymer 149 V. Cockerill 254, 263 V. Lowell 404, 425 426 , 436 Syms V. Chaplin 227 V. Mills V. Patrick 309 27 T. V. Plumer V. The Royal Saxon 302 388 Taber v. Parrot 153 i;. Salmon 157 Taff Vale Railway Co. v. Giles 150 u. Snyder 105 Taft V. Buffum 170 u. Spear 248 V. Pike 8. V. Sumner 435 Tagart v. State of Indiana 247 V. Wakefield 75 Taggard v, Loring 357, 360, 449 V. Weld 16 Taintor v. Prendergast 148, 163 V. Whitthorn 281 Tait V. Levi 436 V. Willson 439 Talbert v. Melton 295 V. Young 291 Talcot V. Com. Ins. Co. 425 Taymon v. Mitchell 58 V. Mar. Ins. Co. 458 Teasdale v. Charleston Ins. Co. 476 Tallcott V. Dudley 190, 300, 305 Tebbetts, In re 309 Tallop V. Ebers 291 V. Dowd 120 Talver v. West 76 V. Haskins 32 Tamplin v. Diggins 292 V. Pickering 315 Tams V. Hitner 169 Tempest v. Fitzgerald 76 Tanner u. Smart 232,. 233 ,236, 237, 238 Temple v. Seaver 192 Tapley v. Butterfield 174, 175, 177 Tenitt v. Bartlett 35 V. Martens 353 Tenny v. Prince 26 121 Tappan v. Blaisdell 185, 186 Terry v. Parker 91 106 Tappenden v. Randall 437 V. Wacher 157 Tarleton v. Backhouse 269 Test, The 385 Tarling v. Baxter 42,48 Thallhimer v. Brinkerhoff 152 Tarpley v. Hamer 316 Thatcher v. CuUoh 356 Tartar, The 343 V, Gammon 258 Tasker v. Cunninghame 458 Thayer v. Brackett 81 V. Scott 413 V. Mid. Mat. Fire Ins. Co. 493 Tassell v. Lewis 107 Thellusou V. Bewick 412 Tatam v. Williams 245 Thellnsson v. Fergnsson 424 Tate V. Citizens Mut. F. Ins. Co 408 V. Staples 424 V. Hilbert 92 Thing V. Libbey 5,6 u. Meek 348 Thomas Martin, The 383 u. Wellings 2.54, 261 h. Boston & P. E. Co. 201, 203, Tatham v. Hodgson 441 207 211 Tatlock V. Harris 89 V. Cartheral 260 Taunton Copper Co. v. Merchants Ins. V. Clarke 357 Co. 15, 370 V. Desanges 282 Tawnev v. Crowther 77 V. Dike 8 Ixxxiv INDEX TO CASES CITED. Thomas v. Edwards 148 Thorpe v. White 29 V. Hewes 147 Thrupp V. Fielder 5 V. Osbora 361 Thurston i'. Koch 420 V. Rhodes 308 u. M'Kown 102 0. Kideing 301 V. Thornton 41 V. Roosa 37 Thurtell v. Beaumont 529 V. Thomas 26 Tibbets v. George 555 V. Todd 90 V. Gen-ish 5 V. VonkapfF 510 Ticorno Bank v. Johnson 264 Thomason v. Frere 302 Tidmarsh v. Washington Ins . Co. 425, Thomasson v. Boyd 6 427, 431 Thomond v. Earl of Suffolk 11 Tidswell v. Angerstein 549 Thompson, The 324 Tiley v. Courtier 81 u. Andrews 170 Tilli'nghast v. Nourse 241 r. Berry 258 Tillottson v. McCrillis 157 .. Bush 395 Tillou V. Kingston Mut. Ins. Co. 407,408, V. Downing 84 346 407 508, 509, 532 533, 534 V. Faussat 389 Tilly V. Tilly 548 !'. Einden 336 Tilton, The 333, 377 V. Gillespy 424 c. Hamilton Fire Insurance Co. V. Hamilton 357 360 361 526 u. Havelock 162 V. Tilton 16 u. Hopper (6 Ellis &B.) 428 Timbers v. Hayward 10 L\ Hunter 484 Timmins v. Gibbins 90 I,. Inglis 358 Timrod v. Shoolbred 57 0. Kctcham 23 321 Tindal, Ex parte 291 V. Lay 5, 6 V. Brown 112, 116 V. Lyon 7 r. Taylor 346, 349 V. Ship Oakland 387 Tinson v. Francis 101 (,. Pcrcival 193 ,194 Tipper r. Bicknell 29 V. Perkins 156 158 159 Tippets V. Heane 239 <-. The Pliiladelphia 389 r. Walker 147, 155 V. Powles 262 Tisdale v. Harris 77 V. Eowcroft 390 476 Tisloe i\ Graeter 23 c. Shepherd 291 Titeomb v. Wood 47 V. Small 349 Tittemore v. Vt. Mut. Fire Ins. Co. 532, V. Snow 360 533 V. Taylor 418 Titus V. Hobart 96, 3S3 c. Thompson (4 Gush.) 61 Tobin V. Crawford 353 V. Trail 62 349 Todd V. Eeid 146, 153, 161 V. Van Vechten 330 V. Todd 238 Thomson v. Davenport 149, 162, 163, 336, Toland v. Sprague 243 436 Toler V. Armstrong 162 c. Hopper (1 AVntts & S.) 243 Tompkin.'i v. Brown 235, 237 V. Thomson (7 Vcs.) 152 V. Haas 54 Thorn v. Hicks 329 V. Saltmarsh 197 Thorndike v. Bordman 456 IK Wheeler 276 V. City of Boston 324 Tonawanda R. R. Co. v. Munjrc ■227,228 V. De Wolf 168 Tooke ('. Hollingworth 302 c. Stone 262, 340, 341 342 Topliam V. Braddiek 157, 248 Thorne v. Deas 158 Torrey v. Grant 258 1. Watkins 318 Toulmin v. Inglis 454 V. White 395 V. Steere 150 Thornton r. Bank of Washington 264 Touro r. Cassin 318 u. Fairlie 28 TourviUe v. Naish 149 [.. Illingworth 285 Toussaint ;;. Martinnant 292 V. Kerr 167 Touteng v. Hubbard 365 .'. U. S. Ins. Co. 372, 374, 484, Tower V. Utiea and Schen. R. E Co. 227 486 Towle V. Han-ington 191 r. Wynn 58 V. Kettell 361 Thorogood u. Marsh 214 Towner v. Wells 295 Thorold v. Smith 137 153 Towns V. Birchett 160, 161 Thorpe v. Jackson 192 Townsend v. Bush 257 INDEX TO CASES CITED. Ixxxv Townsend v. Coming 145, 146 Turner Ex parte 299 V. Derby 98 V. Burrows 337, 406 V. Goewey 182 V. Calvert 254, 257 !). Inglis 137 D. Coolidge 332 Townsley v. Sumrall 26, 110, 111 V. Richardson 298 Townson v. Tickell 304 V. Stetts 512 V. Wilson 150 V. Trustees of Liverpool Docks 62 Tracy v. Wood 198 Turner's case 397 Traders Ins. Co. v. Robert 439, 508, 509 Train v. Bennett 397 V. Gold 18 Trainer v. Superior 385 Transit, The " 400 Trasher v. Everhart 322 Trask v. Duvall 353 V. State Ins. Co. 535 Traveller, The 384 Traver v. Stevens 36 Travis v. Tartt 192 Treadwell v. Union Ins. Co. 349, 427 Treat v. Orono 36 Tremlow v. Oswin 445 Tremont, The 333 Trench w. Chenango Co. Mut. Ins. Co. 497, 525 Trent Nav. Co. v. Wood 213 Trenton L. Ins. Co. v. Johnson 549, 552, 557 Trendre Sostre, The 453 Treuttel v. Barandon 101, 122, 151 Trew V. Railroad P. Ass. Co. 561 Tribune, The 357, 376, 378 Triggs V. Newnham 232 Trimbey w. Viegnier 95,318,322 Trinity House v. Clark 360, 361 Tripler u. Olcot 157 Trotter v. Curtis 263 Troup V. Smith 248 Trow V. Vt. Central R. R. Co. 228 Trowbridge v, Chapin 204 Troy Iron, &c. v. Corning 21 True V. Puller 65 Trueman w. Loder 140,149,155,177 Trull V. Roxbury Mut. Pire Ins. Co. 538, 539 Truman v. Fenton 232 Trumball v. Portage Co. Mut. Ins. Co. 532 Trundy v. Parrar 135, 136 Truscott V. Christie 418 Tuberville v. Ryan 176 Tucker v. Buffington 332, 339 V. Robarts 129 V. Ruston 45, 76 V. Wilamouicz 257 Tuckers v. Oxley 188 Tudor V. Macomber 373 V. N. England Ins. Co. 421 Tnfnell v. Constable 36 Tufts V. Tufts 77 Tunnell v. Pettijohn 205 Tunno v. Edwards 551 Tupper V. Cadwell 7 Turley v. North Am. Pire Ins. Co. 535 Turley w. Thomas 218 H Turuey v. Dodwell 239 V. Wilson 199, 202 Turpin, Ex parte 291 V. Povall 262 Turton v. Turton 10 Tarfill, Ex parte 299 Tutela, The 366 TutclifF w. Dohrman 189 Tuthill V. Davis 257 Tuttle V. Bartholomew 65 V. Clark 266 V. Cooper 167 V. Love 14 Tuxworth V. Moore 45 Twee Juffrowen, The 417 Twende Brodre, The 417 Two Catharines, The 389, 390, 391 Two Priends, The 391 Twopenny v. Young 131 Two Sisters, The 397 Twyford u. Trail 178 Twyne's case 276, 331, 332 Tye V. Gwynne 37 Tyler v. iEtna Pire Ins. Co. 507, 525 Tyly V. Morrice 205, 224 Tyrell v. Rountree 296 Tyrie v. Fletcher 404, 435, 436 Tyson v. Rickard 255, 260 U. Underbill o. Agawam Mut. P. Ins. Co. 536 Underwood v. Wing 547 Union, The 397 Ship, u. Jansen 397, 398 Union Bank v. Coster 67 V. Greary 28 V. Ridgely 68 V. Willis 110, 121 of S. C. V. Union Ins. Co. 372 Canal Co. v. Loyd 150 India Rubber Co. v. Tomlinson 38 Ins. Co. V. Tysen 424, 461 Mut. Ins. Co. V. Commercial Mut. M. Ins. Co. 404, 458 United Ins. Co. v. Lenox 351, 476 1-. Scott 380, 472 United States v. Ashton 392 V. Bainbridge 4 u. Bank of the U. S. 87 V. Barker 387 V. CofiSn -396 V. Crosby 319 Ixxxvi INDEX TO CASES CITED. United States v. Cutler 396, 397 V. Delaware Ins. Co. 340 u. Duncan 1 86 V. Forbes 399 V. Gillies 326 V. Hack 189 V. Hatch 394 o. Hillegas 67 u. Jarvis 158 u. Kirkpatrick 83 V. Lunt 396 V. Lynch 399 V. Morrison 295 V. Netcher 396 u. Nye 392 V. The Paul Shearman 415, 452 V. Euggles 396 V. Staly 387, 392 V. Tillotson 67 V. Wardwell 83 o. Wilder 374 u. Williams 152 V. Willings 326, 327, 329 United States Bank t'. Bank of Georgia 90 I'. Binney 167, 177 V. Lane 114 V. Smith 109 Upham V. Lefavour 159, 161 V. Prince 65 Upton V. Gray 149 u. Salem Ins. Co. 461 V. Suffolk County Mills 142 Ure V. Coffman 383 Urquhart v. Barnard 456 V. MclTCr 159 Usher 2'. Noble 411, 412 Uther i>. Rich 151 Utica Ins. Co. u. Bloodgood 264 V. Tillman 255 i Utterson v. Vernon 289, 309 Valandingham v. Huston 246 Valentine v. Clough 383 u. Packer 142 V, Piper 136 r. Vaughan 285 Vail V. Strong 42 Vallejo V. Wheeler 448, 449, 454, 455 Valpy i'. Gibson 50, 62 Valton V. National Loan Ins. Co. 549 Van Allen v. Vanderpool 141 Van Baggen v. Baines 424 Van Beuren v. Wilson 389, 394 Van Bokkelin v. Ingersoll 345 Van Buskirk v. Parinton 212 Van Castcel v. Booker 62 Vandenheuvel v. United Ins. Co. 434, 474 Vanderbilt, The 385 Vanderslice v. Steam Tow-Boat Supe- rior 203 Vandever v. Tilghman 390 Vandyck v. Hewitt 437 Van Eps v. Corp. of Schenectady 54 V. Dillaye 194 Van Guard, The 388 Vanhom v. Prick 136 Van Keuren v. Parmelee 180, 241 Von Natta v. Mut. Security Ins. Co. 413, 513 Van Ness v. Forrest 182 Van Ostrand v. Reed 82 Van Eaugh v. Van Arsdaln 315 Van Reimsdyk v. Kane 95, 192, 316, 318, 322, 323 Van Rensselaer v. Sheriff of Albany 295 V. Jewett 252 V. Jones 252 Vansandan v. Corsbie 292 Van Stanvoord v. St. John 218 Vansyckle v. Schooner Thomas Ewing 399 Vantine r. The Lake 385 Van Valen v. Russell 187 Van Wart v. Smith 117 V. WooUey 117 Vareck v. Crane 256, 257 Varner v. Nobleborough 82 Varuna, The 387 Vassar v. Camp 20 Vaughan v. Fuller 119 V. Menlove 197 Vaux V. Sheffer 382 Veacock v. M'Call 388 Veasie v. Williams 152 Vedder v. Alkenbrack 316 Venable v. Thompson 24 Venning v. Leckie 182 Vent V. Osgood 4, 8 Ventress !•. Smith 47 Ventris v. Shaw 235 Venus, The 324 Vere v. Ashby 137 u. Smith 159 Vermont Central R. E. Co. v. Estate of Hills 21 Vernon v. Manhattan Co. 172 V. Smith 510 Vertue r. Jewell 60 Very v. McHenry 311, 315 Vibilia, The 401 Vice V. Anson 165 Victoria, The 382, 383 Vidal V. Thompson 318 Viel V. Flemming 177 Viclie V. Osgood 77 Vigilantia, The 423 Vinal V. Burrill 167, 329, 417 Viner v. Cadell 303 Vining v. Gilbreth 44 Violett V. Powell 148 Virgin, The 342, 378 Vlierboom v. Chapman 348 Volcano, The 385 INDEX TO CASES CITED. Ixxxvii Volunteer, The 344, 345, 347, 360 Von Hemert v. Porter 269 Von Lindenaa v. Desborough 549 Von Vacter v. Flack 87 Voorhees v. Earl 58 V. Wait 9 Vose V. Eagle Life & Health Ins. Co. 557 Vrceland v. Hyde 107 Vrouw Judith, The 424 Vrow Johanna, The 424 VuUiamy v. Noble 170 "W. Waddell v. Cook 189 Waddington ;;. United Ins. Co. 435 "Wade's case 81 Wade V. Simeon 28 Wadham v. Slarlow 311 Wadsworth v. Pac. Ins. Co. 460 Wain V. Warlters 66, 77 Wainewright v. Bland 549 Wainhouse t!. Cowie 415 Wainman v. Kynman 239 Wainwright v. Webster 90 Waistell v. Atkinson 81 Wait V. Baker 62 V. Gibbs 157 V. Johnson 148 Waland v. Elkins 217 Walch r. Adams 174 Walden v. Chamberlain 378 V. Firemen Ins. Co. 443 V. Le Roy 372 V. La. Ins. Co. 432, 524 V. New York Firemen Ins. Co. 434 u. Phoinix Ins. Co. 416 V. Sherburne 179, 252 Waldo, The 344 V. Martin 162 Wales V. Webb 258 Walker, Ex parte 284, 292 V. Bank of Augusta 114 V. Bank of Washington 258 u. Birch 453 u. Boston Ins. Co. 362 I,. Campbell 237 I'. Davis 9 v. Forbes 66 V. McDonald 123 I'. Maitland 442, 443 V. Nussey 76 V. Perkins 99 V. Protection Ins. Co. 462 V, Sherman 66 V. Simpson 7 V. Smith 141, 147 V. Trott 171 V. United States Ins. Co. 368, 369, 414, 471 o. Walker 26 Walker V. Warfield 234 Wallu. Bry 118 V. Charlick 29 V. East Kiver Mut. Ins. Co. 520, 525 V. Howard Ins. Co. 496 Wallace v. Agry 82, 103, 113 V. Breeds 47 V. Cook 143 V. Fitzsimmons 193 V. Ins. Co. 530, 538 V. M'Connell 109, 296 V. Patterson 311 u. Vigus 207 Waller v. Lacy 236 Walpole V. Bridges 213 V. Ewer 483 Walsh t). Frank 51 V. Homer 456 u. Nourse 315 V. Pierce 138 V. Whitcomb 143 Walter v. Brewer 216, 382 V. Haynes 113 u. Ross 50 Walton V. Dodson 185 V. Mascall 117 V. The Neptune 392 Walworth v. Holt 182 Want V. Blunt 542 Wape V. Hemenway 387 Waples V. Fames 461 Warburton v. Aken 1 6 Ward V. Ames 395, 396 V. Armstrong 383 V. Dalton 294 V. Sch. Dousman 384 ». Evans 126, 153 u. Felton 353 V. Fuller 304 V. Green 376, 378, 382 V. Leviston 184, 185 V. The Ogdensbnrgh 384 V. AVard 549 V. Whitney 347 Warden v. Mourillyan 207 Warden v. Greer 215 Warder v. Horton 412, 420, 421 V. La Belle Creole 456 Ward well M. Haight 172 Ware v. Adams 66 V. Gay 220 Warfield v. Boswell 259 Waring i'. Clarke 383 V. CunlifTe 268 V. Mason 53 V. Richardson 157 Warner v. Daniels 57 u. Martin 155,159 V. M'Kay 148, 161 ;;. Middlesex Mut. Ass. Co. 512 V. Ocean Ins. Co. 492 Warren, In re 165, 284 o. Buckminster 48 Ixxxviii INDEX TO CASES CITED. Wan-en v. Crabtrcu 258, 261 i\ Mains 81, 90 u. Manuf. Ins. Co. 416 u. Ocean Ins. Co. 406 V. Sproule 60 V. Wheeler 23, 107 V. Whitney 98 Warren Bank v. Suffolk Bank 144, 155 Warrender v. Warrender 319 Warrington v. Turbor 117 Warrior, The 333 Warwick i'. Bruce 9,33 V. Scott 406 Washburn v. Bank of Bellows Falls 18.j, 186 V. Goodman 17C , 190, 191 V. Eamsdell 1IJ2 Washington, The 391 Pilot Boat, i: The Saluda 400 Ins. Co. v. Merchants Ins. Co. 498 Watchman, The 311 Watchorn v. Langford 494 Waterman r. Barratt 27 V. Meigs 78 Waters v. Allen 416,435 V. Earl of Thanet 248 V. Merchants Ins. Co. 443, 527 f. Monarch Ins. Co. 413 u. Taylor 171 V. Tompkins 239 Watkins v. Bensusan 102 V. Bernadiston 400 r. Crouch 109 V. Dui'and 514 t. Hill 82 V. Maule 100, 127 r. Perkins 73 V. Stevens 236, 242 !-. Vince 137 Watkinson v. Bank of Ponn. 172 V. Laughton 356, 473 Watson, jUj- parte 168,179 285, 288 i: A. N. & B. Railway Co. 218 V. Bourne 310 V. Duykinck 354, 350 V. Ins. Co. of N. A. 468 V. King 445 V. Lyle 244 V. Mainwaring 556 <". Marine Ins. Co. 481 c. McLaren 65 L . The Rose 390 < . Threlkeld 137 V. Wilson 295 Watts V. Pricnd 78 Wattson V. Marks 382 AVaugh r. Carver 166, 168 V. Cope 239 AVavc, The 398 Sch., J!. Ileyer 398 Way V. Richardson 125 Waydo v. Carr 218 Waydell v. Luer 82, 193, 194 Wayland i: Mosely 23 Waynam v. Bend 124 Weatherhead v. Boyers 259 Webb, In re 203 V. Duckingfield 388 V. Fox 298, 304 V. Nat. Fire Ins. Co. 494 V. Pierce 360, 361 I. Protection Ins. Co. 526 V. Roberts 5& Webber v. Tivill 243 Webster v. Brig Andes 402 V. Bray 165 1,. De Tastet 156,416 V. Foster 433 V. McGinnis 137 V. Webster 170 Wedderburn v. Bell 427 AVedge v. Newlyn 281 Weed V. Panama Railroad Co. 227, 382 u. Saratoga & Schenectady Rail- road Co. 217, 218, 225 Weeks v. Catharina Maria 389 Wegener v. Smith 353 Weightman v. Macadam 372 Weiler v. Hoch 69 Weir V. Aberdeen 425 Weisscr r. IMaitland 362 Welch V. Hicks 351 t.. Mandeville 554 Welles V. Boston Ins. Co. 367, 538 V. Gray 402 Wellman, In re 282 r. Southard 237 Wells V. Archer 553 V. Hopwood 422 V. Horton 75 V. Mace 293, 309 a. Meldrun 395 V. Parker 284 u. Phil. Ins. Co. 413 I. Porter 55 !'. Ragland 247 V. Steam Navigation Co. 202, 221 V. Whitehead 113 Welsh r. Adams 189 o. Welsh 293 Wendover v. Hogeboom 329 Wenman v. Mohawk Ins. Co. 248 Wcntworth r. BuUen 32 I: Outhwaite 62, 63 West Boylston Manuf Co. v. Searle 159 West Branch Bank v. Moorehead 82 Westerdell r. Dale 339, 400 Westfall V. Hudson R. Fire Ins. Co. 499 !'. Parsons 72 Westlake v. St. Lawrence Co. Slut. Ins. Co. AVestmorland, The Weston V. Barton f. Davis u. Pcnniman 68, 326, 517 387 185 29 329 INDEX TO CASES CITED. Ixxxix Westropp V. Solomon 155 Whitney v. Dutch 5 "Westzlnthus, In re 63 V, Ferris 167 Wethey v. Andrews 102 V. Haven 431 Wetmore v. Henshaw 390 V. Lee 198 Wetzel V. Spousler 69 V. N. Y. Firemen Ins. Co. 354 Weyland v. Elkins 217 Whiton V. Old Colony 438 Whalley v. Wray 197 Whitridge v. Dill 383, 384 Wharton !,-. O'Hara 36 Whittel V. Crawford 383 Wheatley v. Williams 248 Whittemore v. Adams 323 Wheaton v. East 4,5 u. Gibbs 77 Wlioeler v. Bramah 298 Whitteridge v. NoiTis 370 V. The Eastern State 384, 385 Whittingham v. Hill 7 V. Field 105 Whittinghara's case 9 V. Eisk 295 Whittle V. Skinner 27 V. Guild 47 Whitton V. The Ship Com meree 395 398 V. Kroggs 90 V. Smith 170 174 V. Morris 136 Whitwell V. Harrison 462 u. Eice 179 180 V. Johnson 115 I/. Sumner 331 Whitworth v. Adams 266 V. Van Wart 169 Whywall V. Champion 7 V. Webster 247 Wickham v. Blight 388 Wheeling Ins. Co. v. Morr son 508 Wicks V. Gorgerley 257 Wheelock v. Doolittle 241 Wieler v. Schilizzi 57 Wheelwright v. Depeyster 47 Wiffen V. Roberts 97 106 Whetmore v. Baker 181 Wigg V. Wigg 149 Whipple V. Stevens 180, 238, 241 Wiggin V. Amory 448 V. Thayer 307 V. Mer. Ins. Co. 438 Whiston V. Stodder 318 320 V. Suffolk Ins. Co. 420, 437 487 Whitaker v. Bank of England 130 Wightman i-. Western M. & F. Ins. u. Brown 179 Co. 535 Whitbeck v. Whitbeck 27 Wilbur V. Crane 28 Whitcher v. Hall 67 Wilburn v. Larkin 145 Whitcomb v. Whiting 240 241 Wilcox V. Howland 268 White V. Bailey 246 V. Hunt 318 322 V. Bluett 28 V. Plummer 248 V. Boulton 219 V. Koath 5 V. Brown 413 414 510 V. Singletarry 176 V. Chapman 162 Wilcocks V. Union Ins. Co 448 V. Chouteau 139 158 161 Wild V. Bank of Passamaqnoddy 139 V. Demilt 32 Wilde V. Sheridan 85 u. Garden 56 Wilder v. Keeler 187 192 V. Hale 241 Wilders v. Stevens 100 V. Miller 157 Wildes V. Eessenden 193 V. Ledwiek 98 V. Savage 66 129 V. Reed 68 Wildman, Et parte 294 V. Skinner 147 148 Wilhclm V. Caul 30 y. Stoddard 106 Wilkes V. Ferris •45, 62y76 a. Winnisimmet Co 228 V. Jacks 118 u. Woodward 189 Wilkie V. Roosevelt 257 V. Wright 261 ,263 Wilkins ;;. Carmichael 400 Whitehead v. Anderson 61, 62 u. Casey 93 11. Price 503 V. Jadis 107 , 108 i: Tuclvett 135 V. Pearce 177 V. Walker 102 V. Reed 337 Whitesell r. Crane 223 ,227 Wilkinson u. Frazier 168, 385 , 386 Whitesides v. LafFerty 191 V. Henderson 192 Whiting V. Independent Mut. Ins .Co 419, V. Johnson 124 ,131 485 V. Lutwidge 129 Whitman, Ex parte 298 Wilks V. Back 145 u. Leonard 172 Willard v. Dorr 381 ,386 Whitmore v. Gilmour 148 u. Hewlett 5 Whitney v. American Ins. Co. 410 ,438 u. Eeeder 261 V. Bigelow 242 V. Stone 9,33 xc INDEX TO CASES CITED. Willatts V. Kennedy 26, 27 Willes, Er parte 284 D. Glover 152,431 Willett V. Attcrton 233 D. Blanford 191 V. Chambers 180 Willetts V. Buffalo and Rochester R. R. Co. 228 William, The 399 Harris, The 392 Young, The 383 Williams, Ex parte 186, 191 V. Barton 159 V. Branson 215 V. Chester & Holyhead R. Co. 140 o. Clarice 100 V. Cole 421 V. Commercial Exchange Co. V. Everett V. Germaine V. Grant u. Gridley t. Griffiths V. Hance V. Henshaw IK Jones V. Keats r. Kennelicc In 17. Littleficld r. London Ass. Co ,'. Mabre V. Marshall V. Mo D.N 27 130 132 215 240 235, 236, 238 263 181 165, 250, 323 171 Co. 473 139 373, 481 6 424 4 E. Mm. F. Ins. Co. 406, 422, 496, 502, 521, 5C2 . Gates 318 . Shackelford 154 Smith 115,351,413,471 V. Storrs V. Saifolk Ins. Co. V. Taylor r. Thomas V. Tliorp ( . Waring r. Whiting V. Williams r. Wilson c. Winans Williamson r. Brif;- Alphonso V. Canaday ['. Dickens V. Price Willings V. Blight f*. Cunsi_'i|na Willinks v. HoUingsworth AVillis, /n re r. Bank of England ;;. Barrett V. Freeman V. Green V. Newham 157, 158 369, 442 219 338 555 110 323 255, 360 191 131 391 142 291 400 335 318 137 291 149 88 93 11 240 58 Willis V. Willis 42 Willoughby v. Comstoek 259 V. Horridge 228 AVills «. Cowper 319 Wilmar v. The Srailax 342 Wilmot V. Hurd 57 V. Smith 31 Wilmshurst v. Bowker 62 Wilson, Ex parte 284 litre 311 u. Anderton 150, 211 u. Appl'eton 247 (1. Balfour 44 V. Barthorp 148 r. Brett 156 V. Calvert 238 o. Campbell 165 V. Dyson 177 u. Fuller 143 V. General Mut. Ins. Co 449 V. Genesee Mut Ins Co 408, 517, 532 V. Green 16 V. Greenwood 171 r. Hart 148 V. Herkimer Co. Mut. Ins. Co. 520, 525 V. Hicks 358 u. Hill 408, 509, 531, 5.34 r. Kymer 353 V. Lewis 180 V. Martin 413 V. New York & Jlaryland Line R. R Co. 1.55 I. The Ohio 385 V. Poulter 138 c. Royal Exch. Ass Co 419, 473 V. Smith 156 V. Trumbull jNIut. Fire Ins. Co. 490, 534 V. Tumman 137 V. Whitehead 168 r. Williams 176 . . Y. N. & B. Raih: 'av Co. 218 Wilton V. Falmouth 323 Wiltshire ;•. Sims 141 Winch r. Keely 302 AVinohester, Ex parte 289 Windle V. ^Vn(lrc\vs 94 Wing V. Augravo 547 V. Clark 42 r. Ilarvcy 542 V. Mill 40 Wingatc v. Jlechanics Bank 144 Winn v. Ct.'lumbian Ins Co. 377, 466 Winship V. United States Bank 166, 175, 179 Winslow V. Crocker 12 !>. Dawson 257 V. Prince 399 Winsor v. Cutts 360 V. DiUaway 15 INDEX TO CASES CITED, XCl Winsor v. Lombard 57 V. McLellan 332 Winter v. Coit 139 V. Delaware Ins. Co. 458 Winthvop V. Carleton 322, 393 V. Un. Ins. Co. 461 Wirrall, The 384 Wise V, Charlton 90 Wiseman v. Roper 27 Wiswould, Ex parte 285 Witershiem v. Lady Carlisle 247 Withers v. Lyss 76 Witherspoon v. Dubose 11 Witherup v. Hill 157 Witter V. Richards 187 Wittock V. Underwood 107 Woddropp V. Ward 187 Wolcott V. Eagle Ins. Co. 344, 409, 410, 433 439 u. Van Santvoord 109 Wolden v. Louis. Ins. Co. 523 Wolf V. Summers 356 Wolfe V. Howard Ins. Co. 537 V. Myers 347 V. Whiteman • 248 Wolff V. Horncastle 413 V. Koppel 159 Wolverton v. Lacey 386 Wood V. Bell 332 333 V. Benson 74 V. Brown 119 V. Dodgson 292 V. Goodwich 136 145 V. Hamilton 400 V. Hartford Fire Ins. Co. 478 497 V. Jones 60 V. Lincoln & Kennebeck Ins. Co. 465 470 V. Mytton 125 V. New Eng. Mar. Ins. Co. 461 u. The Nimrod 387 u. O'Kelley 167 V. Perry 23 V. Robbins 252 V. Teatman 60, 64 V. Worsley 406 V. Wylds 239 Woodbridge v. Allen 236 ,315 V. Brigham 109 V. Wright 323 Woodcock V. Houldsworth 113 V. Oxford & Worcester R Co. 69 Woodes V. Dennett 147 , 148 Woodfin V. Hooper 316 Woodford v. McClenahan 142 WoodhuU V. Wagner 316 Woodin V. Buiford 142 , 152 Woodlefe v. Curties 213 Woodlife's case 213 Woodman v. Chapman 11 Woodrop Sims, The 382 Woodruff V. Hinman ,383 , 384 34 Woods V. Devin 203, 225 o. Masterman 539 o. Russell 332, 333 Woodman v. Thurston 118 Woodthorpe v. Lowes 113, 116 Woodward v. Cowing 36 V. Rowe 3 V. Windship 175 Wookey v. Pole 122 Wooldridge «. Boydell 457 Wooley V, Clements 107 Woolfu. Beard 228 V. Claggett 427, 456 Wooten v. Miller 35,162 Wordsworth w. Willan 218 Worrall, In re 279 V. Munn 138, 176 Worsley v. De Mattos 283 V. Scarborough 150 V. Wood 36, 406, 422, 535 Worthington v. Grimsditch 240 Wray v. Milestone 181 Wren v. Kirton 141, 157, 160 Wright & Pole, In re 494, 537 V. Bigg 19 V. Caldwell 204 V. Hamiltbn 248 V. Hunter 336 V. Lawes 64 K. McAlexander 255 V. Morley 65 V. Morse 23, 121 V. Nutt 66 V. Reed 81 V. Russell 185 V. Shawcross 115 V. Shiffner 424 u. Simpson 66 .,. Welbie 416 V. Wheeler 258 V. Wright 32 Wrigley, In the matter of 324 Wyatt y. Hodson 261 V. Margins 336 V. Marquis of Hertford 338 Wycoff V. Longhead 254 Wydown's case 282 Wyld V. Pickford 224 Wyllie V. Wilkes 289 Wyman v. Adams 106, 110 V. Gray 77 Wvndham, Ex parte 284 Wynn v. AUard 227 Wynne v. Jackson 318 u. Raikes 129 Wysham v. Rossen 385 Y. Yale V. Eames 191 Yarborough v. Bank of England 124 Yarnell v. Anderson 194 xcii INDEX TO CASES CITED. Yates V. Bell 130 Young V. Taylor 292 II. Brown 399 ,400 V. Washington Co. Mut Ins V. Pym 57 Co. 504 , 506 V. Sherrington 292 Young Mechanic, The 401 , 402 V. Whyte 471 Young Sam, The 402 Yea V. Fouraker 232 Yundt V. Eoberts 34 Yeates v. Grove 87 Yerby v. Grigsby 136 Z. Yonge V. Reynell 65 Yonqua v. Nixon 36 Zacharie v. Orleans Ins Co. 462 Yorke v. Grenaugh 212 Zagury ;;. Farnell 47 Young, Ex parte 289, 292 338 Zane v. Brig President 401 V. Axtell • 167 V. Zane 27 V. Bank of Bengali 292 Zarega, In re 314 V. Berkley 257 Zelden Rust, The 418 o. Bryan 110 Zenobia, The 356 ,.. Cole 126 Zent V. Heart 241 y. Grote 92 Zephyr, The 474 V. Mackall 245 Zerega v. Poppe 356 V. Miller 255 Zodiac, The 400 V. Smith 208 Zouch V. Parsons 4 ELEMENTS OF MEECANTILE LA^. ELEMENTS OF MERCANTILE LAW. CHAPTER I. OF THE PARTIES TO MERCANTILE CONTRACTS. SECTION I. WHO MAY BE PARTIES TO MERCANTILE COKTRACTS. It was once the doctrine of the English courts, that the law merchant did not apply to any contracts between parties who were not merchants.i But this view passed away ; ^ and it has long been a well-established rule in that country as well as in this, that the law merchant applies to mercantile contracts, such as negotiable notes, bills of lading, charter-parties, policies of marine insurance, and the like, whoever may be the parties to them. All mercantile transactions begin or end in contracts of some kind ; express or implied ; executed or to be executed ; and the first essential element of every contract is the existence of par- ties capable of contracting. Generally, all persons may bind themselves by contracts. Whoever would resist a claim *or action founded on his contract, and rests his defence on the ground of his incapacity, must make this out.^ 1 Oaste V. Taylor, Cro. Jac. 306; Eaglechilde's case, Hetley, 167. 2 Barnaby v. Rigalt, Cro. Car. 301; Woodward v. Rowe, 2 Keble, 105, 132. 8 Leader v. Barry, 1 Esp. 353 ; Jetiiie v. Ward, 2 Stark. 326 ; Henderson v. Clarke, [3] 4- ELEMENTS OF MERCANTILE LAW. [CH. I. The incapacity may arise from many causes ; as from insan- ity ; or from being under guardianship ; or from alienage in time of war ; or from infancy ; or from marriage. Of infants and married women we must speak in some detail. SECTION II. OF INFANTS. All are infants, in law, until the age of twenty-one. But in Vermont,^ in Maryland,^ and perhaps one or two other States, women are considered of full age at eighteen, for some pur- poses. The contract of an infant (if not for necessaries) is voidable, but not void.3 That is, he may disavow it, and so annul it, either before his majority, or within a reasonable time after it. As he may avoid it, so he may ratify and confirm it. He may do this by word only. But a mere acknowledgment that the debt exists is not enough.* 27 Missis. 436. And if the plaintiff reply to a plea of infancy, that defendant, after he became of age, confirmed the promise, he need only prove a promise at any time before the commencement of the suit, and the defendant must then show that he was under age at that time. Bigelow v. Grannis, 4 Hill, 206 ; Bay v. Gunn, 1 Denio, 108 ; Hartley v. Wharton, 11 A. & E. 934 ; Borthwick v. Carruthers, 1 T. E. 648. And see HaiTison v. Clifton, 17 Law Jour. Ex. 233. 1 See Sparhawk v. Buell, 9 Vt. 42. ^ Davis V. Jacquin, 5 Harris & J. 100. 8 The rale that those contracts are voidable only which are for the infant's benefit, while those which are prejudicial are absolutely void, is adopted and recognized by many authorities. Sec United States v. Bainbridge, I Mason, 71, 82; Keane v. Boy- cott, 2 H. Bl. 515 ; Baylis v. Dinoley, 3 M. & S. 477 ; Latt v. Booth, 3 Car. & K. 292 ; Kline v. Bebce, 6 Conn. 494 ; McMinn v. Richmonds, 6 Yerg. 9 ; Wheaton v. East, 5 id. 41 ; Ridgeley v. Crandall, 4 Md. 435 ; Fridge v. The State, 3 Gill & J. 104 ; McGan v. Marshall, 7 Humph. 121 ; Rogers v. Hurd, 4 Day, 57 ; Lawson v. Lovejoy, 8 Greenl. 405 ; Vent v. Osgood, 19 Pick. 572 ; La^vrence v. McArter, 10 Ohio, 37 ; Pyle V. Cravens, 4 Litt. 17. But this distinction we suppose to be practically obsolete, the more recent authorities holding that all acts and contracts of infants (except, per- haps, the appointment of an attorney) are voidable only, and not absolutely void. See Cole V. Pennewer, 14 III. 158 ; Fonda v. Van Home, 15 Wend. 631 ; Breckenridge v. Ormsby, 1 J. J. Marsh. 236 ; Scott v. Buchanan, 2 Humph. 468 ; Cimimings v. Powell, 8 Texas, 80 ; Parke, B. in Williams v. More, 11 M. & W. 256 ; 1 Am. Leading Cases, 103. Sluch of the uncertainty upon this question has aiisen from a vague and indefi- nite use of the words " void " and " voidable." The student will find an admirable criticism upon these words by Mr. Justice Bell, in the case of The State i'. Richmond, 6 Foster, 232. An infant cannot, however, avoid his conveyance of real estate until he becomes of age. Zouch v. Parsons, 3 Burr, 1794. But he may avoid a sale of chat- tels. Roof I'. Stafford, 9 Cow, 626 ; CaiT v. Clough, 6 Foster, 280 ; Bool v. Mix, 17 AVend. 119 ; Shipraan v. Horton, 17 Conn. 481 ; Mathewson v. Johnson, 1 Hoff. 560. * In England, by stat. 9 Geo. 4, c. 14, \ 5, and in Maine, and perhaps some otlier [4] CH. I.] THE PARTIES TO MERCANTILE CONTRACTS. It must be a promise to pay the debt ; or such a recognition of the debt as may fairly be understood by the creditor as ex- pressive of the intention to pay it ; for this would be a promise by implication.^ It must also be made voluntarily, and with the purpose of assuming a liability from which he knows that the law has discharged him.^ And if it be a conditional promise, the party who would enforce it must prove the condition to be fulfilled.3 States, by a similar statute, it is necessary that the new promise or confirmation should be in writing, signed by the party to be charged thereby. Under this statute it has been decided, that any written instrument signed by the party, which in the case of adults would have amounted to the adoption of the act of a party acting as agent, will in the case of an infant who has attained his majority amount to a ratification. Harris v. Wall, 1 Exch. 122 ; Mawson v. Blane, 10 id. 206, 26 Bng. L. & Eq. 560 ; Hartley v. Wharton, 11 A. & E. 934. It seems to have been held in Baylis v. Dineley, 3 M. & S. 477, and intimated, in Glamorgan v. Lane, 9 Misso. 446, that a bond or other sealed in- strument given by an infant could not be confinned by parol, after full age. But the better authorities would seem to hold, that any act of an infant, from which his assent to a deed executed during his minority may be inferred, will operate as a confirma- tion. See Wheaton v. East, 5 Yerg. 41 ; Hoyle v. Stowe, 2 Dev. &_B. 320 ; Houser v. Reynolds, 1 Hayw. 143. As to what words are sufficient to constitute a ratification, see Hale v. Gerrish, 8 N. H. 374, in which it was proved that the defendant, after he became of age, admitted that he owed the debt, and said that " the plaintiff ought to get his pay," but refused to give a note lest he might be arrested. Held, that such dec- laration was no sufficient ratification of the original promise. And in Thrupp v. Fielder, 2 Esp. 628, it was held that paying money generally on account of a bill was not sufficient, but that in order to constitute a ratification, there must be an express promise to pay. And see Ford v. Phillipps, 1 Pick. 203 ; Alexander v. Hutcheson, 2 Hawks, 535 ; Robbins v. Baton, 10 N. H. 561 ; Ordinary D. Wherry, 1 Bailey, 28 ; Benham v. Bishop, 9 Conn. 330. 1 See Hale v. Gerrish, supra; Bigelow v. Grannis, 2 Hill, 120 ; Willard v. Hewlett, 19 Wend. 301. In Rogers v. Hurd, 4 Day, 57, it was held, that the same evidence ought to be required of the confiimation, after full age, of a voidable contract made by an infant, as of the execution of a new one. In Whitney v. Dutch, 14 Mass. 460, Parker, C. J., said : "No particular words seem necessary to a ratification, and provided they import a recognition and confirmation of his promise, they need not be a direct promise to pay." Again, in Tibbets v. Gerrish, 5 Foster, 41, it was held, that to sustain the issue of a new promise upon a plea of infancy, a more stringent rule prevails than where the defence is the statute of limitations ; that there must be either an express rat- ification by a new promise made, or such acts of the individual, after becoming of age, as to amount to an unequivocal ratification and promise. And see Edgerly v. Shaw, 5 Foster, 514 ; Martin v. Mayo, 10 Mass. 137 ; Orvis v. Kimball, 3 N. H. 314; Good- sell V. Myers, 3 Wend. 479 ; Benham v. Bishop, 9 Conn. 330 ; Ford v. Phillipps, 1 Pick. 202 ; Wilcox a. Roath, 12 Conn. 550 ; Hinely v. Margarita, 3 Barr, 428 ; Smith v. Mayo, 9 Mass. 62 ; Merchants Fire Ins. Co. v. Grant, 2 Edw. 544. — The ratification must be made before the commencement of the suit. Goodridge v. Ross, 6 Met. 487 ; Men-iam v. Wilkins, 6 N. H. 432 ; Thing v. Libbey, 16 Maine, 55. And it must be made to the party himself or his agent. See Hoit v. Underbill, 9 N. H. 436 ; Bigelow V. Grannis, 2 Hill, 120 ; Goodsell v. Myers, 3 Wend. 479. 2 Harmer v. KiUing, 5 Esp. 102; Ford v. Phillipps, 1 Pick. 202; Smith v. Mayo, 9 Mass. 64 ; Curtin v. Patton, 11 S. & K. 307 ; Brooke v. Gaily, 2 Atk. 34 ; Hinely v. Margarita, 3 Barr, 428. 3 In Cole V. Cole, 3 Esp. 159, the plaintiff to a plea of mfancy replied a new promise after full age, and the evidence was of a promise to pay " when the party was able ; " and it was held that the plamtiff must prove that the defendant was of ability to pay. 1* [5] 6 ELEMENTS OF MEKCANTILB LAW. [CH. I. If an infant's contract is not avoided, it remains in force. But the difficult question sometimes occurs, whether confirmation by mere silence, after a person arrives at full age, prevents him from avoiding his contract made during his infancy. As a general rule, mere silence, or the absence of disafiirmance, is not a con- firmation ; because it is time to disaffirm the contract when its enforcement is sought.^ But if an infant buys property, any unequivocal act of owner- ship after majority — as selling it, for example — is a confirma- tion.^ And the grant of lands received during infancy by way of exchange for other lands has been held to be a confirmation of the original conveyance.^ And generally, a silent continued possession and use of the thing obtained by the contract is evidence of a confirmation ; * and it is much stronger if there be a refusal to redehver the thing when it can be redelivered;^ and is perhaps conclusive, when the conduct of the party may be construed as a confirmation, and if not so construed, must be regarded as fraudulent.*^ The great exception to the rule, that an infant's contracts are And see Ererson v. Carpenter, 17 Wend. 419; Thompson i'. Lay, 4 Pick. 48; Davis V. Smith, 4 Esp. 36; Bosfordn. Saunders, 2 H. Bl. 116. But the plaintiff is not bound to show an ability to pay witliout inconvenience. Martin v. Maj-o, 10 Mass. 141 ; Thomp- son V. Lay, supra. 1 Thing V. Libbey, 16 Maine, 55; Smith v. Kelly, 13 Met, 309; Dana n. Steams, 3 Cush. 372. Sec also editor's note to Dublin & 'VVicklow Eaihvav Co. v. Black, 16 Eng. L. & Eq. 556 ; Ferguson v. Bell, 17 Misso. 347 ; Dunlap v. Hales, 2 Jones, 381 ; Harris v. Wall, 1 Exch. 122. But see Thomasson v. Boyd, 13 Ala. 419 ; Delano v. Blake, 11 Wend. 85. " See Cheshire v. Barrett, 4 McCord, 241, where an infant gave his note for a horse, payable to A or bearer, and kept the horse after he became of age, and then sold him ; and it was held a confirmation, and that the bearer of the note, to whom it had been transferred, might recover on it. And see Dcason ;;. Boyd, 1 Dana, 45 ; Lawson v. Lovejoy, 8 Greenl. 405. " Williams v. Mabre, 3 Halst. Ch. 500. * Thus, in Boyden v. Boyden, 9 Met. 519, it was held, that if an infant buys goods on credit, and retains them in his own hands, and uses them for his own purposes, for an unreasonable time after he comes of ago, without restoring them to the seller, or giving him notice of an intention to avoid tlie contract, it operates as a ratification of the contract, and renders the buyer liable in an action for the price of tlio goods. See also, Eubanks v. Peak, 2 Bailey, 497 ; Alexander v. Hcriot, 1 Bailey, Eq. 223 ; Ivline v. Bcebe, 6 Conn. 494. 1^ See Aldrich v. Grimes, 10 N. H. 194, where an infant purchased a potash-kettle, and gave his promissory note for the price, it being agreed by the parties that he might try the kettle, and return it if it did not suit him. The vendor, after the infant became of age, requested him to return the kettle if he did not intend to keep it ; but he retained and used it a month or two aftenvards. Held, that this was a sufficient ratification of the contract, and that an action miglit be sustained on the note. <^ See Delano v. Blake, 11 Wend. 85. [6] CH. I.] THE PARTIES TO MERCANTILE CONTRACTS. *7 voidable, is when the promise or contract is for necessaries. The rule itself is for the benefit and protection of the infant ; and the same reason causes the exception ; for it cannot be for the benefit of the infant that he should be unable to purchase food, raiment, and shelter, on a credit, if he has no funds. The same reason, however, enlarges this exception, until it covers not only strict necessaries, or those without which the infant might * perish, or would certainly be uncomfortable, but all those things which are distinctly appropriate to his person, station, and means.^ There is no exact dividing line which could make this defi- nition precise. But it is settled that mercantile contracts, as of partnership,^ purchase and sale of merchandise,^ signing notes and bills,* are not necessaries, and that all such contracts are voidable by the infant. So if he gives his note even for neces- saries, he is not bound by it ; but may defend against it on the ground that it was for more than their true value, and the jury will be instructed to give against him only a verdict for so much as the necessaries were worth.^ An infant, however, may be an attorney or agent to execute a mere power, or indeed to perform any^act which he has physi- cal and mental capacity to perform.® 1 In Co. Litt. 1 72, a, it is said : " An infant may bind himself to pay for his necessary meat, drinlt, apparel, necessary physic, and such other necessaries, and likewise for his good teaching or instruction, whereby he may profit himself afterwards." A good com- mon-school education is a " necessary ; " but it seems that a collegiate education is not ; at least for all persons. Middlebury College v. Chandler, 16 Vt. 683 ; Raymond v. liOyl, 10 Barb. 489 ; Peters v. Fleming, 6 M. & W. 48. As to what are necessaries for an infant generally, see Bradley v. Pratt, 23 Vt. 378 ; Harrison v. Fane, 1 Man. & G. 530 ; Johnson v. Lines, 6 Watts & S. 80 ; Hands v. Slaney, 8 T. E. 578 ; Phelps v. Worcester, 11 N. H. 51 ; Tupper v. Cadwell, 12 Met. 559. And an infant is liable for necessaries for his wife and children. Chappie v. Cooper, 11 M. & W. 252 ; Beeler v. Young, 1 Bibb. 152 ; Abell v. Warren, 4 Vt. 149. 2 See Crabtree v. May, 1 B. Mon. 289 ; Goode v. Harrison, 5 B. & Aid. 147. 3 Whittingham v. Hill, Cro. Jac. 494 ; Whywall v. Champion, 2 Stra. 1083 ; Dilk V. Keighley, 2 Esp. 480 ; Latt v. Booth, 3 Car. & K. 292. But where an infant, with his guardian's consent, carried on certain business, it was held that he might bind him- self to pay for articles suitable and necessary for that business. EundeU v. Keeler, 7 Watts, 237. But we should have some doubt of this. * See Ford v. Phillipps, 1 Pick. 202. 5 It was formerly held that no action could be maintained against an infant upon a promissory note, although given for necessaries. See Mine v. Richmonds, 6 Yerg. 9 ; McCrillis V. How, 3 N. H. 348 ; Bouchelle v. Clary, 3 Brev. 194 ; Swasey v. Vander- heyden, 10 Johns. 33 ; Fenton v. White, 1 South. 100 ; Hawks v. Deal, 3 McCord, 257. But the later cases founded upon better reasons uphold the rale stated in the text. See Bradl^ v. Pratt, 23 Vt. 378 ; Stone v. Dennison, 13 Pick. 1 ; Earl v. Keed, 10 Met. 387 ; Dubose v. Whedon, 4 McCord, 221. « Sheldon v. Newton, 3 Ohio, State, 494 ; Thompson v. Lyon, 20 Misso. 155. [7] 8* ELEMENTS OF MERCANTILE LAW. [CH. I. If he borrows money, to expend in the purchase of necessa- ries, and gives his note, the debt, or the note, has been held, at law, voidable by the infant.^ But courts of equity would give relief,^ and even at law an infant is liable for money paid at his request for necessaries for him : ^ and if he give a note for neces- saries with a surety who pays it, the surety may recover against the infant.* * K an infant avoid a contract, he can take no benefit from it ; thus, if he contracts to sell, and refuses to deliver, he cannot de- mand the price ; or if he contracts to buy, and refuses the price, he cannot demand the thing sold.^ If he fraudulently represented himself as of age, when he was not, and so made a contract which he afterwards sought to avoid, this fraud will not prevent his avoiding the contract;^ but for the fraud itself he is answerable as an adult would be.'' So if he disafHrms a sale, for which he has received the money, he must return the money ; because keeping it would in fact be a confirmation of the sale.^ So if after his majority he destroys or puts out of his hands a thing bought while an infant, he can- not now demand his money back, as he might have done on 1 See Bent v. Manning, 10 Vt. 225; Beeler u. Young, 1 Bibb, 519; Walker v. Simpson, 7 Watts & S. 83. 2 See Marlow v. Pitfield, 1 P. Wms. 559, 1 Ves. 249 ; Hickman v. Hall, 5 Litt. 338. 2 Eandall v. Sweet, 1 Denio, 460 ; Clark v. Leslie, 5 Esp. 28. In Bent v. Manning, supra, tlie court considered it questionable whether courts of law might not now con- sider money to a certain extent necessary to be furnished a minor under some circum- stances. * See Conn v. Cobum, 7 N. H. 368 ; Haine v. Terrant, 2 Hill, S. C. 400. 5 See Harney v. Owen, 4 Blackf. 337. Thus, in Ottman v. Moak, 3 Sandf. Ch. 431, where an infant purchased goods, and mortgaged them to secure the purchase-money, it was hdd that he might, after arriving at maturity, affirm both the purchase and the mortgage, or disaffirm both, but he could not disaffirm the mortgage and keep the goods. And see Badger v. Phinney, 15 Mass. 359; Taft v. Pike, 14 Vt. 405 ; Parr V. Sumner, 12 Vt. 28; Hubbard u. Curamings, 1 Greenl. 13; Strain u. Wright, 7 Ga. 568. s Burley v. Eussell, 10 N. H. 184. See also, Stoolfoos v. Jenkins, 12 S. & R. 399 ; Conroe v. Birdsall, 1 Johns. Cas. 127. But see Jennings v. Whitaker 4 T. B Mon. 51. " Com. Dig. Action on the case for Deceit, A, 10 ; 2 Kent, Com. 241 ; Fitts v. Hall, 9 N. H. 441. But see Brown v. McClune, 5 Sandf. 224; Price w. Heivitt, 8 Exch. 146, 18 Eng. L. & Eq. 522. 8 Bailey v. Bamberger, 11 B. Mon. 113; Badger v. Phinney, 15 Mass. 363 ; Hub- bard V. Cummings, 1 Greenl. 13 ; Smith v. Evans, 5 Humph. 70 ; Taft v. Pike, 14 Vt. 405 ; CaiT v. Clough, 6 Foster, 280; Bartholomew v. Finnemore, 17 Barb. 428. And he who seeks the aid of a court of equity to avoid his conveyance, on the ground of infancy, must refund the consideration-money received by him. Smith c;. Evans 5 Humph. 70 ; Hielger v. Bennett, 3 Edw. Ch. 222. ' [8] CH. I.] THE PARTIES TO MERCANTILE CONTRACTS. *9 tendering the thing bought ; for by his disposal of it he has acted as owner, and confirmed the sale.^ In genera], if an infant avoids a contract on which he has ad- vanced money, and it appears that he has received from the other party an adequate consideration for the money so ad- vanced, which he cannot or will not restore, he cannot recover the money back. But if an infant has engaged to labor for a certain period, and, after some part of the work is performed, rescinds the contract, he can recover on a quantum meruit for the work he has. done.^ The contract of an infant is voidable only by him, or by his * legal representatives, and not by the o'ther party .^ The election to avoid or confirm belongs to the infant alone ; and his having this right does not affect the obligation of the other party.* Therefore, one who gives a note to an infant, or makes any other mercantile contract with him, must abide by it, although the infant may, if he choose, annul it.^ 1 See Hubbard v. Cummings, 1 Greenl. 13 ; Badger v. Phinney, 15 Mass. 363 ; Fan' V. Sumner, 12 Vt. 28 ; Taft v. Pike, 14 Vt. 405 ; Lawsan v. Lovejoy, 8 Greenl. 405. 2 See Holmes v. Blogg, 8 Taunt. 508 ; Corpe v. Overton, 10 Bing. 252 ; McCoy v. Huffman, 8 Cowen, 84; Medbury v. Watrous, 7 Hill, 110; Vent v. Osgood, 19 Pick. 572 ; Breed v. Judd, 1 Gray, 455. And see also, Moses v. Stevens, 2 Pick. 332 ; Thomas v. Dike, 11 Vt. 273 ; Hoxie v. Lincoln, 25 Vt. 206 ; Lufkin v. Mayall, 5 Pos- ter, 82. 3 GuUett V. Lamberton, 1 Eng. Ark. 109 ; Parker v. Baker, 1 Clarke, Ch. 136 ; Rose V. Daniel, 3 Brev. 438 ; Voorhees v. Wait, 3 Green, N. J. 343 ; Jackson v. Mayo, 11 Mass. 147; Hussey u. Jewett, 9 Ma,«s. 100; Marten v. Mayo, 10 Mass. 137; Slocum V. Hooker, 13 Barb. 536. This privilege extends to the infant's privies in blood. Aus- tin V. Charlestown Female Seminary, 8 Met. 196. But not to his assignees, or privies in estate only. Whittingham's case, 8 Eep. 43 ; Breckenridge v. Ormsby, 1 J. J. Marsh. 236. Nor to a guardian. Oliver v. Houdlet, 13 Mass. 237 ; Irving v. Crockett, 4 Bibb, 437. * See McGinn v. Shaeffer, 7 Watts, 412; Boyden v. Boyden, 9 Met. 519; Hunt v. Peake, 5 Cowen, 475 ; Pool v. Pratt, 1 D. Chip. 252 ; Willard u. Stone, 7 Cowen, 22 ; Holt V. Ward Clarencieux, 2 Stra. 937. And see Cannon v. Alsbury, 1 A. K. Marsh. 76. 5 Thus, in Warwick v. Bruce, 2 M. & S. 205, where the defendant agreed to sell to the plaintiff, an infant, all the potatoes then growing on three acres, at so much per acre, to be dug up and carried away by the plaintiff, and the plaintiff paid £40 to the defendant under the agreement, and dug a part, and earned away a part of those dug, but was prevented by the defendant from digging and carrying away the residue, it was held, that he was entitled to recover for this breach of the agreement. And Lord Ellen- borough said : " It occurred to me at the trial, on the first view of the case, that as an infant could not trade, and as this was an executory contract, he could not maintain an action for the breach of it ; but if I had adverted to the circumstance of its being in part executed by the infant, for he had paid £40, and therefore it was most immediately for his benefit that he should be enabled to sue upon it, otherwise he might lose the benefit of such payment, I should probably have held otherwise. And I certainly was under a mistake in not adverting to the distinction between the case of an infant plain- [9] 10* ELEMENTS OF MERCANTILE LAW. [CH. I. But if the note were given or the contract made by a fraud on the part of the infant, the injured party has the same right of defending against it on this ground as if the fraudulent party were not an infant. And for this purpose, a wilfully false rep- resentation of the infant that he has reached his majority, would be a sufficient fraud to enable the party dealing with him to set the contract aside.^ SECTION m. OF. MARRIED WOMEiSr. By the common law of England and of this country, a mar- ried woman is wholly incapable of entering into mercantile * con- tracts on her own account. By the fact of marriage, her hus- band becomes possessed of all her real estate during her life, and if a living child be born of the marriage, he has her real estate during his own life, if he survive her.^ AU the persona] property which she has in actual possession becomes absolutely his, as entirely as if she had mad© 9; transfer of it to him. But by property in possession the law means only her goods and chattels ; or things which can be handled ; and which actually are in her hands, or under her direct and imme- diate control. If she have notes of hand, money due her, or shares in various stocks, these are not considered as things in possession, but as things in action, or, as the old Norman phrase is still used, choses in action. The law as to these is different. The husband may, if he pleases, reduce them to his possession, and so make them absolutely his own. It is sometimes difficult to decide whether the husband has reduced them to possession. tiff or defendant. If the defendant had been the infant, what I ruled would have been correct, but here the plaintiif is the infant, and sues upon a contract partly executed bv him, which it is clear that he may do. It is certainly for the benefit of infants, where they have given the fair value for any article of produce, that they should have the thing contracted for. And it is not necessary that they should wait until they come of age in order to bring the action. A hundred actions have been brought by infants for breaches of promise of marriage, and I am not aware that this objection has ever been taken since the case in Strange." 1 Walker v. Davis, 1 Gray, 506. And see Humphry v. Douglass, 10 Vt. 71 ; Lewis V. Littlefield, 15 Maine, 233 ; Bullock v. Babcock, 3 Wend. 391. 2 Co. Litt. 351, a; 2 BI. Com. 126; 4 Kent, Com. 26; Paine's case, 8 Eep. 34; Mercer v. Selden, 1 How. 37. [10] CH. I.] THE PARTIES TO MERCANTILE CONTRACTS. *11 In general, he does this by any act which is distinctly an act of ownership ; as if he demands and collects the debts due to her,' or indorses her notes — which he can do in his own name — and sells them,^ or has the stock transferred to his own name,^ or, in general, makes any final and effectual disposition of these choses in action.'^ If, however, he does not reduce them to possession, and dies, and she survives him, her whole right and property revive at his death, without any interest whatever in his representatives.^ And even if he disposes of them by will, this is ineffectual, un- less he had reduced them into his possession while he lived.® If, however, he survives her, he will be made, if he wishes it, * her administrator, and then can collect all her choses in action, and hold them or their proceeds as his own.^ And if she dies, and then he dies before he has collected these choses in action, administration on his wife's effects wiU be granted to his next of kin, and not to hers ; and when collected they wUl belong to his estate.^ On the other hand, the husband is liable, with her, for aU the debts for which his wife was liable when he married her.® This is true, whether they were then payable, or did not mature until after the marriage ; and whether he received any thing with her 1 See Bates v. Dandy, 2 Atk. 206 ; Earl of Salisbnry v. Newton, 1 Eden, 370 ; John- son V. Johnson, 1 Jacob & W. 456. ^ Mason v. Morgan, 2 A. & E. 30 ; Scarpellini v. Atchison, 7 Q. B. 864. But in Latourette v. Williams, 1 Barb. 9, it was hdd, that the pledge of a note of the wife by the husband, which he afterwards redeemed, was not such a reduction into possession as destroyed the interest of the wife. See also, Bartlet u. Van Zandt, 4 Sandf. Ch. 396. See, as to reduction by agents, Turton v. Turton, 6 Md.' 375. " Bumham v. Bennett, 2 CoUyer, 254. * See, in addition to the cases already cited, Garforth v. Bradley, 2 Ves. 675 ; Carteret V. Paschal, 3 P. Wms. 197; Schuyler v. Hoyle, 5 Johns. Ch. 196; Hart v. Stephen, 6 Q. B. 937 ; Timbers v. Katz, 6 Watts & S. 290. ' Hayward v. Hayward, 20 Pick. 517; Co. Litt. 351, b; Estate of Kintzenger, 2 Ashm. 455 ; Stephens v. Beal, 4 Ga. 319 ; Killcrease v. Killcrease, 7 How. Miss. 311 ; Kogers v. Bumpass, 4 Ired. Eq. 585. And so if the parties are divorced a vinculo. Legg V. Legg, 8 Mass. 99. 6 See Blunt v. Bestland, 5 Ves. 515. ' 1 EoU. Abr. 910 ; Garforth v. Bradly, 2 Ves. 676 ; Elliot v. Collier, 3 Atk. 526, 1 Ves. 15; per Lord Tenterden, in llichards v. Eichards, 2 B. & Ad. 447. And see Drew V. Long, before Kinderdm, V. C, 21 Eng. L. & Eq. 339. 8 See Fielder v. Hanger, 3 Hagg. Eccl. 770 ; 2 Kent, Com. 118. s See 1 Bl. Com. 444; 2 Kent, Com. 128; Morris v. Norfolk, 1 Taunt. 212; Howes V. Bigelow, 13 Mass. 384 ; Pitkin v. Thompson, 13 Pick. 64 ; Haines v. Corliss, 4 Mass. 659. See also, Dodgson v. Bell, 5 Bxch. 967, 3 Eng. L. & Eq. 542. And although he was an infant at the time. Butler v. Breck, 7 Met. 164 ; Roach i;. Quick, 9 Wend. 238. [11] 12* ELEMENTS OF MERCANTILE LAW. [CH. I. or not.i If he dies before they are paid, his estate is not liable, even if he had a fortune with her, and that fortune goes to his heirs or his creditors, and her creditors get nothing. So it is if the wife dies before the creditor recovers a judgment against the husband, and he then retains all her fortune.^ But her responsi- bility revives at his death, and she is liable as before marriage, even if she carried him a fortune, and all her fortune went, as above stated, to his representatives.^ But if she dies, leaving choses in action not reduced by the husband to possession, and he reduces them to his possession as her administrator, he must apply them to the payment of her debts, and can retain only what is left after such payment.* At common law a married woman cannot make a contract, and her husband therefore is not bound for any contract which she may attempt to make. He is responsible for her torts of every kind, but if the tort is eventually connected with a con- tract, as if the wife borrows money on false and fraudulent pre- tences, it is held that the husband is not liable for the tort.^ The wife can only be joined in the suit when she is the merito- rious cause of action. Li general whatever she earns she earns as his servant and for him, for in law her time and her labor, as weU as her money, are his property.^ * It should be added, that the wife may be the agent of the husband, and transact for him his mercantile concerns, making, accepting, or indorsing bills or notes, purchasing goods, render- ing bills, collecting money and receipting for it, and in general entering into any contract so as to bind him, if she has his authority to do so.'^ Further, if she is in the habit of thus act- 1 See Heard v. Stamford, Cases Temp. Talbot, 173, 3 P. Wms. 409; Thomond v. Earl of Suffolk, 1 P. Wms. 469. 2 See Eol. Abr. 351. In Heard v. Stamford, 3 P. Wms. 400, Lord Chancellor TaHot said : " It is extremely clear, that by law the husband is liable to the wife's debts only daring coverture, unless the creditor recovers judgment against him in the wife's life- time." And see Witherspoon v. Dubose, 1 Bailey, Eq. 166; Howes «. Bigelow, 13 Mass. 384 ; Chapline v. Moore, 7 T. B. Mon. 179 ; Buckner v. Smith, 4 Desaus. 371 ; Nutz V. Retter, 1 Watts, 229. ' Woodman v. Chapman, 1 Camp. 189. * Heard v. Stamford, 3 P. Wms. 409; Blenuerhassett v. Monsell, 19 Law T. Eep. 36 ; Donnington v. Mitchell, 1 Green, Ch. 243. * Life A. L. Association v. Fairhurst, 9 Exch. 422. " Legg V. Legg, 8 Mass. 91 ; Howes v. Bigelow, 13 Mass. 384 ; Winslow v. Crocker, 17 Me. 29; In re Grant, 2 Story, 312; Merrill v. Smith, 37 Me. 394. See Messenger I.-. Clarke, 5 Exch. 388. ' Prestwick v. Marshall, 7 Bing. 565. And see Barlow v. Bishop, 1 East, 432 ; Colis [12] CH. I.J THE PARTIES TO MERCANTILE CONTRACTS. *13 ing for him, and he knows it, and does not object, and still more if he by his own acts sanctions hers, it will be deemed that he has given her authority to act for him.i So if a woman carries on trade personally, and to all ap- pearance as a sole trader, and her husband knows this, and makes no objection, especially if he resides with her, and still more if he is benefited by the trade, or takes the profit in any way, it will be understood — in the absence of sufficient testi- mony to the contrary — that she is acting as his agent, and he will be liable on her trade contracts, although made in her own name.2 In this country there seems to be a disposition, both in the legislatures and in the courts, to hold that a woman who is de- serted by her husband, and who is laboring successfully to main- tain herself, and perhaps her children, as a trader, is in substance * a sole trader, liable on her own contracts, and entitled to her own earnings. If this were held, it would seem to follow, of course, that her husband should not be liable for the debts she contracts. But so great a change as this can hardly be intro- duced by adjudication alone, in the absence of distinct statutory provisions. Such, we have said, is the common law of England and of this country. But in several of our States it is essentially modi- fied by statutory provisions. These we do not speak of in any detail, as they not only vary very much in different States, btit are fluctuating and changing rapidly, in most of the States which deal with them at all. It is in truth a very difficult ques- tion, how far it is well to abrogate the old law, whiqh was of feudal origin, and so far inappropriate to our own state of soci- ety. After sufficient experiment, we shall know better than we V. Davis, 1 Camp. 485 ; Minard v. Mead, 7 Wend. 68 ; Sinders u. Bradwell, 5 C. B. 583. 1 Clifford y. Burton, 1 Bing. 199; Felker v. Emerson, 16 Vt. 653; SmaUpiece u. Dawes, 7 C. & P. 40. 2 Thus, in Petty v. Anderson, 2 C. & P. 38, it was Ud, that if husband and wife are living together, and business is earned on in the house in which they live, though the wife's name only appears in the purchase of goods, in the parish rates, and in a con- tract with the parish officers, yet the husband partaking of the profits of the trade, and being aware of and assenting to the dealings, is liable in an action for goods delivered at their house for the purpose of this trade, though the bills of parcels are headed in the wife's name. And see Huckman v. Femie, 3 M. & W. 505 ; Plimmer v. Sells, 3 Nev. & M. 422. 2 [13] 13- ELEMENTS OP MERCANTILE LAW. [CH. I. know now how to pay a due regard to the property and the rights of the wife, and yet preserve the marriage relation from the mischiefs and degradation which must ensue if husband and wife are no longer one person in any sense, but may bargain together, and buy, and sell, and own, and pay, with, or from, or to each other, precisely like other persons, [14] CH. II.J AGREEMENT AND ASSENT. 14 CHAPTER U, OF AQEEEMENT AND ASSENT. SECTION I. OF THE tE&AL MEANIJra OF AGREEMENT. No contract which the law will recognize and enforce exists, until the parties to it have agreed upon the same thing, in the same sense.^ There is an apparent exception to this rule, when, for exam- ple, A declares that he was not understood by B, or did not un- derstand B, in a certain transaction, and that there is therefore no bargain between them ; and B replies by showing that the language used on both sides was explicit and unequivocal, and constituted a distinct contract. Here, B would prevail. The reason is, that the law presumes that every person means that which he distinctly says. If A had offered to sell B his horse for twenty dollars, and received the money, and then tendered to B his cow, on the ground that he was thinking only of his cow, and used the word horse by mistake, this would not avoid his obligation, unless he could show that the mistake was known to 1 In Hutchison y. Bowker, 5 M. & W. S35, which was assumpsit for non-delivery of barley, defendants by letter offered to the plaintiffs a certain quantity of "good" barley, at a certain price. Plaintiffs replied : " We accept your offer, expecting you will give us fine barley and full weight." The jury found that there was a distinction in the trade between the words " good" and " fine," and the court held that there was not a sufiB- cient acceptance. So in Bruce v, Pearson, 3 Johns. 534, where a person sent an order to a merchant for a partictilar quantity of goods on certain tex-ms of credit, and the mer- chant sent a less quantity of goods, at a shorter credit, and the goods were lost by the way, it was held, that the merchant must bear the loss ; for there was no contract, ex- press or implied between the parties. See further, Hazard v. New England Marine Ins. Co. 1 Sumner, 218 ; Greene v. Bateman, 2 Woodb. & M. 359 ; Tuttle v. Love, 7 Johns. 470 ; Eliason v. Henshaw, 4 Wheat. 225 ; Falls v. Gaither, 9 Porter, 605 ; Hamilton V. Terry, 11 C. B. 954, 10 Eng. L. & Eq. 473. [15] 15* ELEMENTS OF MERCANTILE LAW. [CH. 11. B ; and then the bargain would be fraudulent on B's part. This would be an extreme case ; but difficult questions of this sort often arise. If A had agreed to sell, and had actually delivered, a cargo of shingles at " $3.25," supposing that he was to receive that price for a " bunch," which contains five hundred, and B * supposed he had bought them at that price for a " thousand," which view should prevail ? The answer would be, first, that if there was, honestly and actually, a mutual mistake, there was no contract, and the shingles should be returned. But, second- ly, if a jury should be satisfied, from the words used, the usage prevailing where the bargain was made, and known to the par- ties, or other circumstances attending the bargain, that B knew that A was expecting that price for a bunch, B would have to pay it ; and if they were satisfied that A knew that B supposed himself to be buying the shingles by the thousand, then A could not reclaim the shingles, nor recover more than that price.^ In construing a contract, the actual and honest intention of the parties is always regarded as an important guide.^ But it must be their intention as expressed in the contract.^ If the terms of the contract be wholly unambiguous, there is no need of, and no room for, construction.* 1 Greene v. Bateman, 2 "Woodb. & M. 359. And see Hazard v. New England Ma- rine Ins. Co. 1 Sumner, 218; Ketchum u. Catlin, 21 Vt. 191; Winsor u. Dillaway, 4 Met. 221. This last case was indebitatus assumpsit to recover commission on the sale of a ship. Both parties offered evidence, one to prove, and the other to disprove, that it is the usage of ship-brokers in Boston, whenever they bring together a ship-owner and a purcliascr, and tlic owner sells the ship to such purchaser, to cliarge the usual com- mission ; and the jury were instructed that if such usage was proved to exist, and the defendants knew that such usage existed, it raised an implied promise to pay the com- mission. And this instruction was held to be con-ect. See also, Rogers v. Mechanics Ins. Co. 1 Story, 603 ; The Schooner Eeeside, 2 Simmer, 567 ; Taunton Copper Co. V. Merchants Ins. Co. 22 Pick. 115. 2 Thus, in Parkhtirst v. Smith, Willes, 332, Willes, C. J. said : " Wlienever it is nec- essary to give an opinion upon the doubtful words of a deed, the first thing we ought to inquire into is, what was the intention of the parties. If the intent be as doubtful as the words, it will be of no assistance at all. But if the intent of the parties be plain and clear, we ought if possible to put such a construction on the doubtful words of a deed as will best answer tlie intention of the parties, and reject that construction which manifestly tends to overturn and destroy it." And see Hunter v. Miller, 6 B. Mon. 619; Morey v. Homan, 10 Vt. 565; Gray v. Clark, II Vt. 583; Ford v. Beck, 11 Q. B. 866. 8 In Parkhurst v. Smith, supra, Willes, C. J. further said : " I .idmit that though the intention of the parties be never so clear, it cannot take place conti-ary to the rules of law, nor can we put words in a deed which are not there, nor put a construction on the words of a deed directly contrary to the plain sense of them." And see Gibson v. Minet, 1 H. Bl. 569, 614, per Eyre, C. B. ■• Benjamin v. McConnell, 4 Gilman, 536; Strohecker v. The Farmers Bank, 6 Ban-, 41. [16] CH. II.] AGREEMENT AND ASSENT. *i6 If the parties, or either of them, show that a bargain was hon- estly but mistakenly made, which was materially different from that intended to be made, it may be a good ground for declaring that there was no contract But it would not be a good ground * for substituting the contract they had not made, but intended to, for that which they had made and had not intended to make. On this subject there is another rule of frequent application ; namely, that when any written instrument does not express the real intention of the parties in consequence of some mistake in the language used, as by the use of one word when the parties intended another, such instrument will be corrected by a court of equity, and made to conform to what the parties intended.^ But only mistakes of fact can be corrected ; no man being per- mitted to take advantage of a mistake of the law, either to en- force a right, or avoid an obligation ; for it would be obviously dangerous and unwise to encourage ignorance of the law, by permitting a party to profit, or to escape, by his ignorance.^ But the law which one is required at his peril to know, is the law of his own country. Ignorance of the law of a foreign State is ignorance of fact. In this respect the several States of the Union are foreign to each other. Hence, money paid through ignorance or mistake of the law of another State may be recovered back.^ Fraud annuls all obligation and all contracts into which it enters, and the law relieves the party defrauded. But if both of the parties act fraudulently, neither can take advantage of the fraud of the other.* ' Beaumont v. Bramley, Turner & R. 41 ; Rogers v. Eail, 1 Dickens, 294 ; Sim- mons u. North, 3 Smedes & M. 67 ; Tilton v. Tilton, 9 N. H. 385 ; Craig v. Kittredge, 3 Foster, 231. 2 Storrs V. Barker, 6 Johns, Ch. 166 ; Shatwell v. Murray, 1 Johns. Ch. 512 ; Camp- bell V. Carter, 14 111. 286; Hall v. Reed, 2 Barb. Ch. 501 ; Dupre v. Thompson, 4 Barb. 279. 2 Haven v. Foster, 9 Pick. 112 ; Norton v. Harden, 15 Maine, 45. * In Hoitt V. Holcomb, 3 Foster, 554, Bell, J. said : " Fraud vitiates every thing, contracts, obligations, deeds of conveyance, and even the records and judgments of conrts." And see Wilson v. Green, 25 Vt. 450 ; Munn v. Worrall, 16 Barb. 221 ; Spindles v. Atkinson, 3 Md. 409 ; Ford v. Aikin, 4 Rich. 121 ; Hanis v. Ranson, 24 Missis. 504. But no party can avail himself of his own fraud, either in maintaining or defending a suit. Jones v. Yates, 9 B. & C. 532 ; Taylor v. Weld, 5 Mass. 116 ; Ayers V. Hewett, 9 Maine, 281 ; HoUis v. Morris, 2 Han-ing. Del. 128. And one who gives a fraudulent bill of sale to defraud his creditors cannot set it aside. Bessey v. Wind- ham, 6 Q. B. 166 ; Nichols v. Patten, 18 Maine, 231. For the law where both parties are fraudulent, see Goudy v. Gebhart, 1 Ohio, State, 262; Warburton v. Aker, 1 McLean, 460; Nellis v. Clark, 20 Wend. 24; Smith v. Hubbs, 1 Fairf. 71. 2* C 17 ] 17 ELEMENTS OF MERCANTILE LAW. [CH. II. SECTION 11. WHAT IS AN ASSENT. The most important application of the rule stated at the be- ginning of this chapter, is the requirement that an acceptance of a proposition must be a simple and direct affirmative, in order to constitute a contract. For if the party receiving the proposition or offer, accepts it on any condition, or with any change of its terms or provisions which is not altogether immaterial, it is no contract until the party making the offer consents to these mod- ifications.i Therefore, if a party offers to buy certain goods at a certain price, and directs that the goods shall be sent to him, and the owner accepts the offer and sends the goods as directed, and they are lost on the way, it is the buyer's loss, because the goods were his by the sale, which was completed when the offer was accepted. But if the owner accepts the offer with any material modification of its terms, and then sends the goods and they are lost, it is his loss now, because the contract of sale was not com- pleted.^ Nor will a voluntary compliance with the conditions and terms of a proposed contract make it a contract obligatory on the other party, unless there have been an accession to, or an acceptance of, the proposition itself.^ But there may be cases 1 See Hutchison v. Bowker, 5 51. & W. 555, cited ante, p. 14 ; Slaymaker v. Irwin, 4 Whart. 369. Sec also, Surdam v. Clark, 2 Sandf. 133, where, on a sale of one thou- sand barrels of flour, the broker stated in the bought note that seven hundred and fifty barrels were to be delivered when it arrived, not later than three days ; and in the sold note, that the whole was to bo delivered. Held, that this was a material vai-iancc in the notes of sale, and that no contract was eflfected. See also, Peltier v. Collins, 3 Wend. 459 ; Sievewright v. Archibald, 17 Q. B. 103, 6 Eng. L. & Eq. 286 ; Jordan y. Norton, 4 M. & W. 155 ; Gother v. Capper, 14 C. B. 39, 26 Eng. L. & Eq. 39, 15 C. B. 696, 29 Eng. L. & Eq. 242 ; Moore v. Campbell, 10 Exch. 323, 26 Eng. L. & Eq. 522. 2 See Brace v. Pearson, 3 Johns. 534, cited ante, p. 14, and other cases there cited. 3 In Johnston v. Fes sler, 7 Watts, 48, the defendant offered to pay the debts of third persons, if the plaintiffs would forbear to sue them, either by giving the plaintiffs iron immediately, or money in the following spring, to which the plaintiffs did not assent, but afterwards complied -svith the terms proposed ; and it was held that this did not ren- der the defendant liable. And see Beckwith o. Cheever, 1 Poster, 41. So, Avhere a guaranty is offered, it will be seen in oitr chapter on Guaranty, that the general rule requires that the party receiving it shall expressly accept it before he acts on the faith of it. See Mclver y." Richardson, 1 M. & S. 557; Mozley v. Tinker, 1 Cromp. M. & E. 692 ; Meynell v. Surtees, 31 Eng. L. & Eq. 475 ; Cope v. Alvinson, 8 Exch. 185, 16 Eng. L. & Eq. 470; Governor, &c. v. Petch, 10 Exch. 610, 28 Eng. L. & Eq. 470. [18] CH. II.] AGREEMENT AND ASSENT. *18 in which an offer may come from a distance, and be such in its purpose and terms, * that an immediate compliance with it may be the only or at least the ready and proper way of signifying an acceptance and assent.^ SECTION III. CONTRACTS ON TIME. It sometimes happens that one party makes another a certain offer and gives him a certain time in which he may accept it. The law on this subject was once somewhat uncertain, but may now be considered as settled. It is this. If A makes an offer to B, which B at once accepts, there is a bargain. But it cannot be necessary that the acceptance should foUow the offer instan- taneously. B may take time to consider, and although A may expressly withdraw his offer at any time before acceptance, yet if not so withdrawn B may accept within a reasonable time ; and if this is done A cannot say, " I have changed my mind." "What is a reasonable time must depend on the circumstances of each case.2 If A, when he makes the offer, says to B that he may have any certain time wherein to accept it, and is paid by B for thus giving him time, he cannot withdraw the offer, or rather, if he withdraws it, for this breach of his contract, the other party, B, may have his action for damages, for the breach of this initiatory contract, though a court of equity would not perhaps compel the performance of the contract which was con- templated by the parties. If A is not paid for giving the time, A may then withdraw the offer at once or whenever he pleases, provided B has not previously accepted it. But if B has ac- cepted the offer before the time expired, and before the offer was withdrawn, then A is bound, although he gave the time volun- tarily and without consideration. For his offer is to be regarded as a continuing offer during all the time given, unless it be with- drawn.^ 1 See Train v. Gould, 5 Pick. 380. 2 See Beckwith v. Cheever, 1 Poster, 41 ; Peru v. Turner, 1 Pairf. 185. 3 In Boston & Maine Railroad v. Bartlett, 3 Cnsh. 224, it was held that a proposition [19] 19 BLEMENTS OF MERCANTILE LAW. [CH. H. SECTION IV, OP A BARGAIN BY CORRESPONDENCE. When a contract is made by correspondence the question oc- curs, at what time, or by what act is the contract completed. The cases on this subject have fluctuated very much ; but the law, although at one time considered as settled both in England and in this country, may need the aid of further adjudication. If A writes to B proposing to him a contract, this is a continued proposition or offer of A until it reaches B, and for such time afterwards as would give him a reasonable opportunity of ac- cepting it.i It may be withdrawn by A at any time before in writing to sell land, at a certain price, if taken within thirty days, is a continuing offer, which may be retracted at any time ," but if, not being retracted, it is accepted ■nithin the time, such offer and acceptance constitute a valid contract, the specific per- formance of which may be enforced in equity. Fletcher, J. said : " In the present case, though the writing signed by the defendants was but an offer, and an offer which might be revoked, yet while it remained in force, and unrevoked, it was a continuing offer, during the time limited for acceptance ; and during the whole of that time it waa an offer every instant, but as soon as it was accepted it ceased to be an offer merely, and then ripened into a contract. The counsel for the defendants is most surely in the right in saying that the writing when made was without consideration, and did not therefore form a contract. It was tlicn but an offer to contract, and the parties making the offer most undoubtedly might have withdrawn it at any time before acceptance. But when the offer was accepted, the minds of the parties met, and the contract was complete. There was then the meeting of the minds of the parties, which constitutes and is the definition of a contract. The acceptance by the plaintiffs constituted a suffi- cient legal consideration for the engag-ement on the part of the defendants. There was then nothing wanting, in order to perfect a valid contract on the part of the defend- ants. It was precisely as if the parties had met at the time of the acceptance, and the offer had then been made and accepted and the bargain completed at once." In Wright V. Bigg, 15 Beav. 592, 21 Eng. L. & Eq. 591, an agent was authorized by the defend- ant to make a proposal of sale of some land to the plaintiff, to be accepted within a week. The plaintiff wrote to the agent within that time, accepting the offer, but the agent did not communicate the acceptance to the defendant until long after. Held, that there was a valid contract, which was not destroyed by the neglect of the agent to com- municate the acceptance to the defendant. In Payne v. Cave, 3 T. R. 148, it was held that at a sale by auction, every bid is an offer which may be withdrawn at any time be- fore it is accepted by the fall of the hammer or othenvise. See also, Fisher v. Seltzer, 25 Penn. State, 308. 1 This doctrine was first laid down in England in Adams v. Lindsell, 1 B. & Aid. 681. In that case the defendants by letter offered to sell to the plaintiffs a certain quantity of wool, on certain specified terms. This letter reached the plaintiffs on the 5th of Sep- tember at 7, p. M. On that evening the plaintiffs wrote an answer, agreeing to accept the wool on the terms proposed. This letter reached the defendants in due course of mail, on the 9th of September; but they had sold the wool in question on the day pre- ceding to another person. The action was brought to recover damages of the defend- ants for not delivering the wool to the plaintiffs. The court held that the contract was complete from the moment the offer was accepted, and therefoi-e the plaintiffs were en- [20] OH. ir.] AGREEMENT AND ASSENT. *20 acceptance ; but not, we think, in law, until a notice of with- drawal reaches B.^ * This is the important point. Thus if A, in Boston, writes to B, in New Orleans, offering him a certain price for one hundred bales of cotton ; and the next day alters his mind and writes to B withdrawing his offer ; if the first let- ter reaches B after the second is written, but before the second reaches him, B has a right to accept the offer, and by his accept- ance bind A. But if B delays his acceptance until the second letter reaches him, the offer is then effectually withdrawn. It cannot be denied, however, that this precise question, though titled to recover. It was contended for the defendants, that there could be no binding contract between the parties, until the plaintiffs' answer was actually received. But the court said : " If that were so, no contract could ever be completed by the post. For if the defendants were not bound by their offer when accepted by the plaintiifs till the an- swer was received, then the plaintiffi ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it. And so it might go on ad infinitum. The defendants miist be considered in law as maliing, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs, and then the contract is completed by the acceptance of it by the latter." And see Averill v. Hedge, 12 Conn. 436; Mactier r. Prith, 6 Wend. 103; Brisban v. Boyd, 4 Paige, 17 ; Stocken v. CoUen, 7 M. & W. 515 ; Dunlop v. Higgins, 1 H. L. Cas. 381. ' Routledge v. Grant, 4 Bing. 653. In the case of The Palo Alto, Daveis, 344, Ware, J. says : " In all engagements inter absentes, when the negotiations are cai-ried on by letters or messengers, an offer by one party, until it is made known to tlie other, is but an intention not expressed, propositum in mente retentum. If the messenger or letter can be overtaken before it anives at its destination, it may be revoked ; but if the revo- , cation does not arrive until after the offer is received and accepted, and especially not until it has been acted upon, then it is too late. For the revocation is but a simple act of the will, a propositum, not res gesta, an act done, until after it is known , and of com'se can have no more effect than an intention not expressed, but confined witliin the breast of the party. It is a remark of one of the most profound jurists of the last age that an act of the will not known is, in jurisprudence, as if it did not exist. Uno volonte' qui n'est pas connue est en jurisprudence comme si elle n'existait pas. C. Toul. Droit Civil, No. 29." So also in Tayloe v. Merchants Fire Insurance Co. 9 How. 390, 400, where the question arose upon a letter from the defendants to the plaintiffs, stating the terms upon which they would insure his property, Nelson, J. said : " We are of opinion that an offer under ttie circumstances stated, prescribing the terms of insurance, is intended, and is to be deemed, a valid undertaking on the part of the company, tliat they will be bound, according to the terms tendered, if an answer is transmitted in due course of mail, accepting them. And that it cannot be withdrawn, unless the withdrawal reaches the party to whom it is addressed before his letter of reply, announcing the acceptance, has been transmitted." This, however, is obiter, and in Falls v. Gaither, 9 Porter, 605, 614, a different opinion is declared. Collier, C. J., there says : " Since a proposition to sell imposes no obligation till accepted, it is, in general, competent for the party offering to withdraw it, any time previous to acceptance ; and if he does so, a subsequent accept- ance will not bind him, though made before the accepting party had notice of the with- drawal. To exemplify: suppose A has oflfered by letter to sell B a slave— -B accepts the offer by addressing a letter to A,, assenting to his terms ; if the latter did not, pre- vious to the date of B's letter, recall the offer, he is bound by the contract ; but if he withdrew it by a letter sent to B, before B's letter was written, the acceptance of the latter would be unavailing for any legal purpose ; and this, too, though the letter of withdrawal was not received. This example rests upon the well-settled rule, that the concun-ence of both parties is essential to a contract of sale, though given at different times." [21] 21* ELEMENTS OF MERCANTILE LAW. [CH. II. discussed in some cases, has not been directly adjudicated upon. The objection urged to the view we have taken is, that this rule makes the letters take effect at different times. Thus the letter of offer and the letter of acceptance date from the time they are mailed, while the letter of withdrawal dates from the time it is received. If the view we have taken be correct, it would seem to follow, that if the party making the offer became insane, or died, before the letter of acceptance were wi'itten, the contract would be complete, unless the news of such an event reached the party accepting before the mailing of his letter.^ It is a suf- ficient acceptance if B writes to A declaring his acceptance, and puts his letter into the post-office. It seems now quite clear that as soon as the letter leaves the post-office, or is beyond the reach of the writer, the acceptance is complete.^ The cases above cited would indicate, that if the letter of withdrawal reaches B after he has put his letter of acceptance into the post-office, but before it has gone, and while he could still take it back if he chose, he may disregard the withdrawal of the offer, and let his letter go on its way. This certainly is not * settled ; but the dicta of judges, and the principles on which the later decisions rest, would seem to lead to the conclusion that the contract is entirely complete as soon as the letter is in the post-office. ' The party making the offer by letter is not bound to use the same means for withdrawing it, w^hich he uses for making it. Thus, if A, in the case just supposed, a week after he has sent his offer by letter, telegraphs a withdrawal to B, and this with- drawal reaches him before he accepts the offer, this withdrawal is effectual.^ 1 See 2 Parsons, Maritime Law, p. 22, ii. 4, for a full consideration of this interesting question. 2 See Potter v. Sanders, 6 Hare, 1 ; Dunlop v. Higgins, 1 H. Ii. Cas. 381 ; Tayloe v. Merchants Eire Ins. Co. 9 How. 390; Duncan v. Topham, 8 C. B. 225; Vassar v. Camp, 14 Barb. 341 ; Levy v. Cohen, 4 Ga. 1 ; Chiles v. Nelson, 7 Dana, 281 ; Ham- ilton V. Lycoming Mutual Ins. Co. 5 Barr, 339. 3 In Sheffield Canal Co. c. Sheffield & Rotherham Rail. Co. 3 Rail. Cas. 121, where a treaty was commenced by letter, and in the course of the treaty an offer, made by letter, was verbally rejected ; held, that the party who made the offer was relieved from his Uability, notwithstanding a subsequent acceptance in writing. [22] CH. II.] AGREEMENT AND ASSENT. *22 SECTION V. WHAT EVIDENCE MAY BE RECEIVED IN REFERENCE TO A WRITTEN CONTRACT. If an agreement upon which a party relies be oral only, it must be proved by evidence, and any evidence tending to show what the contract was is admissible. But if the contract .be reduced to writing, it proves itself ; and now, no evidence what- ever is receivable for the purpose of varying the contract or affecting its obligations.^ The reasons are obvious. The law prefers written to oral evidence, from its greater precision and certainty, and because it is less open to fraud. And where parties have closed a negotiation and reduced the result to writing, it is to be presumed that they have written all they intended to agree to, and therefore, that what is omitted was finally rejected by them.^ * But some evidence may always be necessary, and therefore admissible; as evidence of the identity of the parties to the con- tract, or of the things which form its subject-matter. And upon the whole, we cannot state the rule on this subject better than that, while no evidence is receivable to contradict or vary a writ- ten contract, all evidence — not otherwise inadmissible — may be received to explain its meaning and show what the contract is in fact.* 1 See Herring v. Boston Iron Co. 1 Gray, 134 ; Kenard v. Sampson, 2 Kern. 561 ; Hudson V. Clementson, 18 C. B. 213, 36 Eng. L. & Eq. 332. 2 In Kane v. Old, 2 B. & C. 634, AJbbott, C. J. said : " Where the whole matter passes in parol, all that passes may sometimes be taken together as forming parcel of the contract, though not always, because matter talked of at the commencement of a bargain may be excluded by the language used at Its termination. But if the contract be in the end reduced into writing, nothing which is not found in the writing can be considered as a part of the contract. A matter antecedent to and dehors the writing may in some cases be received in evidence, as showing the inducement to the contract, such as a representation of some particular quality or incident to the thing sold. But the buyer is not at liberty to show such a representation, unless he can also show that the seller by some fraud prevented him from discovering a fault which he, the seller, knew to exist." See also, Pickering v. Dowson, 4 Taunt 786 ; Preston v. Mercean, 2 W. Bl. 1249; Carter v. Hamilton, 11 Barb. 147; Troy Iron and Nail Factory v. Coming, 1 Blatch. C. C. 467 ; Meres v. Ansell, 3 Wilson, 275 ; Hakes o. Hotchkiss, 23 Vt. 231 ; Vermont Central R. R. Co. v. Estate of Hills, id. 681 ; Hamor v. Groves, 15 C. B. 667, 29 Eng. L. & Eq. 220. 8 " When there is a devise of the estate pm-chased of A, or of the farm in the occu- ' [23] 23* ELEMENTS OF MERCANTILE LAW. [CH. II. There are some obvious limitations to this rule. The first is, that as evidence is admissible only to explain the contract, if the contract needs no explanation, that is, if it be by itself perfectly explicit and unambiguous, evidence is inadmissible, because it is wholly unnecessary excepting to vary the meaning and force of the contract, and that is not permitted.^ Another, following from this, is, that if the evidence purports, under the name of explanation, to give to the contract a meaning which its words do not fairly bear, this is not permitted, because such evidence would in fact make a new contract.^ A frequent use of oral evidence is to explain, by means of persons experienced in the subject-matter of the contract, the meaning of technical or peculiar words and phrases ; and such witnesses are called experts, and are very freely admitted.^ * It may be remarked too, that a written receipt for money is not within the general rule as to written contracts, being always open, not only to explanation, but even to contradiction by extrinsic evidence. But this is true only of a simple receipt. K pation of B, nobody can tell what is given till it is shown by extrinsic evidence what estate it was that was purchased of A, or what farm was in the occupation of B." Per Sir William Grant, in Sanford v. Raikes, 1 Meriv. 653. Again, in Clayton v. Nugent, 13 M. & W. 207, Rolfe, B. says : " Speaking philosophically, you must always look beyond the instrument itself to some extent, in order to ascertain who is meant ; for instance, you must look to names and places. There may indeed be no difficulty in ascertaining who is meant, when a person who has five or six names, and some of them unusual ones, is described in full ; while on the other hand, a devise simply to John Smith would necessarily create some uncertainty." See also, Owen v. Thomas, 3 Mylne & K. 353. 1 In Pierson v. Hooker, 3 Johns. 68, one of several partnei-s executed a deed of release in due form in the name of the partnership, whereby he released the defendant from all debts and demands of every nature and kind whatsoever ; held, that parol evidence was inadmissible to show that a particular debt was not intended to be released. ^ In Doe V. Oxenden, 3 Taunt. 147, a testator made a devise, using these words — "my estate of Ashton." He had a maternal estate comprehending several distinct estates in Ashton parish, and some others in adjacent parishes, some ten or fifteen miles distant; held, that evidence was not admissible to show that he was accustomed to call all his maternal estate, his Ashton estate ; and intended to devise the same by that name. And see Doe v. Greening, 3 M. & S. 171 ; Doe u. Lyford, 4 M. &. S. 550 ; Miller v. Travers, 8 Bing. 244; Hunt v. Adams, 7 Mass. 518; Nelson v. Hopkins, 21 Law J. N. s. Ch. 410, 11 Eng. L. & Eq. 66. 2 In Coblet v. Bachey, 3 Simons, 24, a statuary bequeathed articles used in his business by their technical names, some of which were vei-y obscurely written ; and per- sons who were skilled in writing and acquainted with articles used by statuaries, were called to explain the meaning of the will. If a contract contains words used in a tech- nical sense; Shore v. AVilson, 3 Clark & F. 511, 568 ; Smith v. Wilson, 3 B. & Ad. 728 ; or words of a foreign language ; Cabarga v. Seeger, 17 Penn. State, 514 ; Sheldon V. Benham, 4 Hill, 129 ; or cliaractcrs which are difficult to be deciphered; Norman v. Morrell, 4 Ves. 769 ; Masters v. Masters, 1 P. Wms. 425 ; an expert may be admitted to explain them, [24] CH. II.] AGREEMENT AND ASSENT. -23 a written instrument not only recites or acknowledges the re- ceiving of money or goods, but contains also a contract or grant, such instrument, as to the contract or grant, is no more to be affected by extrinsic evidence than if it contained no receipt ; but as to the receipt itself, it may be varied or contradicted in the same manner as if it contained nothing else.^ A certain legal inference from a written promise can no more be rebutted by evidence, than if it were itself written. Thus, it is not only true that if A, by his note, promises to pay B a sum of money in sixty days, he cannot, when called upon, resist the claim by proving that B, when the note was made, agreed to wait ninety days ; but if A promise to pay money, and no time is set, this is by force of law a promise to pay on demand, and evidence is not receivable to show that a distant period was agreed upon.^ And, in Massachusetts, one who (not being a payee) puts his name on the back of a note at the time it was made, is not permitted to introduce proof that his contract was conditional only.^ And where a contract is entire, and a part only is reduced to writing, and the law does not supply the resi- due, evidence may be received to prove that residue ; but not if it materially changes or contradicts what is written.^ 1 Bell V. Bell, 12 Penn. State, 235 ; Button v. Tilden, 13 id. 46 ; Kirkpatrick v. Smith, 10 Humph. 188 ; Cole v. Taylor, 2 N. J. 59 ; Fuller v. Crittenden, 9 Conn. 401 ; Straton v. Rostall, 2 T. K. 366. Thus, a bill of lading, in the usual form, is a receipt for the quantity of goods shipped, and also a promise to transport and deliver the same ; and so far as such a bill of lading is a receipt it may be controlled by parol proof. Therefore, in a suit by the shipper upon such a bill for the non-delivery of goods shipped, it is competent for the defendant to prove that the quantity of goods received was less than that acknowledged in the bill. O'Brien v. Gilchrist, 34 Maine, 554. In Tisloe v. Graeter, 1 Blackf. 353, where in a receipt money was acknowledged to have been received " for safe keeping," it was hfM that evidence was not admissi- ble to show that the money was not deposited for safe keeping, but was in discharge of a debt. See also, Egleston v. Kniekerbacker, 6 Barb. 458 ; Smith v. Brown, 3 Hawks, 580 ; May v. Babcock, 4 Ohio, 346 ; Stone v. Vance, 6 Hamm. 246 ; Wood V. Perry, Wright, 240 ; Graves u. Harwood, 9 Barb. 477 ; Wayland v. Mosely, 5 Ala. 430. 2 Thompson v. Ketchum, 8 Johns. 189 ; Warren v. Wheeler, 8 Met. 97 ; Atwood v. Cobb, 16 Pick. 227 ; Ryan v. Hall, 13 Met. 520 ; Barringer v. Sneed, 3 Stew. 201 ; Simpson v. Henderson, Moody & M. 300 ; BaiTy v. Ransom, 2 Kern. 462. 3 Wright V. Morse, S. J. C. Mass. 1858, 20 Law Reporter, 656. See also cases post, p. 121. * In Jefirey v. Walton, 1 Stark. 267, in an action for not taking proper care of a horse hired by the defendant of the plaintiff, the following memorandum, made at the time of hiring, was offered in evidence : " Six weeks at two guineas, Wm. Walton, Jr." Lord Ellenbormgh regarded the memorandum as incomplete, but conclusive as far as it went. " The written agi-eement," said he, "merely regulates the time of hiring and the rate of payment, and I shall not allow any evidence to be given by the plaintiff in contradiction of these terms ; but I am of opinion that it is competent to the plaintiff 3 [25] 24 ELEMENTS OF MERCANTILE LAW. [CH. II. The construction or interpretation of a written contract may sometimes be very material to the interests or rights of third parties, who had nothing to do with writing it, and were in no way privy to it. In such case, these parties may show by evi- dence what the contract which purports to have been written, really was as between the parties to it.^ Generally speaking, all written instruments are construed and interpreted by the law according to the simple, customary, and natural meaning of the words used. It should be added, that when a contract is so obscure or uncertain that it must be set whoUy aside as no contract what- ever, it can have no force or effect upon the rights or relations of the parties, but they are remitted to their original rights and obligations. to give in evidence suppletory matter as a part of the agreement." See Edwards v. Goldsmitii, 16 Penn. State, 43 ; Knapp v. Harden, 6 C. & P. 745 ; Deshon v. Merchants Ins. Co. 11 Met. 199; Coates v. Sangston, 5 Md. 121 ; Knight v. Knotts, 8 Rich. 35; Hetherly v. Record, 12 Texas, 49 ; Clark v. Deshon, 12 Cush. 589. 1 Parol evidence may be introduced to contradict a written instrument when both or only one of the parties to the suit are strangers to the instrument. Reynolds v. Mag- ness, 2 Ired. 26 ; Krider v. Lafferty, 1 Whart. 303 ; Strader v. Lambeth, 7 B. Mon. 589 ; Venable v. Thompson, U Ala. 147; Taylor v. Baldwin, 10 Barb. 582; The King v, Laindon, 8 T, R, 379. [26] CH- III-] CONSIDERATION, 25 CHAPTER III. OF CONSIDERATION. SECTION I. OF THE NEED OF A CONSIDEEATION. It is an ancient and well-established rule of the common law of England and of this country, that no promise can be enforced at law, unless it rests upon a consideration. If it do not, it is called a nudum pactum ; and the promisor, even if he admits his promise, is under no legal obligation to perform it.* There are two exceptions to this rule. One is when the promise is made by a sealed instrument, or defed ; for every writ- ten instrument which is sealed is a deed. Here the law is said to imply a consideration ; the meaning of which is, that it does not require that any consideration should be proved. The seal itself is said to be a consideration, or to import a consideration.^ 1 Bio. Abr. action sur le case, 40 j 3 Hen. 6, 36, pi. 38 ; 17 Ed. 4, pi. 4 ; 2 BI. Com, 445 Eastwood V. Kenyon, 11 A. & E. 438; Cook v. Bradley, 7 Conn. 57 ; Dodge v. Bur- dell, 13 Conn. 170 ; Bean v, Burbank, 16 Maine, 458 ; Bumet v. Bisco, 4 Johns. 2S5 ; People V. Shall, 9 Cowen, 778. And see American Law Eegiater, vol. 2 (1854), 257, 385, 449. This rale is said to have been bon^owed from tlie civil law, in which the maxim, " Ex nudo pacta rum oritur actio," was applied to all contracts. 2 Bl. Com. 445. But the nudum pactum of the civil law was not the same as that now recognized by our common law. The civilians only applied the term to those contracts which had not been entered into with the requisite formalities, without reference to the duties im- posed upon one party, which were to be performed without recompense by the other. Yin. Comm. de Inst. lib. 3, tit. 14, p. 659. '^ See Irons v. Smallpiece, 2 B. & Aid. 551. In Sharington v. Stratton, PI. Com. 308, Plowdm, arguendo, says : " Words pass from men lightly and inconsiderately, but .where the agreement is by deed, there is more time for deliberation. Por when a man passes a thing by deed, first there is the determination of the mind to do it, and upon that he causes it to be written, wliich is one part of deliberation, and afterwards he puts his seal to it, which is another part of deliberation, and lastly he delivers the writing as his deed, which is the consummation of his resolution ; and by the delivery' of the deed from him that makes it to him to whom it is made, he gives his assent to [27] 26 ELEMENTS OF MERCANTILE LAW. [CH. III. The second exception relates to negotiable paper ; and is an instance in which the law merchant has materially qualified the common law. We shall speak more fully of this exception when we treat of negotiable paper. The word " consideration," as it is used in this rule, has a peculiar and technical meaning. It denotes some substantial cause for the promise.^ This cause must be one of two things ; either a benefit to the promisor, or else an injury or loss to the promisee, sustained by him at the instance and request of the promisor. Thus, if A promises B to pay him a thousand dollars in three months, and even promises this in writing, the promise is worthless in law, if A makes it as a merely voluntary prom- ise, without consideration. But if B, or anybody else, gives to A to-day a thousand dollars in goods or money, and this was the ground and cause of the promise, then it is enforceable. And if A got nothing for his promise, but B, at the request of A, gave the same goods or money to C, this would be an equally good consideration, and the promise would be equally valid in law.^ This rule sometimes operates harshly and unjustly, and per- part mtli the thing contained in the deed to him to whom he delivers the deed, and this delivery is a ceremony in law, signifying fully his good-will that the thing in the deed should pass from him to the other. So that there is great deliberation used in the making of deeds, for which reason they are received as a lien final to the party, and are adjudged to bind the party, without examining upon what cause or consider- ation they were made." See also, Shubrick v. Salmond, 3 Burr. 1639; Fallowes k. Taylor, 7 T. E. 477; Morley v. Boothby, 3 Bing. Ill ; Sumner v. Williams, 8 Mass. 200 ; Page v. Trufant, 2 Mass. 159 ; Green v. Thomas, 2 Fairf 318 ; Beldenu. Davies, 2 Hall, 433 ; Dale v. Roosevelt, 9 Cowcn, 307. In some of the United States, however, cither by usage or statute, a want or failure of consideration is a good defence to an action upon a sealed agreement. See Walker v. Walker, 13 Xred. 335 ; Peebles v. Ste- phens, 1 Bibb, 500; Coyle v. Powler, 3 J. J. Marsh. 473; Case v. Boughton, 11 Wend. 106 ; Leonard v. Bates, 1 Blackf. 173 ; Swift v. Hawkins, 1 Dallas, 17 ; Gray v. Handkinson, 1 Bay, 278 ; State v. G.aillard, 2 Bay, 1 1 ; Solomon v. Kimmel, 5 Binn. 232. And an exception to the general rule also exists in the case of contracts in re- straint of.trade, which, although under seal, require a consideration. See Homer v. Ashford, 3 Bing. 322; Mitchel v. Reynolds, 1 P. Wms. 181. t Consideration is considered as the cause {causa), and this is not to be confounded with the motive. Thomas o. Thomas, 2 Q. B. 851 ; Lilly v. Hays, 5 A. & E. 548 ; Mouton V. Noble, 1 La. Ann. 192. 2 Either of these causes constitutes a sufficient consideration to uphold a contract. Com. Dig., Action upon the case upon assumpsit (B. 1) ; Pilans v. Van Mierop, 3 Burr. 1673 ; Nerot v. Wallace, 3 T. R. 24 ; Bunu v. Guy, 4 East, 194 ; Willatts v. Ken- nedy, 8 Bing. 5 ; Miller v. Drake, 1 Caines, 45 ; Powell v. Brown, 1 Johns. 100 ; Le- master v. Buckhart, 2 Bibb, 30 ; Chick v. Trevett, 20 Maine, 462 ; Sampson v. Swift, 11 Vt. 315. See also, Porster v. Puller, 6 Mass. 58 ; Townsley v. Sumrall, 2 Pet. 182 ; 'Leonard v. Vredenburgh, 8 Johns. 29; Bailey v. Freeman, 11 Johns. 221 ; Stadt r. Lill, 9 East, 348 ; Tenney v. Prince, 4 i?ick. 385. [28] CH. III.] CONSIDERATION. *27 mits promisors to break their word under circumstances calling strongly for its fulfilment. Courts have been led, perhaps, by this to moderate the rule, by saying that the consideration is sufficient if it be a substantial one, although it be not an ade- quate one. This is the unquestionable rule now.^ ♦SECTION H. WHAT IS A SUFFICIENT CONSIDEKATION. The law detests litigation ; and considers any thing a suffi- cient consideration which arrests and suspends or terminates litigation.^ Thus the compromise,^ or forbearance,* or mutual 1 Hubbard v. Coolidge, 1 Met. 84. And in Clark v. Sigoumey, 17 Conn. 511, itwas held, that any act done by the promisee, at the request of the promisor, by which the former sustains any loss, trouble, or inconvenience, even of the most trifling descrip- tion, if not utterly worthless in fact and in law, constitutes a sufScient consideration for a promise, although the promisor derives no advantage therefrom. Therefore where B, at the request of A, and at his sole risk, executed to him a deed of release, without covenants, of all B's right in certain land therein described, in consideration of which, A gave his promissory note to B for $300 ; and it afterwards appeared that B had no title to the land so conveyed ; it was held, that the consideration of the note was suffi- cient. So, in Sanborn v. French, 2 Foster, 246, where the cases were examined with much learning and ability by Perley, J., It was hM that, in the absence of fraud and mistake, the senarate deed of a married woman, purporting to convey her land, though inoperative and void as a conveyance, is yet a sufScient consideration for a promissory note made payable to her. And the learned judge said : " The court cannot inquire into the amount and adequacy of the consideration. If the contract is fairly made, with a full understanding of all the facts, the ' smallest spark ' of consideration is sufficient." See also, Speed v. Phillips, 3 Anst. 732 ; Skeate v. Beale, 11 A. & E. 983 ; Hitchcock v. Coker, 6 A. & E. 438 ; Whittle v. Skinner, 23 Vt. 532 ; Low v. Barchard, 8 Ves. 133 ; McGhee v. Morgan; 3 Sch. & L. 395, n. (a) ; Floyer v. Sherard, Ambl. 18; Coles v. Trecothick, 9 Ves. 246 ; Kirwan v. Kirwan, 2 Cromp. & M. 623 ; Phillips v. Bateman, 16 Bast, 272; Bedell v. Loomis, 11 N. H. 9; Johnson ». Titus, 2 Hill, 606. But gross inadequacy of consideration, in connection with other circumstances, may help to sustain a charge of fraud. See Prebble v. Bogherst, 1 Swanst. 329 ; Cockell v. Taylor, 15 Bcav. 103, 15 Eng. L. & Eq. 101 ; Edwards v. Burt, 2 De G., M. & G. 55, 15 Eng. L. & Eq. 435; Johnson v. Dorsey, 7 Gill, 269; Judge v. Wilkins, 19 Ala. 765; Milnes V. Cowley, 8 Price, 620. 2 Penn v. Lord Baltimore, 1 Ves. 444 ; Stopilton v. Stopilton, 1 Atk. 3 ; Wiseman o. Roper, 1 Chan. Rep. 158. " As in Barlow v. Ocean Ins. Co. 4 Met. 270, where it was held that the compromise of an action upon a policy of insurance, the result of a trial of the case being doubtful, was a sufficient consideration to uphold a promise. And see Zane v. Zane, 6 Munf. 406 ; Fisher v. May, 2 Bibb, 448 ; Taylor v. Patrick, 1 Bibb, 168 ; Durham v. Wadling- ton,'2 Strobh. Eq. 258; Hoge v. Hoge, 1 Watts, 216; Rice v. Bixler, 1 Watts & S. 456 ; O'Keson v. Barclay, 2 Penn. 531. * Atkinson v. Bayntun, 1 Bing. N. C. 444. See also, 1 Roll. Abr. 24, pi. 33 ; Com. Dig. Action upon the case upon assumpsit (B. 11) ; Willatts v. Kennedy, 8 Bing. 5; Morton v. Burn, 7 A. & E. 19 ; King v. Upton, 4 Greenl. 387 ; Elting v. Vanderlyn, 4 Johns. 237 ; Muirhead v. Kirkpatrick, 21 Penn. State, 237. 3 * [ 29 ] 28* ELEMENTS OF MERCANTILE LAW. [CH. III. reference to arbitration,^ or any similar settlement of a suit, or of a claim,^ is a good consideration for a promise founded upon it.^ And it is no defence to a suit on this promise, to show that the claim or suit thus disposed of would probably have been *foundtohave no foundation or substance.* If the claim or suit be a mere pretence, or oppression, and have no reality what- ever, and there is no rational possibility of enforcing it, then indeed it is nothing, and any settlement of it is also nothing, and a promise founded upon such settlement rests upon no con- sideration.^ But if there be any honest claim, which he who 1 Jones V. Boston Mill Corp. 4 Pick. 507 ; Hodges v. Sannders, 17 Pick. 470; Wil- liams V. Commercial Exchange Co. 10 Exch. 569, 29 Eng. L. & Eq. 429. 2 Waterman v. Barratt, 4 Harring. Del. 311 ; Stebbins n. Smith, 4 Pick. 97 ; Smith V. Weed, 20 Wend. 184; Hinman v. Moulton, 14 Johns. 466; Haigh i>. Brooks, 2 Perry & D. 477 ; Whitbeck v. Whitbeck, 9 Cowon, 266 ; Brealey v. Andreiv, 2 Nev. & P. 114 ; Davis v. Morgan, 4 B. & C. 8. ^ Thus in Peck v. Requa, 13 Gray, 407, it was held that the resignation of an office ill a corporation is a sufficient consideration for a promissory note, although the payee of the note has previously agreed, for a valuable consideration, to resign the office on demand of the maker. * In Stapilton v. Stapilton, I Atk. 10, it was decided by Lord Hardwiche, "that an agreement entered into upon a supposition of rights, or of a doubtful right, though it after comes out that the right was on the other side, shall be binding, and the right shall not pi-evail against the agreement of tlic parties ; for the right must always he on one side or the other ; and therefore the compromise of a doubtful right is a sufficient foundation for an agreement." And in O'Keson v. Barclay, 2 Penn. 531, it was held that the compromise of an action of slander, in which the words laid in the declaration were not actionable, was a sufficient consideration to sustain a promise. And see also, Bennet v. Paine, 5 Watts, 259 ; Moore v. Fitzwater, 2 Eand. 442 ; Ex parte Lucy, 4 De G., M. & G. 356, 21 Eng. L. & Eq. 199. , ^ This principle is well ilhistrated by the case of Wade v. Simeon, 2 C. B. 548: The declaration stated that the plaintiff liad brought an action against the defendant in the Exchequer, to recover certain moneys, which action was about to be ti-ied, and that in consideration that the plaintiff Avould forbear proceeding in that action until a cer- tain day, the defendant promised on that day to pay the amount, but that he had made default, &c. Plea, that the plaintiff never had any cause .of action against the defendant in respect to the subject-matter of the action in the Exchequer, which he, the plaintiff, well knew. Upon general demurrer, this plea was held sufficient, and Tindal, C. J. said : " By demun-ing to that plea, tlie plaintiff admits that he had no canse of action against the defendant in the action therein mentioned, and that he knew it. It appears to me, therefore, that he is estopped from saying that there was any valid con- sideration for the defendant's promise. It is almost contra bonos mores, and certainly contrary to all the principles of natural justice, that a man should institute proceedings against another, when he is conscious that he has no good cause of action. In order to constitute a binding promise, the plaintiff must show a good consideration, something beneficial to the defendant, or detrimental to the plaintiff'. Detrimental to the plaintiff it cannot be, if he has no cause of action ; and beneficial to the defendant it cannot be, for, in contemplation of law, the defence upon such an admitted state of facts must be successful, and the defendant will recover costs, which must be assumed to bo a full consideration for all the legal damage he may sustain. The consideration, therefore, altogether fails. On the part of tlie plaintiff, it has been urged, that the cases cited for the defendant were not cases where actions had already been brought, but only cases of promises to forbear commencing proceedings. I must however confess, that, if it were so, I do not see that it would make any substantial difference." And see Gould t;. Armstrong, 2 Hall, 266 ; Lowe v. Weatherley, 4 Dev. & B. 212 ; Jones v. Ashburn- ham, 4 East, 455 ; Smith v. Algar, 1 B. & Ad. 604. [30] CH. III.] CONSIBERATION. *29 advances it believes to be well grounded, and which within a rational possibility may be so, this is enough ; the court will not go on and try the validity of the claim or of the suit in order to test the validity of a promise which rests upon its settlement ; for the very purpose for which it favors this settlement is the avoidance of all necessity of investigating the claim by litiga- tion.^ But a promise by a son not to complain of his father's distribution of his estate, is no consideration for the father's promise not to sue a note given by the son.^ And for reasons of public policy, no promise can be * enforced of which the con- sideration was the discontinuance of criminal proceedings, or of any in which the public are interested.^ So the obtaining the passage of a law by corrupt means, is no valid consideration.* If any work or service is rendered to one, or for one, and he requested the same, it is a good consideration for a promise of payment ; and not only so, but the law will imply the promise.^ The rule is the same as to goods, or property of any kind deliv- ered to any one at his request.^ No person can make another his debtor against that other's will, by a voluntary offer of work, or service, or money, or goods.'' *But if that other accept what is thus offered, and retain the benefit of it, the law will, generally, imply or presume that it was offered at the request of that other party, and will also imply his promise to pay for it, and will enforce the promise.^ 1 Longridge v. Dorville, 5 B. & Aid. 117 ; Thornton v. Fairlie, 2 J. B. Moore, 397 ; Eicliardson v. Mellish, 2 Bing. 229 ; Atlee v. Backhouse, 3 M. & W. 648 ; Wilbur v. Crane, 13 Pick. 284; Mills v. Lee, 6 T. B. Mon. 97; Union Bank v. Geary, 5 Pet. 114 ; Bennet v. Paine, 5 Watts, 259 ; Stracy v. Bank of England, 6 Bing. 7.'j4 ; Muir- head v. Kirkpatrlck, 21 Penn. State, 237. 2 White V. Bluett, Exch. 1853, 24 Eng. L. & Eq. 434. 8 Coppock V. Bower, 4 M. & W. 361 ; Keir v. Leeman, 9 Q. B. 371 ; Wall v. Char- lick, Sup. Jud. Ct. New York. * Marshall v. Baltimore and Ohio Kaihoad Co. 16 How. 314. 6 1 Rol. Abr. 11, pi. 2, 3 ; Hunt v. Bate, Dyer, 272 ; Taylor v. Jones, 1 Ld. Eaym. 312; Newel v. Keith, 11 Vt. 214; Tipper v. Bicknell, 3 Bing. N. C. 710; 1 Wms. Saund. 264, n. (1 ) ; Abbot v. Hermon, 7 Greenl. 118 ; Lewis v. Trickey, 20 Barb. 387. « Brackott v. Norton, 4 Conn. 524 ; Pichards v. Sears, 6 A. & E. 474. ' In Frear v. Hardenburgh, 5 Johns. 272, where A entered on land belonging to B, and without his knowledge or authority, cleared it, made improvements, erected build- ings, &c., and B afterwards promised to pay A for the improvements he had made, it was hdd that the promise to pay for the work done and improvements made, without the request of B, was a nudum pactum on which no action could be maintained. And see 1 Rol. Abr. 11, pi. 1 ; Hunt v. Bate, Dyer, 272, a; Hayes v. Warren, 2 Stra. 933 ; Dogget V. Vowell, F. Moore, 643 ; Jeremy v. Goochman, Cro. Eliz. 442 ; Eoscorla v. Thomas, 3 Q. B. 234 ; Bartholomew v. Jackson, 20 Johns. 28. 8 As in Abbott). Hermon, 7 Groenl. 118, where one built a school-house under a [31] 30* ELEMENTS OF MERCANTILE LAW. [CH. III. If A agrees with B to work for him one year, or any stated time, for so much a month, or so much for the whole time, and after working a part of the time, leaves B without good cause, the question arises whether A can recover any thing from B for the service he has rendered. It is universally conceded that he cannot on the contract, because that is entire, and is broken by A, and therefore A has no claim under it. And it is the ancient and still prevailing rule, that A can recover nothing in any form.^ It has, however, been held in New Hampshire, that A can still recover whatever his services are worth, B having the right to ' set off or deduct the amount of any damage he may have sus- tained from A's breach of the contract.^ We think this view just and reasonable, although it has not been supported by adjudica- tion in other States. If A agrees to sell to B five hundred bar- rels of flour at a certain price, and after delivering one half refuses to deliver any more, B can certainly return that half, and pay A nothing. But if B chooses to retain that half, or if he has so disposed of or lost it that he cannot return it, he must, generally at least, pay what it is worth, deducting all that he loses by the breach of the contract. And this case we think analogous to that of a broken contract of service.^ A difficulty sometimes arises where A, at the request of B, undertakes to do something for B, for which he is to be paid a certain price ; and in doing it he departs materially from the directions of B and from his own undertaking. What are now the rights of the parties ? This question arises most frequently in budding-contracts, in which there is perhaps usually some departure from the original undertaking. The general rules are contract with persons assuming to act as a district committee, but who had no authority ; and a district scliool was afterwards kept in it by direction of the school agent. This was held to be an acceptance of the house on the part of the district, binding the inhab- itants to pay the reasonable value of the building. And see Weston v. Davis, 24 Maine, 374 ; Law v. Wilkin, 6 A. & E. 718 ; Nichole v. Allen, 3 C. & P. 36. But see, as to this last case, Mortimore v. Wright, 6 M. & W. 485. 1 Thorpe v. White, 13 Johns. 53; M'Millan v. Vanderlip, 12 Johns. 165 ; Jennings V. Camp, 13 Johns. 94; Mullen v. Gilkinson, 19 Vt. 503; Davis v. Maxwell, 12 Met. 286 ; Stark v. Parker, 2 Pick. 267 ; Olmstead v. Beale, 19 Pick. 528 ; Shaw v. Turnp. Co. 2 Penn. 454 ; Eldridge i;. Rowe, 2 Oilman, 91 ; Lantry v. Parks, 8 Cowen, 63 ; Marsh v. Eulesson, 1 Wend. 514; Monell v. Burns, 4 Denio, 121. 2 In Britton i-. Turner, 6 N. H. 481, tliis whole subject was ably examined by Parker, J., and the court came to the conclusions stated in the text. ^ In New York, however, it is held that B cannot be compelled to pay any thing in this last case. See Champlin v. Rowley, 13 Wend. 258, 18 id. 187 ; llead v. Degol- yer, 16 Wend. 632 ; McKnight v. Dunlop, 4 Barb. 36 ; Paige v. Ott, 5 Denio, 406. [32] CH. III.J CONSIDERATION. *31 these : If B assent to the alteration, it is the same thing as if it were a part of the original contract.^ He may assent expressly, by word or in writing, or constructively, by seeing the work, and approving it as it goes on, or being silent ; for silence under such circumstances would generally be equivalent to an approval.^ But if the change be one which B had a right, either from the nature of the change, or the appearance of it, or A's language respecting it, to suppose would add nothing to the cost, then no * promise to pay an increased price would be inferred from either an express or tacit approval.^ Generally, as we have seen, if A does or makes what B did not order or request, B can refuse to accept it, and if he does, he will not then be held to pay for it. But if he accepts it, he must pay for it. This consequence results, however, only from a voluntary acceptance. For if A * choose, without any request from B, to add something to B's ^ See Dubois v. Del. & Hud. Canal Co. 12 Wend. 334 ; Preston v. Finney, 2 Watts & S. 53 ; Albany Dutch Church v. Bradford, 8 Cowen, 457. 2 Hay ward v. Leonard, 7 Pick. 181. In this case, A contracted in writing to build a house for B, within a certain time, of certain dimensions, and in a certain manner, and afterwards built the house within the time, and of the dimensions agreed upon, but in workmanship and materials varying from the contract. B was present almost every day during the building, and had an opportunity of seeing the materials and labor, and ob- jected at times to part of the materials and work, but continued to give directions about the house, and ordered- some variations from the contract. He expressed himself satis- fied with parts of the work from time to time, though professing to be no judge of it. Soon after the house was done, he refused to accept it, but A had no knowledge that he intended to refuse it until after it was finished. It was held that A miglit maintain an action against B on a quantum meruit for his labor, and on a quantum valebant for the ma- terials. See also, Norris v. Windsor, 4 Fairf. 293 ; Wilhelm v. Caul, 2 Watts & S. 27 ; Adams v. Hill, 16 Maine, 215. ^ In Lovelock v. King, 1 Moody & K. 60, a very important and wholesome principle was laid down by Lord Tenterden upon the subject of extra work. The action was assumpsit upon a carpenter's bill for alterations in the house of the defendant. In sum- ming up to the jury, his lordship said : " That the case, although very common in its circumstances, involved a very important principle, and requked their very serious con- sideration. In this case, as in most others of the kind, the work was originally under- taken on a contract for a fixed sum. A person intending to make alterations of tliis nature generally consults the person whom he intends to employ, and ascertains from him the expense of the undertaking; and it will very frequently depend upon this esti- mate whether he proceeds or not. It is therefore a great hardship upon him if he is to lose the protection of this estimate, unless he fully understands that such consequences ivill follow, and assents to them. In many cases he will be completely ignorant whether the particular alterations suggested will produce any increase of labor and expendi- tures ; and I do not think that the mere fact of assenting to them ought to deprive him of the protection of his contract. Sometimes, indeed, the nature of the alterations ^viIl be such thai! he cannot fail to be aware that they must increase the expense, and cannot therefore suppose that they are to be done for the contract price. But where the de- partures from the original scheme are not of that character, I think the jury would do wisely in considering that a party does not abandon the security of his contract by consenting that such alterations shall be made, unless he is also infoi-med, at the time of the consent, that the effect of the alteration will be to increase the expense of the work." [33] 32* ELEMENTS OF MERCANTILE LAW. [CH. III. house or make some alteration in it, which being done cannot be undone or taken away without detriment to the house, B may hold it, and yet not be liable to pay for it ; and A has no right to take it away, unless he can do so without inflicting any injury whatever on B.^ This rule would apply whether the addition or alteration were larger or smaller. It is sometimes provided in building contracts that B shall pay for no alteration or addition unless previously ordered by him in writing. But if there be such provision, B would be liable for any alteration or addition he ordered in any way, or voluntarily accepted. So it is sometimes agreed that any additions or alterations shall be paid for at the same rate as the work contracted for. But we think that the law would imply this agreement if the parties did not make it expressly .^ *A promise is a good consideration for a promise ; and it is one which frequently occurs in fact.^ But it is said that the promises must be mutual ; * and sometimes questions of this sort have arisen ; if A promises to live with B two years, for the purpose of learning a certain trade, but B makes no express promise, and 1 It was held by Lord Tenterden, in Wilmot v. Smith, 3 C. & P. 453, that if A agrees to make an article of certain materials for a stipulated price, but puts in materials of a better kind, he is not at liberty on that account to charge more than the stipulated price, nor can he require the article to be returned because the buyer will not pay an increased price on account of the better materials. 2 But this point is not well settled. See Jones v. Woodbury, 11 B. Mon. 167 ; Farm- er V. Francis, 12 Ired. 282 ; Tebbetts v. Haskins, 16 Maine, 288 ; McCormick v. Con- noly, 2 Bay, 401 ; Wright v. Wright, 1 Litt. 179; Dubois v. Del. & Hud. Canal Co. 12 Wend. 334. 8 See White v. Demilt, 2 Hall, 405, which was assumpsit for breach of the defendant's contract to sell and deliver certain goods to the plaintiff. It was held that the promise of the latter to accept the goods and pay for them was a good consideration for the de- fendant's promise to deliver them. And in McNiell v. Eeid, 2 Moore & S. 89, which was an action for the breach of an agreement entered into by one of several partners to admit a stranger jnto the firm, it was held that it was a sufficient consideration for the defendant's promise that the plaintiff had promised and was willing to become a part- ner. And see also, Howe v. O'Mally, 1 Murph. 287 ; Miller v. Drake, 1 Gaines, 45 ; Gower v. Capper, Cro. Eliz, 543 ; Wentworth v. Bullen, 9 B. & C. 840 ; Cartwright v. Cooke, 3 B. & Ad. 703 ; New York & New Haven Railroad Co. v. Pixley 19 Barb. 428 ■ Kiester v. Miller, 25 Penn. State, 481. * In Lester v. Jewett, 12 Barb. 502, the plaintiff brought an action upon an instru- ment executed by defendant, whereby he agreed, at the expiration of one year from its date, to purchase of the plaintiff thirty shares of the capital stock of the Southern Life Insurance and Trust Company, for the sum of three thousand dollars. It was held, that the agreement on the part of the defendant to purchase was void for want of mutuality, there being no corresponding obligation on the plaintiff to sell. And see Governor & Co. of Copper Miners v. Pox, 16 Q. B. 229, 3 Eng. L. & Eq. 420; McKmly v. Wat- kins, 13 111. 140; Nichols v. Raynbred, Hob. 88; Biddel v. Dowse, 6 B. & C. 255 • Dorsey v. Packwood, 12 How. 126. [34] CH. III.] CONSIDERATION. *33 A leaves at the end of one year, it has been said that B cannot recover damages, because there was no consideration for A's promise, inasmuch as B made no promise.^ But we should rather say in such cases, that if A performed his promise, he might have an action against B on his constructive or implied promise to teach ; and that this constructive or implied promise to teach was a sufficient consideration for A's promise to stay with B.2 So, if A says to B, " If you will deliver goods to C, I will pay * for them," although there is no obligation upon B to deliver the goods, and therefore no mutuality in the contract, yet, if he does deliver them, he furnishes a consideration for the agreement, and may enforce it against A.* There is also an exception to this requirement of mutuality in the case of contracts between infants and persons of full age. For though the infant may avoid his contract, the adult is bound.* An agreement by two or more parties to refer disputes or claims between them to arbitration, is not binding upon any of the parties unless all have signed it.^ This principle, that a promise is a good consideration for a promise, has been sometimes applied to subscription papers ; all who sign them being held on the ground that the promise of ' Lees V. Whitcomb, 2 Moore & P. 86, which was assumpsit for the breach of the fol- lowing written agreement : " I hereby agree to remain with Mrs. D. (the plaintiff's wife) for two years from the date hereof, for the purpose of learning the business of a dress- maker, &c." Held, that such agi'eement was nudum pactum, and not binding, as it con- tained no engagement by the plaintiff or his wife to teach. And see, to the same effect, Sykes v. Dixon, 9 A. & E. 693. 2 In Phelps V. Townsend, 8 Pick. 392, the defendant gave the plaintiffi a written con- tract, by which, after reciting that he placed his son with the plaintiffs to learn the art of printing, "to stay till he is twenty-one years of age," the defendant agreed, in con- sideration of the son's being so old (he was then eighteen), to pay the plaintiff a stipu- lated amoimt if the son did not continue in the plamtiff's employment six months after he was twenty-one. The son entered into the plaintiff's employment in pursuance of the agreement, and was instructed in the art of printing for some months, when he left the plaintiffs without cause. An action being brought upon this agreement, it was ob- jected that the contract was void for want of mutuality, there being no obligation on the plaintiffs to do any thing which might form a consideration for the defendant's promise. But the court said, "that the acceptance of the contract by the plaintiffs, and the execu- tion of it in part by receiving the apprentice, created an obligation on their part to main- tain and instruct the defendant's son." 8 L'Amoreux v. Gould, 3 Seld. 349 ; 1 Parsons on Cont. pp. 375, 376 ; Cabellero v. Slater, 14 C. B. 300, 25 Eng. L. & Eq. 285. But see Dorsey v. Packwood, 12 How. 126. 4 "Warwick v. Bruce, 2 M. & S. 205 ; Holt v. Ward Clarencieux, 2 Stra. 937 ; Hunt Zagury v. Furnell, 2 Camp. 240; Sheplcy v. Davis, 5 Taunt. 617; Wallace v. Breeds, 13 East, 522 ; Busk v. Davis, 2 M. & S. 397 ; Gillett v. Hill, 2 Cromp. & M. 535 ■ Rhode v. Thwaites, 6 B. & C. 388 ; Simmons v. Swift, 5 B. & C. 857 ; Tarling [51] 48 ELEMENTS OF MERCANTILE LAW. [CH. IV. So, if the goods are a part of a large quantity, they remain the seller's until selected and separated; and even after that, until recognized and accepted by the buyer, unless it is plain from words or circumstances, that the selection and separation by the buyer are intended to be conclusive upon both parties.^ If repairing, or measuring, or counting, must be done by the seller, before the goods are fitted for delivery, or the price can be determined, or their quantity ascertained, they remain, until this be done, the seller's, and where part is measured and delivered, this part passes to the vendee, but the portion not so set apart does not.2 So even if earnest or a part of the price is paid, the sale is not complete under the circumstances, and if it finally fail, the money paid may be recovered back.^ But if the seller delivers the whole, and the buyer accepts it, and any of these acts remain to be done, these acts will not be considered as belonging to the contract of sale, for that will be regarded as completed, and the property in the goods wiU have passed to the buyer with the possession ; and these acts will be taken only to refer to the adjustment of the final settlement as to the price.* Questions of this kind have given rise to much litigation, and caused some perplexity. Whatever rule be adopted, it may be sometimes difficult to apply it ; but we cannot doubt that the true principle is this : Every sale transfers the property, and that is not a sale which does not transfer the property in the thing sold ; but this property cannot pass, and therefore the thing is V. Baxter, 6 B. & C. 360 ; Alexander v. Gardner, 1 Bing. N. C. 676 ; Stone v. Peacock, 35 Maine, 385 ; Dixon v. Myers, 7 Gratt. 240 ; Crawford v. Smitli, 7 Dana, 61 ; Ea- pelye v. Macl^ie, 6 Cowen, 250 ; Cutwater v. Dodge, 7 Cowen, 85 ; Stevens v. Euo, 10 Barb. 95; Riddleu. Vanium, 20 Picli;.280; Goldern. Ogden, 15 Penn. State, 528; Lester u. McDowell, 18 Penn. State, 91 ; Messer v. Woodman, 2 Foster, 1 72 ; Warren v. Buck- minster, 4 Foster, 337. 1 Dutton V, Solomonson, 3 B. & P. 582 ; Fragano v. Long, 4 B. & C. 219 ; Atldnson V. Bell, 8 B. & C. 277. 2 Alridge v. Johnson, 7 Ellis & B. 885. " Nesbit V. Bury, 2 Penn. State, 208 ; Joyce v. Adams, 4 Seld. 291. * Cusbman v. Holvoke, 34 Maine, 289; Macomber v. Parker, 13 Pick. 175 183 per Wilde, J.; Scott v. Wells, 6 Watts & S. 357, whore Gibson, C. J. says: "A sale is imperfect only where it is left open for the addition often necessary to complete it, or where it is deficient in some indispensable ingredient which cannot be supplied from an extrinsic source. But when possession is delivered pursuant to a contract which con- tains no provision for additional terms, the parties evince, in a way not to be mistaken, that they suppose the bargain to be consummated." But if it is certain that the parties intended that the sale should be complete before the article sold is weighed or measured the property may pass before this is done, though there be no deliveiy. Riddle v Varnum, 20 Pick. 280. [52] CH. IV.] SALES OF PERSONAL PROPERTY. *49 not sold, unless, first, it is completed and wholly finished so as to be in fact and in reality the thing purporting to be sold.i And in the second place, it must be so distinguished and dis- criminated * from all other things, that it is certain, or can be made certain, what is the specific thing, the property in which is changed by the sale.^ If the transaction is deficient in either of these two points, it is not a sale, although it may be a valid contract for a future sale of certain articles when they shall be completed, or when separated from others. And it is to be noticed that a contract for a future sale, to take place either at a future point of time or when a certain event happens, does not, when that time arrives, or on the happening of the event, become of itself a sale, transferring the property. The party to whom the sale was to be made does not then acquire the property, and cannot by tendering the price acquire a right to possession ; but he may tender the price or whatever else would be the fulfilment of his obligation, and then sue the owner for his breach of contract. But the property in the goods remains in the original owner. For the same reason that the property in the goods must pass by a sale, there can be no actual sale of any chattel or goods which have no existence at the time. It may, as we have seen, be a good contract for a future sale, but it is not a present sale.^ Thus, in contracts for the sale of articles yet to be manufactured, the subject of the contract not being in existence when the par- ties enter into their engagement, no property passes until the chattel is in a finished state, and has been specifically appro- priated to the person giving the order, and approved and ac- cepted by him.* 1 Mucklow V. Mangles, 1 Taunt. 318 ; Goode v. Langley, 7 B. & C. 26 ; Atkinson V. Bell, 8 B. & C. 277 ; ElUott v. Pybus, 4 M. & S. 389, 10 Blug. 512 ; Moody v. Brown, 34 Maine, 109 ; but see Bement v. Smith, 15 Wend. 493. 2 Six ante, p. 48, n. (1). ■> Smith V. Atkins, 18 Vt. 461 ; Brainard v. Burton, 5 Vt. 97 ; Strickland v. Turner, 7 Exch. 208, 14 Eng. L. & Eq. 471 ; Parsons v. Woodward, 2 N. J. 196. In this last case it was held that a contract to deliver, at a certain price, a quantity of trees of a spec- ified kind, to be grown after the contract, is not strictly a contract of sale; nor would it be valid as such, but it is a mere executory contract ; and it does not confine the ven- dor to deliver any particular individual trees, or only trees raised by himself; but a ten- der of any trees answering the description in the contract will be sufBcient. * In Moody v. Brown, 34 Maine, 107, it was held that neither the manufacture of an article, pursuant to the order of a customer, nor the tender of the article when so man- ufactured, nor leaving it with the customer against his will, vrill transfer the title. To pass the title there must be an acceptance, by the customer, express or implied. And Shepley, C. J. said, " To effect a change in the property there must be an assent of both parties. It is admitted that the mere order given for the manufacture of the article 5* [53] 50* ELEMENTS OF MERCANTILE LAW. [CH. IV. As there can be no sale unless of a specific thing, so there is no sale but for a price which is certain, or which is capable of being made certain by a distinct reference to a certain standard.^ * SECTION III. OF DELIVERY AND ITS INCIDENTS. What is a sufficient delivery is sometimes a question of diffi- culty. In general, it is sufficient, if the goods are placed in the buyer's hands or his actual, possession, or if that is done which is the equivalent of this transfer of possession. Some modes and instances of delivery we have already seen. We add, that if the goods are landed on a wharf alongside of the ship which brings them, with notice to the buyer or knowledge on his part, this may be a sufficient delivery, if usage, or the obvious nature of the case make it equivalent to actually giving possession.^ And usage is of the utmost importance in determining ques- tions of this kind. If the contract does not specify any place of delivery, the place where the article is made, sold, or manufactured, is in general the place of delivery.^ But if a particular place be appointed by the contract, the goods must be delivered there before an action wiU lie for their price.* If goods are delivered to a carrier for transportation to the vendee, and the vendor takes a way-bill making the goods deliv- erable to himself, the property would not generally vest in the vendee before actual delivery to him ; but if the vendor assigns docs not affect the title. It will continue to be the property of the manufacturer until completed and tendered. There is no assent of the other party to a change of the title exhibited by a tender and refusal. There must be proof of an acceptance, or of acts or words respecting it, from which an acceptance may be infen-ed, to pass the property." 1 Brown v. Bellows, 4 Pick. 179, 189. But under some circumstances a contract of sale may be complete and l>inding, though silent as to the price, such silence being equivalent to a stipulation for a reasonable price. Valpy v. Gibson, 4 C. B. 837, 864. In this case, Wilde, C. J. said, " Goods may be sold, and frequently are sold, when it is the intention of tlie parties to bind themselves by a contract which does not specify the price or the mode of payment, leaving them to be settled by some future agreement, or to be determined by wliat is reasonable under the circumstances. And see Acebal V. Levy, 10 Bing. .376 ; Hoadly v. M'Laine, id. 482 ; Dickson v. Jordan, 12 Ired. 79. 2 See 1 Parsons, Mar. Law, 152-158. " Lobdell V. Hopkins, 5 Cowcn, 516 ; Goodwin v. Holbrook, 4 Wend. 380 ; Barr v. Myers, 3 Watts & S. 295. * Savage Manuf Co. v'. Armstrong, 19 Me. 147 ; Howard v. Miner, 20 id. 325. [54] CH. IV.] SALES OF PEESONjiL PROPERTY. '51 and sends such order to the vendee, and the latter gives notice thereof to the carrier, and he assents to such order, this amounts to a delivery to the vendee.^ In general, the rule may be said to be, that that is a sufficient delivery which puts the goods within the actual reach or power of the buyer, with immediate notice to him, so that there is nothing to prevent him from taking actual possession. When, from the nature or situation of the goods, an actual delivery is difficult or impossible, as in case of a quantity of tim- ber floating in a boom, slight acts are sufficient to constitute a delivery .2 So if the property which is the subject of the sale is at sea, the indorsement and delivery of the bill of lading, or other muniment of title, is sufficient to constitute a delivery.^ *7^d in such case, the seller should send or deliver the bill of lading to the buyer within a reasonable time, that he may have the means of offering the goods in the market. And it has been held that a refusal of the bill of lading authorized the buyer to rescind the sale.* Until delivery, the seller is bound to keep the goods with ordi- nary care, and is liable for any loss or injury arising from the want of such care or of good faith.^ If the buyer lives at a distance from the seller, the seller must send the goods in the manner indicated by the buyer. If no directions are given, he must send them as usage or, in the 1 Hatch u. Bayley, 12 Cash. 27; Hatch v. Lincoln, 12 id. 31. '•* Jewett V. Wan-en, 12 Mass. 300 ; Boynton v. Veazie, 24 Maine, 286 ; Gibson v. Stevens, 8 How. 384; Calkins v. Lockwood, 17 Conn. 154. 3 Gardner v. Howland, 2 Pick. 599 ; Pratt v. Parkman, 24 id. 42 ; Dows v. Cobb, 12 Barb, 310; Brinley v. Spring, 7 Grecnl. 241 ; Richardson v. Kimball, 28 Maine, 463. The sale of ships and merchandise at, sea is governed by more liberal rules than the sale of goods and chattels on shore. By the indorsement and deliveiy of the bill of lading, which is the documentary evidence of title to the merchandise, the property instantly vests in the vendee, and he can tranfer it to a second purchaser by another indorsement and deUvery. Lickbarrow v. Mason, 2 T. E. 63, 6 East, 21, note, 1 Smith's Lead. Cas. 388, which gives an excellent summary of the law relating to hills of lading. See further, Walter v. Ross, 2 Wash. C. C. 283 ; Ryberg v. Snell, id. 403. * Barber v. Taylor, 5 M. & W. 533. s But if the seller exercises ordinai-y diligence in keeping the commodity, he is not liable for its loss or depreciation, unless it arises from a defect against which he has warranted. Thus, in Lansing v. Turner, 2 Johns. 13, A sold to B a certain quantity of beef, B paying the purchase-money in full ; and it was agi-eed between them that the beef should remain in the custody of A until it should be sent to another place. Sometime after, B received a part, which proved to he bad, and the whole was found, on inspection, to be unmerchantable : Held, that as the beef was good at the time of its sale, the vendee must bear the loss of its subsequent deterioration. See Black o. Webb, 20 Ohio, 304. [55] 52* ELEMENTS OP MERCANTILE LAW. [CH. IV. absence of usage, as reasonable care would require. And generally all customary and proper precautions should be taken to prevent loss or injury in the transit.' If these are taken, the goods are sent at the risk of the buyer, and the seller is not responsible for any loss.^ But he is responsible for any loss or injury happening through the want of such care or precaution. And if he sends them by his own servant, or carries them him- self, they are in his custody, and generally, at his risk, until delivery. The contract may be, however, that the goods are to be manufactured in one place and delivered to the vendee in another, and then the seller takes the risk of their loss or destruction until they are thus delivered. But even in such a case, it has been held that if the article when delivered is of a merchantable quality, the purchaser is bound to accept it, if only deteriorated to the extent that it is necessarily subject to, in its course of transit from the one place to the other.^ This question of delivery has a very great importance in another point of view ; and that is, as it bears upon the honesty, and therefore the validity, of the transaction. As the owner of goods ought to have them in his possession, and as a transfer of possession usually does and always should accompany a sale, the want of this transfer is an indication more or less strong, that the sale is not a real one, but a mere cover. The law on this subject has fluctuated considerably ; and is different in differ- ent 'parts of the country. Generally, and as the prevailing rule, it may be stated thus : Delivery is nowhere essential to a sale at common law ; but if there is no delivery, and a third party, with- out knowledge of the previous sale, purchases the same thing from the seller, he gains an equally valid title as the first buyer ; and if he completes this title by acquiring the possession before the other, he can hold the property against the other.* So, also. ' Buckman v. Levi, 3 Camp. 414 ; Clark v. Hutchins, 14 East, 475. If the goods are sent by ship or otherwise, it is a part of the seller's duty to give such notice of the sending as will enable the buyer to insure or take other precautions. Cothay v. Tute, 3 Camp. 129 ; 2 Kent's Com. 500. And if it has been a former custom with the par- ties for the vendor to insure, he is bound to mtike insurance of the articles sent. Lond. Law Mafc. vol. 4, p. 359 ; Smith v. Lascelles, 2 T. R. 189 ; Walsh v. Frank, 19 Ark. 270. ^ Orcutt V. Xelson, 1 Gray, 536. 8 Bull V. Eobison, lOExch. 342, 28 Eng. L. & Eq. 586. ' Lanfear v. Sumner, 17 Mass. 110 ; Babb v. Clemson, 10 S. & R. 419 ; Fletcher v. Howard, 2 Aikens, 115 ; Hoofsmith v. Cope, 6 Whart. 53 ; Dawes v. Cope, 4 Binn. 258; Carter v. Willard, 19 Pick. 1. [56] CH. IV.J SALES OF PERSONAL PROPERTY. *53 unless delivery or possession accompany the transfer of the right of property, the things sold are subject to attachment by the creditors of the seller.^ And if the sale be completed, and never- theless no change of possession takes place, and there is no certain and adequate cause or justification of the want or delay of this change of possession, the transaction will be regarded as fraudulent and void in favor of a third party, who, either by pur- chase or by attachment, acquires the property in good faith, and without a knowledge of the former sale. In this country the rules of law on this point are hardly so strict as in England ; and, generally, fraud would not be absolutely inferred from the want of change of possession. But this circumstance might be ex- plained, and if shown to be perfectly consistent with honesty, and to have occurred for good reasons, and especially if the delay in taking possession was brief, the title of the first buyer would be respected.2 1£ goods are sold in a shop or store, separated and weighed or numbered, if that be necessary, and put into a parcel, or other- wise made ready for delivery to the buyer, in his presence, and he request the seller to keep the goods for a time for him, this is so far a delivery as to vest the property in the goods in the buyer, and the seller becomes the bailee of the buyer. And if the goods are lost while thus in the keeping of the seller, without his fault, it is the loss of the buyer. In a contract of sale there is sometimes a clause providing that a mistake in description, or a deficiency in quality or quan- tity, shall not avoid the sale, but only give the buyer a right to "deduction or compensation. But if the mistake or defect be great and substantial, and affects materially the availabilitv of the thing for the purpose for which it was bought, the sale is nevertheless void, for the thing sold is not that which was to have been sold.^ If the buyer knowingly receives goods so deficient or so differ- 1 See cases supra. ^ There is a great diversity of opinion upon this subject, but the weight of authority, both here and in England, seems to sustain the doctrine stated in the text. The ques- tion is ably discussed in 2 Kent's Com. 515, and in 1 Smith's Lead. Cas. 1. The prin- cipal authorities are' fully cited in 1 Parsons on Contracts, pp. 441 and 442, and notes. » Plight V. Booth, 1 Bing. N. C. 370 ; Duke of Norfolk v. Worthy, 1 Camp. 340 ; Leach v. MuUett, 3 C. & P. 115 ; Robinson v. Musgi-ove, 2 Moody & 11. 92, 8 C. & p. 469. [57] 54* ELEMENTS OP MERCANTILE LAW. [CH. IV. ent from what they should have been that he might have refused them, he will be held to have waived the objection, and to be liable for the whole price ; unless he can show a good reason for not returning them, as in the case of materials innocently used before discovery of the defects or the like.i In that case, when the price is demanded, he may set off whatever damages he has sustained by the seller's breach of contract, and the seller shall recover only the value to the buyer of the goods sold, even if that be nothing.^ But a long delay or silence may imply a waiver of such right on the part of the buyer. One who orders many things at one time and by one bargain may, generally, refuse to receive a part without the rest ; ^ but if he accepts any part, he severs that part from the rest, and rebuts the presumption that it was an entire contract ; the buyer will then be held as having given a separate order for each thing, or part, and as therefore bound to receive such other parts as are tendered, unless some distinct reason for refusal attaches to them.* The law is not perhaps quite settled on this point, especially if many several things are bought at one auction, but by different bids.*5 * Probably, the question whether it is one contract, so that the buyer shall not be bound to receive any part unless the whole be tendered to him, would be determined by an inference from all the facts, as to whether the parts so belong together, that it may 1 As in Milnor v. Tucker, 1 C. & P. 15, where a person contracted to supply a chan- delier, sufficient to light a certain room, and the purchaser kept the article six months, and then returned it ; it was held that he was liable for the price of the chandelier, al- though it was not according to the contract. See also, Cash v. Giles, 3 id. 407 ; Elliott V. Thomas, 3 M. & W. 177 ; Jordan v. Norton, 4 id. 155 ; Percival v. Blake, 2 C. & P. 514. In this case, keeping property tivo months was held to be an acceptance, and the purchaser was bound to pay the price. See Okell v. Smith, 1 Stark. 107 ; Groning V. Mendham, id. 257 ; Hopkins u. Appleby, id. 477 ; Goodhue v. Butman, 8 Greenl. 116 ; KcUog-g V. Denslow, 14 Conn. 411 ; Poulton v. Lattimore, 9 B. & C. 259. 2 Waring v. Mason, 18 Wend. 425 ; Basten v. Butter, 7 East, 480 ; Earnsworth v. Garrard, 1 Camp. 38 ; Chappel v. Hicks, 4 Tyrw. 43, 2 Cromp. & M. 214 ; Cousins ;;. Paddon, 4 Dowl. 488. 8 Champion v. Short, 1 Camp. 53 ; Symonds v. CaiT, id. 361 ; Baldey v. Parker, 2 B. &C. 37. * Bowker v. Hoyt, 18 Pick. 555 ; Miner v. Bradley, 22 Pick. 457. ^ In the case of Roots v. Lord Dormer, 4 B. & Ad. 77, it is expressly decided that, where several lots are knocked down to a bidder at an auction, and his name marked against them in the catalogue, a distinct contract rises for each lot. See also, Messer V. Woodman, 2 Poster, 176; Van Eps v. Corporation of Schenectady, 12 Johns. 436; James v. Shore, 1 Stark. 426 ; Emmerson v. Heelis, 2 Taunt. 38. But see contra, Chambers v. Griffiths, 1 Esp. 150 ; Coffmanu. Hampton, 2 Watts & S. 377 ; Tompkins V. Haas, 2 Barr, 74. [58] CH. IV.J SALES OF PERSONAL PROPERTY. "55 reasonably be supposed that none would have been purchased if any part could not have been. The buyer may have, by the terms of the bargain, the right of redelivery. For sales are sometimes made, and it is agreed that the purchaser may return the goods within a fixed, or within a reasonable time. He may have this right without any condition, and then has only to exercise it at his discretion. But he may have the right to return the thing bought, only if it turns out to have, or not to have, certain qualities ; or only upon the happen- ing of a certain event. In such case the burden of proof is on him to show that the circumstances exist which are necessary to give him this right. In either case the property vests in the buyer at once, as in ordinary sales ; but subject to the right of return given him by the agreement. If he does not exercise his right within the agreed time, or within a reasonable time if none be agreed upon, the right is wholly lost, the sale becomes abso- lute, and the price of the goods may be recovered in an action for goods sold and delivered.^ So, if during the time the vendee so misuse the property as to materially impair its value, he can not tender it back, but is liable for the price.^ SECTION IV. OF CONTRACTS VOID FOR ILLEGALITY OR FRAUD. As the law will not compel or require any one to do that which it forbids him to do, no contract can be enforced at law which is tainted with illegality. It may, however, be necessary to consider whether the contract be entire or separable, and whether it is wholly or partially iUegal. If the whole consideration, or any part of the consideration, be illegal, the promise founded ' upon it is void. If a whole promise, or any part of a promise that cannot be severed into substantial and independent parts, is illegal, the whole promise is void. But if the consideration is 1 Moss V. Sweet, 16 Q. B. 493, 3 Eng. L. & Eq. 311 ; Beverly v. Lincoln Gas Light and Coke Co. 6 A. & E. 829 ; Bayley v. Gouldsmith, Peake, 56 ; Neate v. Ball, 2 East, 116 ; Dearborn v. Turner, 16 Maine, 17 ; Johnson v. McLane, 7 Blackf. 501. ^ Ray V. Thompson, 12 Cush. 281. [59] 56* ELEMENTS OF MERCANTILE LAW. [CH. IV. legal, and the promise is legal in part and illegal in part, and that part of the promise which is legal can be severed from that part which is illegal, and there be a substantial promise having a value of its own, this legal part can be enforced.^ For further remarks upon this subject, we refer to the previous chapter on consideration. Formerly, an agreement to sell at a future day goods which the promisor had not now, and had not contracted to buy, and had no notice or expectation of receiving by consignment, was considered open to the objection that it was merely a wager, and therefore void.^ But later cases have admitted it to be a valid contract.'^ We have already said, in our second chapter, that fraud vitiates and avoids every contract and every transaction. Hence, a wilfully false representation by which a sale is affected ; * or a purchase of goods with the design of not paying for them ; ^ or * hindering others from bidding at auction by wrongful means ; or selling " with all faults," and then purposely concealing and 1 See 2 Parsona on Cont. 252, note, where the leading authorities for this well-settled principle are collected. ^ This was the opinion of Lord Tenterden. See Bi-yan v. Lewis, Eyan & 51. 386 ; Lorymer r. Smith, 1 B. & C. 1 . 2 'See Hibblewhite v. McMorine, 5 M. & W. 462. In this case, Parhe, B. in deliver- ing the judgment of the court, said, " I have always entertained considerable doubt and suspicion as to the correctness of Lord Tenterden's doctrine in Biyan y. Lewis ; it excited a good deal of surprise in my mind at the time ; and, when examined, I think it is untenable. I cannot see what principle of haw is at all affected by a man's being allowed to contract for the sale of goods, of which he has not possession at the time of tlie bargain, and has no reasonable expectation of receiving. Such a contract does not amount to a wager, inasmuch as both the contracting parties are not cognizant of the fact that the goods are not in the vendor's possession ; and even if it were a wager, it is not illegal, because it has no tendency to injure third parties. The dictum of Lord Tenterden certainly was not a liasty observation thrown out by him, because it appears from the case of Lorymer v. Smith, that he had entertained and expressed similar no- tions four years before. Ho did not, indeed, in that case, say that such a contract was void, but only that it was of a kind not to be encouraged ; and the strong opinion he afterwards ex|ircsscd appears to have gradually formed in his mind during the inten'al, and was no doubt confirmed by the effects of the unfortunate mercantile speculations throughout the country about that time. There is no indication in any of the books of such a doctrine having ever been promulgated from the bench, until the case of L017- mer v. Smith, in the year 1822, and there is no case which has been since decided on that authority. Not only, then, was the doubt expressed by Bosanquet, J. in Wells v. Porter, well founded, but the doctrine is clearly contrary to law." And see Wells v. Porter, 2 Bing. N. C. 722 ; Stanton v. Small, 3 Sandf. 230. * Frost V. Lowry, 15 Ohio, 200 ; Cross v. Peters, 1 Grecnl. 376 ; Herrick v. Kingsley, 3 Pairf. 278. If the vendor make such material misrepresentations of matters of fact, as essentially affect the interests of the other party, who is thereby deceived, the sale mav be repudiated. Doggctt t'. Emerson, 3 Story, 700, 733 ; Daniel v. Mitchell, 1 Storv, 172; Hammatt v. Emerson, 27 Maine, 308. 5 See 2 Parsons on Cont. 269, 270. [60] en. IV.] SALES OF PERSONAL PROPERTY. *bl disguising them ; i and any similar act will avoid a sale. No title passes to the buyer by such sale, which he can himself maintain, even if there be a delivery to him. But, by an exception to the general rule that he who has no title can give none, if such fraud- ulent buyer sells to a third party who is wholly without partici- pation in or knowledge of the fraud, such innocent buyer may acquire a good title.^ A buyer who is imposed upon by a fraud, and therefore has a right to annul the sale, must exercise this right as soon as may be after discovering the fraud. He does not lose the right necessarily by any delay, but certainly does by any unexcused delay.^ A seller may rescind and annul a sale if he were induced to make it by fraud. But he may waive the right and sue for the price. If, however, the fraudulent buyer gets the goods on a credit, and the seller sues for the price, this suit is a confirmation of the whole sale including the credit, or rather it is an entire waiver of his right to annul the sale, and the suit cannot be maintained until the credit has wholly expired.* If a party who has been defrauded by any contract, brings an action to enforce it, this is a waiver of his right to rescind, and a confirmation of the contract.^ Or if, with knowledge of the fraud, he offers to perform the contract on conditions which he had no right to exact, this has been held so effectual a waiver of the fraud that he cannot set it up in defence if sued on the contract.^ ♦SECTION V. OF SALES WITH WARKANTY. A sale may be with warranty ; and this may be general, or particular and limited. A general warranty does not extend to 1 Baglehole V. Walters, 3 Camp. 154. 2 Load V. Green, 15 M. & W. 216 ; White v. Garden, 10 C. B. 919 ; Powell v. Hoy- land, 6 Exch. 67 ; Stevenson v. Newnham, 13 C. B. 285, 16 Eng. L. & Eq. 401 ; Hoff- man V. Noble, 6 Met. 68. s See Masson v. Bovet, 1 Denio, 69 ; Selway v. Fogg, 5 M. & W. 83 ; Saratoga E. E. V. Eow, 24 Wend. 74. * Ferguson v. Carrington, 9 B. & C. 59. ^ Ferguson v. Carrington, 9 B. & C. 59 ; Kimball ;;. Cunningham, 4 Mass. 502. 6 Blydenburg v. Welsh, Baldvv. 331. 6 [61] 57- ELEMENTS OF MERCANTILE LAW. [CH. IV. defects which are known to the purchaser ; or which are open to inspection and observation, unless the purchaser is at the time unable to discover them readily, and relies rather upon the knowl- edge and warranty of the seller.^ A warranty may also be either express or implied. It is not implied by the law generally merely from a full or, as it is said, a sound price. The rule, caveat emp- tor, prevents this.^ But this rule never applies to cases of fraud.^ It is, however, sometimes difficult to determine accurately what is to be considered as a legal fraud. The general rule is, that mere silence on the part of the seller is not fraud, but he must not by word or deed lead the buyer astray.* But the usage of the trade will be considered, and if that require a declaration of certain defects whenever they exist, the absence of such decla- ration is a warranty against such defects.^ And if the sale is made under circumstances which render it impossible for the seller to ascertain the quality of the goods, the rule of caveat emptor does not apply.'' Mere declarations of opinion are not a warranty;'' but if they are intended to deceive and have that effect, they may avoid the sale for fraud.^ And affirmations of quantity or quality, which are made pending the negotiations for sale, with a view to procure a sale, and having that effect. ' See 1 Parsons on Cent. 459, n. (/). 2 Mixer v. Coburn, 11 Met. 559; Winsor v. Lombard, 18 Pick. 59 ; Parkinson v. Lee, 2 East, 321 ; Stuart v. Wilkins, Doug. 20 ; Johnston v. Cope, 3 Harris & J. 89 ; Seixas V. Woods, 2 Caines, 48 ; Holden v. Dakin, 4 Johns. 421 ; Moses v. Mead, 1 Dcnio, 378. But in Louisiana, where the civil law prevails, and in South Carolina,' it is held that the sale of a chattel for a sound price creates a wan-anty against all faults known or unknown to the seller. Timrod v. Shoolbred, 1 Bay, 324"; State ;;. Gaillard 2 id. 19 ; Dewees v. Morgan, 1 Mart. La. 1 ; Melanpon v. Robichaux, 17 La. 97 • Bar- nard V. Yates, 1 Nott & McC. 142 ; Missroon v. Waldo, 2 id. 76. ' 8 Irving V. Thomas, 18 Me. 418 ; Otts v. Alderson, 10 Smedes & M. 476. ' Laidlaw v. Organ, 2 Wheat. 178; Bencli v. Sheldon, 14 Barb. 66; Kintzing v. McElrath, 5 Barr, 467 ; Irvine v. lOrkpatrick, House of Lords, 1850, 3 Eng. L. & En'. 17. See Hill v. Gray, 1 Stark. 434, as explained in Keatcs v. Cadogan, 10 C B 59l' 2 Eng. L. &Eq. 318. ^ Sec Jones v. Bowden, 4 Taunt. 847. <^ Hanks v. McKee, 2 Litt. 227 ; Gardiner v. Grav, 4 Camp. 144 ; Wielcr v Schilizzi 17 C. B. 619. ' Thus, in Amott o. Hughes, Chitty on Con. 393, n., an action was brouf^ht on a warranty that certain goods were fit for the China market. The plaintiff produced a letter from the defendant, saying tliat he had goods fit for the China market, which he offered to sell cheap. Lord Ellmhorough held tliat such a letter was not a wan-anty, bnt merely an invitation to trade, it not having any specific reference to the goods actually bought by the plaintiff. And see 1 Parsons on Cont. 463, n. (o). 8 Matthews v. Bliss, 22 Pick. 48 ; Doggett v. Emerson, 3 Story, 700 ; Houo-h v. Rich- ardson, id. 659; Daniel v. Mitchell, 1 id. 172; Small t^. Attwood 1 Yoiina-e 407- Warner v. Daniels, 1 Woodb. & M. 90. e > > [62] CH. IV.J SALES OF PERSONAL PROPERTY. *58 will be regarded as warranties.! But to have this effect they must be made during the negotiations for the sale.^ If a bill of sale be given in which the article sold is described, the rule seems now to be that this description has the full effect of a warranty .^ Goods sold by sample are warranted to conform *to the sample ; * but there is no warranty that the sample is what it appears to be.^ If there be an express warranty, an examination of samples is no waiver of the warranty, nor is any inquiry or examination into the character or quality of the things sold, for a man has a right to protect himself by such inquiry and also by a warranty.^ It seems, according to the weight of authority, that a breach of warranty does not generally authorize the buyer to return the ^ Thus, in Carley v. Wilkins, 6 Barb. 557, it was held that a representation made by a vendor, upon a sale of flour in ban'els, that it was in quality superfine or extra super- fine, and worth a shilling a barrel more than common, coupled with the assurance to the buyer's agent that he might rely upon such representation, was a warranty of the quality of the flour. So in Cave v. Coleman, 3 Man. & R. 2, where upon the sale of a horse the vendor said to the vendee, " You may depend upon it, the horse is perfectly quiet and free from vice ; " this was held to amount to an express warranty. And see 1 Parsons on Cont. 463, n. (o). 2 Roscorla v. Thomas, 3 Q. B. 234 ; Bloss v. Kittridge, 5 Vt. 28. It has been held that if the vendor, in a negotiation a few days before the sale, offer to wan'ant the article, the warranty will be binding. Wilmot v. Hurd, 11 Wend. 584; Lysney v. Selby, Ld. Eaym. 1120. But see Hopkins v. Tanqueray, 15 C. B. 130, 26 Eng. L. & Eq. 254. 8 Henshaw v. Bobbins, 9 Met. 83 ; Hastings v. Lovering, 2 Pick. 214 ; Yates v. Pym, 6 Taunt. 646. In Pennsylvania this doctrine does not apply to the quality of the goods. Fraley v. Bispham, 10 Barr, 320. ' Bradford v. Manly, 13 Mass. 139 ; Oneida Mannf. Co. v. Lawrence, 4 Cowen, 440 ; Andrews v. Kneeland, 6 Cowen, 354 ; Gallagljer v. Waring, 9 Wend. 20 ; Webb v. Rob- erts, 11 Wend. 422 ; Boorman v. Jenkins, 12 Wend. 566 ; Moses v. Mead, 1 Denio, 386 ; Hargous v. Stone, 1 Seld. 73 ; Beirne v. Dord, id. 95, 2 Sandf. 89. In this last case it was held that the mere circumstance that the seller of goods exhibits a sample at the time of the sale, will not of itself make it a sale by sample, so as to subject the seller to liability on an implied warranty as to the nature or quahty of the goods. To have this effect, the evidence must show that the parties mutually understood that they were deal- ing with the sample, upon an agreement on the part of the seller that the bulk of the commodity corresponded with the sample. But in Ormrod v. Huth, 14 M. &W. 651, it seems to be held that if the goods do not correspond to the sample, the vendee can recover only by showing some knowledge on the part of the vendor of the want of con-espondenee. , ^ Parkinson v. Lee, 2 East, 314, is the leading ease upon this point. That was a case of a sale of five pockets of hops, with express warranty that the bulk answered the samples by which they were sold. The sale was in January, 1800 ; at that time the samples fau-ly answered to the commodity in bulk, and no defect was at that time per- ceptible to the buyer. In July following, every pocket was found to have become unmerchantable and spoiled, by heating, caused probably by the hops having been fraud- ulently watered by the grower, or some other person, before they were purchased by the defendant. The defendant knew nothing of this fact at the time of sale, and it was then impossible to detect it. It was held that there was here no implied wan-anty that the bulk of the commodity was merchantable at the time of sale, although a merchant- able price was given. 6 Willings V. Consequa, Pet. C. C. 301. [63] 59* ELEMENTS OF MERCANTILE LAW. [CH. IV. article sold, unless there be an agreement to that effect, or fraud.i But if one orders a thing for a special purpose known to the seller, he may certainly return it if unfit for that purpose, if he does so as soon as he ascertains its unfitness.^ In this country, the seller of goods actually in his possession is generally held to warrant his own title by the fact of the sale. This we consider now to be quite well established, although it has been doubted.^ But if the property be not in the possession *of the vendor, and there be no assertion of ownership by him, no implied warranty of title arises.'' And a pawnbroker who sells an unredeemed pledge does not by such sale warrant the title.^ If a thing is ordered of a manufacturer for a special purpose, and is supplied, there is an implied warranty that it is fit for that purpose.^ But this principle must not be applied to those cases 1 Thornton v. Wynn, 12 Wheat. 183 ; Voorhees v. Earl, 2 Hill, 288 ; Gary v. Gra- man, 4 Hill, 625 ; Kase i'. John, 10 Watts, 107 ; Street v. Blay, 2 B. & Ad. 456 ; Gom- yiertz v. Denton, 1 Cromp. & M. 207; Parson v. Sexton, 4 C. B. 899; OUivant v. Bavlev, 5 Q. B. 288 ; Dawson v. CoUis, 10 C. B. 523, 4 Eng. L. & Eq. 338. But see Taymon v. Mitchell, 1 Md. Ch. 496. ^ In Street v. Blay, 2 B. & Ad. 456, Lord Tenterden said : "Although the vendee of a specific chattel, delivered with a warranty, may not have a right to return it, the same reason does not apply to cases of executory contracts, where an article, for instance, is ordered from a manufacturer, who contracts that it shall be of a certain quality, or fit for a certain purpose, and the article sent as such is never completely accepted by the party ordering it. In this and similar cases the latter may return it as soon as he discovers the defect, provided he has done nothing more in the mean time than was necessary to give it a fair trial. Okell v. Smith, 1 Stark. 107 ; nor would the purchaser of a commodity, to be afterwards delivered according to sample, be bound to receive the bulk, which may not agree with it ; nor after having received what was ten- dered and delivered as licing in accordance with the sample, will he be precluded by the simple receipt from returning the article within a reasonable time for the purpose of examination and comparison." And see cases in preceding note. " McCoy V. Artcher, 3 Barb. 323; Dresser v. Ainsworth, 9 id. 619; Edick v. Crim, 10 id. 445 ; Huntingdon v. Hall, 36 Maine, 501 ; Coolidge v. Brigham, 1 Met. 551. In this last case, Wilde, J., says : "In contracts of sales, a warranty of title is implied. The vendor is always understood to affirm tjiat the property he sells is his own. And this implied affirmation renders him responsible, if the title proves defective. This re- sponsibility tlie vendor incurs, although the sale may be made in good faith, and in ignorance of the defect of his title. This rule of law is well established, and does not trench unreasonably upon the rule of the common law, caveat emptor." And see 1 Pai'- sons on Cont. pp. 457, 458; 11 Law Reporter, 272. * See authorities in preceding note. ^ Morley v. Attenborough, 3 Exch. 500. See Sims c. Marryatt, 17 Q. B. 281, 7 Eng. L. & Eq. 330. « Brown v. Edgingtori, 2 Man. & G. 279. In this case the defendant was a dealer in ropes, and represented himself to be a manufacturer of the article. The plaintiff, a wine merchant, applied to him for a crane rope. The defendant's foreman went to the plain- tiff's premises, in order to ascertain the dimensions and kind of rope required. He examined the crane and the old ro|ie, and took the necessary admeasurements, and was told that the new rope was wanted for the purpose of raising pipes of wine out of the cellar, and letting them down into the street ; when he informed the plaintiff tliat a rope must bo made on purpose. The defendant did not make the rope himself, but sent the [64] CH. IV.] SALES OF PERSONAL PROPERTY. -59 where an ascertained article is purchased, although it be intended for a special purpose. For if the thing itself is specifically- selected and purchased, the purchaser takes upon himself the risk of its effecting its purpose.^ order to his manufacturer, who employed a third person to make it. It was held that, as between the parties to the sale, the defendant was to be considered as the manufac- turer, and that there was an implied warranty that the rope was a tit and proper one for the purpose for which it was ordered. And Tindal, C. J., said : " It appears to me to be a distinction well founded, both in reason and on authority, that if a party pur- chases an article upon his own judgment, he cannot afterwards hold the vendor respon- sible, on the ground that the article turns out to be unfit for the purpose for which it was required ; but if he relies upon the judgment of the seller, and informs him of the use to which the article is to be applied, it seems to me the transaction carries with it an im- plied warranty that the thing famished shall be tit and proper for the purpose for which it was designed." And see 1 Parsons on Cont. 468, n'. (v). 1 Thus, in Keates v. Kadogan, 10 C. B. 591, 2 Eng. L. & Eq. 320, Maule, J., says : " If a man says to another, ' sell me a horse fit to carry me,' and the other sells a horse which he knows to be unfit to ride, he may be liable for the consequences ; but if a man says, ' Sell me that gray horse to ride,' and the other sells it, knowing that the former will not be able to ride it, that would not make him liable." And see Chanter v. Hop- kins, 4 M. & W. 399 ; Bluett v. Osborne, 1 Stark. 384 ; Gray v. Cox, 4 B. & C. 108 ; Dickson v. Jordan, 11 Ired. 166. 6 * [ 65 ] 60 ELEMENTS OF MEECANTILB LAW. [CH. T. CHAPTER V. STOPPAGE IN TRANSITU. A SELLER, who has sent goods to a buyer at a distance, and after sending them finds that the buyer is insolvent, may stop the goods at any time before they reach the buyer. His right to do this is called the right of Stoppage in Transitu. The right exists only between a buyer and a seller. A surety for the price of the goods, bound to pay for them if the buyer does not, has not this right.i But one who is substantially a seller, has ; thus, one ordered by a foreign correspondent to buy goods for him, and then buying them in his own name and on his own credit, and sending them as ordered, may stop them in transitu.^ So may a principal who sends goods to his factor,^ or one who remits money for any particular purpose.* The fact that the accounts are unsettled between the parties, and the bal- ance uncertain, does not defeat the right ; ^ nor does the recep- tion and negotiation of a bUl for the goods,^ or actual part pay- ment.'' But if the goods are sent to pay a precedent and existing debt, they are not subject to this right.^ 1 Siffken v. Wray, 6 East, 371. 2 Peise V, Wray, 3 East, 93 ; Newhall v. Vargas, 13 Me. 93. 8 Kinloch v. Craig, 3 T. E. 119. * Smith V. Bowles, 2 Esp. 578. 6 Wood V. Jones, 7 Dowl. & K. 126. In this case a merchant in England sent goods of a given value to a merchant at Quebec for sale on his account. Before the goods were sold or the proceeds ascertained, the latter shipped three cargoes of timber to the former, to credit m his account. Two of them arrived. Against the third the consignor drew a bill for the amount, whilst it was in transitu. In the interval, the consignee dis- honored the bill and became insolvent : . — Held, that the consignor had a perfect right of stoppage in transitu, and was not bound to wait until the mutual accounts between him and the consignee were finally adjusted. ° And this is true although the bills have not yet matured. Newhall v. Vargas, 13 Me. 93 ; Bell v. Morse, 5 Whart. 189 ; Peise v. Wray, 3 East, 93 ; Jenkyns v. Usbome, 7 Man. & G. 678, 698 ; Donath v. Broomhead, 7 Peun. State, 301. And it is said that the vendor need not tender back the bill. Edwards v. Brewer, 2 M. & W. 375 ; Hays V. MouiUe, 14 Penn. State, 48. 7 Hodgson V. Loy, 7 T. E. 440; Newhall v. Vargas, 13 Me. 93. This latter case also holds that if part payment has been made, the buyer cannot recover it back. 8 Smith V. Bowles, 2 Esp. 578 ; Vertue v. JeweU, 4 Camp. 31 ; Clark v. Mauran, [66] . McLaren, 19 Wend. 557 ; Tuttle v. Bartholomew, 12 Met. 452. But see Partridge V. Davis, 20 Vt. 499. 2 Ketchell v. Burns, 24 Wend. 456. In this case tlie instrament was as follows : " For and in consideration of thirty-one dollars and fifty cents received of B. F. Spencer, I hereby guarantee the payment and collection of the witliin note to him or bearer. Au- burn, Sept. 25, 1837. (Signed) Thomas Burns." And it was AeH negotiable. " See Maggs v. Ames, 4 Bing. 470; Connerat v. Goldsmith, 6 Ga. 14. * See Conn v. Cobum, 7 N. H. 368. ^ Harris v. Huntbach, 1 Burr. 373. See also, Buckmyr v. Damall, 2 Ld. Ravm. 1085 ; Conn v. Coburn, 7 N. H. 368. « Bardwell v. Lydall, 7 Bing. 489. [72] CH. VI.] GUARANTY. *66 A contract of guaranty is construed somewhat strictly.^ Thus, a guaranty of the notes of one, does not extend to notes which he gives jointly with another.^ A guarantor who pays the debt of the principal, may demand from his creditor the securities he holds,^ although not, perhaps, * an assignment of the debt itself, or of the note or bond which declares the debt, for that is paid and discharged.* And in equity, the creditor will be restrained from resorting to the guar- antor, until he has collected as much as he can from these securities.^ Unless the guaranty is by a sealed instrument, there must be a consideration to support it.^ If the original debt or obligation rest upon a good consideration, this will support the promise of guaranty, if this promise be simultaneous with, or prior to the original debt." But if that debt or obligation be first incurred and completed, there must be a new consideration for the prom- ise to guarantee that debt.^ But it need not pass from him who receives the guaranty to him who gives it. Any benefit to him for whom the guaranty is given, or any injury to him who receives it, is a sufficient consideration if the guaranty be given because of it.^ Forbearance to sue a third party in connection with other facts, is sometimes evidence of an agreement to for- bear, and as such it may form a good consideration.^" But mere forbearance, without any agreement or promise, is no consid- eration. ^^ 1 Bigelow V. Benton, 14 Barb. 123 ; Eyan v. Trustees, 14 111. 20. 2 Russell V. Perkins, 1 Mason, 368. 8 Craythorne v. Swinburne, 14 Ves. 160; Parsons v. Briddock, 2 Vern. 608; Wright V. Morley, 11 Ves. 12; Copis v. Middleton, Turner & R. 224; Hodgson v. Shaw, 3 Mylne & K. 183 ; Younge v. Reynell, 9 Hare, 809, 15 Eng. L. & Eq. 237 ; Mathews v. AMn, 1 Comst. 595. 4 Copis V. Middleton, Turner & R. 224 ; Hodgson v. Shaw, 3 Mylne & K. 183 ; Pray V. Maine, 7 Cush. 253. But see, contra, Goodyear v. Watson, 14 Barb. 481. 5 Cottin V. Blane, 2 Anst. 544; Wriglit v. Nutt, 3 Bro. C. C. 326, 1 H. Bl. 136; Wright V. Simpson, 6 Ves. 728. 6 Wain V. Warlters, 5 East, 10 ; Elliott v. Giese, 7 Harris & J. 457 ; Leonard v. Vre- denburgh, 8 Johns. 29 ; Cobb v. Page, 17 Penn. State, 469. 7 Bainbridge v. Wade, 16 Q. B. 89, 1 Eng. L. & Eq. 236; Campbell v. Knapp, 15 Penn. State, 27 ; Klein v. Cuixier, 14 111. 237 ; Bickfordt). Gibbs, 8 Cush. 156 ; Leonard V. Vredenburgh, 8 Johns. 29 ; Graham v. O'Niel, 2 Hall, 474. 8 Bell V. Welch, 9 C. B. 154; Pike v. Irwin, 1 Sandf. 14; Ware v. Adams, 24 Me. 177 ; Parker v. Barker, 2 Met. 423 ; Mecomey v. Stanley, 8 Cush. 85. 9 Morley v. Boothby, 3 Bing. 113, Best, C. J.; Leonard v. Vredenburgh, 8 Johns. 29 ; Bickford v. Gibbs, 8 Cush. 156. » Walker v. Sherman, 11 Met. 170. 11 Mecomey v. Stanley, 8 Cush. 85. 7 [73] 67* ELEMENTS OP MERCANTILE LAW. [CH. VI. In genera], if there be a new and independent consideration for the guaranty, passing between the parties to it, this will make it an original promise, and not a promise to pay the debt of another ; and will therefore protect it from the Statute of Frauds. But of this we shall speak particularly in the chapter on that statute. Wherever any fraud exists in the consideration of the contract of guaranty, or in the circumstances which induced it, the con- tract is entirely nuU.^ A guaranty is not binding unless it is accepted,^ and unless the guarantor has knowledge of this.^ But the law presumes this acceptance in general, when the giving of the guaranty and an action on the faith of it, by the party to whom it is given, are simultaneous.* In New York, wherever the guaranty is abso- * lute, notice of its acceptance is urmecessary, unless expressly or impliedly required.^ But, generally, an offer to guaranty a future operation, especially if by letter, does not bind the offerer, unless he has such notice of the acceptance of his offer as would give him a reasonable opportunity of indemnifying himself.^ If the liability of the principal be materially varied by the act of the party guaranteed, without the consent of the guarantor, the guarantor is discharged." So is he, by the weight of author- 1 Jackson v. Duchaire, 3 T. E. 551 ; Pidcock v. Bishop, 3 B. & C. 605. See also, Stone V. Compton, 5 Bing. N. C. 142; Franklin Bank v. Cooper, 36 Me. 179 ; Selscr V. Brock, 3 Oliio, State, 302. 2 Mozley v. Tinkler, 1 Crom]5. M. & E. 692 ; :\r'Iver !■. Eicliardson, 1 M. & S. 557. 3 Lee I'.'Dick, 10 Pet. 482 ; Adams v. Jones, 12 Pet. 207 ; Walker r. Forbes, 25 Ala. 139; Belli). Kellar, 13 B. Mon. 381; Gaunt v. Hill, 1 Stark. 10; M'lver v. Eicliard- son, 1 M. & S. 557. * Wildes V. Savage, 1 Story, 22 ; Blocker v. Hj'dc, 3 McLean, 279 ; Xew Haven County Bank v. Mitchell, 15 Conn. 206. In this last case, A executed a writing, where- by he agreed with B, for value received, that he, A, would at all times hold himself responsible to B, to a limited amount, for sucli paper as might be indorsed by C, and holden by B, within the amount speciiied. The writing was simultaneonsly delivered by A and accepted by B ; and B, on the credit thereof, discounted paper indorsed by C. Held, that no other acceptance by B, or notice thereof to A, was necessary to perfect the obligation of A. 5 Douglass V. Rowland, 24 Wend. 35 ; Smith v. Dann, 6 Hill, 543 ; LTnion Bank v. Coster, 3 Comst. 203. In this last case, Pratt, J., in delivering tlie judgment of the Court of Appeals, said : " We must hold the law to be settled in this State that where the guaranty is absolute, no notice of acceptance is neecs.sary." Lee V. Dick, 10 Pet. 482 ; Adams c. Jones, 12 Pet. 207 ; Kav v. Allen, 9 Ban-, 320 ; Mussey v. Eayner, 22 Pick. 223 ; Howe v. Nickels, 22 Me. 175; Lowry v. Adams, 22 Vt. 169. ' United States v. Tillotson, 1 Paine, C. C. 305 ; United States v. Hillegas, 3 Wash. C. C. 70; Postmaster-General v. Eeeder, 4 id. 678. In Miller v. Stewart, 9 AVheat. 680, a bond was given conditioned for the faithful performance of the duties of the office [74] CH. VI.] GUARANTY. *68 ity, if the liability or obligation be renewed or extended by law. As if a bank, incorporated for twenty years, be renewed for ten more, and the officers and business of the bank go on without change ; the original sureties of the cashier are not held beyond *the first term.i So a guaranty to a partnership is extinguished by a change among the members, although neither the name nor of deputy collector of direct taxes for eight certain townships, and the instrument of appointment, referred to in the bond, was afterwards altered, so as to extend to another township, without the consent of the surety. The court held that the surety was dis- charged from his i-esponsibility for moneys subsequently collected by his principal. Again, In the case of Bonar v. MacDonald, 3 H. L. Cas. 226, 1 Eng. L. & Eq. 1, in the House of Lords, on appeal from Scotland, the facts were that, in a bond by cautioners (sureties) for the careful attention to business and the faithful discharge of the duties of an agent of a bank, it was provided " that he should have no other business of any kind, nor be connected in any shape with any trade, manufacture, or mercantile copartnery, nor be agent of any individual or copartnery in any manner or way whatsoever, nor be security for any individual or copartnery in any manner or way whatsoever." The bank subsequently, without the knowledge of the sureties, increased the salaiy of the agent, he undertaking to bear one fourth part of all losses which might be incurred by his dis- counts. Held, affirming the decision of a majority of the court below, that this was such an alteration of the contract, and of the liability of the agent, that the sureties were discharged, notwithstanding that the loss arose, not from discounts, but from im- proper conduct of the agent. And Lord Cottenham, in a written opinion which was read by Lord Brougham, said : " The rule, as extracted from the English authorities, Evans v. Whyle, 5 Bing. 485 ; Eyre v. Bartrop, 3 Mad. 221 ; Archer v. Hale, 4 Bing. 464 ; Whitcher v. Hall, 5 B. & C. 269, is, that any variation in the agreement to which the surety has subscribed, which is made without the surety's knowledge or consent, which may prejudice him, or which may amount to a substitution of a new agreement for a former agreement, and, though the original agreement may, notwithstanding such variation, be substantially performed, wUl discharge the surety ; and as to Scotland, in BeU's Principles, 71, the rule is laid down, that the cautioner is freed by any essential change consented to by the creditor in the principal obligation or transaction, without the knowledge or assent of the cautioner, which is supported by the authorities referred to." And see Farmers and Mechanics Bank v. Kercheval, 2 Mich. 504. 1 Union Bank v. Eidgely, 1 Harris & G. 324. This was an action against the sure- ties of a cashier for the faithful performance of his duties. The charter of the bank expired, and was extended by a new act of the legislature. The alleged default of the cashier occurred after the reenactment of the charter. The court held that, where an act of incorporation, under which a bond was taken to secure the good conduct of one of the officers of the corporation, was limited in its duration to a certain period, the bond must have the same Umitation ; because, the parties looking to that act, it would seem to be very clear that no responsibility was contemplated beyond the period of its specified existence. The extension of the charter beyond the period of its first limita- tion, by legislative authority, does not enter into the contract, and cannot enlarge it. And see Bamford v. Ees, 3 Exch. 380. See also. Mayor of Berwick-upon-Tweed v. Oswald, 1 Ellis & B. 295, 16 Eng. L. & Eq. 236; Oswald v. Mayor of Berwick-upon- Tweed, 3 Ellis & B. 653, 26 Eng. L. & Eq. 85 ; Frank v. Edwards, 8 Exch. 214, 16 Eng. L. & Eq. 477 ; Northwestern Railway Co. v. Whinray, 10 Exch. 77, 26 Eng. L. & Eq. 488 ; Kitson v. Julian, 4 ElUs & B. 854, 30 Eng. L. & Eq. 326. But, in the case of Exeter Bank v. Eogers, 7 N. H. 21, the court took a different view of this ques- tion. It appeared that Exeter Bank was incorporated by an act of the legislature, in 1803, to continue for the term of twenty years, from January 1, 1804. In 1822, an additional act of the legislature was passed, providing that the first act should remain and continue in force for a further term of twenty years, from January 1, 1824. The defendant, Rogers, was appointed cashier of the bank in 1 809, gave bond with sureties for the faithful discharge of the duties of the office, and continued cashier until 1830. It was held that the bond covered all the time that Eogers remained in office. [75] 68- ELEMENTS OF MERCANTIIiB LAW. [CH. VI. the business of the firm be changed.i But a guaranty, by ex- press terms, may be made to continue over most changes of this kind.2 The obligation of guaranty for good conduct does not seem to be one which survives the obligee and passes over to his repre- sentatives. Thus a bond for the good conduct of a clerk, when the obligee died, and the executor employed the same clerk in arranging and finishing the business of the obligee, was not held sufficient to maintain an action by the executor for misconduct of the clerk after the death of the obligee.^ Generally, when a guaranty is intended to apply to a single transaction, it should be so expressed.* But if this purpose may fairly be gathered from the whole contract, courts will so construe it.^ A continu- ing guaranty remains in force, of course, until it is revoked.'' A specific guaranty, for one transaction, is not revocable. If it be a continuing or a general guaranty, it is revocable, unless an express agreement, founded on consideration, makes it other- wise.'' 1 Bellairs v. Ebsworth, 3 Camp. 52 ; Russell v. Perkins, 1 Mason, 368 ; Weston v. Barton, 4 Taunt. 673. In this last case, it was AeH that a bond conditioned to repay to five persons all sums advanced by them, or any of them, in their capacity of bankers, will not extend to sums advanced after the decease of one of the five by the four sur- vivors, the four then acting as bankers. Mansfield, C. J., said : " The question here is, where the original partnership being at an end, in consequence of the death of Golding, the bond is still in force as security to the surviving four ; or whether, that political personage, as it may be called, consisting of five, being dead, the bond is not at an end. .... ]?rom almost all the cases, in truth we may say from all (for, though there is one adverse case of Barclay v. Lucas, the propriety of that decision has been very much questioned), it results that, where one of the obligees dies, the security is at an end. It is not necessary now to enter into the reasons of those decisions, but there may be very good reasons for such a construction ; it is very probable that sureties may be induced to enter into such a security by a confidence wliich they repose in the integrity", diligence, caution, and accuracy of one or two of the partners. In tlie nature of tilings, there cannot be a partnership consisting of several persons, in which there are not some per- sons possessing these qualities in a greater degree than the I'est ; and it may be that the partner dying, or going out, may be the very person on whom the sureties relied ; it would, therefore, be very unreasonable to hold the surety to his contract, after such change. As to the case of Barclay v. Lucas, 3 Doug. 321, 1 T. E. 291, n. (a), cited by his lordship in the preceding extract, see 1 Parsons on Cont. 507, n. (m). See further, Bodenham v. Purchas, 2 B. & Aid. 39 ; New Haven County Bank v. Mitchell, 15 Conn. 206 ; Staats v. Howlett, 4 Denio, 559 ; 1 Parsons on Cont. 502, et seq. 2 Barclay v. Lucas, 3 Doug. 321, 1 T. E. 291, n. (a) ; Pease v. Hirst, 10 B. & C. 122. See Weston v. Barton, 4 Taunt. 681. 3 Barker v. Parker, 1 T. E. 287. 1 Merle v. Wells, 2 Camp. 413. See Broom v. Batchelor, 1 H. & N. 255. ^ Cremer v. Higginson, 1 Mason, 323. See Grant v. Eidsdale, 2 Haras & J. 186 ; Eapelye v. Bailey, 5 Conn. 149 ; Bent v. Hartshorn, 1 Met. 24 ; White v. Eeed, 15 Conn. 457; Fellows y. Prentiss, 3 Denio, 512. ^ Bastow V. Bennett, 3 Camp. 220. ' See Hassell v. Long, 2 M. & S. 370 ; Calvert v. Gordon, 7 B. & C. 809 ; Hough v. Warr, 1 C. &P. 151. [76] CH. VI.] GUARANTY. *69 A creditor may give his debtor some accommodation or indul- * gence, without thereby discharging his guarantor.^ It would seem just, however, that he should not be permitted to give him any indulgence which would materially prejudice the guarantor.^ Generally, a guarantor may always pay a debt, and so acquire at once the right of proceeding against the party whose debt he has paid. On this ground, it has been held that where a surety requested the creditor to proceed against the principal debtor, and the creditor refused to do this, and afterwards the debtor became insolvent and the surety was without indemnity, still the surety (or guarantor) was not discharged.^ But if by gross negligence, the creditor has lost his debt, and has deprived the surety of security or indemnity, we should say that the surety must be discharged, unless he was equally negligent.* If a cred- itor gives time to his debtor, by a binding agreement which will prevent a suit in the mean time, this undoubtedly discharges the guarantor, because it deprives him of his power of paying the debt, and by that means acquiring a right of proceeding against 1 Huffman v. Hulbert, 13 Wend. 377 ; Davis v. Hugging, 3 N. H. 231 ; Bellows V. Lorell, 5 Pick. 307 ; Erie Bank v. Gibson, 1 Watts, 143 ; Cope v. Smith, 8 S. & R. 110. 2 Row V. Pulver, 1 Cowen, 246 ; Herri ck v. Borst, 4 Hill, 650. See Miller y. Berkey, 27 Penn. State, 317. " Bellows V. Lorell, 5 Pick. 307 ; Davis v. Huggins, 3 N. H. 231. * See Pain v. Packard, 13 Johns. 174 ; King v. Baldwin, 17 id. 384 ; Row i'. Pulver, 1 Cowen, 246; Manchester Iron Man. Co. v. Sweeting, 10 Wend. 162; HuiJFman v. Hulbert, 13 id. 377 ; Herrick v. Borst, 4 Hill, 650. In New York, it is settled that if the surety requests the creditor to proceed against the principal debtor, and he refuses, and the principal debtor aftei-wards becomes insolvent, the surety will be discharged. See cases supra. But this rule has not been established there without much opposition. In Herrick v. Borst, 4 Hill, 650, Cowen, J., says : " What principle such a defence should ever have found to stand upon in any court, it is difficult to see. It introduces a new term into the creditor's contract. It came into tliis comt without precedent (Pain v. Packard, 13 Johns. 174), was afterwards repudiated even by the Court of Chancery (King V. Baldwin, 2 Johns. Ch. 554), as it always has been, both at law and equity, in England ; but was restored on a tie in the Court of EiTOrs, turned by the casting vote of a layman. King v. Baldwin, 17 Johns. 384. Piatt, J., and Yates, J., took that occa- sion to acknowledge that they had erred in Pain v. Packard, as Senator Van Vechten showed most conclnsively that the whole court had done I do not deny that the eiTOr has become inveterate, though it has never been treated with much favor. A dictum was referred to on the argument, in the Manchester Iron Man. Co. v. Sweeting, 10 Wend. 162, that the refusal to sue is tantamount to an agreement not to prosecute the surety. The remark meant, however, no more than that such a neglect as amounts to a defence is like the agreement not to sue in respect to being receivable under the general issue. The judge was speaking to the question whether the defence should not have been specially pleaded as it was in Pain v. Packard. On the other hand, it has often been said that the defence should not be encouraged, but rather discountenanced ; and several decisions will be found to have proceeded on this ground." See Dawson V. Lawes, 1 Kay, 280, 23 Eng. L. & Eq. 365 ; Wetzel v. Sponsler, 18 Penn. State, 460 ; Strong V. Foster, 17 C. B. 201. 7 * [ 77 ] 70* ELEMENTS OP MERCANTILE LAW. [CH. VI. the debtor.! The rule is otherwise if the delay is given with the consent of the surety .^ * K there be a failure on the part of the principal, and the guarantor is looked to, he should have reasonable notice of this. And, generally, at least, any notice would be reasonable which would be sufficient in fact to prevent his suffering from the delay. And if there be no notice, and the guarantor has been unharmed thereby, he is not discharged.^ If a guaranty purport to be official, that is, if made by one who claims to hold a certain office, and to give the promise of guaranty only as such officer, and not personally, the general rule is, that he is not liable personally, provided he actually held that office and had a right to give the guaranty officially.* But he would still be held personally if the promise made, or the rela- tions of the parties indicated, that credit was given personally to the parties promising, or if he had no right to give the promise in his official capacity.^ 1 Leavitt v. Savage, 16 Maine, 72 ; Bailey v. Adams, 10 N. H. 162 ; Joslyn v. Smith, 13 Vt. 353 ; Lime Eock Bank v. Mallett, 34 Maine, 547. ^ Suydam v. Vance, 2 McLean, 92; New Hamp. Savings Bk. v. Colcord, 15 N. H. 119; Weilar v. Hoch, 25 Penn. State, 525 ; LaFarge ;;. Herter, 11 Barb. 159; Wood- u. Oxford & Worcester E. Co. 1 Drewry, 521, 21 Eng. L. & Eq. 285. ^ This is the -n-ell-settled law in Massachusetts. Oxford Bank v. Haynes, 8 Pick. 423 ; Bickford v. Gibbs, 8 Cush. 154. In this last case, Shaxo, C. J., said : " This ques- tion has been much discussed, especially since the leading case of Oxford Bank v. Haynes, 8 Pick. 423. The principle to be deduced from that case, and the Pennsylva- nia case of Gibbs v. Cannon, 9 S. & R. 202, there cited with approbation and relied on, is this : That, in order to maintain an action against a guarantor, a demand of payment must be made in a reasonable time of the principal, and notice of non-payment given to the guarantor ; and if, in consequence of want of such notice, the guarantor suffers loss, he is exonerated. Dole v. Young, 24 Pick. 250. The same prompt demand and no- tice as are required to charge an indorser, are not necessary ; and if the circumstances of parties remain the same, and the guarantor suffers no loss by delay, demand and no- tice at any time before action brought mil be sufficient. Babcock v. Bryant, 12 Pick. 133." But see Douglass v. Howland, 24 Wend. 35 ; Beebe v. Dudley, 6 Foster, 249 ; Farmers and Mechanics Bank v. Kercheval, 2 Mich. 504. * Macbeath v. Haldimand, 1 T. E. 1 72. 5 Burrell v. Jones, 3 B. & Aid. 47 ; Appleton v. Binks, 5 East, 148 ; Hall ;;. Ashurst, 1 Cromp. & M. 714 ; Redhead v. Cator, 1 Stark. 14 ; Sumner v. Williams, 8 Mass. 162. [78] OH. VII.] STATUTE OF FRAUDS. 71 CHAPTER VII. OF THE STATUTE OF FRAUDS. SECTION I. OF ITS PURPOSE AND GENERAL PROVISIONS. The Statute of Frauds, so called, was passed in the 29th year of Charles II. (1677) for the purpose of preventing frauds and perjuries, by requiring in many cases written evidence of a con- tract. It is very generally in force in this country, either by ex- press enactment, or as a part of our common law. Those pro- visions which especially relate to commercial law, are contained in the fourth and seventeenth sections. By the fourth section, it is enacted that " no action shall be brought 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 miscarriages of another person ; or to charge any person upon any agreement made upon consid- eration of marriage ; or any contract for 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 therewith, or some other person thereunto by him law- fully authorized." By the seventeenth section, it is enacted that " no contract for the sale of any goods, wares, and merchandises, for the price of £10 sterling, or upwards, shall be allowed to be good, except [79] 72* ELEMENTS OF MERCANTILE LAW. [CH. VII. the buyer shall accept part of the goods so sold, and actually re- ceive the same, or give something in earnest to bind the bargain, or in part of payment, or that some note or memorandum in writing of the said bargain be made and signed by the parties to * be charged by such contract, or their agents thereunto lawfully authorized." The second and fifth clauses of the fourth section, and the whole of the seventeenth, relate to our present subject. The second clause prevents an oral guaranty from being enforced at law ; but if money be paid on one, it cannot be recovered back.^ SECTION n. OP A PROMISE TO PAY THE DEBT OF AXOTHEE. Such a promise, although in writing, is not valid without a consideration ; as we have already stated and illustrated in the chapter on guaranty. And this necessity, and difficulty of dis- tinguishing in many cases between an original promise, which need not be in writing, and a collateral promise which must be in writing, has caused much litigation ; nor are all the rules which relate to this question as yet positively determined. Per- haps nothing better can be said than that, 1. Where the guaranty is made at the same time with the original promise, and is an essential cause of the credit given to the original promisor, that credit is a consideration for the collateral promise.^ 2. Where the guaranty is given after the original promise is completed and credit given, there must be a new consideration for the guaranty.^ 1 Griffith r. Young, 12 EaPt, 513; PhUbrook v. Belknap, 6 Vt. 383; Abbott v. Draper, 4 Dcnio, 51 ; Westfall v. Parsons, 16 Barb. 645. 2 Per Kent, C. J., in Leonard v. Vrcdenburgh, 8 Johns. 29, a very Icadino- and cele- brated case upon this clause of the statute. In the recent case of lirewsteru. Silence, 4 Sekl. 207, in the Now York Court of Appeals, Willard. J., adverting to the case of Leonard r. Vredenburgh, said: "The then chief justice hoped, by his learned and elaborate opinion in that case, to put at rest forever most of the questions arising under that branch of the statute of frauds which relates to special promises to answer for the debt, default, or miscan-iage of another. But a review of the cases in this State, for the last forty years, will show how fniitless was the attempt. Instead of settling conflicting doubts, few questions have occasioned more conti-oversy, or given birth to more nice and shadowy distinctions than those arising out of this branch of the statute of frauds." 3 Ibid. [80] CH. VII.J STATUTE OF FRAUDS. *73 3. If, after the new promise is given, the original promisor re- mains liable, and there is no liability on the part of the guarantor other than what arises from his guaranty, this is a collateral promise, and is generally within the provisions of the statute, and must be in writing.^ * It is often difficult to say whether the promise of one to pay for goods delivered to another, is an original promise, as to pay for one's own goods, or a promise to pay the debt, or guaranty the promise of him to whom the goods are delivered. The ques- tion may always be said to be : To whom did the seller give, and was authorized to give, credit? This question the jury wiU de- cide, upon consideration of all the facts, under the direction of the court.^ If, on examination of the books of the seller, it appear that he charged the goods to the party who received them, it will be difficult, if not impossible, for him to maintain that he sold them to the other party.* But if he charged them to this other, such an entry would be good evidence, and if confirmed by cir- cumstances, strong evidence that this party was the purchaser." But it cannot be conclusive ; for the party not receiving the goods may always prove, if he can, that he was not the buyer, and that he promised only as surety for the party who was the ^ See 2 Parsons on Cont. 300, et seq. ^ In Birkmyr v. Darnell, 1 Salk. 27, the court said : " 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 him have the goods, I will be your paymaster,' or ' I 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 but as his servant." So, in the well-considered case of Elder v. Warfield, 7 Harris & J. 391, Buchanan, J., said : " If B gives credit to C for goods sold and delivered to him, on the promise of A to ' see him paid,' or ' to pay him for them if C should not,' in that case, it is the immediate debt of C, for which an action will lie against him, and the promise of A is a collateral undertaking to pay that debt, he being only as a secmity. But where the party undertaken for is under no original liability, the promise is an original undertaking, and binding upon the party promising, without being in writing. Thus, if B furnishes goods to C, on the express promise of A to pay for them, as if A says to him, ' Let C have goods to such an amount, and I will pay you,' and the credit is given to A, in that case, C being under no liability, there is nothing to which the promise of A can be collateral ; but A being the immediate debtor, it is his original undertaking, and not a promise to answer for the debt of another." See further upon this distinction, Watkins v. Perkins, 1 Ld. Eaym. 224 ; Harris v. Huntbach, 1 Burr. 371 ; Jones v. Cooper, 1 Cowp. 227 ; Matson V. Wharam, 2 T. R. 80 ; Anderson a. Hayman, 1 H. Bl. 120 ; Keate v. Temple, 1 B. & P. 158 ; Ston- v. Scott, 6 C. & P. 241 ; Planders v. Crolius, 1 Duer, 206. 8 See cases in preceding note. * See Matthews v. Milton, 4 Yerg. 576 ; Gardiner v. Hopkins, 5 Wend. 23 ; Graham V. O'Neil, 2 Hall, 474 ; Porter v. Langhom, 2 Bibb, 63. And see cases cited supra, n. (1). * See cases, supra. [81J 74* ELEMENTS OF MERCANTILE LAW. [CH. VII. buyer ; and, consequently, that his promise cannot be enforced if not in writing. And, in general, in determining this question, the court will always look to the actual character of the transac- tion, and the intention of the parties.^ It is quite certain, as has been said, that the party for whom the promise has been made, must be liable to the party to whom it is made.^ And if a promise or undertaking be once shown to be original, and not collateral, as we have endeavored to explain and illustrate "those terms, it can never be brought within the operation of the statute. This is a rule to which there is no exception that we are aware of. But the converse does not hold universally. For, though it is generally true, as we have said, that collaleral promises are within the statute, there are several , cases in the books of collateral promises to which it has been held that the statute did not apply. Many attempts have been made to discover a principle which would explain all these cases, and serve as a test in the future for distinguishing those collat- eral promises which are, from those which are not, within the statute. Chief Justice Kent stated the principle thus : " When the promise to pay the debt of another arises out of some new and original consideration of benefit or harm, moving between the newly contracting parties, it is not within the statute."^ But this wiU scarcely explain all the cases, though it may most of them. We should prefer to state the distinction thus : When- ever the main purpose and object of the promisor is not to answer for another, but to subserve some purpose of his own, his promise is not within the statute, although it may be in form a promise to pay the debt of another, and although the perform- ance of it may incidentally have the effect of extinguishing the liability of another.* If by a new promise an old debt is extinguished, the promise is not within the statute, but it is considered as an original promise.^ 1 Keato V. Temple, 1 B. & P. 158. - Hargreavea v. Parsons, 13 M. & W. 561 ; Eastwood v. Kenyon, 11 A. & E. 438 ; Pearce v. Blagvave, C. B. 1855, 30 Eng. L. & Eq. 510; Pratt v. Humphrey, 22 Conn. 317 ; Preble v. Baldwin, 6 Gush. 549 ; Alger v. Scoville, 1 Gray, 391. ^ Leonard v. Vrcdenburgh, 8 Johns. 29. ■• Sec Nelson v. Boynton, 3 Met. 396; Alger v. Scoville, 1 Gray, 391. And see 2 Parsons on Cont. 305 et seq., where the cases on this subject are collected. s Goodman v. Chase, 1 B. & Aid. 297 ; Lane v. Burghart, 1 Q. B. 933 ; Curtis v. Brown, 5 Cash. 488 ; Bird v. Gammon, 3 Bing. N. C. 883. [82] CH. VII.] STATUTE OF FRAUDS. *75 An oral promise to pay the debt of another, and to do some other thing, can be enforced at law, if this other thing, and so much of the promise as relates to it, can be severed from the debt of the other and the promise relating to it.^ SECTION m. OP AN AGREEMENT NOT TO BE PERFOHMED WITHIN A YEAR. Under the fifth clause in the fourth section, it is held that an agreement which may be performed within the year, is not •affected by the statute, as the words, " that is not to be performed within one year," do not apply to an agreement which, when made, was, and by the parties was understood to be, fairly ca- *pable of complete execution within a year, without the interven- tion of extraordinary circumstances, — although in point of fact its execution was extended much beyond the year.^ 1 Mayfield v. Wadsley, 3 B. & C. 357 ; Wood v. Benson, 2 Cromp. & J. 94 ; Rand V. Mather, 11 Cusli. 1. 2 An agreement may be ineapable of performance within a year, either from the ex- press terms of the agreement itself, or from its subject-matter, and in either case it is witliin the statute. Tlius, in Bracegirdle v. Heald, 1 B. & Aid. 722, it was hdd that a contract made on the 27th of May, for a year's service, to commence on the 30th of June following, was within the statute. So, where A, on the 20th of July, made pro- posals to B to enter liis service as bailiff for a year, and B toolc the proposals and went away, and entered into A's service on the 24th of July, it was hdd that this was a con- tract on the 20th, and so not to be performed within the space of one year fi-om the making, and within the 4th section of the Statute of Frauds. Snelling v. Lord Hunt- ingfield, 1 Cromp. M. & K. 20. Again, in Birch v. The Earl of Liverpool, 9 B. c& C. 392, it was hdd that a contract whereby a coachmaker agreed to let a carriage for a term of five years, in consideration of receiving an annual payment for the use of it, was within the statute. And see Hill v. Hooper, 1 Gray, 131. So, if it is clear, from the whole scope of a contract, taking into view its subject-matter and tlie stipulations of the parties, that the parties contemplated more than a year, as the period for its per- formance, it is within the statute. See Boydell «.,Drummond, 11 East, 142 ; Herrin v. Butters, 20 Maine, 119. But where the time for the performance of a contract is made to depend upon some contingency, which may or may not happen witliin a year, the contract is not within the statute. This was decided against the opinion of Holt, C. J., in the case of Peter v. Compton, Sldn. 353. There, the defendant promised for one fuinea to give the plaintiff so many guineas on the day of his marriage. And it was eld that the plaintiff was entitled to recover, although the agreement was not in writ- ing. And see Eenton v. Emblers, 3 Burr. 1278 ; Wells v. Horton, 4 Bing. 40. And tills doctrine has been carried so far as to include a case where one undertakes to ab- stain from doing a certain thing, without limitation as to time, on the ground that such a contract is in its nature binding only during tlie life of the party. Thus, in Lyon V. King, 11 Met. 411, the defendant, for a good consideration, promised the plaintiff that he would not thereafter engage in the staging or the livery stable business in [83] 76* ELEMENTS OP MERCANTILE LAW. [CH. VII. SECTION IV. OF THE ACCEPTANCE OF A THIXG SOLD. Under the exceptional clause in the seventeenth section, '^ un- less the buyer shall accept and actually receive the same," it is clear that a mere delivery is not enough, without a distinct ac- ceptance by the buyer. But any thing would amount to a delivery and acceptance, * which was intended to be so, and was received as such, and which actually put the goods within the reaph and power of the buyer.^ If the sale: be complete, and the bargain is for imme- " diate delivery; and the seller asks the buyer to lend him the chattel for a time, to which the buyer assents, and therefore does not at once take it away, but permits the seller to keep it, this has been recently held in England to be an acceptance under the siatute.^ The symbolical deliveries before mentioned, as the delivery of the key of a warehouse,^ or an entry in the books of the ware- house keeper,^ or indorsement and delivery of a bill of lading, or even of a receipt, in many cases,^ or a delivery of a part of one Southbridge. And the court held that the contract was not within the statute. Dewey, J., said : " The contract might liave been wholly peiformed within a year. It was a personal engagement to forbear doing certain acts. It stipulated nothing beyond the defendant's life. It imposed no duties upon his legal representatiTcs, as might hare been the case under a contract to perform certain positive dnties. The mere fact of abstaining from pursuing the staging and livery stable business, and the happening of his death during the year, would be a full performance of this contract. Any stipula- tion in the contract, looking lioyond the year, depended entirely upon the contingency of the defendant's life ; and this being so, the case falls within the class of cases in which it has been lield that the statute does not apply." And see Foster v. McO'Blenis, 18 Misso. 88. Souch v. Strawbridge, 2 C. B. 808 ; Dobson v. CoUis, 1 H. & N. 81 . For a more full collection of eases on this clause of the statute, see 2 Parsons on Cont. 316 et seq. 1 Pliillips V. BistoUi, 2 B. & C. 511 : Parker v. Wallis, 5 Ellis & B. 21 ; Holmes v. Hoskins, 9 Exch. 753 ; Dole v. Stimpson, 21 Pick. 384 ; Tempest v. Fitzgerald, 3 B. & Aid. 680 ; Howe v. Palmer, 3 B. & Aid. 321 ; Maberley r. Shcppard, 10 Bing. 99 ; Carter v. Toussaint, 5 B. & Aid. 855 ; Baldey i'. Parker, 2 B. & C. 37 ; Bill v. Bament, 9 IM, & W. 41 ; Shindler v. Houston, 1 Denio, 48, 1 Comst. 261. ^ Marvin v. Wallis, 6 Ellis & B. 726. Sec also, as to acceptance, Taylor v, Wake- field, id. 765. 8 Wilkes V. Ferris, 5 Johns. 335 ; Chappel v. Marvin, 2 Aikens, 79. * Harman v. Anderson, 2 Camp. 243. 5 Peters v. Ballistier, 3 Pick. 495 ; Wilkes v. Ferris, 5 Johns. 335 ; Soarle v. Keeves, 2 Esp. 598; Harman v. Anderson, 2 Camp. 243 ; Withers v. Lyss, 4 id. 237 ; Tucker [84] CH. Vir.] STATUTE OF FKAUDS. -76 whole, without the intention of separating it from the rest, are sufficient.! But some of many distinct and severable things may be delivered without this operating as a delivery of the rest.^ If several owners make a joint sale, and one of them delivers a part of his portion, this delivery is said to satisfy the statute.^ Whether the delivery of a part was intended as a delivery of the whole, is a question of fact for the jury.* The delivery of a sam- ple is not sufficient, unless it be delivered as a part of the thing sold.^ The subject of delivery has also been considered in the chapter on Sales. If the buyer receives the goods, but reserves the right of return- ing them and rescinding the sale if they are not satisfactory, or as represented, this we should hold to be a conditional accept- ance, which does not suffice to take the case out of the statute, until this reserved right be extinguished by lapse of time or otherwise. But there has been much litigation on this question, and there is still some uncertainty.^ " Earnest " must be given and received as such to make the sale valid under the clause of the statute relating to it.'^ And part-payment, to have the effect of earnest, must be actual, and not a mere agreement that something else, as a discharge of an existing debt, shall be taken as part-payment.^ V. Euston, 2 C. & P. 86. But see Farina v. Home, 16 M. & W. 119 ; Bentall v. Burn, 3 B. & C. 423 ; Lackington v. Atherton, 7 Man. & G. 360 ; Godts v. Eose, 17 C. B. 229, 33 Bng. L. & Eq. 268. And see ante, p. 45, n. 3. 1 Slubey v. Heyward, 2 H. BI. 504 ; Hammond v. Anderson, 4 B. & P. 69 ; Elliott V. Thomas, 3 M. & W. 170 ; Scott v. The Eastern Counties Railway Co. 12 M. & W. 33 ; Biggs v. Wisking, 14 C. B. 195, 25 Eng. L. & Eq. 257 ; Mills v. Hunt, 20 Wend. 431 ; Da-vis v. Moore, 13 Maine, 424. 2 Price V. Lea, 1 B. & C. 156 ; Seymour v. Davis, 2 Sandf. 239. s Field V. Bunk, 2 N. J. 525. * Pratt V. Chase, 40 Me. 269. 5 Talver v. West, Holt, N. P. 178 ; Johnson v. Smith, Anthon, N. P. 60, id. 81, 2d ed. ; Hinde v. Whitehouse, 7 East, 558 ; Gardner v. Grout, 2 C. B., N. s. 341. 8 See per Parke, J., in Smith v. Surman, 9 B. & C. 561, 577 ; Norman v. Phillips, 14 M. & W. 277 ; Howe v. Palmer, 3 B. & Aid. 321 ; Hanson v. Armitage, 5 B. & Aid. 557; Acebal v. Levy, 10 Bing. 376; Cunliffe v. Harrison, 6 Exch. 903; Curtis v. Pugh, 10 Q. B. 511 ; Morton v. Tibbett, 15 Q. B. 428 ; Hunt v. Hecht, 8 Exch. 814, 20 Eng. L. & Eq. 524. ' Blenkinsop v. Clayton, 7 Taunt. 597. 8 Walker v. Nussey, 16 M. & W. 302. 8 [85] 77 ELEMENTS OF MERCANTILE LAW. [CH. VII. SECTION V. OF THE FORM AND SUBJBCT-MATTEK OF THE AGREEMENT. The " agreement " must be in writing ; and parol evidence cannot be received to supply any thing which is wanting in the writing to make it the written agreement on which the parties rely.i But generally, in this country, the writing need not con- tain or express the consideration, which may be proved other- wise.2 Nor need it be all on one piece of paper. For it is sufficient if on several pieces, as in several letters, which, how- ever, relate to one and the same business, and may fairly be read together as the statement of one transaction.^ This connection of the several parts cannot be shown by extrinsic evidence.* The " signature " may be in any part of the paper — the begin- ning, middle, or end,^ except in those of our States in which the statute has the word " subscribe " instead of " signed ; " in which case it is said that it must be in the usual place at the bottom.^ If the name and the agreement be printed, it is sufficient ; '' hence, a printed shop bUl, with the name of the seller, as ixsual, at the 1 Salmon Falls Manuf. Co. v. Goddard, 14 How. 446. 2 Packard v. Richardson, 17 Mass. 122 ; Sage v. Wilcox, 6 Conn. 81 ; Tufts v. Tufts, 3 "Woodb. & M. 456 ; Reed v. Evans, 17 Ohio, 128 ; Gillighan v. Boardman, 29 Me. 79. But in some of the States, the English doctrine, which requires the consideration to be expressed in writing, has been adopted. See Scars v. Brink, 3 Johns. 210; Ben- nett V. Pratt, 4 Denio, 275 ; Staats v. Howlctt, id. 559 ; Wj'man i'. Gray, 7 Harris & J. 409 ; Elliott v. Geise, id. 457 ; Edelen v. Gougli, 5 Gill, 103. The le.iding English case is Wain v. Warlters, 5 East, 10. See also. Powers v. Eowler, 4 Ellis & B. 511, 30 Eng. L. & Eq. 225. In cases under the 17tli section, where the word agreement does not occur, it has been Mrf that the consideration need not be expressed. Egerton v. Mathews, 6 East, 307 ; Marshall v. Lynn, 6 M. & W. 118, per Alderson, B. 8 Brcttel 0. Williams, 4 Exch. 623 ; Tawney v. Crowther, 3 Bro. C. C. 318 ; Saun- derson v. Jackson, 2 B. & P. 238 ; Eorstcr v. Hale, 3 Ves. 696 ; Ide v. Stanton, 15 Vt. 685. * Clinan v. Cooke, 1 Sch. & L. 22 ; Brodie v. St. Paul, 1 Ves. 326 ; Parkhurst v. Van Cortlandt, 1 Jolins. Ch. 273. ^ Propert v. Parker, 1 Russ. & M. 625 ; Johnson v. Dodgson, 2 M. & W. 653 ; Mer- ritt V. Clason, 12 Johns. 102, nom. Clason v. Bailey, 14 id. 484 ; Saunderson v. Jackson, 2 B. & P. 238. But if the signature be only at the beginning or in the body of the in- sti-ument, and it cannot be reasonably inferred from tlie whole agreement and the cir- cumstances of the case, that it was placed there for the pm-poso of rendering tlie agree- ment binding, it will not be sufficient. Stokes v. Moore, 1 Cox, 219 ; Cabot v. Haskins, 3 Pick. 83 ; Cowie v. Eemfiy, 10 Jur. 789. " Davis V. Shields, 24 Wend. 322, 26 id. 341 ; Vielie v. Osgood, 8 Barb. 130. But see James v. Patten, id. 344. ' Saunderson v. Jackson, 3 Esp. 180, 2 B. & P. 238. [86] CH. VII.] STATUTE OF FRAUDS. *78 beginning, if delivered to the buyer, is sufficient to charge the seller in an action for refusing to deliver the goods.i An entry by the seller in his order book, on the fly-leaf of which at the beginning, his name was written, and a signature by the buyer at the foot of the entry, was held to be a signature by both par- ties." Shares in railroad companies, manufacturing companies, and, we think, in all corporations and joint-stock companies, are " goods, wares, or merchandises," within the statute.^ Whether a sale of a promissory note be within the statute is not certain upon the authorities.* * We think — in opposition to certain authorities, but in accord- ance with those of more recent date — that an executory con- tract for sale is within the statute.^ So a contract for an article not now the seller's, or not existing, and which must therefore be bought or manufactured before it can be delivered, will also be within the statute, if it may be procured by the seller by pur- chase from any one, or manufactured by himself at his choice, the bargain being, in substance as well as form, only that the seller shall, on a certain day, deliver certain articles to the buyer for a certain price.^ But if the bargain be rather that the one party shall make a certain article, and deliver it to the other party, who shall thereupon pay him for his materials, skill, and labor, this is not a contract of or for sale, but an agreement to hire and pay for work and labor, — or to employ that party in a certain way ; and it is not within the Statute of Frauds as a contract for the sale of goods, wares, or merchandises.^ 1 Schneider v. Norris, 2 M. & S. 286. 2 Sari V. Bourdillon, 1 C. B., n. s. 188. 8 Tisdale v. Harris, 29 Pick. 9 ; Colviu v. Williams-, 3 Harris & J. 38 ; North v. For- est, 15 Conn. 400. See also, Life Ins. & Trust Co. v. Cole, 4 Fla. 359. It is held otherwise in England, Humble v. Mitchell, 11 A. & E. 205; Duncuft v. Albrecht, 12 Sim. 189; Heseltine v. Siggers, 1 Exch. 856. * See Baldwin v. Williams, 3 Met. 365 ; Whittemore v. Gibbs, 4 Foster, 484 ; Beers V. Crowell, Dudley, Ga. 28. 5 Bondeau u. Wyatt, 2 H. Bl. 63 ; Cooper v. Elston, 7 T. E. 14 ; Bennett v. Hull, 10 Johns. 364 ; Jackson v. Covert, 5 Wend. 139 ; Downs v. Ross, 23 id. 270; Garbutt V. Watson, 5 B. & Aid. 613 ; Smith v. Sunnan, 9 B. & C. 561. <' See next note. But see, contra, Sewall i;. Fitch, 8 Cowen, 215; Robertson v. Vaughn, 5 Sandf. 1. ' Hightw. Ripley, 19 Maine, 137; Gardner v. Joy, 9 Met. 177; Mixer v. Howarth, 21 Pick. 205 ; Spencer v. Cone, 1 Met. 283 ; Lamb v. Crafts, 12 id. 353 ; Waterman v. Meigs, 4 Cush. 497; Watts v. Friend, 10 B. & C. 446. In Hight v. Ripley, supra, Shepley, C. J., said : "It may.be considered as now settled that the Statute of Frauds [87] 79* ELEMENTS OF MERCANTILE LAW. [CH. VII. The operation of the statute in the clauses we have considered, is not to avoid the contract, but only to inhibit and prevent actions from being brought upon it. In all other respects, it is vaHd.i It may be further remarked that the operation of the statute * has been always limited to such executory contracts as have not been executed in any substantial part.^ embraces executory as well as executed contracts for the sale of goods. But it does not prevent parties from contracting verbally for the manufacture and delivery of articles. The only difficulty now remaining is, to decide whether the contract be one for the sale, or for the manufacture and delivery of the article. It may provide for the application of labor to materials already existing partially or wholly in the form designed, and that the article improved by the labor shall be transferred from one party to the other. In such cases, there may be difEculty in ascertaining the intentions ; and the distinction may be nice, whether it be a contract for sale or for manufacture. . . A contract for the manufacture of an article differs from a contract of sale in this ; the person ordering the article to be made, is under no obligation to receive as good or even a better one of the like kind purchased from another, and not made for him. It is the peculiar skill and labor of the other party, combined with the materials, for which he contracted, and to which he is entitled." 1 Cahill V. Bigelow, 18 Pick. 369 ; Dowdle v. Camp, 12 Johns. 451 ; Souch v. Straw- bridge, 2 C. B. 808; Crane v. Gough, 4 Maryland, 316; Leroux v. Brown, 12 C. B. 801, 14 Eng. L. & Eq. 247. In this last case, the plaintiff, who was a resident of Cal- ais, in France, entered into a parol agreement with the defendant, who resided in Eng- land, to serve him as clerk and agent for one year, from a future day ; and it was held that the case came within the Statute of Erauds, and that an action on the contract could not be maintained in England ; but that this decision did not prevent the plaintiff from enforcing the agreement by a bill in equity, or by an action on the contract in France ; that the statute does not say that the contract is void ; but only that " no action shall be brought upon it." Jervis, C. J., said : " I am of opinion that this rtde must be made absolute. There has been no discussion at the bar as to the principles which ought to govern our decision. It is admitted by the plaintiff's counsel, that if the 4th section of the Statute of Frauds applies, not to the validity of the contract, but only to the mode of procedure upon it, then that, as there is no ' agreement, or memorandum, or note thereof ' in writing, this action is not maintainable. On the other hand, it is not denied that, if that section applies to the contract itself, or, as BouUenois says, to the ' solemnities of the contract,' inasmuch as our law does not affect to jegulate for- eign contracts, the action is maintainable. On consideration, I am of opinion that the 4th section does not apply to the ' solemnities ' of the contract, but to the proceedings upon it; and therefore, that this action cannot be maintained. The 4th section, looked at in contrast with the 1st, 2d, 3d, and 17th, leads to this conclusion. The words are: ' No action shall be brought whereby to charge any person 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 therewith, or some other person thereto by him lawfully authorized.' It does not say that, unless those requisites are complied with, the contract shall be void, but only that ' no action shall be brought upon it ; ' and, as put by Mr. Honyman with great force, the alternative requiring the 'agreement or some memorandum thereof to be in writing, shows that the legislature contemplated a contract, good before any writing, but not enforceable without the writing as evidence of it." 2 Stone V. Dennison, 13 Pick, 1 ; Davenport v. Mason, 15 Mass. 85, 93; Cocking V. Ward, 1 C. B. 858 ; Kelly v. Webster, 12 id. 283. And see 2 Parsons on Cont. 319 [88] CH. VIII.] PAYMENT. 80 CHAPTER VIII. * OF PAYMENT. SECTION I. HOW PAYMENT MAY BB MADE. The obligations which arise out of many mercantile contracts are to be satisfied by payment of money. The parties may always agree to any specific manner of payment, and then that becomes obligatory on the creditor as well as the debtor. As, by deducting the amount to be paid from a debt due to the debtor either from the creditor or from any one else.^ Or the amount may be made by agreement payable by a bill or note. If the debt is to be paid by a bill, it must be such a bill as is agreed upon, and this must be tendered by the debtor. But the word " bill " does not necessarily mean an " approved bill ; " and if this phrase be itself used, it means only a biU to which there is no reasonable objection.^ In the absence of any especial agreement, the only payment 1 Owens V. Denton, 5 Tyrw. 360. So, also, an agreement that goods furnished by the debtor shall go in satisfaction of the debt, is equivalent to an actual payment. Hooper v. Stephens, 4 A. & E. 71 ; Hart v. Nash, 2 Cromp. M. & E. 337. 2 Thus, in Hodgson ;;. Davies, 2 Camp. 530, which was an action for refusing to deliver goods purchased by the plaintiff of the defendant, to be paid hy bill, the plaintiff proved thnt he had tendered his own acceptances in payment ; whereupon the defend- ant offered to call witnesses to prove that by bill is meant an approved bill, and that the seller is not bound to deliver the goods, unless he approves of the bill offered in pay- ment by the purchaser. But Lord Elknborough said : "I cannot receive the evidence. The contract must speak for itself Even if the phrase approved bill were introduced, I think it could only mean a bill to which no reasonable objection could be made, and which ought to be approved. To allow the seller in an arbitrary manner to repudiate the bill, would be to enable him, according to his interest or caprice, to annul a con- tract by which the purchaser is absolutely bound. 8* [89] 81* ELEMENTS OF MERCANTILE LAW. [CH. VIII. known to the law is by cash, which the debtor must pay when it is due, or tender to the creditor. The tender should, properly, be in cash, and must be so if that * is required ; but a tender in good and current bank-bills is suffi- cient, unless it be objected to because they are not money.i Generally, if thf tender be refused for any express and spe- cific reason, the creditor cannot afterwards take advantage of any informality, to which he did not object at the time of the tender.^ The tender may be of a larger sum than is due.^ But a tender of a larger sum, with a requirement of change or of the balance, is not good.* Nor must it be accompanied with a demand or condition that any instrument or document shall be delivered ; nor that the sum tendered shall be received as all that is due ; nor that a receipt in full shaU be given.^ But it seems that a simple receipt for so much money paid may, perhaps, be de- manded.s s^q ji^yg already seen that, if a receipt be given, it is only primd facie and strong evidence of payment, but not con- clusive. And even if it be " in full of all demands," it is still open to explanation or denial by evidence.'^ A lawful tender, and payment of the money into court, is a 1 Snow V. Perry, 9 Pick. 542 ; Warren v. Mains, 7 Johns. 476 ; Hoyt v. Byrnes, 2 Pairf. 475; Tiley v. Courtier, 2 Cromp. & J. 16, n.; Wright v. Reed, 3 T. R. 554; Polglass V. Oliver, 2 Cromp. & J. 15 ; Coxe v. State Bank, 3 Halst. 172 ; Moody v. Ma- hurin, 4 K H. 296 ; Donaldson u. Benton, 4 Dev. & B. 435; M'Clarin v. Nesbit, 2 Nott & McC. 519. 2 Cole V. Blake, Pcake, 179; Richardson u. Jackson, 8 M. & W. 298 ; Bull v. Par- ker, 2 Dowl. N. s. 345. 8 Astley V. Reynolds, 2 Stra. 916; Wade's case, 5 Rep. 115; Dean v. James, 4B.& Ad. 546 ; Douglas v. Pati-ick, 3 T. R. 683 ; Black ;;. Smith, Peake, 88 ; Cadman u. Lubbock, 5 Dowl. & R. 289 ; Bevans v. Recs, 5 51. & W. 306. * Betterbee v. Davis, 3 Camp. 70. And see Robinson v. Cook, 6 Taunt. 336 ; Blow V. Russell, 1 C. & P. 365. 5 Thus, in Glasscott v. Day, 5 Esp. 48, the sum claimed by the plaintiff was £20. The defendant pleaded non assumpsit, except as to il8, and as to that, a tender. The witness for the defendant, who proved the tender, stated that he went to the plaintiiT with the money, which be offered to pay on the plaintiffs giving him a receipt in full. The plaintiff refused to receive it. And Lord Ellenhorough held this not to be a good tender. So, in Thayer v. Brackctt, 12 Mass. 450, where the defendant, upon making a tender, demanded a receipt in full, Parker, C. J., said ; " The defendant lost the benefit of his tender by insisting on a receipt in full of all demands, which the plaintiff was not obliged to give him. The defendant should have relied on his tender, and upon proof at the trial that no more was due. But he withdrcAv the tender, because the plaintiff would not comply with the terms which accompanied it. Tliis cannot be deemed a lawful tender." 8 See 2 Parsons on Contracts, pp. 155, 156, n. {/). ' See ante, p. 23, u. 1. [90] . CH. VIII.] PAYMENT. *82 good defence to an action for the. debt.^ But the creditor may- break down this defence by proving that he demunded the money of the debtor, and the debtor refused to give it, subsequently to the tender.^ * If the buyer or debtor give, and the seller or creditor receive, a negotiable note or biU for the sum due, this is not anywhere absolute and conclusive payment. In Maine and in Massachu- setts, the law presumes that such note or bill is payment of the debt, unless a contrary intention is shown.^ In England, in the other States of this Union, and in the Supreme Court of the United States, it is not payment unless the intention of the par- ties that it should be so, is shown.* In New York, it has been held that the debtor's own promissory note is not payment, even if it be intended or expressly agreed that it should be.^ If a creditor who receives from his debtor any bill or note, negotiates or sells it for value to a third party, without making himself liable, it is still payment, although it be dishonored, because it has been good to him and he has received the avails of it ; and if it is not held payment, he can recur to his original debtor, and then he will have the value of the bill, or payment, twice.^ Not so, however, if he negotiates it in such a way as to make himself liable upon it.'' SECTION II. OF APPEOPEIATION OP PAYMENT. If one who owes several debts to his creditor makes to him a general payment, it may be an important question to which of 1 Dixon V. Clark, 5 C. B. 365 ; Waistell v. Atkinson, 3 Bing. 290 ; Law v. Jackson, 9 Cowen, 641 : Carley v. Vance, 17 Mass. 389 ; Cornell v. Green, 10 S. & E. 14 ; Gofif u. Relioboth, 2 Cush. 475. 2 See cases supra, 3 Ilsley V. Jewett, 2 Met, 168; Butts v. Dean, id. 76 ; Watkins v. Hill, 8 Pick. 522 ; Varner v. Nobleborough, 2 Greenl. Bennett's ed. 121, and n. (o) ; Bangor v. Warren, 34 Maine, 324 ; Fowler v. Ludwig, id. 455 ; Shumway v. Eeed, id. 560. * Peter V. Beverlv, 10 Pet. 567; Wallace v. Agry, 4 Mason, 336 ; Van Ostrand v. Reed, 1 Wend. 424"; Burdick v. Green, 15 Johns. 247 ; Hughes c/. Wheeler, 8 Cowen, 77 ; Bill V. Porter, 9 Conn. 23. s Prisbie v. Lamed, 21 Wend. 450; Cole v. Sackett, 1 Hill, 516; Waydell v. Luer, 5 Hill, 448, 3 Denio, 410. 6 Bunney v. Poyntz, 4 B. & Ad. 568. ' Miles V. Gorton, 4 Tyrwh. 295. Bee post, p. 124. [91] 83* ELEMENTS OF MERCANTILE LAW. [CH. VIII. those debts this payment shall be appropriated ; for some of them may be secured, and others not, or some of them carry interest, and others not, or some of them be barred by the Statute of Limitations, and others not. There is no doubt that the payor may appropriate his pay- ment, at the time of the payment, at his own pleasure.^ And if * he does not exercise this right, perhaps it is as certain that the receiver may, at the time of payment, make the appropriation.^ But if neither party does this at that time, and at a future period the question comes up as to which party may then make the appropriation, or, rather, how the law wUl then appropriate the payment, there is more difficulty .^ Upon the whole, we should prefer to state, as the better and prevailing rule, that, if the court can ascertain, either from the words used, or from the circum- stances of the case, or from any usage, what was the intention and understanding of the parties at the time of the payment, that intention will be carried into effect. And if this cannot be ascertained, then the court will direct such appropriation of the payment as will best protect the rights and interests of both parties, and do justice between them.* And one reason for this 1 Cremer V. Higginson, 1 Mason, 338; Tayloe v. Sandiford, 7 Wheat. 13; "West Branch Bank v. Moorehead, 5 Watts & S.- 542 ; Stone v. Seymour, 15 Wend. 19 ; Newmarch v. Clay, 14 East, 239 ; Shaw v. Picton, 4 B. & C. 715. 2 Peters w. Anderson, 5 Taunt. 596; Bosanquet u. Wray, 6 id. 597; Goddard v. Cox, 2 Stra. 1194 ; Plomer v. Long, 1 Stark. 153 ; Marryatts v. White, 2 id. 101. 3 In England, it seems to bo held that the creditor need not make the appropriation at the time of the payment, but may do it at any time before the trial. Thus, in Simp- son V. Ingham, 2 B. & C. 75, Best, J., said : "It is true that Su: William Grant says, in Clayton's case, that, by the civil law, the application is given first to the debtor, and then to the creditor, and that as well the creditor as the debtor must make his election at the time of payment ; and that, unless election be immediately made, the law will appropriate it in discharge of the most burdensome, and if all are equally burdensome, of the oldest debts. But, according to tlie cases there cited, our law does not require of the creditor an instant decision. I think that he has a reasonable time to decide to which account be will place a sum that has been paid him without any application of it by his debtor." And see the later case of Philpott v. Jones, 2 A. & E. 41, where Taunton, J., said the creditor might make the application " at any time before the case came under the consideration of a jury." * Field V. Holland, 6 Cranch, 8, 27 ; United States t/. Wardwell, 5 Mason, 82 ; Smith 11. Lord, 11 Leigh, 512 ; Callahan v. Boazman, 21 Ala. 246 ; United States v. Kirkpatrick,' 9 Wheat. 720, 737. In this last case, the defendants were obligees of a bond to indemnify the plaintiffs against any loss by their collector during the period of his first commission ; and a question arose, whether the plaintiffs could appropriate pay- ments, made by the collector during that time, to debts accruing subsequently. Story, J., said : " The general doctrine is, that the debtor has a right, if he pleases, to make the appropriation of payments ; if he omits it, the creditor may make it ; if both omit it, the law will apply the payments according to its own notions of justice. It is cer- tainly too late for either party to claim a right to make an appropriation, after the con- troversy has arisen, and a fortiori at the time of the trial. In cases like the present, of [92] CH. VIII.] PAYMENT. -83 conclusion would be, that the law would presume that this was the original intention of the parties. If the debtor owes two debts, and one is barred by the Statute of Limitations and the other not, the payment may be appropri- ated to the earlier debt, if nothing is said by the debtor in respect to it.i But by the weight of authority the creditor may not make use of this payment to revive the debt and remove the bar of the statute.^ long and running accounts, where debits and credits are perpetually occurring, and no balances are otherwise adjusted than for the mere purpose of making rests, we are of the opinion that payments ought to be applied to extinguish the debts according to the priority of time ; so that the credits are to be deemed payments pro tanlo of the debts antecedently due." 1 Mills V. Fowkes, 5 Bing. N. C. 455 ; Logan v. Mason, 6 Poster, 85 ; Watt v. Hoch, 25 Penn. State, 411. 2 Mills V. Fowkes, 5 Bing. N. C. 455 ; Nash v. Hodgson, 6 De G., M. & G. 474, 31 Eng. L. & Eq. 555 ; Pond v. Williams, 1 Gray, 630. But see Ayer v. Hawkins, 19 Vt. 26. [93] 84 ELEMENTS OF MERCANTILE LAW. [CH. IX. CHAPTER IX. OF NEGOTIABLE PAPER. SECTION I. OF THE PURPOSE OP AND PARTIES TO BILLS AND NOTES. Where and when bills of exchange were invented, is not certainly known. They were not used by any ancient nations, but have been employed and recognized by most commercial nations for some centuries. A still more recent invention is the promissory negotiable note, which, in this country, for inland and domestic purposes, has taken the place of the bill of ex- change very generally. Besides these two, bills of lading, and some other documents, have a kind of negotiability, but it is quite imperfect.^ The utility of bills and notes in commerce arises from the fact that they represent money, which is the representative of every thing else ; and many of the peculiar rules respecting negotiable paper, are derived from, and intended to make this representation adequate and effectual. A negotiable bill of exchange is a written order whereby A orders B to pay to C, or to his order, or to bearer, a sum of money, absolutely and at a certain time. A is the Drawer, B the Drawee, and C the Payee. If the bill is presented to B, and he agrees to obey the order, which he does in a mercantile way by writing the word " accepted " across the face of the bill, and also writing his name below this word, the drawee then becomes the Acceptor. If C, the payee, choose to transfer the paper and all his rights under it to some other person, he may do this by 1 Sec Thompson ;;. Dominy, 14 M. & W. 403. [94] CH. IX.] NEGOTIABLE PAPER. *8o writing his name on (usually across) the back ; this is called indorsement, and C then becomes an Indorser. The person to whom C thus transfers the bill is an Indorsee. He may again transfer the bUl by writing his name below that of the former Indorser, and the Indorsee then becomes the second Indorser ; * and this process may go on indefinitely. If the added names cover all the back of the note, a piece may be wafered on to receive more. In Prance, this added piece is called " allong'e" and this word is used in some text-books, but not by our mer- chants. A negotiable promissory note is a written promise to pay to a certain person or his order, or to bearer, at a certain time, a cer- tain sum of money. He who signs this is called the Maker or the Promisor ; the other party is the Promisee or Payee. The payee of such a note has the same power of indorsement as the payee of a bill of exchange. If the note be not payable to order, nor to bearer, it is then not negotiable ; but it has been held that, if such a note be indorsed by the payee, payable to some person or his order, this becomes negotiable as between the indorser and indorsee, and subsequent parties. Such an indorse- ment may in fact be regarded as a bill of exchange, drawn by the payee of the note upon the maker, in favor of the person to whom the note is indorsed.^ The maker of a negotiable note holds much the same position as the acceptor of a bill, the drawer much the same as the first indorser of a note ; that is, a party holding a note and seeking payment of it, looks first to the maker, and then to the indorser. One holding a bill, looks first to the drawee or acceptor, and, on his failure, to the drawer. Neither indorsement nor acceptance, nor, indeed, making, are complete until delivery and reception of the bill or note, or acceptance ; and a defendant may show that there was no legal delivery of the paper.^ 1 Leidy v. Tammany, 9 Watts, 353 ; Brenzer v. Wightman, 7 Watts & S. 264 ; Elkinton v. Pennimore, 13 Penn. State, 173. 2 Chamberlain v. Hopps, 8 Vt. 94; Adams v. Jones, 12 A. & E. 455; Brind v. Hampshire, 1 M. & W. 365 ; Marston v. Allen, 8 M. & W. 494 ; Buckley v. Hann, 5 Exch. 43 ; Emmett v. Tottenham, 8 Exch. 884, 20 Eng. L. & Eq. 348 ; Sainsbmy v. Parkinson, Exch. H. T. 1852, cited 20 Eng. L. & Eq. 351. See also, Hall y. Wilson, 16 Barb. 548. Perhaps, however, the proposition in the text should be qualified so far as regards an acceptance. In Kegina v. Birch, 1 Lownd. & Max. 56, ». c. nom. Wilde V. Sheridan, 1 1 Eng. L. & Eq. 380, where an acceptance was written on a bill in Lon- [95] 86 ELEMENTS OF MERCANTILE LAW. [CH. IX. The law of negotiable paper first defines a bill or note, and determines what instruments come under these names, and then describes and ascertains the duties and obligations of all the parties we have named above. We shall follow this order. SECTION II. WHAT IS ESSENTIAL TO A BILL OR NOTE. 1. That the promise be absolute and definite. — The promise of the note, and the order of the bUl, must be absolute. Words expressive of intention in the one case, or a request which im- ports only to ask a favor, in the second case, are insufficient.^ But no one word, and no set of words, is absolutely necessary ; if from all the language the distinct promise or positive order can be inferred, that is sufficient.^ The time of payment is usually written in a bill or note ; if not, it is payable on demand. The time of payment must not be uncertain ; therefore, a promise is insufficient if it be to pay on one's marriage, or if certain terms are complied with, or on the sale of certain goods, or at thirty days after the arrival of a ship, or out of a certain expected payment when it should be made.3 5,^^ ^f j^ distinctly refers to an event which must hap- don, and the bill deliyered to the payee in Norwich, and the question was at which place the hill was accepted, it was held, per Coleridge, J., that the acceptance of a bill, though revocable at any time before delivery, is, if unrevoked, complete as soon as written on the bill ; and the contract is made in that place where the bill is accepted, not wlierc it is issued. And tlie learned judge thus distinguished an acceptance from an indorse- ment : " One puqiose of an indorsement is to pass the property in the bill, and that purpose is not effected until actual or constructive delivery. But the acceptor has no property in the bill, either before or after an acceptance ; he must be supposed to receive the drawer's paper, and on it to write his promise, mthout thereby in any way altering the property in the bill. He may, indeed, before any communication to the drawer of the act done, revoke it, according to Cox v. Troy, 5 B. & Aid. 474, and modern author- ities ; but Ills promise, unless so revoked, is complete and takes effect from the time when it was made." And see Smith v. M'Clurc, 5 East, 476 ; Eoff v. Miller, 19 Law J., C. P. 278, which support the same view. 1 Thus, in Little v. Slackford, Moody &, M. 171, a paper in these words, " Mr. L., please to let the bearer have £7, and place it to my account, and you will oblige j'our humble servant, R. S.," was held by Lord Tenterden not to be a bill of exchange. And see Home v. Redfern, 4 Bing. N. C. 433. 2 See Mon-is v. Lee, 2 Ld. Eaym. 1396 ; Ellison v. CoUingridge, 9 C. B. .570 ; Allen V. Sea Fire and Life Ins. Co. id. 574. 8 Beardesley v. Baldwin, 2 Stra. 1151 ; Pearson v. Garrett, 4 Mod. 242 ; Roberts v. [96] CH. IX.] NEGOTIABLE PAPER. *87 pen, as to one's death, it has been held good ; ^ and this has been extended to the paying off of a crew of a public vessel ; ^ but we doubt the soundness of this decision. In fact, any contin- gency apparent on the face of the instrument defeats it ; and the happening of the contingency does not cure it.^ And the pay- ment promised or ordered must be of a definite sum of money ; and, therefore, a promise to pay a certain sum " and all fines," is *not a promissory note.* But if the contingency be wholly in the payee's power, the note may still be good ; thus, a promise to pay a sum, with interest, in twelve months after notice, was held a good note.^ The promise or order to pay out of a certain fund, is not fatal, if this be merely descriptive or directory ;•> but if it must or should be construed as making the payment de- pend upon the fund, however ample and certain that may seem, it is a fatal contingency.'' So, an order to pay rents accruing to a certain time, or to pay over a sum out of money collected by an attorney, or an order drawn on the treasury by a public officer, is not a bill of exchange.^ Nor is a bill drawn by one government upon another for a treaty -payment, subject to the law-merchant as a bill, and incident to protest, damages, &c.^ An order drawn expressly for the whole of a particular fund, will operate as a transfer of that fund, although not recognizable as a bill of exchange.^" A bill of exchange or promissory note must be payable in money only, and not in goods or merchandise, or property of any kind, or by the performance of any act.^^ If payable in " current Peake, 1 Burr. 323; Hill v. Halford, 2 B. & P. 413 ; Clarke v. Percival, 2 B. & Ad. 660 ; Palmer v. Pratt, 2 Bing. 185 ; Haydock v. Lynch, 2 Ld. Raym. 1563 ; Sheltonu. Bruce, 9 Yerg. 24 ; De Forest v. Fraiy, 6 Cowen, 151. 1 Cooke V. Colehan, 2 Stra. 1217; Goss v. Nelson, 1 Burr. 226. 2 Andrews v. Franklin, 1 Stra. 24 ; Evans v. Underwood, 1 Wilson, 262. 8 Thus, in Seacord v. Burling, 5 Denio, 444, it was held that an agreement in writ- ing, by which the subscriber promised to pay another a sum of money on demand, with interest, and added, but no demand is to be made as long as interest is paid, was not a promissory note. See also, Richardson v. Martyr, Q. B. 1855, 30 Eng. L. & Eq. 365. * Ayi-ey v. Feamsides, 4 M. & W. 168. 5 Clayton v. Gosling, 5 B. & C. 360. « Macleed v. Snee, 2 Stra. 762. ' Haydock v. Lynch, 2 Ld. Raym. 1563 ; Dawkes v. De Loraine, 3 Wilson, 207; Yeates v. Grove, 1 Ves. Jun. 280 ; Carlos v. Fancourt, 5 T. R. 482. 8 Jenney v. Herle, 2 Ld. Raym. 1361 ; Crawford v. Cully, Wright, 453 ; Van Vacter V. Flack, 1 Smedes & M. 393 ; Reeside v. Knox, 2 Whart. 233 ; Morton v. Naylor, 1 Hill, 583. 9 United States v. Bank of the United States, 5 How. 382. 1" Copperthwaite v. Sheffield, 1 Sandf. 416. 11 Jerome v. Whitney, 7 Johns. 321 ; Thomas v. Roosa, id. 461 ; Atkinson v. Manks, 9 [97] 88* ELEMENTS OF MERCANTILE LAW. [CH. IX. funds," or " good bank-notes," or " current bank-notes," this should not be sufficient on general principles, and according to many authorities ; ^ some courts, however, construe this as mean- ing notes convertible on demand into money, and therefore as the same thing as money .^ A bill or note may be written upon any paper or proper substi- tute for it, in any language, in ink or pencil.-' A name may be * signed or indorsed by a mark ; * and, though usually written at the bottom, it may be sufficient if written in the body of the note ; as " I, A B, promise," &c. ; unless it can be shown that the note was incomplete, and was intended to be finished by signature.^ If not dated, it wiU be considered as dated when it was made ; but a written date is primd facie evidence of the time of making.^ The amount is usually written in figures at the corner or bottom. If the su^m is written at length in the body, and also in figures at the corner, it seems that the written words control the figures, and evidence is not admissible to show that the figures were right and the words inaccurate ; ^ but the omission of such a word as " dollars," or " pounds," or " sterling," may be supplied, if the meaning of the instrument is quite clear.^ 2. The payee must be designated. — The payee should be dis- tinctly named, unless the bill or note be made payable to bearer.^ 1 Cowen, 691, 707; Clark u. Kin,';, 2 Jlass. 524. And an instrament containing, in addition to a promise to pay money, stipulations to do otlier tilings, is not a promissory note. Austin v. Burns, 16 Barb. 643. Tliercfore, an instrument which contained a promise to deliver up horses and a wharf, and also to pay money at a particular day, was held not to be a promissory note. Martin v. Chauntry, 2 Stra. 1271. 1 M'Cormick v. Trotter, 10 "S. & 11. 94 ; Gray v. Donahoe, 4 Watts, 400 ; Hasbrook 1/. Palmer, 2 McLean, 10; Fry r. Rousseau, 3 id. 106. 2 Keith !'. Jones, 9 Johns. 120 ; Judah v. Harris, 19 Johns. 144; Swetland v. Creigh, 15 Ohio, 118. 3 Geary v. Physic, 5 B. & C. 234. * George v. Siuivy, Moody & U. 516. '> Taylor v. Dobbins, 1 Stra. 399 ; Elliot v. Cooper, 2 Ld. Eaym. 1376 ; Ereskine v. Murray, id. 1542. " Anderson v. Weston, 8 Scott, 583. ' Saundei-son v. Piper, 5 Bing. N. C. 425. 8 Eex V. EUiott, 2 East, P. C. 951. But see Sauuderson v. Piper, supra. See fur- ther, Norwich Bank u. Hyde, 13 Conn. 279; Boyd v. Brotherson, 10 Wend. 93. In Burnham v. Allen, 1 Gray, 496, a promissory note, expressed to be for " thee hundi-ed dollars," and in figures in the margin, $300, was held to be a good note for three hun- dred dollars, if the maker, when he signed it, intended "thee" for "three;" and whether such was his intention, was a question for the jury. " Storm V. Stirling, 3 Ellis & B. 832; per Eyre, C. B., in Gibson v. Minet, 1 H. Bl. [98] CH. IX.] NEGOTIABLE PAPER. *89 And if he be named, and the note get hato the possession of a wrong person of the same name, this person neither has nor can give a title to it.i If the name be spelt wrong, evidence of inten- tion is receivable.2 If father and son have the same name, and the son have possession of the note and indorse it, this would be evidence of his rightful ownership ; but in the absence of evidence, it is said that the presumption of law would give the note to the father ; ^ but this must depend on circumstances. If neither payable to bearer, nor to the maker's or drawer's order, nor to any other person, it would be an incomplete and in- valid instrument.* K the payee of a bill be fictitious, and the * drawer indorse it with the fictitious name, the acceptor is not liable thereon to the holder, unless at the time of the acceptance he knew the name to be fictitious.^ In that case, the bill may be declared on as payable to bearer ; ^ or the amount may be recov- ered on the money counts ; ^ as it may if the acceptor did not know the name to be fictitious, but had the money of the holder in his hands.^ A note to a fictitious payee, with his name in- dorsed by the maker, would undoubtedly be held to be the maker's own note, either payable to bearer, or to himself, or order, by another name, and so indorsed.^ If a blank be left in a bill for the payee's name, a bond fide, holder may fill it with his own, the issuing of the bill in blank being an authority to a bond fide holder to insert the name.^'^ And if the name of the payee be not the name of a person, as if it be the name of a ship, the instru- ment is payable to bearer.^^ A note payable to " A, or B, or C," is not a good promissory note.^^ ^ bill or note " to the order of " 608. Biit if it can be gathered from the instrument, by a reasonable or necessary in- tendment, who is the payee, it will be sufficient. Thus, in Green v. JiKsrves, 4 B. & C. 235, an instrument in the following form : " Received of A. B. £100, which I promise to pay on demand, with lawful interest," was held to be a promissory note. 1 Mead v. Young, 4 T. R. 28. 2 Willis V. Barrett, 2 Stark. 29. 3 Sweeting v. Fowler, 1 Stark. 106. 4 Storm V. Stirling, 3 Ellis & B. 832. s Bennett v. Farnell, 1 Camp. 130, 180; Gibson v. Minet, 1 H. Bl. 569. s Gibson v. Minet, supra. ' Tatlock V. Han-is, 3 T. R. 174. 8 Bennett v. Famell, 1 Camp. 130. " Plets V. Johnson, 3 Hill, 112. And see cases cited supra. 1° Cruchley v. Clarance, 2 M. & S. 90 ; Crutchley v. Mann, 5 Taunt. 529 ; Attwood V. Griffin, Ryan & M. 425. II Grant v. Vanghan, 3 Burr. 1528. w Blanckenhagen v. Blundell, 2 B. & Aid. 417. [99] 90* ELEMENTS OF MERCANTILE LAW. [CH. IX. the plaintiff, is the same as if to him " or his order," and may be sued by him without indorsement.^ 3. Of ambiguous and irregular instruments. — The law in rela- tion to protest and damages makes it sometimes important to distinguish between a promissory note and a bill of exchange. The rule in general is, that, if an instrument be so ambiguous in its terms that it cannot be certainly pronounced one of these to the exclusion of the other, the holder may elect and treat it as either.2 As if written, " value received, in three months from date, pay the order of H. L., |500. Signed A B ; " and an address or memorandum at the bottom, " At Messrs. E. F. & Co." ^ It has been held that an indorsement upon a bond, order- ing the contents to be paid to A or order, for value received, is a good bill.* So also, a direction to pay the amount of a promis- * sory note, written under the same by the promisor ; so that the person directed, if he accepts, is liable as acceptor of a bill.^ So, where a certificate of deposit in a bank, payable on a future day to the order of A, was indorsed for value to B by A, it was held that the indorsement constituted a bill of exchange.^ An agree- ment in the instrument itself to give further security, would avoid it as a promissory note or bill ; ^ but not, as it seems, a statement that security has been given.^ 4. Of hank-notes. — Bank-notes, or bank-bills, are promissory notes of the bank, payable to bearer ; and, like all notes to bearer, the property in them passes by delivery. They are intended to be used as money ; and, while a finder, or one who steals them, has no title himself against the owner, still, if he passes them away to a hand fide holder, that is, a holder for value without notice or knowledge, such owner holds them against the original owner.^ And if the bank pays them in good faith on regular presentment, the owner has no claim.^^ They pass by a will bequeathing 1 Smith V. M'Clure, 5 East, 476. 2 Edis V. Bury, 6 B. & C. 433 ; Lloyd v. Oliver, 18 Q. B. 471, 12 Eng. L. & Eq. 424, 8 Shuttleworth v. Stephens, 1 Camp. 407. * Bay V. Freazer, 1 Bay, 66. '• Leonard v. Mason, 1 Wend. 522. " Elgore V. Bulkley, 14 Conn. 362. 7 See Byles on Bills, 9. 8 Wise V. Charlton, 4 A. & E. 786. » Miller v. Race, 1 Burr. 452. » Ibid. [100] CH. IX.J NEGOTIABLE PAPER. *91 money .^ They are a good tender, unless objected to at the time because not money .^ Forged bills, given in payment, are a mere nullity .3 Bills of a bank which has failed, but of which the fail- ure is unknown to both parties, are now, generally, put on the footing of forged or void bills ; although there is some conflict on this subject.* But if the receiver of them, by holding them, and by a delay of returning or giving them up, injures the payer and impairs his opportunity or means of indemnity, the receiver must then lose them.* 5. Of checks on banks. — A check on a bank is undoubtedly a bill of exchange ; but usage and the nature of the case have in- * troduced some important qualifications of the general law of bills, as applicable to checks.^ A check has no days of grace, and requires no acceptance, because a bank, after a customary or reasonable time has elapsed since deposit, and while still in possession of funds, is bound to pay the checks of the depositors.' But whether the holder of a check, in case of refusal, may sue the bank for non-payment, is a question of some difficulty, and is not yet definitely settled by authority.^ But we have no doubt but that, on correct principles of commercial law, the holder should have this right, so long as the bank has funds of the depositor in its possession. The drawer of a check is not a surety as is the drawer of a bill, but a principal debtor, like the maker of a note.^ Nor can a drawer complain of any delay whatever in the presentment ; for it is an absolute appropriation 1 Fleming v. Brook, 1 Sch. & L. 318 ; Stuart v. Marquis of Bute, 11 Ves. 662. - Snow V. Perry, 9 Pick. 542 ; Wheeler v. Kraggs, 8 Ohio, 169 ; Warren v. Mains, 7 Johns. 476 ; Noe v. Hodges, 3 Humph. 162 ; Seawell v. Henry, 6 Ala. 226 ; Hoyt v. Byrnes, 2 Fairf. 475 ; Polglass v. Oliver, 2 Cromp. & J. 15. 3 United States Bank ;;. Bank of Georgia, 10 Wheat. 333 ; Thomas v. Todd, 6 Hill, 340; Simms o. Clarke, 11 III. 137; Eamsdale v. Horton, 3 Penn. State, 330; Keene V. Thompson, 4 Gill & J. 463. * Wainwright v. Webster, 11 Vt. 576 ; Fogg v. Sawyer, 9 N. H. 365 ; Lightbody v. Ontario Bank, 11 Wend. 1, 13 id. 101; Frontier Bank u. Morse, 22 Maine, 88 ; Timmins V. Gibbins, 18 Q. B. 722, 14 Bng. L. & Bq. 64. 5 Pindall w. Northwestern Bank, 7 Leigh, 617 ; Simms v. Clarke, 11 111. 137. if the note be payable to bearer, it means received by the maker of the holder. In a bill, this phrase means that the value was received of the payee by the drawer.^ But if the bill 1 Middlebury v. Case, 6 Vt. 165 ; Horn v. Fuller, 6 N. H. 511 ; Goshen Turnpike Co. V. Hurtin, 9 Johns. 217 ; Camp v. Tompkins, 9 Conn. 545 ; Mandeville v, Welch, 5 Wheat. 277. 2 Delano v. Bartlett, 6 Cush. 364. " Munroe v. Cooper, 5 Pick. 412 ; Bailey v. Bidwell, 13 M. & W. 73 ; Smith v. Braine, 16 Q. B. 244, 3 Eng. L. & Eq. 379 ; Harvey v. Towers, 6 Exch. 656 ; Fitch v. Jones, 5 Ellis & B. 238, 32 Eng. L. & Eq. 134. * Lewis V. Parker, 4 A. & E. 838. 5 White V. Ledwick, Bayley on Bills, 2 Am. ed. p. 33, 4 Doug. 247 ; Grant v. Da Costa, 3 M. & S. 352 ; Hatch v. Trayes, 11 A. & E. 702 ; Townsend v. Derby, 3 Met. 363. " Abbott V. Hendricks, 1 Man. & G. 791 ; Fox v. Frith, 1 Car. & M. 502. ' Clayton v. Gosling, 5 B. & C. 360. * Grant v. Da Costa, 3 M. & S. 351. In this case, a question was made whether the words " value received," in a bill, mean value received by the drawer of the payee, or value received by the drawee .of the drawer. And Lord Ellenborough said : " It ap- pears to me that ' value received ' is capable of two intei-pretations, but the more natui'al one is, that the pasty who draws the bill should inform the drawee of a fact which he does not know, than of one of which he must be well aware. The words ' value re- ceived ' are not at all material ; they might be wholly omitted in the declaration, and there are several cases to that effect. The meaning of them here is, that the drawer in- forms the drawee that he draws upon him in favor of the payee, because he has received value of such payee. To tell him that he draws upon him because he, the drawee, has value in his hands, is to tell him nothing ; therefore the first is the more probable inter- 10 [109] 99* ELEMENTS OF MERCANTILE LAW. [CH. IX. be payable to the drawer's own order, then it means received by the acceptor of the drawer.^ 3. WJiat the consideration may he. — A valuable consideration may be either any gain or advantage to the promisor, or any loss or injury sustained by the promisee at the promisor's re- quest.^ A previous debt, or a fluctuating balance, or a debt due from a third person, might be a valuable consideration.* So is a moral consideration, if founded upon a previous legal consideration ; as, where one promises to pay a debt barred by the statute of Kmitations, or by infancy.* But a merely moral consideration, as one founded u:pon natural love and affection or the relation *of parent and child, is no legal consideration.^ No consideration is sufficient in law if it be illegal in its nature ; and it may be illegal because, first, it violates some positive law, as, for example, the Sunday law, or the law against usury. Secondly, because it violates religion or morality, as an agree- ment for future illicit cohabitation, or to let lodgings for .pur- poses of prostitution, or an indecent wager ; for any bill or note founded upon either of these would be void.^ Thirdly, if dis- tinctly opposed to public policy ; as an agreement in restraint of trade, or injurious to the revenue, or in restraint of marriage, or for procurement of marriage, or suppressing evidence, or withdrawing a prosecution for felony or public misdemeanor.'^ But one who sells goods, only knoiving that an illegal use is to be made, without any personal aid in the illegal purpose, may, it seems, recover the price of them.^ pretation. And Bayley, J., said : " The object of inserting the words ' value received/ is to show that It is not an accommodation bill, but made on a valuable consideration given for it by the payee." 1 Highmore v. Primrose, 5 M. & S. 65. ^ See ante, pp. 27, 28, and notes. 5 Percival v. Frampton, 2 Cromp. M. & R. 180 ; Pease v. Hirst, 10 B. & C. 122 ; Poplewell ;;. Wilson, 1 Stra. 264 ; Baker v. Walker, 14 M. & W. 465. * Dodge V. Adams, 19 Pick. 429 ; Ehle v. Judson, 24 Wend. 97 ; Warren c.. Whit- ney, 24 Maine, 561 ; Gccr v. Archer, 2 Barb. 420. 6 Smith V. Kittridge, 21 Vt. 238. ^ Walker v. Perkins, 3 Burr. 1568 ; Girarday v. Eichardson, 1 Esp. 13 ; Da Costa v. Jones, Cowp. 729 ; Ditchbum v. Goldsmith, 4 Camp. 152. • ' Mitchel V. Reynolds, 1 P. Wms. 181 ; Lowe v. Peers, 4 Bun'. 2225 ; Biggs v. Law- rence, 3 T. R. 454. " Hodgson V. Temple, 5 Taunt. 181. [110] CH. IX.] NEGOTIABLE PAPER. *100 SECTION IV. OP THE EIGHTS AND DUTIES OF THE MAKER. The maker of a note and the acceptor of a bill is bound to pay the same at its maturity, and at any time thereafter, unless the action be barred by the statute of limitations, or he has some other defence under the general law of contracts. As between himself and the payee of the note or bill, he may make any defences which he could make on any debt arising from simple contract ; as want or failure of consideration ; payment, in whole or in part; set-off; accord and satisfaction, or the like. The peculiar characteristics of negotiable paper do not begin to oper- ate, so to speak, until the paper has passed into the hands of third parties. Then, the party liable on the note or bill can make none of these defences, unless the time or manner in which it came into the possession of the holder, lays him open to these defences. But the law on this subject may better be presented in our next section. * SECTION V. OP THE EIGHTS AND DUTIES OP THE HOLDER OP NEGOTIABLE PAPER. 1. What a holder may do with a bill or note. — An indorsee has a right of action against all whose names are on the bill when he received it. And if one delivers a bill or note which he ought to indorse and does not, the holder has an action against him for not indorsing,^ or may proceed in equity, to oblige him to indorse.^ If a bill or note is indorsed in blank, and is transferred 1 Rose V. Sims, 1 B. & Ad. 521. 2 Thus, in Watkins v. Maule, 2 Jacob & W. 237, Sir Thomas Plumer said : " When a note is handed over for valuable consideration, the Indorsement is a mere form ; the transfer for consideration is the substance ; it creates an equitable right, and entitles the party to call for the form. The other is bound to do that formal act, in order to substantiate the right of the party to whom he has transferred it." And see Smith v. Pickering, Peake, .50; Ex parte Rhodes, 3 Mont. & A. 217; Ex parte Greening, 13 Ves. 206. [Ill J 101* ELEMENTS OF MERCANTILE LAW. [CH. IX. by the indorsee by delivery only, without any fresh indorsement, the transferree cannot sue the party from whom he received it, but he takes, as against the acceptor of the bill or the maker of a note, any title which the intermediate holder possessed.^ If a bill come back to a previous indorser, he may strike out the intermediate indorsements and sue in his own name, as in- dorsee ; but he has, in general, no remedy against the interme- diate parties ; ^ if, however, the circumstances are such that they would have no right against him as an indorser to them, if they were compelled to pay, then he may, perhaps, have a claim against them.^ And it seems now to be settled that an in- dorser who comes again into possession of the note or bill, is to be taken, merely on the evidence of his possession, as the holder and proprietor of the bill, unless the contrary is made to appear.* * The holder of a bill indorsed and deposited with him for col- lection, or only as a trustee, can use it only in conformity with the trust.^ And if the indorsement express that it is to be col- lected for the indorser's use, or use any equivalent language, this is notice to any one who discounts it ; and the party discount- ing against this notice, will be obliged to deliver the note, or pay its contents, if collected, to the indorser.^ 1 Faircloiigh i'. Pavia, 9 Exch. 690, 25 Eng. L. & Eq. 533. 2 The reason is, that such intermediate parties would have their remedy over against him. Byles on Bills, 114; Bishop v. Hayward, 4 T. R. 470; Britten v. Webb, 2 B. & C. 483. ^ Wilders v. Stevens, 15 M. & W. 208. And Bishop v. Hayward, supra. There, A having declared a<;ainst B on n promissory note made by C to A, by him indorsed to B, and by B again indorsed to A, and having obtained a verdict, the judgment was arrested. But Lord Kenyan, in delivering his opinion, said : " I do not say but that there may be circumstances which, if disclosed on the record, might entitle the plaintiff to recover against the defendant on this note ; but we are now called upon to form a judgment on the title which ho has disclosed." And see further, Williams v. Clarke, 16 M. & W. 834; Smith v. Marsack, 6 C. B. 486; Morris v. Walker, 15 Q. B. 589. * It was so held by the Supreme Court of the United States, in Dugan v. United States, 3 Wheat. 172. Livingston, J., in delivering the opinion of tlie court, said: " After an examination of the cases on tliis subject (which cannot all of them be recon- ciled), the court is of opinion that, if any person who indorses a bill of exchange to another, whether for value, or for tlie purpose of collection, shall come to the possession thereof again, he shall be regarded, unless the contrary appear in evidence, as the bona fide holder and proprietor of such bill, and shall bo entitled to recover, notwithstanding there may be on it one or more indorsements in full, subsequent to the one to him, without producing any receipt or indorsement back from either of such indorsers, whose names he may strike from the bill or not, as he may think proper." And see, to the same effect, Green v. Jackson, 15 Maine, 136; Eaton v. Mcltown, 34 Maine, 510; Earbee v. Wolfe, 9 Porter, 366 ; Bond v. Storrs, 13 Conn. 412. 5 Goggerlcy v. Cuthbert, 5 B. & P. 170 ; Evans v. Kymer, 1 B. & Ad. 528. ^ Thus, in Treuttel o. Barandon, 8 Taunt. 100, a bill was indorsed by the payee in [112] CH. IX.] NEGOTIABLE PAPER. *102 2. Of a transfer after dishonor of negotiable paper. — A holder who took the note after it became due, is open to any defence which could have been made against the party from whom he took it ; because he necessarily has notice that the bill or note is dishonored, and should ascertain whether any, and if so, what defence is set up.i And it has been held that if the note is indorsed and negotiated on the last day of grace, it is subject to the same defences as if indorsed after dishonor.^ So, too, if he takes the note or bill before it is due, but with notice or knowl- edge of fraud or other good defence, that defence may be made against him. Otherwise, no defence can be made against one who becomes an indorsee for consideration, which does not spring out of the relations between himself and the defendant.^ Nor is an indorsee liable to such defences as arise out of col- lateral matters ; but only to those which attach to the note or bill itself. Hence, it is said, he is not liable to a set-off betw'een the original payee and the maker.* Nor is * the mere want of this fonn ; " Pay A B, or order, for the account of C D." A B pledged it with the defendant, who advanced money upon it to A B personally. Meld, that the defendant had sufficient notice, from the indorsement, that A B had no authority to raise money on the bill for his own benefit, and therefore could not defend an action of trover for the bill, brought by C D. So, in Sigoumey v. Lloyd, 8 B. & C. 622, 5 Bing. 525, where the plaintiif, a merchant in Boston, remitted a bill to B, his agent in London, indorsing it in this form : " Pay B, or his order, for my use ; " and B discounted the bill with his bankers, and afterwards failed, and the bankers, to whom he was indebted in more than the amount of the bill, received payment of it at maturity iix)m the ac- ceptors ; it was held that the bankers were liable to the plaintiff in an action for money had and received. And see Snee v. Prescot, 1 Atk. 245 ; Edie v. East India Co. 2 Burr. 1227 ; Ancher t7. Bank of England, Doug. 637. 1 Brown v. Davies, 3 T. R. 80 ; Boehm v. Sterling, 7 id. 423 ; Tinson v. Francis, 1 Camp. 19. In this last case. Lord Ellenborough said: "After a bill or note is due, it comes disgraced to the indorsee, and it is his duty to make inqiuries concerning it. If he takes it, though he gives a full consideration for it, he takes it on the credit of the indorser, and subject to all the equities with which it may be incumbered." And the declarations made by a holder while he held the note are admissible to show payment to such holder, or right of set-off. Bond v. Fitzpatrick, 4 Gray, 89. 2 Pine V. Smith, S. J. C. Mass. 1858, 21 Law Eep. 559. See Conley v. Grant, S. Ct. N. H. 1857, 20 Law Rep. 595. 3 Brown r. Davies, 3 T. E. 82. * This is well settled in England. The point was first decided in Burrough v. Moss, 10 B. & C. 558. That was an action on a promissory note made by the defendant, payable to one Eearn, and by him indorsed to the plaintiff after it became due. For the defendant, it was insisted that lie had a right to set.off against the plaintiff's claim a debt due to him from Fearn, who held the note at the time when it became due. But Bayky, J., delivering the opinion of the court, said : " The impression on my mind was, that the defendant was entitled to the se^off; but, on discussion of the matter with my Lord Tenta-den and my learned brothers, I agree with them in thinking that the indorsee of an overdue bill or note is liable to such equities only as attach on the bill or note itself, and not to claims arising out of collateral matters." And this de- cision has been uniformly adhered to in England. See Stein v. Yglesias, 1 Cromp., M. 10* [113] 103* ELEMENTS OF MERCANTILE LAW. [CH. IX. consideration between payee and maker one of those equities to which a holder for value after dishonor, even with notice, is liable, provided the bill or note was originally intended to be without consideration, as in the case of an accommodation biU or note, or one intended as a gift.^ But it seems that, if a bill be delivered as security for a balance on a running account, and, when it becomes due, the balance is in favor of the depositor who does not withdraw the bill, and afterwards the balance becomes against the depositor, the holder may not only hold it to secure the balance, but will not be regarded as the transferree of an overdue bill.^ And in the absence of any evidence on the point, the presumption of law is, that the bill was transferred before maturity.^ And a promissory note, payable on demand, is considered as intended to be a continuing security, and there- fore as not overdue, unless very old, without some evidence of deftiand of payment and refusal.* If interest is provided for, this strengthens the probability that the maker was to have a credit of some extent, and the indorser or guarantor will be held liable accordingly .° But it is not so with a check; for this should be presented without unreasonable delay, " and, although a taker after one day's delay may not be affected, nor a taking & R. 565 ; Watkins v. Bensusan, 9 M. & W. 422 ; Whitehead v. Walker, 10 id. 696 ; Oulds V. Harrison, 10 Exch. 572. But in this country there is no uniform rule. In some cases, it is regulated by statute. See 1 Parsons on Cont. 214, n. (c). 1 See ante, p. 97, and notes. 2 Atwood V. Crowdie, 1 Stark. 483. 8 Parkin v. Moon, 7 C. & P. 408 ; Lewis v. Parker, 4 A. & E. 838 ; Pinkerton v. Bailey, 8 Wend. 600 ; Burnham v. Wood, 8 N. H. 334 ; Bumham v. Webster, 19 Maine, 232; Ranger v. Gary, 1 Met. 369 ; Washburn v. Ramsdell, 17 Vt. 299. * Thus, in Brooks v. Mitchell, 9 M. & W. 15, it was held that a promissory note, payable on demand, cannot be treated as overdue, so as to affect an indorsee with any equities against the indorser, merely because it is indorsed a number of years after its date, and no interest had been paid on it for several years before such indorsement. And Parle, B., said : " If a promissory note payable on demand, is, after a certain time, to be treated as overdue, although payment has not been demanded, it is no longer a negotiable instrument. But a promissory note, payable on demand, is intended to be a continuing security. It is quite unlike the case of a check, which is intended to be presented speedily." And see Barough i'. White, 4 B. & C. 325 ; Cripps v. Davis, 12 M. & W. 165. But in this country, it is generally held that, if a note payable on demand, is negotiated a long time after it is made, it is to be regarded as a note over- due. See Furman v. Haskin, 2 Caines, 369 ; Hendricks v. Judah, 1 Johns. 319 ; Thurston v. M'Kown, 6 Mass. 428 ; Ayer v. Hutchins, 4 id. 370 ; Dennett v. Wyman, 13 Vt. 485 ; Camp v. Scott, 14 id. 387 ; Ranger v. Gary, 1 Met. 369 ; Wethey v. Andrews, 3 Hill, 582. There is, however, no precise time at which such a note is to be deemed dishonored ; it must depend on the circumstances of the case, and the situation of the parties. Losee v. Dunldn, 7 Johns. 70 ; Sanford v. Mickles, 4 id. 224. And it is a question of law, and not of fact. Sylvester v. Grapo, 15 Pick. 93. ^ Lockwood V. Crawford, 18 Conn. 361. [114] CH. IX.] NEGOTIABLE PAPBK, 103 after six days be held as conclusive evidence of negligence or fraud, yet the jury may infer this.i The drawer of a check is not however discharged by any delay in presenting it which has not been actually injurious to him.^ Priority in the drawing of a check gives the holder no preference of payment over checks subsequently drawn.^ If a check be drawn on a bank where the drawer has no funds, it need not be presented, in order to maintain an action.* Sometimes a check is drawn by A in favor of C, on a bank in which C is a depositor. Then, generally, the bank will be held to have received the check as the agent of C, and, by giving him notice of the non-payment for want of funds, the bank will be discharged.^ But it is said that, if, while the bank holds the check, the drawer deposits funds enough to pay it, the bank must appropriate these funds to that payment, although the drawer is indebted to the bank in a larger balance.^ If a holder sends back the bill or note as of no value to him, or for any such reason, his title dies and cannot be revived by his merely getting it back into his possession again, without a new transfer to him.'' It is most important to the holder of negotiable paper to know distinctly what his duties are in relation to presentment for acceptance or payment, and notice to others interested, in case of non-acceptance or non-payment. 3. Of presentment for acceptance. — It is always prudent for the holder of a biU to present it for acceptance without delay ; for, if it be accepted, he has new security ; if it be not, the former parties are immediately liable ; and it is but just to the drawer to give him as early an opportunity as may be to withdra.w his funds or obtain indemnity from a debtor who will not honor his bills. And if a bill is payable at sight, or at a certain period after sight, there is not only no right of action against anybody 1 Down V. Hailing, 4 B. & C. 330 ; Rothschild v. Corncy, 9 id. 388. 2 Robinson v. Hawksford, 9 Q. B. 52 ; Pack v. Thomas, 13 Smedes & M. H ; Poster V. Paulk, Sup. Ct. Maine, 1857, 20 Law Eep. 222. 2 Dykes v. Leather Manuf. Bank, H Paige, 612. * Foster v. Paulk, supra. 5 Boyd V. Emmerson, 2 A. & E. 184. 6 Kilsby V. Williams, 5 B. & Aid. 815. ' Cartwright v. Williams, 2 Stark. 340. [115] 104* ELEMENTS OF MERCANTILE LAW. [CH. IX. until presentment,^ but, if this be delayed beyond a reasonable time, the holder loses his remedy against all previous parties.^ And, although the question of reasonable time is generally one only of law, yet, in this connection it seems to be treated as a mixed question of law and fact, and as such given to the jury.^ * There is no certain rule in relation to what is reasonable time. If a bill be payable on demand, it is not like a promissory note, but must be presented within a reasonable time, or the drawer will be discharged.* If the holder puts a bill payable after sight into circulation, a much larger delay in presentment would be allowed than if he kept it in his own possession.^ The presentment should be made during business hours ; but it is said that in this country they extend through the day and until evening, excepting in the case of banks.^ But a distinct usage would probably be received in evidence, and permitted to affect the question. Ill health or other actual impediment without fault, may ex- cuse delay on the part of the holder ; but not the request of the drawer to the drawee not to accept.'' Presentment for acceptance should be made to the drawee himself, or to his agent authorized to accept.* And when it is presented, the drawee may have a reasonable time to consider whether he will accept, during which time the holder is justified in leaving the biU with him. And it seems that this time would be as much as twenty-four hours, unless, perhaps, the mail goes 1 Holmes v. Kenison, 2 Taunt. 323 ; Dixon v. Nuttall, 1 Cromp., M. & K. 307. 2 Robinson v. Ames, 20 Johns. 146; Wallace v. Agry, 4 Mason, 336, 5 id. 118; Aymar v. Beers, 7 Cowen, 705. 8 Muilman v. D'Effuino, 2 H. Bl. 565 ; Fry v. Hill, 7 Taunt. 397 ; Shute v. Robins, Moody & M. 133 ; Mellisli u. Rawdon, 9 Bing. 416 ; Straker v. Graham, 4 M. & W. 721. But see, contra, Aymar v. Beers, 7 Cowen, 705. * Biting V. BrinkerhofF, 2 Hall, 459 ; Dumont v. Pope, 7 Blackf. 367. See, ante, p. 102, n. 4, and p. 103, n. 1. s Muilman v. D'Eguino, 2 H. Bl. 565. In this case, BuUer, J., said : " I think a rale may thus far be laid down as to laches, with regard to bills payable at sight or at a certain time after sight, namely, that they ought to be put in circulation. If they are circulated, the parties are known to the world, and their credit is looked to ; and if a bill drawn at three days' sight, were kept out in that way for a year, I cannot say there would be ladies." And see, to the same effect, Gompy v. Harden, 7 Taunt. 159. " Cayuga County Bank v. Hunt, 2 Hill, 635. ' Hill V. Heap, Dowl. & R., N. P. 57 ; Byles on Bills, 141. ' Tlierefore, where the holder's servant called at the drawee's residence, and showed the bill to some person in the drawee's tanyard, who refused to accept it, but the wit- ness did not know the drawee's person, nor could he swear that the person to whom he offered the bill was he, or repi-esentcd himself to be so, it was held insufficient. Cheek V. Roper, 5 Esp. 175. [116] CH. IX.J NEGOTIABLE PAPER. *105 out before.! And if the holder gives more than twenty-four hours for this purpose, he should inform the previous parties of it.2 If the drawee has changed his residence, the holder should use due diligence to find him ; and what constitutes due or rea- sonable diligence, is a question of fact for a jury.^ And if he *be dead, the holder should ascertain who is his personal repre- sentative, if he has one, and present the bill to him.* And in an action against the drawer, for non-acceptance, not only that, but presentment for acceptance should be alleged.^ If the bill be drawn upon the drawee at a particular place, it is regarded as dishonored if the drawee has absconded so that the bill cannot be presented for acceptance.^ 4. Of presentment for demand of payment. — The next question relates to the duty of demanding payment ; and here the law is nauch the same in respect to notes and bills. A demand is sufficient if made at the usual residence or place of business of the payer, of himself, or of an agent authorized to pay ; '' and this authority may be inferred from the habit of pay- ing, especially in the case of a child, a wife, or a servant. The demand should not be made in the streets, but such a demand it would seem, is good unless objected to on that ground.^ When a demand is made, the bill or note should be exhibited ; ^ and if lost, a copy should be exhibited, although this does not seem absolutely necessary.^" And when the payer calls on the holder, and declares to him that he shall not pay, and desires him to give notice to the indorsers, this constitutes demand and 1 Byles on Bills, 142 ; Ingram v. Forster, 2 Smith, K. B. 242. 2 Ingram v. Forster, 2 Smith, K. B. 242. » See Collins v. Butler, 2 Stra. 1087 ; Bateman v. Joseph, 12 East, 433. But it is well settled in this country that, if the drawee has removed out of the jurisdiction, the holder need not follow him. Anderson v. Drake, 14 Johns. 114; M'Gruder v. Bank of Washington, 9 Wheat. 598 ; Gillespie v. Hannahan, 4 McCord, 503 ; Reid v. Morri- son, 2 Watts & S. 401 ; Sanger v. Stimpson, 8 Mass. 260 ; Taylor v. Snyder, 3 Denio, 145. But in such case, the bill must be presented at the drawee's former residence or place of business. Wheeler v. Field, 6 Met. 290. * Gower v. Moore, 25 Maine, 16 ; Landry v. Stansbury, 10 La. 484. 5 Mercer v. Southwell, 2 Show. 180. ^ Anonymous, 1 Ld. Raym. 743. See next page, n. 4. ' Brown v. M'Dermot, 5 Esp. 265. 8 King V. Holmes, 11 Penn. State, 456. 9 Freeman v. Boynton, 7 Mass. 483 ; Musson v. Lake, 4 How. 262 ; Bank of Ver- gennes v. Cameron, 7 Barb. 143. 1" See Hinsdale v. Miles, 5 Conn. 331. [117] 106* ELEMENTS OF MERCANTILE LAW. [CH. IX. refusal, provided this declaration be made at the maturity of the paper ; but not if it be made before, because the payer may change his intention.^ Bankruptcy or insolvency of the payer is no excuse for non- demand ; ^ although the shutting up of a bank, perhaps, may be regarded as a refusal to all their creditors, to pay their notes.^ And absconding is a sufficient excuse ; * but if the payer has * shut up his house, the holder must nevertheless inquire after him, and find him, if he can by proper efforts.^ If the maker be dead, demand should be made at his house, unless he have per- sonal representatives, and in that case, of them.^ And if the holder die, presentment should be made by his personal repre- sentativesJ And it has been held that, where the holder of a note died, and no executor or administrator had been appointed 1 Gilbert v. Dennis, 3 Met. 495. 2 Kussell V. Langstaffe, Doug. 514 ; Ex parte Johnston, 3 Dea. & Ch. 433 ; Bowes v. Howe, 5 Taunt. 30; Gower v. Moore, 25 Maine, 16; Ireland v. Kip, Antlion, 142; Sliaw V. Eeed, 12 Pick. 132; Grotou v. Dalllieim, 6 Greenl. 476; Holland v. Turner, 10 Conn. 308. 3 See Byles on Bills, 158. But see Howe v. Bowes, 16 East, 112, 5 Taunt. 30. * It was said, in an early case by Holt, C. J., that the holder of a note " ought to prove tliat he had demanded, or done his endeavor to demand " the money of the maker before he could sue the indorser. Lambert v. Oakes, 1 Ld. Raym. 443. In Anony- mous, 1 Ld. Eaym. 743, it is said : " The custom of merchants is, that if B, upon whom a bill of exchange is drawn, absconds before the day of payment, the man to whom it is payable may protest it, to have better security for the payment, and to give notice to the drawer of the absconding of B." In accordance with these cases, the rule has been established that the holder of a note shall make every reasonable endeavor to find the maker, and make a demand upon him. But at the same time the law does not require a man to do what would be nugatory and fraitless. A distinction has accordingly been taken between a removal by the maker from his place of residence and an abscond- ing. In the fonner case, the presumption is, that by a demand at the former residence or place of business of the maker, the debt will be paid ; and such a demand is neces- sary. See ante, p. 104, n. 3. But where the maker absconds, no such presumption exists, and it has generally been held that due notice to the indorser is sufficient without any demand, cither personal or otherwise. Putnam v. Sullivan, 4 Mass. 45 ; Lehman V. Jones, 1 Watts & S. 126. And see dicta to the same effect, in Gilbert v. Dennis, 3 Met. 495, 499, per Shaw, C. J., and in Duncan v. M'CuUough, 4 S. & R. 480. The case of Putnam v. Sullivan has, however, been oven-uled by a recent case, and in Mas- sachusetts it is now held, that where tlio maker of a note absconds, a demand at his last and usual place of abode or business is necessary. Pierce v. Gate, 12 Gush. 190. We cannot but believe, however, that the earlier decision of the same court was the more correct, both on principle and on authority. In Shaw v. Eeed, 12 Pick. 132, the note was made payable at a particular place. No demand was made there, but it was shown that the maker had left the State. The court said : " that in some cases a demand on the malcer is excused, as where he absconds, and it so becomes impossible to make a de- mand, but that where the note is payable at u time and place certain, that principle does not apply ; that an actual or virtual demand must be made at that place, and no- tice of non-payment there must be given to the indorser in order to charge him." ^ Ellis V. Commercial Bank of Natchez, 7 How. Missis. 294. '> See ante, p. 105, n. 4 ; Chitty on Bills, 357. I Chitty on Bills, 357. [118] CH. IX.] NEGOTIABLE PAPER. -106 upon his estate when the note became due, that the executor or administrator, within a reasonable time after his appointment, might demand payment from the maker, and notify the indorser, and hold the laiter.^ It is said that both the death and insol- vency of the maker do not relieve the holder from the duty of demanding payment.^ But it seems to be held in one case that, where the maker of a negotiable note was dead at the time the indorsement was made, the indorser was chargeable without demand on the maker.^ K the drawer has no effects in the hands of the drawee, and has made no arrangement equivalent to having effects there, non-presentation for payment is no defence as to him.* Impossibility of presenting a bill for payment, without the fault of the holder, as the actual loss of a bill, or the like, will excuse some delay in making a demand for payment ; but not more than the circumstances require.^ Whether due diligence is used in such a case, if there be conflicting evidence, is a ques- tion of fact for the jury, under proper instructions from the court.^ In this country, all negotiable paper payable at a time certain, is entitled to grace, which here means three days delay of pay- ment, unless it be expressly stated and agreed that there shall be 1 White V. Stoddard, S. J. C. Mass. 1858, 21 Law Reporter, 564. 2 Johnson v. H'arth, 1 Bailey, 482. 8 Davis V. Francisco, 11 Misso. 572. * Thus, in Terry v. Parker, 6 A. & E. 502, it was held that, if the drawee of a bill of exchange has no effects in the hands of the drawee at the time of drawing the bill, and of its maturity, and has no ground to expect that it will be paid, it is not necessary to present the bill at maturity ; and if it be presented two days after, and payment be refused, the drawer is liable. And Lord Demnan said : "Many cases establish that no- tice of dishonor need not be given to the drawer in such a case ; and the reason assigned is, because he is in no respect prejudiced by want of such notice, having no remedy against any other party on the bill. This reason equally appUes to want of presentment for payment, since, if the bill were presented and paid by the drawee, the drawer would become indebted to him in the amount, instead of being indebted to the holder of the bill, and would be in no way beneiited by such presentment and payment." And see Commercial Bank of Albany v. Hughes, 17 Wend. 94 ; Dickins v. Beal, 10 Pet. 572 ; Foard v. Womack, 2 Ala. 368. 6 Abom V. Bosworth, 1 R. I. 401 ; Patience v. Townley, 2 Smith, K. B. 223. But where a bill payable in London was by mistake sent from Birmingham, where the holder resided, to Liverpool, to be presented for payment, and the mistake was discov- ered and attempted to be cured by sending the bill to London, where it did not arrive until two days after its maturity, but would have arrived in season but for the oversight or negligence of the clerks of the post-ofBce in Liverpool, it was hdd that such mistake or negligence was not a suflScient excuse for not presenting the bill on the day it fell due. « Wyman o. Adams, 12 Cush. 210. [119] 107* ELEMENTS OF MERCANTILE LAW. [CH. IX. no grace ; and a presentment for payment before the last day of grace, is premature, the note not being due until then.^ If the * last day of grace falls on a Sunday, or on a legal holiday, the note is due on the Saturday, or other day before the holiday.^ But if there be no grace, and the note falls due on a Sunday, or other holiday, it is not payable until the next day,^ unless by usage it is payable on the preceding day.* Generally, if a bill or note be payable in or after a certain number of days, from date, sight, or demand, in counting these days, the day of date, sight, or demand is excluded, and the day on which it falls due included.^ Although payment must be demanded promptly, it need not be done instantly ; a holder has all the business part of the day in which the bill falls due to make his demand in.^ Bills and notes, payable on demand, should be presented for payment within a reasonable time. If said to be " on interest," this strengthens the indication that they were intended to remain for a time unpaid and undemanded. But to hold indorsers, they should still be presented within whatever the circumstances may make a reasonable time ; and this is such a time as the interests and safety of all concerned may require.^ A bill or note in 1 Wiffen V. Roberts, 1 Esp. 261 ; Mitchell v. Degrand, 1 Mason, 176. 2 Eansom v. Mack, 2 Hill, 587 ; Cuyler v. Stevens, 4 Wend. 566; Sheldon v. Ben- ham, 4 Hill, 129 ; Holmes o. Smith, 20 Mainfe, 264 ; Tassell v. Lewis, 1 Ld. Raym. 743 ;-Hayncs v. Birks, 3 B. & P. 599; Bussard v. Levering, 6 Wheat. 102. 3 Salter v. Burt, 20 Wend. 205 : Avery v. Stewart, 2 Conn. 69; Delamateru. Miller, 1 Cowcn, 75 ; Barrett v. Allen, 10 Ohio, 426. And if the nominal day of payment, in an instrument which is entitled to gi-ace, happens to fall on a Sunday or a holiday, the days of grace are the same as in other cases, and p.ayment is not due until the third day after. Wooley v. Clements, 11 Ala. 220. ^ Kilgore v. Bulkley, 14 Conn. 362. See also, Osborne v. Smith, Superior Court New York city, cited 14 Conn. 366, note. s Chittv on Bills, 370. 8 AVilldns v. Jadis, 2 B. & Ad. 188 ; Barclay v. Bailey, 2 Camp. 527 ; Morgan v. Davison, 1 Starkie, 114; Cayuga County Bank v. Hunt, 2 Hill, 635. ' Furman v. Haskin, 2 Caincs, 369 ; Sice v. Cunningham, 1 Cowen, 408 ; Mohawk Bank w. Broderick, 10 AVcnd. 304; Bank of Utica v. Smedes, 3 Cowcn, 662. And wliat is a reasonable time in such a case is a question of law. See cases, supra. In Seaver v. Lincoln, 21 Pick. 267, it was held that a demand on the maker of a note pay- alile on demand, made on the seventh day from the date, was made within a reasonable time to charge the indorser. And Shaw, C. J., said : " One of the most difficult ques- tions presented for the decision of a court of law, is, what shall be deemed a reasomible time, within which to demand payment of the maker of a note payable on demand, in order to charge the indorser. It depends upon so many circumstances to detennine what is a reasonable time in a jiarticular case, that one decision goes but little way in establishing a precedent for another. In the present case, however, the court have no hesitation in stating it as their opinion, that a demand within seven days of the date of [120] CH. IX.] NEGOTIABLE PAPER. '108 which no time of payment is expressed, is held to be payable on demand.^ And evidence to prove it otherwise is inadmissible.^ *The holder of a check should present it at once; for the drawer has a right to expect that he will ; it should, therefore, be presented, or forwarded for presentment, in the course of the day following that in which it was received, or, upon failure of the bank, the holder will lose the remedy he would otherwise have had against the person from whom he received it.^ If the drawer of the check had no funds, he is liable always.^ Every demand or payment should be made at the proper place, which is either the place of residence or of business of the payer, and within the proper hours of business.^ If made at a bank after hours of business, if the officers are there and refuse payment for want of funds, the demand is sufficient.^ the note was within a reasonable time to charge the indorser." In Vreeland v. Hyde, 2 Hall, 429, it was held that the rule requiring promissory notes, payable on demand, to be presented within a " reasonable time," was applicable chiefly to those which are made for commercial purposes. 1 Whittock V. Underwood, 2 B. & C. 157. 2 Warren v. Wheeler, 8 Met. 97 ; Atwood v. Cobb, 16 Pick. 227 ; Eyan v. Hall, 13 Met. 520; Thomson v. Ketchum, 8 Johns. 189. 3 Rickford v. Kidge, 2 Camp. 539 ; Boddington v. Schlencher, 4 B. & Ad. 752 ; Moule V. Brown, 4 Bing. N. C. 266. * Hoyt V. Seeley, 18 Conn. 353. ^ If the bill or note be payable at a bank, it must be presented strictly within the usual banking hours. Parker v. Gordon, 7 East, 385; Elford v. Teed, 1 M. & S. 28. But if it be not payable at a bank, it may be presented at any time of the day when the payer may reasonably be expected to be found at his place of residence or business, though it be six, seven, or eight o'clock in the evening. Thus, in Barclay v. Bailey, 2 Camp. 527, it was held that the presentment of a bill of exchange for payment at the house of a merchant residing in London, at eight o'clock in the evening of the day it became due, was sufficient to charge the drawer. And Lord Ellenborough said : "A common trader is different from bankers, and has not any peculiar hours for paying or receiving money. If the presentment had been during the hours of rest, it would have been altogether unavailing; but eight in the evening cannot be considered an unreasonable hour for demanding payment at the house of a private merchant who has accepted a bill." So, in Wilkins v. Jadis, 2 B. & Ad. 188, it was held that a pre- sentment of a bill of exchange for payment at a house in London, where it was made payable, at eight o'clock in the evening of the day it became due, was suflicient to charge the drawer, although at that hour the house was shut up, and no person was there to pay the bill. And Lord Tenterden said : " As to bankers, it is established, with reference to a well-known rule of trade, that a presentment out of the hours of business is not sufficient ; but in other cases the rule of law is, that the bill must be presented at a reasonable hour. A presentment at twelve o'clock at night, when a person has retired to rest, would be unreasonable ; but I cannot say that a presentment between seven and eight in the evening is not a presentment at a reasonable time." And see Morgan V. Davison, 1 Stark. 114. See also, ante, p. 104, n. 6. s Thus, in Garnett v. Woodcock, 6 M. & S. 44, 1 Stark. 475, it was held that a pre- sentment of a bill of exchange at the banking-house where payable, after banking hours, is sufficient, if a person be stationed at the banking-house and return for answer that there are no orders. And the court said : " Here, though the presentment was out of banking hours, there was a person stationed for the purpose of returning an answer, 11 [121] 109* ELEMENTS OF MBKCANTILB LAW. [CH. IX. A note payable at a particular place, should be demanded at that place ; and a biU drawn payable at a particular place, should be demanded there, in order to charge antecedent parties, accord- ing to the law in England, the place being considered as part of the contract.! g^^ j,^ ^hjg country *an action may be maintained against the maker or acceptor without such demand.^ He, how- ever, may discharge himself of damages and costs beyond the amount of the paper, by showing that he was ready at that place with funds.^ If the note be payable at any of several different places, presentment at any one of them will be suffi- cient.* If a bill which is drawn, payable generally, be accepted, payable at a particular place, we think the holder may and should so far regard this as non-acceptance that he should pro- test and give notice.^ But if this limited acceptance is assented to and received, it must be complied with by the holder, and the bill must be presented for payment at that place, or the ante- cedent parties are discharged.^ If payable at a banker's, or the house or counting-room of any person, and such banker or person becomes the owner at matur- ity, this is demand enough ; and if there are no funds deposited with him for the payment, this is refusal enough.'^ If any house and an answer was returned, the same as would have been if the presentment had been within the hours of business. The answer was not that the party came too late, but that there were no orders ; the object of the presentment was, therefore, completed, after which it cannot be open to either party to aver that it was out of time." And see Henry v. Lee, 2 Chitty, 124; Commercial and Railroad Bank v. Hamer, 7 How. Miss. 448 ; Cohea v. Hunt, 2 Smedes & M. 227 ; Flint v. Rogers, 1.5 ilaine, 67. ' Rowe V. Young, 2 Brod. & B. 165; >Sanderson o. Bowes, 14 East, 500; Spindler V. Grellett, 1 Exch. 384 ; Emblin v. Dartnell, 12 M. & W. 830. - United States Bank v. Smith, 11 Wheat. 171; Wolcott v. Van Santvoord, 17 Johns. 248; Caldwell v. Cassidy, 8 Cowen, 271; Haxtun o. Bishop, 3 Wend. 13; Wallace v. McConnell, 13 Pet. 136; Watkins v. Crouch, 5 Leifth, 522; Green «;. Goings, 7 Barb. 652 ; Ciirlev v. Vance, 17 Mass. 389 ; Pavson v. ^Vliitcomb, 15 Pick. 212 ; Bacon v. Dyer, 3 Faiif. 19 ; Carter v. Smith, 9 Cush. 321. ^ See cases citcil in preceding note. * Langley v. Palmer, 30 Me. 667 ; Maiden Bank v. Baldwin, 13 Gray, 154. ^ Thus, in Gammon v. SchmoU, 5 Taunt. 344, it was held that if a person to whom a bill is directed generally, accepts it payable at a particular place, the holder need not receive such qualified acceptance, but may resort to the drawer as for non-acceptance. And sec Boehm v. Garcias, 1 Camp. 425, n. ; Parker v. Gordon, 7 East, 385 ; per Bay- ley, J., in Sebag v. Abitbol, 4 M. & S. 466. " See cases supra. ' Saunderson v. Judge, 2 H. Bl. 509. In this case, A made a promissory note pay- able to B or order, with a memorandum upon it that it would be paid at the house of C, who was A's banker ; in the course of business, the note was indorsed to C. In an action by C against the indorser, it was held not necessary to prove an actual demand on A. And per Curiam : " As they at whose house the note was to be ])aid, were them- s elves the holders of it, it was a sufficient demand for them to turn to their books, and [122] CH. IX.] NEGOTIABLE PAPER. 110 be designated, a presentment to any person there,i or at the door if the house be shut up, is enough.^ K this direction be not in the body of the note, but added at the close or elsewhere as a memorandum, it is not part of the contract, and should not be attended to.^ If the payer has changed his residence, he should be sought for with due diligence ; but if he has absconded, this is an entire excuse for non-demand.* Where a bill or note is not presented for payment, or not pre- sented at the time or to the person, or in the place or in the way required by law, all parties but the acceptor or maker are dis- charged. If a note is signed by a partnership, a demand on any one of the partners is sufficient to charge an indorser. But it has been held that if the makers are not partners a demand must be made on each.^ But this has been controverted.^ see the maker's account with them, and a sufficient refusal, to find that he had no effects in their hands." The same question was presented in United States Bank v. Smith, 11 Wheat. 171. And Thompson, J., delivering the opinion of the court, said : "If the bank where the note is made payable is the holder, and the maker neglects to appear there when the note falls due, a formal demand is impracticable by the default of the maker. All that can in fiitness be done, or ought to be required, is, that the books of the bank should be examined, to ascertain whether the maker had any funds in their hands ; and if not, there was a default, which gave to the holder a right to look to the indorser for payment. And even this examination of the books was not required in the cases cited from the Massachusetts Reports. The maker was deemed in default by not appearing at the bank to take up his note when it fell due. We should incline, however, to think that the books of the bank ought to be examined, to ascertain whether the maker had any balance standing to his credit ; for, if he had, the bank would have a right to apply it to the payment of the note ; and no default would be in- curred by the maker, which would give a right of action against the indorser." And see Bailey u. Porter, 14 M. & W. 44; Berkshire Bank v. Jones, 6 Mass. 524; Wood- bridge V. Brigham, 12 id. 403. 1 Buxton V. Jones, 1 Man. & G. 83. In this case a bill of excnange was presented for payment at the door of the house where the drawee was described as living, to a lodger who was coming from the passage of the house into the street. The drawee had removed to another residence, known to the occupier of the house, but not to the lodger ; and it was not shown that he had left funds for payment. Hdd, that the pre- sentment was sufficient. 2 Hine v. AUely, 4 B. & Ad. 624. '^ "In point of practice," said Lord Tenterden, in Williams v. Waring, 10 B. & C. 2 " the distinction between mentioning a particular place for payment of a note, in the body and in the margin of the instrument, has been frequently acted on. In the latter case it has been treated as a memorandum only, and not as a part of the coufcract ; and I do not see any sufficient reason for departing from that course." See Masters o, Baretto, 8 C. B. 433. ■1 See ante, p. 104, and p. 105, n. 4. 5 Union Bank v. Willis, 8 Met. 504. In this case a person not a payee had put his Harris v. Clark, 10 Ohio, 5. [123] Ill* ELEMENTS OF MERCANTILE LAW. [CH. IX. Infancy of the maker of a note does not excuse the want of a demand on him in order to hold the indorser.^ 5. Of protest and notice. — If a bill be not accepted when prop- erly presented for that purpose, or if a bill or note, when prop- erly presented for payment, be not paid, the holder has a further duty to perform to all who are responsible for payment. But this duty differs somewhat in the case of a bill and a note. Li case of non-payment of a foreign bill, there should be a regular protest by a public notary ; ^ but this, although frequently prac- tised, is not necessary in the case of an inland bill or a promis- sory note.2 But notice of non-payment should be given to all antecedent parties, equally, and in the same way, in the case of a bill and of a note. The demand and protest must be made according to the laws of the place where the bill is payable.* It should be made by a * notary-public, who should present the bill himself ; ^ but if there be no notary-public in that place or within reasonable reach, it may be made by any respectable inhabitant in the presence of witnesses.^ The protest should be noted on the day of demand and re- fusal ; and may be filled up afterwards, even, perhaps, so late as at the trial.' English authorities say that there may be a pro- test for better security ; but this practice is, we believe, unknown in this country, and nothing seems to be gained by it there, un- name on the back of the note at the time it was made, and this, according to the law in Massachusetts, rendered him liable as a joint promisor. There was no evidence to show that the holder knew when the name was placed there, and nothing by which the holder could presume that he was not a second indorser, except that his name was before that of the payee on the back of the note. The court held that, being a joint promisor, the indorser could not be charged till demand was made on him. 1 Wyman v. Adams, 12 Cush. 210. 2 Gale V. Walsh, 5 T. R. 239; Rogers v. Stephens, 2 T. R. 713; Orr v. Maginnis, 7 East, 359 ; Bijden v. Taylor, 2 Harris & J. 396 ; Townslcy v. Sumrall, 2 Pet. 170. 3 Young V. Bryan, 6 Wheat. 146 ; Burke v. McKay, 2 How. 66 ; Bonar v. Mitchell, 5 Exch. 415; Bay w. Church, 15 Conn. 15. * Ellis V. Commercial Bank, 7 How. Miss. 294 ; Carter v. Union Bank, 7 Humph. 548. And see ante, p. 106, n. 2. ^ It cannot be done by an agent. Carmichael v. Bank of Pennsylvania, 4 How. Miss. 567 ; Sacrider v. Brown, 3 McLean, 481 ; Chenomth v. Chamberlin, 6 B. Mon. 60 ; Bank of Kentucky v. Garey, id. 626 ; Carter v. Union Bank, 7 Humph. 548. " Byles on Bills, 200. ' Goostrey v. Mead, Bull. N. P. 271 ; Chaters v. Bell, 4 Esp. 48 ; On- v. Maginnis, 7 East, 359. [124] CH. IX.] NEGOTIABLE PAPER. *112 less, as is said, there may then be a second acceptance for honor, which cannot otherwise be made.^ The loss of a bill is not a sufficient excuse for not protesting it.2 But a subsequent promise to pay is held to imply protest and notice.^ The notarial seal is evidence of the dishonor of a foreign bill ; * but not, it would seem, of an inland bill.^ And no col- lateral statement in the certificate is evidence of the fact stated ; thus, the statement by a notary that the drawee refused to ac- cept or pay because he had no funds of the drawer, is no evi- dence of the absence of such funds.® The general, or, indeed, universal duty of the holder of nego- tiable paper is, to give notice of any refusal to accept or pay to all antecedent parties. The reason of this is obvious. These previous parties have engaged that the party who should accept * or pay will do so ; and they have further engaged that, if he refuses to do his dtity, they will be liable in his stead to the per- sons injured by his refusal. They have a right to indemnity or compensation from the paity for whom they are liable, and to such immediate notice of his failure as shall secure to them an immediate opportunity of procuring this indemnity or compen- sation if they can. Nor is the question what notice this should be, left to be judged of by the circumstances of each case ; for the law merchant has certain fixed rules applicable to all negoti"- able paper. Notice must be given even to one who has knowledge.^ No 1 See Byles on Bills, 202. 2 Byles on Bills, 204. ^ Thus, in Gibbon v. Coggon, 2 Camp. 188, in an action against the drawer of a foreign bill of exchange, it was held that a promise of payment by the defendant after the bill was due, was sufficient evidence of a protest for non-payment, and notice of the dishonor of the bill. And Lord Ellenborougk said : " By the drawer's promise to pay, he admits his liability ; he admits the existence of every thing which is necessary to render him liable. When called upon for payment of the bill, he ought to have ob- jected that there was no protest. Instead of that, he promises to pay it. I must, there- fore, presume that he had due notice, and that a protest was regularly drawn up by a notary." And see Patterson v. Beeher, 6 J. B. Moore, 319 ; Greenway v. Hindley, 4 Camp. 52 ; Campbell v. Webster, 2 C. B. 258. * Anonymous, 12 Mod. 345 ; Bryden v. Taylor, 2 Harris & J. 399 ; Nicholls v. Webb, 8 Wheat. 333 ; Townsley v. Sumrall, 2 Pet. 179 ; Bank of Kentucky v. Purs- ley, 3 T. B. Mon. 238 ; Chase v. Taylor, 4 Harris & J. 54. s See Chesmer v. Noyes, 4 Camp. 129. And see cases supra. « Dnmont v. Pope, 7 Blackf. 367. ' Caunt V. Thompson, 7 C. B. 400 ; Burgh v. Legge, 5 M. & W. 418. 11 * [ 125 ] 113* ELEMENTS OP MERCANTILE LAW. [CH. IX. particular form is necessary ; it may be in writing or oral ; ^ all that is absolutely essential is, that it should designate the note or bill with sufficient distinctness, and state that it has been dis- honored ; ^ and also that the party notified is looked to for pay- ment.^ If the maker is away from home, so that personal demand cannot be made upon him, the holder is not obliged to notify the indorser of this absence, but may make a demand at the last and usual place of abode or business of the maker, and then notify the indorser of the non-payment of the note, and request payment.* It has been held that the notice to the party, when given by the immediate holder of the bill, sufficiently im- plies that he is looked to.° And notice of protest for non-pay- ment is sufficient notice of demand and refusal.^ How dis- tinctly the note or bill should be described, cannot be precisely defined. It is enough if there be no such looseness, ambiguity, or misdescription as might mislead a man of ordinary intelli- gence ; and if the intention was to describe the true note, and the party notified * was not actually misled, perhaps this is always enough. The notice need not state for whom payment is de- manded, nor where the note is lying ; ^ and even a misstatement 1 Phillips V. Gould, 8 C. & P. 355 ; Glasgow v. Pratte, 8 Misso. 336 ; Cuyler v. Ste- vens, 4 Wend. 566. 2 Hartley v. Case, 4 B. & C. 339. In this case, an indorsee sent a letter to the drawer, merely demanding payment ; and it was held not sufficient. Abbott, C. J., said : " There is no precise form of words necessary to be used in giving notice of the dishonor of a bill of exchange, but the language used must be such as to convey notice to the party what the bill is, and that payment of it has been refused by the acceptor. Here, the letter in question did not convey to the defendant any such notice ; it does not even say that the bill was ever accepted." And see Solarte v. Palmer, 7 Bing. 530, 2 Clark & P. 93 ; Everard v. Watson, 1 Ellis & B. 801 ; Caunt v. Thompson, 7 C. B. 400 ; Hedger v. Steavenson, 2 M. & W. 799 ; Lewis v. Gompertz, 6 id. 399 ; Grageon V. Smith, 6 A. & E. 499 ; Boulton v. Welsh, 3 Bing. N. C. 688 ; Ploulditch v. Cauty, i id. 411 ; Strange v. Price, 10 A. & E. 125; Messenger v. Southey, 1 Man. & G. 76; Pnrze v. Sharwood, 2 Q. B. 388 ; Gilbert v. Dennis, 3 Met. 495 ; Pinkham v. Macv, 9 id. 174. 8 Per Ashurst and Buller, JJ., in Tindal v. Brown, 1 T. E. 167 ; East v. Smith, 4 Dowl. & L. 744. * Sanger v. Stimpson, 8 Mass. 260. 5 Furze v. Sharwood, 2 Q. B. 416. In this case. Lord Daman said: "Where no- tice has been given by another pai-ty than the holder, there may be good sense in re- quU-ing that it shall be accompanied by a direct demand of payment, or a statement that it will be required of the party addressed ; but in no case has the absence of such information been held to vitiate a notice in other respects complete, and which has come directly from the holder." And see King v. Bickley, 2 Q. B. 419 ; Miers v. Brown 11 M. & W. 372. ^ Spies V. Newbei-ry, 2 Doug. Mich. 425 ; Smith v. Little, 10 N. H. 526. ' Woodthorpe v. Lawes, 2 M. & W. 109 ; Housego v. Cowne, id. 348 ; Harrison v. Euscos, 15 id. 231. [126] CH. IX.] NEGOTIABLE PAPER. *114 in this respect may not be material, if it do not actually mis- lead.i No copy of the protest need be sent ;2 but information of the protest should be given. If the letter be properly put into the post-office, any miscar- riage of the mail does not afi'ect the party giving notice.^ The address should be sufficiently specific. Only the surname — as " Mr. A " — especially if sent to a large city, might not, in gen- eral, be enough.* The postmarks are strong evidence that the letter was mailed at the very time these marks indicate ; but this evidence may be rebutted.^ A notice not only may, but should be sent by the public post. It may, however, be sent by * a private messenger ; but is not sufficient if it do not arrive until after the time at which it would have arrived by mail.^ It may 1 Kowlands v. Springett, 14 M. & W. 7. ^ See Blakely v. Grant, 6 Mass. 386 ; Lenox v. Leverett, 10 Mass. 1 ; Wallace v. Agrv, 4 Mason, 336 ; Wells v. Whitehead, 15'Wend. 527. 8 Woodcock V. Houldsworth, 16 M. & W. 124. In this case. Pollock, C. B., before whom the cause was tried, directed the jury to inquire when the notice was received by the party to whom it was sent. And this was held incorrect. ParJce, B., said : " The jury should have been asked to say on what day the letter was posted, not on what day it was received. Notices of dishonor are generally put into the post ; when that is done, although, by some mistake or delay at the post-ofBce, the letter fails to reach its destination in proper time, the party who posted it ought not to be prejudiced ; he has done all that was usual and necessary, and he does not guarantee the certainty or cor- rectness of the post-office delivery." And see, to the same effect, Dobree v. Eastwood, 3 C. & P. 250 ; Stocken v. Collin, 7 M. & W. 515. * Thus, in Walter v. Haynes, Kyan & M. 149, where a letter, directed "Mr. Haynes, Bristol," containing notice of the dishonor of a bill, was proved to have been put into the post-office, it was held that this was not sufScieut proof of notice ; the direction being too general to raise a presumption that the letter reached the particular individual intended. And Abbott, C. J., said : "Where a letter, fully and particularly directed to a person at his usual place of residence, is proved to have been put into the post-office, this is equivalent to proof of a delivery into the hands of that person, because it is a safe and reasonable presumption that it reaches its destination ; but where a letter is addressed generally to A B, at a large town, as in the present case, it is not to be abso- lutely presumed from the fact of its having been put into the post-office, that it was ever received by the party for whom it was intended. The name may be unknown at the post-ofBce, or, if the name be known, there may be several persons to whom so gen- eral an address would apply. It is, therefore, always necessaiy, in the latter case, to give some further evidence to show that the letter did in fact come to the hands of the person for whom it was intended." But where a party drew a bill, dating it generally " London," it was held that proof tjiat a letter containing notice of the dishonor of the bill was put into the post-office, addressed to the drawer at " London," was evidence to go to the jury that he had due notice of dishonor. And Lord Abinger said : "I have known such evidence admitted a hundred times. If the party chooses to draw a bill, and date it so generally, it implies that a letter sent to the post-office, and so directed, will find him." And see, to the same effect, Mann v. Moors, Ryan & M. 249 ; Bur- mester v. Barron, 17 Q. B. 828. 6 Stocken v. Collin, 7 M. & W. 515 ; Woodcock v. Houldsworth; 16 id. 124 ; Craw- ford V. Branch Bank at Mobile, 7 Ala. 205. ^ Darbishire v. Parker, 6 East, 3, If, however, it arrive on the same day and within business hours, it vrill be sufficient. Bancroft v. Hall, Holt, N. P. 476. [127] 115* ELEMENTS OF MERCANTILE LAW. [CH. IX. be sent to the town where the party resides, or to another town, or a more distant post-office, if it is clear that he may thereby receive the notice earlier.^ And if the notice is sent to what the sezider deems, after due diligence, the nearest post-office, this is enough.^ If the parties live in the same town, notice should not be sent by mail.^ The notice should be sent either to the place of business, or to the residence of the party notified.* But if one directs a no- tice to be sent to him elsewhere than at home, it seems that it may be so sent, and bind not only him but prior parties, although time is lost by so sending it.^ The notice should be sent within reasonable time ; and in respect to negotiable paper, the law merchant defines this within very narrow limits. If the parties live in the same town, notice must be given so that the party to whom it is sent may receive the notice in the course of the day next after that in which the party sending has knowledge of the fact.^ If the parties live in * different places, the notice must be sent as soon as by the first practicable mail of the next day." Each party receiving notice ' United States Bank o. Lane, 3 Hawks, 453 ; Farmers and Merchants Bank v. Battle, 4 Humpli. 86 ; Sherman v. Clark, 3 McLean, 91 ; Mercer v. Lancaster, 5 Penn. State, 160; Walker v. Bank of Augusta, 3 Ga. 486 ; Hunt v. Fish, 4 Barb. 324. ^ Marsh v. BaiT, Meigs, 68. 8 Ireland v. Kip, 10 Johns. 490, U id. 231 ; Ransom v. Mack, 2 Hill, 587 ; Kramer V. M'Dowell, 8 Watts & S. 138 ; Bowling v. Harrison, 6 How. 248 ; Peirce v. Pendar, 5 Met. 352. In this last case, Shaw, C. J., said : "The general rule certainly is, that when the indorser resides in the same place with the party who is to give the notice, the notice must be given to the party personally, or at his domicil or place of business. Perhaps a different rule may prevail in London, where a penny post is established and regulated by law, by whom letters are to be delivered to the party addressed, or at his place of domicil or business, on the same day they are deposited. And, perhaps, the same rule might not apply where the party to whom notice is to be given lives in the same town, if it be at a distant village or settlement where a town is large, and there are several post-offices in different parts of it. But of this we give no opinion. In the present case, the defendant had his residence and place of business in the city of Ban- gor, and the only notice given him was by a letter, addressed to him at Bangor, and deposited in the post-office at that place. And we are of opinion that this was insufii- cient to charge him as indorser." * Bank of Columbia v. Lawrence, 1 Pet. 578. And see cases cited in preceding note. s Shelton V. Braithwaite, 8 M. & W. 252. <> Smitli V. MuUett, 2 Camp. 208. In this case. Lord Ellenborough said : " Where the parties reside in London, each party should have a day to give notice. The holder of a bill is not, omissis omnibus cdiis negoliis, to devote himself to giving notice of its dishonor. If you limit a man to a fractional part of a day, it will come to a question how swiftly the notice can be conveyed, — a man and horse must be employed, and you will have a race against time." And see Scott v. Lifford, 9 East, 347 ; Hilton v. Pair- dough, 2 Camp. 633 ; Haynes o. Birks, 3 B. & P. 599 ; Fowler v. Hendon, 4 Tvrw. 1002 ; Grand Bank v. Blanchard, 23 Pick. 305. ' Williams u. Smith, 2 B. & Aid. 496. In this case, Abbott, C. J., said : "It is of the greatest importance to commerce that some plain and precise rule should be laid [128] CH. IX.] NEGOTIABLE PAPER. -115 has a day, or until the next post after the day in which he re- ceives it, before he is obliged to send the notice forward. Thus, a banker with whom the paper is deposited for collection, is con- sidered a holder, and entitled to a day to give notice to the de- positor, who then has a day for his notice to antecedent parties.^ The different branches of one establishment have been held dis- tinct holders for this purpose.^ Notice must not be given too soon. Thus, if a note is paya- ble at a bank, the maker has till the close of bank hours to pay it in, and if not payable at a bank, he has till the close of that day ; and in the latter case notice to the indorser in the after- noon that the maker has absconded and the note is unpaid, is not sufficient.^ If notice be sent by ship, it is said that it may be delayed until the next regular ship ; * but this is not quite certain ; or, rather, the rule can hardly as yet be considered fixed and definite. It should be sent by the first proper opportunity. Neither Sunday nor any legal hoHday is to be computed in reckoning the time within which notice must be given.^ down to gaide persons in all cases as to the time within which notices of the dishonor of bills must be given. That time I hare always understood to be the departure of the post on the day following that in which the party receives the intelligence of the dis- honor. If, instead of that rule, we were to say that thei party must give notice by the next practicable post, we should raise in many cases difficult questions of fact, and should, according to the peculiar local situations of parties, give them more or less facility in complying with the rule. But no dispute can arise from adopting the rule which I have stated." And see Wright ;;. Shawcross, 2 B. & Aid. 501, n. (a). And if no post goes oat the next day, the party may wait until the next post day. GeiU v. Jeremy, Moody & M. 61. And if the first post of the next day goes out at an early hour in the morning, the party may wait until the next post. Thus, where a bill was dishonored on Saturday in « place where the post went out at half after nine in the morning, it was held that it was sufficient notice of dishonor to send a letter by the fol- lowing Tuesday morning's post. Hawkes v. Salter, 4 Bing. 715. And see Howard v. Ives, 1 Hill, 263. In this case, Cowen, J., makes a question, whether, if there are sev- eral mails leaving on the same day, at different hours, the party may in all cases elect by which he will send. See Whitwell v. Johnson, 17 Mass. 449, 454. ' Bray v. Hadwen, 5 M. & S. 68 ; Firth v. Thrush, 8 B. & C. 387 ; Howard v. Ives, 1 Hill, 263. 2 Thus, in Clode v. Bayley, 12 M. & W. 51, where a bill of exchange was indorsed to a branch of the National Provincial Bank of England, at Postmadoc, who sent it to the Pwllheli branch of the same bank, who indorsed it to the head establishment in London ; it was held that each of the branch banks were to be considered as indepen- dent indorsers, and each entitled to the usual notice of dishonor. 3 Pierce v. Gate, 12 Gush. 190. * Muilman v. D'Eguino, 2 H. Bl. 565. And see Fleming v. M'Glure, 1 Brev. 428. ^ Eagle Bank v. Ghapin, 3 Pick. 180 ; Agnew v. Bank of Gettysburg, 2 Harris & G. 478 ; Hawkes v. Salter, 4 Bing. 715 ; Wright v. Shawcross, 2 B. & Aid. 501, u. (a) ; Bray v. Hadwen, 5 M. & S. 68 ; Cuyler v. Stevens, 4 Wend. 566 ; Lindo v. Unsworth, 2 Camp. 602. [129] 116* ELEMENTS OF MERCANTILE LAW. [CH. IX. There is no presumption of notice ; and the plaintiff must prove that it was given and was sufficient. Thus, proving that it was given in " two or thre days," is insufficient, if two would have been right, but three not.^ * Notice should be given only by a party to the instrument, who is liable upon it, and not by a stranger ; ^ and it has been held that notice could not be given by a first indorser who, not having been notified, was not himself liable.^ A notice by any party liable will enure to the benefit of all antecedent or subse- quent parties. The notice may be given by any authorized agent of a party who could himself give notice.* Notice must be given to every antecedent party who is to be held. And we have seen that this may be given by a holder to the first party liable, and by him to the next, &c. But the holder may always give notice to all antecedent parties ; and it is al- ways prudent, and in this country, we believe, quite usual, to do so.° Notice may be given personally to a party, or to his agent authorized to receive notice, or left in writing at his home or place of business.^ If the party to be notified is dead, notice should be given to his personal representatives.^ A notice addressed to the " legal representative," and sent to the town in which the deceased party resided at his death, has been held 1 Lawson v. Sherwood, 1 Stark. 314. 2 It was formerly hdd that the notice must be given by the actual holder of the bill. See Tindal v. Brown, 1 T. R. 167, 2 id. 186; Ex parte Barclay, 7 Ves. 597. But it was decided in Chapman v. Keane, 3 A. & E. 193, that a notice given by any party to the bill was sufficient ; and, therefore, that an indorsee, who has indorsed over, and is not the holder at the time of the maturity and dishonor, may give notice at such time to an earlier party, and, upon afterwards taking up the bill and suing such party, may avail himself of such notice. And see Harrison v. Ruscoe, 15 M. & W. 231 ; Stewart v. Konnett, 2 Camp. 177 ; Lysaght v. Bryant, 9 C. B. 46; Chanoine v. Fow- ler, 3 Wend. 173. ' See cases in preceding note. * Woodthorpe v. Lawes, 2 M. & W. 109. ^ In such case the notice must be given to all the parties the day after the dishonor. Thus, if there be a drawer, acceptor, payee, and first indorsee of a bill of exchange, all residing in the same place, .and the bill bo dishonored on Monday, and the indorsee notify the payee on Tuesday, and the payee notify the drawer on Wednesday, this will be good. But if the indorsee wish to notify both the payee and the drawer, he must notify them both on Tuesday. See Howe v. Tipper, 13 C. B. 249 ; Dobree v. East- wood, 3 C. & P. 250 ; Chapcott v. Curlewis, 2 Moody & R. 284 ; Smith v. MuUett, 2 Camp. 208 ; Marsh v. Maxwell, 2 Camp. 210, u. •^ Crosse v. Smith, 1 M. & S. 545 ; Housego v. Cowne, 2 M. & W. 348. ' Merchants Bank v. Birch, 17 Johns. 25; Oriental Bank v. Blake, 22 Pick. 206; Planters Bank v. White, 2 Humph. 112 ; Cayuga Bank v. Bennett, 5 Hill, 236 ; Barns V. Reynolds, 4 How. Miss. 114. [130] CH. IX.] NEGOTIABLE PAPER. *11 7 sufficient.! But a notice addressed to the party himself, when known to be dead, or to "the estate of, &c.," would not be sufficient, but might become so with evidence that the adminis- trator. or executor actually received the notice.^ * If two or more parties are jointly liable on a bill as partners, notice to one is enough.^ But if the indorsers are not partners, notice should be given to each one in order to bind him.* One transferring by delivery a note or bill payable to bearer is not entitled to notice of non-payment, unless the circumstances of the case are such as to make him liable ; and then he is en- titled to such reasonable notice only as is due to a guarantor ; ^ as if, for instance, the paper was transferred as security, or even in payment of a preexisting debt. For this revives if the bill or note be dishonored, and there must be notice given of the dis- honor. In general, a guarantor of a bill or note, or debt, is en- titled only to such notice as shall save him from actual injury ; and cannot interpose the want of notice as a defence, unless he can show that the notice was unreasonably withheld or delayed, and that he has actually sustained injury from such delay or want of notice.^ And if an indorser give also a bond to pay the debt, he is not discharged from his bond by want of notice.' 1 Pillow V. Hardeman, 3 Humph. 538. 2 Cayuga Bank v. Bennett, 5 Hill, 236. " Porthouse v. Parker, 1 Camp. 83 ; Dabney v. Stidger, 4 Smedes & M. 749. Bat if one of the partners is dead, although notice to a partner of the original firm might bind the partnership assets, this would not be enough to hold the separate estate of the deceased partner. To accomplish this, notice should be given to the administrator or executor of the deceased. Cocke v. Bank of Tennessee, 6 Humph. 51. * State Bank v. Slaughter, 7 Blackf. 133 ; Sayi-e v. Frisk, 7 "Watts & S. 383 ; Shep- ard V. Ha^ley, 1 Conn. 367 ; Willis v. Green, 5 Hill, 232 ; Miser v. Trovinger, 7 Ohio, State, 281. s "If a person deliver a bill to another without indorsing his own name upon it, he does not subject himself to the obligations of the law merchant ; he cannot be sued on the bill either by the person to whom he delivers it, or by any other. And, as he does not subject himself to the obligations, we think he is not entitled to the advantages. If the holder of a bill sell it mthout his own indorsement, he is, generally speaking, liable to no action in respect of the bill. If he deliver it without his indorsement upon any other consideration, antecedent or concomitant, the nature of the transaction, and all circumstances regarding the bill, must be inquired into, in order to ascertain whether he is subject to any responsibility. If the bill be delivered and received as an absolute discharge, he will not be liable ; if othenvise, he may be." Per Lord Tenterden, in Van "Wart V. "Woolley, 3 B. & C. 439. And see Van Wart v. Smith, 1 Wend. 219 ; Swin- yard v. Bowes, 5 M. & S. 62. 8 See Warrington v. Purbor, 8 East, 242 ; Philips v. Astling, 2 Taunt. 206 ; Swm- yard v. Bowes, 5 M. & S. 62 ; Holbrow v. Wilkins, 1 B. & C. 10 ; Van Wart v. Wool- ley, 3 B. & C. 439 ; Walton v. Mascall, 13 M. & W. 72 ; Hitchcock v. Humpfrey, 5 Man. & G. 559. And ante, p. 70, n. 1. ' Murray v. King, 5 B. & Aid. 165. [131] 118* ELEMENTS OF MERCANTILE LAW. [CH. IX. In general, all parties to negotiable paper, who are entitled to notice, are discharged by want of notice. The law presumes them to be injured, and does not put them to proof.^ It has been held, however, that the drawer of a check not notified of non-payment, is thereby discharged only to the extent of the loss which he actually sustains.^ * If one who is discharged by want of notice, nevertheless pays the bill or note, he may call upon the antecedent parties, if due notice has been given to them, and if, by taking up the paper, he acquires the rights of the holder ; or if he, having been indorsee, indorsed the paper over ; for he is then remitted to his rights and position as indorsee. The right to notice may be waived by any agreement to that effect prior to the maturity of the paper.^ It is quite common for an indorser to write, " I waive notice," or, " I waive demand," or some words to this effect. It should, however, be remembered that these rights are independent. A waiver of demand may imply a waiver of notice of non-payment ; but a waiver of notice of non-payment certainly does not imply a waiver of demand.* And it has been held that a waiver of protest is a waiver of de- mand, but not of notice.^ So, if a drawer countermands his order, the bill should still be presented, but notice of dishonor need not be given to the drawer.^ Or, if a drawer has no funds, and nothing equivalent to funds, in the drawee's hands, and would have no remedy against him or any one else, as he cannot 1 Bridges v. Berry, 3 Taunt. 130. In this case, the defendant, being unable to pay a bill when due, whic-li he had accepted, obtained time, and indorsed to the plaintitf, as a security, a bill drawn by himself to his own order, which, when due, was dishonored by tlie drawee, but the holder omitted to give the defendant notice : Held, that by this omission the defendant was not only discharged as indorser of the one bill, but also as acceptor of the other. ■^ Pack V. Thomas, 13 Smedes & M. 11. And see ante, p. 109, n. 1. 5 Thus, in I'hipson v. Kneller, 4 Camp. 285, the drawer of a bill of exchange, a few days before it became due, stated to the holder that he had no regular residence, and that he would call and see if tlie bill was paid by the acceptor. Held, that under these circumstances he was not entitled to notice of its dishonor. And see Burgh v. Legge, 5 ai. & W. 418; Woodman v. Tlrarston, 8 Cush. 159. * Di-inkwafer v. Tebbetts, 17 Maine, 16 ; Lane v. Steward, 20 Maine, 98 ; Berkshire Bank v. Jones, 6 Mass. 524 ; Backus v. Shipherd, 11 Wend. 629 ; Buchanan v. Mar- shall, 22 Vt. 561. 5 Wall !'. Bry, 1 La. Ann. 312. But, in Coddington v. Davis, 1 Comst. 186,3 Denio, 16, it was held tliat the ivord " protest," as used among men of business, meant all the steps necessary to charge an indorser, and that a waiver of protest was a waiver of demand and notice. 8 Hill V. Heap, Dowl. & E., N. P. 57 ; Prideaux v. Collier, 2 Stark. 57. [132] CH. IX.J NEGOTIABLE PAPER. *119 be prejudiced by want of notice, it is not necessary to give him notice.i But the indorser must still be notified ; ^ and a drawer for the accommodation of the acceptor, is entitled to notice, be- cause he might have a claim upon the acceptor.^ If a drawer make a bill payable at his own house, or counting- room, this has been said to be evidence to a jury that the bill was " drawn for his accommodation, and that he expects to provide for the payment, and is not entitled to notice of dishonor.* Actual ignorance of a party's residence justifies the delay necessary to find it out, and no more ; ^ and after it is discovered, the notifier has the usual time.® Death, or severe illness of the notifier or his agent, is an excuse for delay ; but the death, bankruptcy, or insolvency of the drawee is no excuse.'^ A letter of the maker, before maturity, stating inability to pay. 1 Bickerdike v. Bollman, 1 T. R. 405 ; Cory ». Scott, 3 B. & Aid. 619 ; Carter v. Hower, 16 M. & W. 743. 2 Wilkes V. Jacks, Peake, 202. This was an action against the indorser of a bill of exchange. It appeared that notice had not been given to the defendant, whereupon the plaintiff offered to show that the drawer had no effects in the hands of the drawee. But Lord Kenyan said : " That circumstance will not avail the plaintiff ; the mle extends only to actions brought against the drawer ; the indorser is in aU cases entitled to notice, for he has no concern with the accounts between the drawer and the drawee." 3 Ex parte Heath, 2 Ves. & B. 240; Sleigh v. Sleigh, 5 Exch. 514. And where a bill was drawn for the accommodation of an indorsee, and neither such indorsee nor the drawer had any effects in the hands of the acceptor, it was held that a subsequent indor- see, in order to recover against the drawer, was bound to give him notice, for the drawer had a remedy over against his immediate indorsee. Norton v. Pickering, 8 B. & C. 610 ; Cory v. Scott, 3 B. & Aid. 619. * Sharp V. Bailey, 9 B. & C. 44. * Bateman v. Joseph, 2 Camp. 461, 12 East, 433. In this case. Lord Ellenborough said : " When the holder of a bill of exchange does not know where the indorser is to be found, it would be very hard if he lost his remedy by not communicating immediate notice of the dishonor of the bill ; and I think the law lays down no such rigid mle. The holder must not allow himself to remain in a state of'^ passive and contented igno- rance ; but if he uses reasonable diligence to discover the residence of the indorser, I conceive that notice given as soon as this is discovered, is due notice of the dishonor of the bill, within the usage and custom of merchants." But, in Beveridge v. Burgis, 3 Camp. 262, where the holder, being ignorant of the indorser's residence, made inquiries at a certain house where the bill was made payable. Lord Ellenhorough said : " Ignorance of the indorser's residence may excuse the want of due notice ; but the party must show that he has used reasonable diligence to find it out. Has he done so here 1 How should it be expected that the requisite information should be obtained where the bill was payable ? Inquiries might have been made of the other persons whose names ap- peared upon the bill, and appUcation might have been made to persons of the same name with the defendant, whose addresses are set down in the directory." And see Porter v. Judson, 1 Gray, 175 ; Hunt v. Maybee, 3 Seld. 266 ; Dixon v. Johnson, Exch. 1855, 29 Eng. L. & Eq. 504. 6 Firth V. Thrush, 8 B. & C. 387. 7 Lawrence v. Langley, 14 N. H. 70; Esdaile v. Sowerby, 11 East, 114; Boultbee V. Stubbs, 18 Ves. 20 ; Barton v. Baker, 1 S. & R. 334 ; Gibbs v. Cannon, 9 S. & K. 198. 12 [133] 120* ELEMENTS OF MERCANTILE LAW. [CH. IX. and requesting delay, does not excuse want of demand or of notice.! But a request of the indorser for delay, or an agreement with him for delay, would excuse or waive demand or notice.^ If notice of the dishonor of a bill is given, and it afterwards turns out that the bill was actually dishonored at the time the notice was given, it is immaterial whether the party giving the notice had actual knowledge of the fact at the time when he gave the notice.^ As the right to notice may be waived before maturity, so the want of notice may be cured afterwards by an express promise to pay ; and an acknowledgment of liability, or a payment in part, is evidence, but not conclusive evidence, of notice ; * nor are the jury bound to draw this conclusion, even if the evidence be not rebutted.^ If the promise be conditional, and the condi^ tion be not complied with, the promise has been held to be still evidence.^ Nor is it sufficient to avoid such promise, that it was made in ignorance of the law ; it must be made, however, with a full knowledge of the facts. The following distinction seems to be drawn : if the fact of neglect to give notice appears, the party entitled to notice is not bound by his subsequent promise, unless dt was made with a knowledge of the neglect ; but if the fact of * neglect does not appear, the subsequent promise wiU be taken as evidence that there was no neglect, but sufficient notice." And a promise to pay, made in expectation of the dis- honor of a bill or note, will be construed as a promise on con- dition of usual demand and notice, and, of course, does not waive them.^ And, as we have remarked, no waiver of laches can affect any party but him who makes the waiver. 1 Pierce ;;. Whitney, 29 Me. 188. 2 Ridgeway !'. Day, 13 Penn. State, 208 ; Clayton v. Phipps, 14 Misso. 399. ' Jennings v. Roberts, 4 Ellis & B. 615, 29 Eng. L. & Eq. 118. * Vaughan v. Fuller, 2 Stra. 1246 ; Horford v. Wilson, 1 Taunt. 12 ; Lundie v. Rob- ertson, 7 East, 231 ; Brett v. Levett, 13 East, 213; Wood v. Brown, 1 Stark. 217; Rogers v. Stephens, 2 T. E. 713 ; Hicks v. Duke of Beaufort, 4 Bing. N. C. 229 ; Booth V. Jacobs, 3 Nev. & M. 351 ; Brownell v. Bonney, 1 Q. B. 39. 5 See Byles on Bills, 238 ; Bell v. Erankis, 4 Man. & G. 446. " Campbell v. Webster, 2 C. B. 258. ^ Tebbetts v. Dowd, 23 Wend. 379. ' Pickin V. Graham, 1 Cromp. & M. 725. [134] CH. IX.] NEGOTIABLE PAPER. -120 SECTION VI. OP THE EIGHTS AND DUTIES OP AN INDORSEE. Only a note or bill payable to a payee or order is, strictly speaking, subject to indorsement. Those who write their names on the back of any note or bill, are indorsers in one sense, and are sometimes called so. The payee of a negotiable bill or note — whether he be also maker or not — may indorse it, and afterwards any person, or any number of persons, may indorse it. The maker promises to pay to the payee or his order ; and the indorsement is an order to pay the indorsee, and the maker's promise is then to him. But if the original promise was to the payee or order, this " or order," which is the negotiable element, passes over to the indorsee, and he may indorse, and so may his indorsee, indefinitely.^ Each indorser, by his indorsement, does two things ; first, he orders the antecedent parties to pay to his indorsee ; and next, he engages with his indorsee that if they do not pay, he will. "What effect an indorsement of a negotiable note or bill by one not payee, before the indorsement by payee, should have, is not quite certain. Upon the whole, however, we should hold, with some reason and authority, that, where such a name appears, as it may be made to have the place of a second indorser whenever the payee chooses to write his name over it, it shall be held to be so intended, in the absence of evidence ; ^ and then, of course, 1 More 0. Manning, 1 Comyns, 311; Acheson d. Foimtain, 1 Stra. 557; Edie v. East India Co. 2 Burr. 1216 ; Gay v. Lauder, 6 C. B. 336. 2 This is the well-settled law in New York. See Dean v. Hall, 17 Wend. 214; Seabury v. Hungerford, 2 Hill, 80 ; Hall v. Newcomb, 3 Hill, 233, 7 id. 416 ; Spies v. Gilmore, 1 Barb. 158, 1 Comst. 321. But in Massachusetts, and some other States, such an indorser is held as a co-maker. Union Bank v. "Willis, 8 Met. 504 ; Martin v. Boyd, 11 K H. 385 ; Flint v. Day, 9 Vt. 345 ; Nash v. Skinner, 12 id. 219. In Union Bank v. Willis, supra, A made a note payable to B or order ; C put his name in blank on the back of the note, and B put his name in blank under C's name ; A presented the note in this condition to the plaintiffs, who discounted it for him. On failure of A to pay the note, the plaintiffs gave notice to B and C of the non-payment, but did not present the note to C for payment. Held, in a suit by the plaintiffs against B, as in- dorser, that it was to be presumed that C put his name on the note at the time when A signed it ; that he was, therefore, an original promisor ; and that B was discharged by the omission of the plaintiffs to present the note to C for payment. Hubbard, J., in deliTering the opinion of the court, said : " If the subject now brought before us were [135] 121 ELEMENTS OF MERCANTILE LAW. [CH. IX. it gives the payee no claim against such a party, because a first indorser can have none against a second, but the second may have a claim against the first. But evidence is receivable to prove that the party put his name on the note for the purpose of adding to its security by becoming responsible for it to the payee. And then, if he indorsed the note before it was received by the payee, the consideration of the note attaches to him, and he may be held either as surety for consideration, or as a maker.^ If he wrote his name on the note after it was made, and at the request of the payee or other holder, he is bound only as guarantor or surety, and the consideration of the note being exhausted, he is bound only by showing some new and independent considera- tion.^ But if the person who put his name on the back of the note after delivery to the payee, had made an agreement with a new one, we shonld hesitate in giving countenance to such an irregularity, as to hold that any person whose name is written on the back of a note should be chargeable as a promisor. We should say that a name written on the paper, which name was not that of the payee, nor following his name on his having indorsed it, was either of no validity to bind such individual, because the contract intended to be entered into, if any, was incomplete or within the Statute of Frauds ; or that he should be treated by third par- ties simply as a second indorser ; leaving the payee and himself to settle their respective liabilities, according to their own agreement. But the validity of such contracts has been so long established, and the course of decisions, on the whole, so uniform, that we have now only to apply the law, as it has been previously settled, in order to decide the present suit." The learned judge then proceeds to a minute examination of the cases previously decided on the point in Massachusetts, and arrives at the conclusion stated above. And it has been recently held that a party not the payee, who indorses a note before its delivery to the payee, becomes liable as an original promisor, and that this is a conclitsive presumption of law, and that parol evidence is not admissible to show that the real agreement was that he was only to be liable as an indorser. Essex Co. v. Ed- mands, S. J. C. Mass., 21 Law Eepoiter, 571. See also, Wright v. Morse, S. J. C. Mass. 1858, 20 Law Reporter, 656. But if the note is payable to the maker or his order, and indorsed by the maker, a person who puts his name on it after the maker, but before delivery to a third party, is liable only as an indorser, and not as a joint maker. Bige- low V. Colton, 13 Gray, 309 ; Lake v. Stetson, id. 310, a. And parties who indorse their names on a promissory note before its delivery, for the benefit of the maker, are not liable as joint makers, if the payee afterwards indorses his name above theu's be- fore the note is delivered, and parol evidence is inadmissible to show that they were joint makers. Clapp v. Rice, 13 Gray, 402, and other cases cited in note. This case of Clapp V. Rice also decides, that where several persons indorse their names on a promissory note, to enable the maker to get it discounted, and some of them afterwards, on the failure of the maker, pay the note, they cannot maintain an action against the others for contribution, without proving that the relation between them was really that of co-sureties. But parol evidence of that fact will maintain such an action. t Nelson v. Dubois, 13 Johns. 175 ; Herrick v. Carman, 12 id. 160 ; Hall v. Newcomb, 7 Hill, 422, per Bockee, Senator. But see cases supra. ^ Tenney v. Prince, 4 Pick. 385. In this case, A gave B a negotiable promissory note, payable in twelve months, and, three months before it fell due, C indorsed it in blank. It was held, that B could not declare upon C's indorsement as an original prom- ise, but that he might maintain an action upon it as a guaranty, upon showing a legal consideration. And see, to the same effect, Benthal v. Jitdkins, 13 Met. 265 ; Mecorney V. Stanley, 8 Cush. 85. [136] CH. IX.] NEGOTIABLE PAPER. *122 the latter before the making of the note that he would sign it, he is liable as a promisor although the maker of the note did not know of this promise.i No one who thus indorses a note not negotiable, can be treated or considered precisely as a second indorser, whatever be the names on the paper before his own ; but any indorser of such a note or bill may be held to be a new maker or drawer, or a guarantor or surety, as the circumstances of the case indicate or * require ; but either the original consider- ation or a new one must attach to him to affect him with a legal obligation.^ If the words "to order," or "to bearer," are omitted acciden- tally, and by mistake, it seems that they may be afterwards in- serted without injury to the bill or note ; ^ and whether a bill or note is negotiable or not, is held to be a question of law.* By the law merchant, bills and notes which are payable to order, can be effectually and fuUy transferred only by indorse- ment This indorsement may be in blank, or in full. The writ- ing of the name of a payee — either the original payee or an indorsee — with nothing more, is an indorsement in blank ; and a blank indorsement makes the bill or note transferable by de- livery, in like manner as if it had been originally payable to bearer. If the indorsement consist not only of the name, but of an order above the name to pay the note to some specified per- son, then it is an indorsement in full, and the note can be paid to no one else ; nor can the property in it be fully transferred, except by the indorsement of the indorsee ; and he may again indorse it in blank or in full. If the indorsement is, pay to A B onlp, or in equivalent words, A B is indorsee, but cannot indorse it over.^ Any holder for value of a bill or note indorsed in blank, whether he be the first indorsee or one to whom it has come through many hands, may write over any name indorsed an order to pay the contents to himself, and this makes it a' special 1 Hawkes v. Phillips, 7 Gray, 284. See also, Moies v. Bird, 11 Mass. 436. 2 Josselyn v. Ames, 3 Mass. 274 ; Hall v. Newcomb, 3 Hill, 233 ; Seabury v. Hunger- ford, 2 HiU, 84. 5 Kershaw v. Cox, 3 Esp. 246. * Grant w..Vaughan, 3 Burr. 1516. 5 Ancher v. Bank of England, Doug. 637 ; Edie v. East India Co. 2 Burr. 1227 ; Cramlington v. Eyans, 2 Vent. 307 ; Treuttel v. Barandon, 7 Taunt. 100. 12* [137] 123* ELEMENTS OP MERCANTILE LAW. [CH. IX. indorsement, or an indorsement in full. This is often done for security ; that is, to guard against the loss of the note by acci- dent or theft. For the rule of law is, that negotiable paper trans- ferable by delivery (whether payable to bearer or indorsed in blank), is, like money, the property of whoever receives it in good faith.i The same rule has been extended in England to ex- chequer bills ;^ to public bonds payable to bearer;^ and to Bast India bonds ; * and we think it would extend here to our railroad *and other corporation bonds, and, perhaps, to all such instruments as are payable to bearer, whether sealed or not, and whatever they may be called.^ If one has such an instrument, and it is stolen, and the thief passes it for consideration to a bond fide holder, this holder acquires a legal right to it, because the prop- erty and possession go together. But if the bill or note be spe- cially indorsed, no person can acquire any property in it, except by the indorsement of the special indorsee. But if the instru- ment has once been indorsed in blank, it becomes then equiva- lent to a note payable to bearer, and even the special indorser is liable to a bond fide holder, the negotiability of the note not being affected by subsequent special indorsements, and the holder has the power to strike out the special indorsements and recover under the first indorsement in blank.^ At one time, this acquirement of property in negotiable paper was defeasible by proof of want of care ; that is, if a holder lost his note, and a thief or finder passed it off to a bond fide holder, the property did not pass if the circumstances were such as to show negligence on the part of the purchaser, or a want of due inquiry.^ But this question of negligence seems now to be 1 Miller v. Eace, 1 Bun-. 452. 2 Wookey v. Pole, 4 B. & Aid. 1. 8 Gorgier v. MieviUe, 3 B. & C. 45. * Stat. 51 Geo. 3, c. 64. 6 See State of Illinois v. Delafield, 8 Paige, 527. 8 Smith V. Clarke, Peake, 225 ; Walker v. McDonald, 2 Exch. 527 ; Mitchell v. Fuller, 15 Penn. State, 268. ' The doctrine alluded to in the text was established by the case of Gill v. Cubitt, 3 B. & C. 466. There, a bill of exchange was stolen during the night, and taken to the office of a discount broker early on the following morning, by a person whose features were known, but whose name was unknown to the broker, and the latter being satisfied with the name of the acceptor, discounted the bill, according to his usual practice, without making any inquiry 6f the person who brought it. Imd, in an action on the bill by tlie broker against the acceptor, that the jury were properly directed to find a verdict for the defendant if they thought the plaintiff had taken the bill under circum- stances which ought to have excited the suspicion of a prudent and careful man. [138] CH. IX.] NEGOTIABLE PAPER. *124 at an end, and nothing less than fraud defeats the title of the purchaser.^ The written transfer of negotiable paper is called an indorse- *ment, because it is almost always written on the back of the note ; but it has its full legal effect if written on the face,^ Joint payees of a bill or note, who are not partners, must all join in the indorsement.^ But if the name of a payee is inserted by mistake, or inadvertently left on when the note was indorsed and delivered by the real payees, the indorsee can recover on the note, although the names of all the payees are not on the in- dorsement, and he can prove the facts by evidence.* An indorser may always prevent his own responsibility by writing " without recourse," or other equivalent words, over his indorsement ; ° and any bargain between the indorser and in- dorsee, written or oral, that the indorser shall not be sued, is available against that indorsee, but not against subsequent in- dorsees without notice.^ A bill or note may be indorsed conditionally ; and an acceptor of a bill so indorsed, who paid it before such condition is satis- fied or complied with, has been held to pay it again after the condition is performed.^ Every indorsement and acceptance admits conclusively the signature of every party who has put his name upon the bill 1 Gill V. Cubitt, supra, was finally overruled in Goodman v. Harvey, 4 A. & E. 870. It was there hdd that, in an action by the indorsee of a bill who has given value, if his title be disputed on the ground that his indorser obtained the discount of such bill in fraud of the right owner, the question for the jury is, whether the indorsee acted with good faith in taking the bill ; that the question whether or not he was guilty of gross negligence is improper ; that gross negligence may be evidence of mala fides, but is not equivalent to it. And Lord Denman said : " The question I offered to submit to the jury was, whether the plaintiff had been guilty of gross negligence or not. I believe we are all of opinion that gross negligence only, would not be a snificient answer where the party has given consideration for the bill. Gross negligence may be evidence of mala fides, but is not the same thing. We have shaken off the last remnant of the con- trary doctrine. Where the bill has passed to the plaintiff without any evidence of bad faith in him, there is no objection to his title." This case has been uniformly adhered to in England ever since; see Eaphael v. Bank of England, 17 C. B. 161, 33 Eng. L. & Eq. 276 ; but it was disapproved of by the Superior Court of the city of New York in Pringle v. Phillips, 5 Sandf. 157, and a determination declared to adhere to Gill v. Cubitt. ^ Yarborough v. Bank of England, 16 East, 6. » Carvick v. Vickery, Doug. 653 ; Bennett v. M'Gaflghy, 3 How. Miss. 192. * Pease v. Dwight, 6 How. 190, 3 McLean, C. C. 94. 5 Richardson v. Lincoln, 5 Met. 201 ; Goupy v. Harden, 7 Taunt. 159. " Pike V. Street, Moody & M. 226. ' Kobertson v. Kensington, 4 Taunt. 30. [139] 125* ELEMENTS OE MERCANTILE LAW. [CH. IX. previously in fact, and who is also previous in order.' Thus, an acceptance admits the signature of the drawer, but not the sig- nature of one who actually indorses before acceptance, because acceptance is in its nature prior to indorsement.^ If a holder strike out an indorsement by mistake, he may re- store it ; 3 if on purpose, the indorser is permanently discharged.* If the plaintiff, in his declaration, derives his title through all the previous indorsements, all must be there, and proved." But a holder may bring his action against any prior indorser, either by making title through all the subsequent indorsements ; or, if that indorser's indorsement was in blank, by filling it specially to himself, and suing accordingly ; but then he invalidates the sub- sequent indorsements.^ The * reason is, that he takes from them all right to indorse ; thus, for example, if A makes a note to B, and B, C, D, E, and F indorse it in blank, and G, the holder, writes over C's name, " pay to G," it is as if C had written this himself; and then G only could indorse, and, of course, D, E, and F could not, as they were mere strangers. And a holder precludes himself from taking advantage of the title of any party whose indorsement is thus avoided. Nor can he strike out the name of any indorser prior to that one whom he makes defendant ; for, by so doing, he deprives the defendant of his right to look to the party whose name is stricken out, and this discharges the defendant.^ One may make a note or bUl payable to his own order, and indorse it in blank ; and this is now very common in our com- mercial cities, because the holder of such a bill or note can trans- 1 Lambert v. Oakes, 1 Ld. Eaym. 543, 12 Mod. 244 ; Lambert v. Pack, 1 Salk. 127 ; Free v. Hakins, Holt, N. P. 550 ; Critchlow v. Parry, 2 Camp. 182. 2 Smith V. Chester, 1 T. R. 654. ' Eaper v. Birkbeck, 15 East, 17 ; Novelli ,j. Eossi, 2 B. & Ad. 757 ; Wilkinson v. Johnson, 3 B. & C. 428. 4 Byles on Bills, 118. 5 Thus, in an action against the maker of a promissory note, payable to A B or bearer, if the declaration states that A B indorsed it to the plaintiff, this indorsement must be proved. Waynam v. Bend, 1 Camp. 175. " And the subsequent indorsements must be struck out. But this may be done at the trial. Cocks v. Borradaile, Chitty on Bills, 642. In this case, Abbott, C. J., said : " All the indorsements must be proyed, or struck out, although not stated in the decla- ration. I remember Mr. Justice Bayley..&o ruling, and striking them out himself on the trial ; and this need not be done before the trial." And see Mayer v. Jadis, 1 Moody & E. 247. If there are intermecfiate indorsements between the payee and the defend- ant, these need not be stated ; but the plaintiff may state in his declaration that the payee indorsed to the defendant. Chaters v. Bell, 4 Esp. 210. " Curry v. Bank of Mobile, 8 Porter, 360. . [140] OH. IX.] NEGOTIABLE PAPER. *126 fer it by delivery, and it needs not his indorsement to make it negotiable further.^ A transfer by delivery, without indorsement, of a bill or note payable to bearer, or indorsed in blank, does not generally make the transferrer responsible to the transferree for the payment of the instrument. Nor has the transferree a right to fall back, in case of non-payment, upon the transferrer for the original con- sideration of the transfer, if the bill were transferred in good faith, in exchange for money or goods ; for such transfer would be held to be a sale of the bill or note, and the purchaser takes it with all risks.2 But it seems not to be so where such a note is delivered * either in payment or by way of security for a pre- viously existing debt.^ Then, if the transferrer has lost nothing by the reception of the note by the transferree, because if he had continued to hold the note, he would have lost it, there seems to 1 See night v. Maclean, 16 M. & W. 51 ; Wood v. Mytton, 10 Q. B. 805 ; Hooper V. Williams, 2 Exch. 13 ; Brown v. De Winton, 6 C. B. 342 ; Gay v. Lander, 6 C. B. 336 ; Way v. Kichardson, 3 Gray, 412 ; Central Bank of Brooklyn v. Lang, 1 Bosw. 202. ^ " It is extremely clear," said Lord Kenyan, in Fenn v. Harrison, 3 T. E. 759, " that, if the holder of a bill send it to market without indorsing his name npon it, neither morality nor the laws of this country will compel him to refund the money for which he sold it, if he did not know at the time that it was not a good bill." So, where a party discounted bills with bankers, and received, in part of the discount, other bills, but not indorsed by the bankers, which bills turned out to be bad, it was held that the bankers were not liable. " Having taken them without indorsement," said Lord Kenyan, " he hath taken the risk on himself. The bankers were the holders of the bills, and by not indorsing them, have refused to pledge their credit to their validity ; and the trans- ferree must be taken to have received them on their own credit only." So, in Bank of England v. Newman, 1 Ld. Eaym. 442, where the defendant had discounted with the plaintiffs a bill payable to bearer, without indorsing it, and payment of the bill was afterwards refused, it was held that the plaintiffs could not maintain an action against the defendant to recover back the money paid to him. And Holt, C, J., said ; "If a man has a bill payable to him or bearer, and he delivers it over for money received, without indorsement of it, this is a plain sale of the bill, and he who sells it does not become a new security. But if he had indorsed it, he had become a new security, and then he had been liable on the indorsement." And see Ex parte Shuttleworth, 3 Ves. 368 ; Emly v. Lye, 15 East, 7. 3 Thus, in Ward v. Evans, 2 Ld. Kaym. 928, it was argued, by Darnall, Sergeant, " that if A sells goods to B for £iQ, and at the same time B gives A a note fbr £50, and A accepts it, this is an actual payment, although the note be never received, be- cause it shall be taken as part of the contract that A was to accept such note in satis- faction for his goods. But where there is a precedent debt or duty, such note will not amount to payment till it be paid, unless there be any negligence and delay in the party who takes the note, in going to receive it." And Holt, C. J., said: "I agree in the difference taken by my brother Darnall, that taking a note for goods sold is a payment, because it was part of the original contract ; but paper is no payment where there is a precedent debt. For, when such a note is given in payment, it is always intended to be taken under this condition, to be payment if the money be paid thereon in convenient time." And see, to the same effect, Moore v. Warren, 1 Stra. 415; Holme v. Barry, id. ; Camidge v. AUenby, 6 B. & C. 373. [141] 127* ELEMENTS OP MERCANTILE LAW. [CH. IX. be no reason why the transferree should lose it. "We have no doubt that such a transferrer may make himself liable, without indorsement, by express contract ; and that circumstances might warrant and require the implication that the bill or note so transferred remained, by the agreement and understanding of both parties, at the risk of the transferrer.^ And every such transferrer warrants that the bill or note (or bank-note) is not forged or fictitious.^ An indorsement may be made on the paper before the bill or note is drawn ; and such indorsement, says Lord Mansfield, " is a letter of credit for an indefinite sum, and it will not lie in the indorser's mouth to say that the indorsements were not regu- lar." ^ The same rule applies to an acceptance on blank paper.* So, an indorsement may be made after or before acceptance. If made after a refusal of acceptance, which is known to the indorsee, he takes only the title of the indorser, and is subject to all defences available against him.^ * A bill or note once paid at or after maturity, ceases to be negotiable, in reference to all who could be prejudiced by its transfer.^ So, where a bill drawn payable to a third person, by whom it is indorsed, is dishonored and taken up by the drawer, it ceases to be a negotiable instrument.'' But if one draw a bill payable to his ovm order, and indorse it over, and, upon the bill's being dishonored, take it up, he may indorse it again, and this last indorsee can recover against the acceptor.* And if a bill or 1 See Byles on Bills, 124. 2 Gurney v. Womersley, 4 Ellis & B. 133 ; Gompertz v. Bartlett, 2 Ellis & B. 849 ; Jones V. Eyde, 5 Taunt. 488 ; Young v. Cole, 3 Bing. N. C. 724. ' Russel V. Langstaffe, Doug. 514. And see ColUs v. Emett, 1 H. Bl. 313 ; Schultz V. Astley, 2 Bing. N. C. 544; Montague v. Perkins, C. B. 1853, 22 Eng. L. & Eq. 516 ; FuUerton v. Sturges, 4 Ohio, State, 529. But see Hatch v. Searles, 2 Smale & G. 147, 31 Eng. L. & Eq. 219 ; Awde v. Dixon, 6 Exch. 869. * See cases supra. 5 Crossley v. Ham, 13 East, 498. But if the indorsee had no notice of the refusal to accept, he will not be prejudiced by it. Thus, in O'Keefe v. Dunn, 6 Taunt. 305, 5 Maule & S. 282, the payee of a bill of exchange presented it for acceptance, which was refused. He neglected to adyise the drawer, and thereby discharged the drawer as between the drawer and himself. He then indorsed the bill without informing his in- dorsee of the refusal to accept. Held, that the discharge to the drawer extended only to an action at the suit of the party guilty of the neglect ; and that the indorsee haying had no notice of the dishonor, the same defence was not ayailable against him as against his indorser. 8 Bartrum v. Caddy, 9 A. & E. 275 ; Lazarus v. Cowie, 3 Q. B. 459 ; Eaton v. Mc- Kown, 34 Maine, 510 ; Cochran v. Wheeler, 7 N. H. 202. ' Beck V. Robley, 1 H. Bl. 89, n. ; Price v. Sharp, 2 Ir-ed. 417. 8 Hubbard v. Jackson, 4 Bing. 390; Callow v. Lawrence, 3 Maule & S. 95. In this [142] CH. IX.] NEGOTIABLE PAPER. *128 note is paid before it is due, it is valid in the hands of a subse- quent bond fide indorsee.^ A portion of a negotiable bill or note cannot be transferred so as to give the transferree a right of action for that portion in his own name.2 But if the bill or note be partly paid, it may be indorsed over for the balance.^ If an action be brought on the bill or note, no transfer during the pendency of such action gives to the transferree a right of action, unless he was ignorant of the action ; then the transfer is valid.* After the death of a holder of a bill or note, his executor or administrator should transfer it.^ But it seems that if a note, needing indorsement, was * indorsed by the holder, but not de- livered, the executor cannot complete the transfer by delivery.^ The husband who acquires a right to a bill or a note given to the wife, either before or after marriage, may indorse.'^ One who may claim payment of a bill or note, and of whom payment may also be demanded, or one who is liable to con- tribute for the payment of a note, cannot sue upon it. But if only the technical rule — that the same party cannot be plaintiff and defendant — prevents the action, it may be avoided by in- dorsement over to another before maturity.^ last case, Lord Ellenborough said : " A bill of exchange is negotiable ad infinitum, until it has been paid by or discharged on behalf of the acceptor. If the drawer has paid the bUl, it seems that he may sue the acceptor upon the bill ; and if, instead of suing the acceptor, he put it into circulation upon his own indorsement only, it does not preju- dice any of the other parties who have indorsed the bill, that the holder should be at liberty to sue the acceptor. The case would be different if the circulation of the bill would have the effect of prejudicing any of the indorsers." But this language, as we hare seen, must be taken with some qualifications. See cases in preceding note. ■ 1 " I agree," said Lord Ellenbormgh, in Burridge v. Manners, 3 Camp. 193, " that a bill paid at maturity cannot be reissued, and that no action can afterwards be main- tained upon it by a subsequent indorsee. A payment before it becomes due, however, I think does not extinguish it any more than if it were merely discounted. A contrary doctrine would add a new clog to the circulation of bills of exchange and promissory notes ; for it would be impossible to know whether there had not been an anticipated payment of them." * Hawkins v. Cardy, 1 Ld. Raym. 360. 3 Ibid. * Marsh v. Newell, 1 Taunt. 109 ; Jones «;. Lane, 3 Younge & C. Exch. 281 ; Co- lombier v. Slim, Chitty on Bills, 217. 6 Eawlinson v. Stone, 3 Wilson, 1 ; Watkins v. Maule, 2 Jacob & W. 237, 243 ; Eand V. Hubbard, 4 Met. 252, 258 ; Malbon v. Southard, 36 Me. 147 ; Dwight v. Newell, 15 Dl. 333. " Bromage v. Lloyd, 1 Exch. 32; Clark v. Sigourney, 17 Conn. 511. ' Connor v. Martin, cited 3 Wilson, 5, 1 Stra. 516; Barlow v. Bishop, 1 East, 432; Mason v. Morgan, 2 A. & E. 30. 8 Morley v, Culverwell, 7 M. & W. 174 ; Steele o. Harmer, 14 M. & W. 831, 4 Exch. 1. [143] 129* ELEMENTS OF MERCANTILE LAW. [CH. IX. SECTION VII. OF THE RIGHTS AND DUTIES OF THE ACCEPTOR. Acceptance applies to bills and not to notes. It is an engage- ment of the person on whom the bill is drawn to pay it accord- ing to its tenor. The usual way of entering into this agreement, or of accepting, is by the drawee's writing his name across the face of the bill, and writing over it the word " accepted." But any other word of equivalent meaning may be used, and it may be written elsewhere, and it need not be signed, or the drawee's name alone on the bill may be enough.^ But if accepted irreg- ularly, or in an unusual way, the question whether it were ac- cepted would generally go to a jury under the direction of the court.2 A written promise to accept a future bill, if it distinctly define and describe that very bill, has been held in this country as the equivalent of an acceptance, if the bill was taken on the credit of such promise.'^ But this doctrine of virtual acceptance should, * perhaps, have no application to a bill drawn payable at some fixed period after sights In England and in this country, generally, an acceptance may be by parol.^ And it is said that a promise, whether written or verbal, to pay an existing bUl, is an acceptance.^ But the language, whether oral or written, al- 1 Anonymous, Comb. 401 ; Powell v. Monnier, 2 Atk. 611 ; Dufaur v. Oxenden, 1 Moody & R. 90. - Ibid. ^ Coolidge V. Payson, 2 Wlieat. 66 ; Schimmelpennich v. Bayard, 1 Pet. 264 ; Boyce V. Edwards, 4 id. 121. And in New York it has been declared by statute that " an un- conditional promise, in wiiting, to accept a bill before it is drawn, shall be deemed an actual acceptance, in favor of every person who, upon the faith thereof, shaU have received the bill for a valuable consideration." 1 R. S. 768, ^ 8. * Per Story, J., in Wildes v. Savage, 1 Story, 22. And see Russell v. Wiggin, 2 Story, 213. 6 Lumley v. Palmer, 2 Stra. 1000; Rex v. Maggott, Chitty on Bills, 288; Julian v. Schobrooke, 2 Wilson, 9 ; Powell v. Monnier, 2 Atk. 611 ; Sproat v. Matthews, 1 T. R. 182 ; Clarke v. Cock, 4 East, 72 ; Edson v. Fuller, 2 Foster, 183. But In New York it is declared by statute, that " no person within that' State shall be charged as an ac- ceptor on a bill of exchange, unless his acceptance shall be in ■writing, signed by him- self or his lawful agent ; and if such acceptance be written on a paper, other than the bill, it shall not bind the acceptor, except in favor of a person to whom such acceptance shall have been shown, and who, on the faith thereof, shall have received the bill for a valuable consideration." 1 R. S. 768, ^ 6, 7. " Clarke v. Cock, 4 East, 72 ; AVynno v. Eaikes, 5 id. 514 ; Edson v. Fuller, 2 Foster, 183. [144] CH. IX.] NEGOTIABLE PAPER. *130 though no form be prescribed for it, must not be ambiguous.^ It must distinctly import acceptance, or an agreement to do what acceptance would bind the party to do ; and mere deten- tion of the bill is not acceptance.^ An acceptance admits the signature and capacity of the drawer ; ^ and the capacity at that time of the payee to indorse, which is also ajlmitted by the maker of a promissory note ; and this cannot be denied, although the payee be an infant, a mar- ried woman, or a bankrupt.* But the acceptance does not admit the validity of an existing indorsement ; ^ nor, if it be by an agent, his authority ; ^ if, however, the acceptor knew that the indorsement was forged or made without authority, he cannot use the fact in his defence.^ But if the bill is drawn in a ficti- tious name, *the acceptor is said to be bound to pay on an indorse- ment by the same hand.^ But a biU drawn and indorsed in a fictitious name, with the knowledge of the drawer, may, and perhaps should be, declared on as payable to bearer.^ In gen- eral, any party who gives credit and circulation to negotiable paper, admits, so far as he is concerned, aU properly antecedent names.^" A banker is liable to his customer without acceptance, if he refuses to pay checks drawn against funds in his hands.^" So it 1 Kees V. Warwick, 2 B. & Aid. 113. In this case, the drawer of a bill wrote to the drawee, stating that he had valued on him for the amount, and added, " which please to honor;" to which the drawee answered, "the bill shall have attention." Seld, that these words were ambiguous and did not amount to an acceptance of the bill. And Abbott, C. J., said : " The phrase ' shall have attention,' is at least ambiguous ; it may mean that tiie defendant would examine and inquire into the state of the accounts be- tween them for the purpose of ascertaining whether he would accept the bill or not. If, indeed, it could have been shown that these words, either generally in the mercan- tile world, or as between these individual parties, meant an acceptance of the bill to which they related, the case would have been different. But that has not been done." And see Powell v. Jones, 1 Esp. 17. 2 Mason v. Barff, 2 B. & Aid. 26. 8 Wilkinson v. Lutwidge, 1 Stra. 648 ; Jenys v. Fawler, 2 id. 946 ; Price v. Neale, 3 Burr. 1354 ; Bass v. CUve, 4 Maule & S. 15 ; Smith v. Mercer, 6 Taunt. 76 ; Eobin- son V. Reynolds, 2 Q. B. 196 ; Canal Bank v. Bank of Albany, 1 Hill, 287. ^ Drayton v. Dale, 2 B. & C. 293 ; Braithwaite v. Gardiner, 8 Q. B. 473 ; Taylor v. Croker, 4 Esp. 187 ; Hallifax v. Lyle, 3 Exch. 446 ; Smith v. Marsack, 6 C. B. 486. 6 Smith V. Chester, 1 T. R. 654; Beeman v. Duck, 11 M. & W. 251; Tucker v. Kobarts, 18 Law J., Q. B., N. s., 169. See s. c. m eiTor, Eobarts v. Tucker, 16 Q. B. 560. « Robinson v. Yarrow, 7 Taunt. 455. 7 Beeman v. Duck, 11 M. & W. 251. 8 Cooper V. Meyer, 10 B. & C. 468; Beeman v. Duck, 11 M. & W. 251. 9 Gibson v. Minet, 1 H. Bl. 569 ; Beeman v. Duck, 11 M. & W. 251. W See ante, p. 124. 11 Marchetti v. "Williams, 1 B. & Ad. 415 ; Rolin v. Steward, 14 C. B. 595. 13 [145] 131* ELEMENTS OF MERCANTILE LAW. [CH. IX. seems that a banker, at whose house a customer, accepting a bill, makes it payable, is liable to an action at the suit of the cus- tomer, if he refuse to pay it, having at the time of presentment sufficient funds, and having had those funds a reasonable time, so that his clerks and servants might know it.^ But he is not liable to the holder of the bill for money had and received, even if funds had been remitted to meet it, unless he has assented to hold and apply them for that purpose ; ^ but that assent may be implied from usage or circumstances. And the banker has authority from the bill itself to apply to its payment the funds of the acceptor.^ There cannot be two or more acceptors of the same bill unless they are jointly responsible, as partners are.* If accepted by a part only of those jointly responsible, or joint drawers, it may be treated as dishonored ; but if not so treated the parties accepting will be bound. An acceptance may be made after maturity, and wiU be treated as an acceptance to pay on demand ; and if the words " accord- ' ing to the tenor and effect of the bill," or like words, are used, they will be regarded as of no effect.^ The acceptance may be cancelled by the holder ; and if volun- tary and intended, this cancelling is complete and effectual ; but if made by mistake, by him or other parties, and this can be shown, the acceptor is not discharged.^ And if the cancelling be 1 Wliitaker v. Bank of Enfrland, 1 Cromp., M'. & R. 744. 2 Williams r. Everett, 14 East, 582 ; Yates r. Bell, 3 B. & Aid. 643. 3 Kymer !•. Laurie, 18 Law J., Q. B., K. s., 218. 4 Jackson v. Hudson, 2 Cainp. 447. In this case, tlie plaintiff and one Irving having dealings together, the plaintiff refused to supply Irving with good.=!, unless the defendant would become his surety. The defendant agreeil to do it. Goods to the value of .£157 were accordingly supplied. For the amount the plaintiff drew a bill on Irving, which was accepted both by Irving and the defendant, each writing his name on it. In an action on the bill against the defendant as acceptor, the plaintiff was nonsuited. And Lord ElliiihoTourjh said : " If you had declared that, in consideration of the plaintiff sell- ing the goods to Irving, the defendant undertook that the bill should be paid, you might have fixed him by this evidence. But I know of no custom or usage of merchants, according to which, if a bill lie drawn upon one man, it may be accepted by two. The acceptance of the defendant is contrary to the usage and custom of merchants. A bill must be accepted by the drawee, or, failing him, by some one for the honor of the drawer. There cannot be a scries of acceptors." "o Jackson v. Pigott, 1 Ld. Kaym. 364 ; Mutford r. Walcot, id. 574 ; Williams v. Wi- nans, 2 Green, N. J. 339. " Wilkinson v. Johnson, 3 B. & C. 428 ; Eaper v. Birkbcck, 15 East, 17. And see ante, p. 124. [146] CH. IX.] NEGOTIABLE PAPER. *132 by a third party, it is for the jury to say whether the holder authorized or assented to it.^ The liability of an acceptor or maker is destroyed by receiving from him a coextensive or greater security by specialty, unless it is distinctly agreed and declared that the bill or note remains in force.2 If a qualified acceptance be offered, the holder may accept or refuse it. If he refuses it, he may treat the bUl as dishonored ; if he accepts it, he should notify antecedent parties, and obtain their consent ; without which they are not liable.^ But if he protests the bill as dishonored, for this reason, he cannot hold the acceptor upon his conditional acceptance.* A bill can be accepted only by the drawee — in person or by his authorized agent — or by some one who accepts for honor. ^ And a bill drawn on one incompetent to contract, as from infancy, coverture, or lunacy, may be treated as dishonored.^ SECTION vm. OF. ACCEPTANCE FOE HONOR. If a bill be protested for non-acceptance or for better security, any person may accept it, for the honor either of the drawer or of any indorser. This he should distinctly express at the time ' when he makes his acceptance, before a notary-public, and it should be noted by him.^ A general acceptance supra protest, •for honor, is taken to be for honor of the drawer.^ The drawee 1 Sweeting v. Halse, 9 B. & C. 365. 2 Twopenny v. Young, 3 B. & C. 208. ' Sebag V. Abitbol, 4 Maule & S. 462, per Bayley, J. ; Boehm u. Garcias, 1 Camp. 425 ; Gammon v. SchmoU, 5 Taunt. 353, per Chambre, j. * Sproat V. Matthews, 1 T. E. 182 ; Bentinck v. Donien, 6 East, 200. 5 Polhill V. Walter, 3 B. & Ad. 114 ; Davis v. Clarke, 6 Q. B. 16. 6 Chitty on Bills, 310 (8th ed.). ' In Beawes' Lex Mercatoria, 5th ed. p. 435, pi. 38, it is said : " The method of ac- cepting supra protest is as follows, namely : the acceptor must personally appear before a notary-public with witnesses, whether the same that protested the bill or not is of no importance, and declare that he doth accept such protested bill in honor of the drawer, or indorser, &c., and that he will satisfy the same at the appointed time ; and then he must subscribe the bill with his own hand, thus : ' Accepted, supra protest, in honor of T. B., &c.'" 8 Chitty on Bills, 376 {8th ed.) ; Beawes, pi. 39. [147] 133* ELEMENTS OE MERCANTILE LAW. [CH. IX. himself, refusing to accept it generally, may thus accept for the honor of the drawer or an indorser.^ And after a bill is accepted for honor of one party, it may be accepted by another person for honor of another party.^ And an acceptance for honor may be made at the intervention and request of the drawee.^ No holder is obliged to receive an acceptance for honor ; he may refuse it wholly.* K he receive it, he should, at the maturity of the bill, present it for payment to the drawee who may have been supplied with funds in the mean time.^ If not paid, the bill should be protested for non-payment, and then presented for payment to the acceptor for honor.^ The undertaking of the acceptor for honor is collateral only ; being an engagement to pay if the drawee does not." It can * only be made for some party who will certainly be liable if the bill be not paid ; because, by an acceptance properly made, for honor, supra protest, such acceptor acquires an absolute claim against the party for whom he accepts, and against all parties to the bill antecedent to him, for aU his lawful costs, payments, and damages, by reason of such acceptance.^ If a thii'd party 1 Beawes, pi. 33. 2 Beawes, pi. 42. 8 Konig V. Bayard, 1 Pet. 250. * Mitford V. Walcott, 12 Mod. 410 ; Gregory c. Walcup, Comyns, 75 ; PiUans v. Van Microp, 3 BiuT. 1663. ^ In Hoarc v. Cazcnove, 16 East, 391, it was held that the acceptors of a foreign bill of exchange, who, after presentment to the drawees for acceptance, and a refusal by them to accept, and protest for non-acceptance, accept the same for the honor of the first indorsers, are not liable on such acceptance, unless there has been a presentment of the bill to the drawees for payment, and a protest for non-payment. And Lord EHenborough said : " The reason of the thing, as well as the strict law of the case, seems to render a second resort to the cb'awee proper, when the unaccepted bill still remains with the holder ; for effects often reach the drawee, who has refused acceptance in the first instance, out of which the bill may and would be satisfied, if presented to him again when the period of payment had arrived. And the drawer is entitled to the chance of benefit to arise from such second demand, or at any rate to the benefit of that evidence which the protest affords, that the demand has been made duly without effect, as far as such evidence may be available to him for purposes of ulterior resort." . Meclianics Bank of Alexandria, 1 Pet. 70 ; Frankfort Bank c. Johnson, 24 Miiine, 490; Lloyd v. West Branch Bank, 15 Penn. State, 172. The cashier of a bank has prima facie authority to indorse, on behalf of the bank, the negotiable securi- ties held by it. Wild v. Bank of Passamaquoddy, 3 Mason, 505 ; Fleckner v. United States Bank, 8 Wheat. 360 ; Mechanics Bank v. Bank of Columbia, 5 id. 326 ; Lafay- ette Bank r. State Bank of Illinois, 4 McLean, 208; Folger v. Chase, 18 Pick. 63. The same power belongs to the general agent or treasm'er of a corporation or joint-stock company. Perkins v. Bradley, 24 Vt. 66. So, an indorsement of a promissory note or bill of exchange by the president of a bank, pursuant to authority conferred by the directors, will pa^s the projierty in the same. Spear v. Ladd, 11 Mass. 94 ; Northamp- ton Bank v. Pepoon, id. 2SS ; Jlerrick v. Bank of the Meti-opolis, 8 Gill, 59 ; Sterens u. Hill, 29 Maine, 133. - An agreement by the president and cashier of the Bank of the United States, that the indorscr of a promissory note should not be liable on his indorsement, was held not to bind the bank. Bank of United States v. Dunn, 6 Pet. 51. Nor has he authority to bind the bank by declarations, beyond the scope of his ordinary duties. Merchants Bank v. JIarine Bank, 3 Gill, 96 ; Bank of Metropolis v. Jones, 8"Pet. 12 ; Salem Bank V. Gloucester Bank, 17 Mass. 1. Nor can he accept bills of exchange on behalf of the bank, for the accommodation of the drawers merely ; and the holder, with notice of such acceptance, cannot recover against the bank. Farmers and Mechanics Bank v. Troy City Bank, 1 Doug. Mich. 457, 3 The general agent of a corporation, clothed with a certain power by its charter, and using that power for an unauthorized or prohibited purpose in dealings with an innocent third party, may render the corporation liable ; but if such agent has no such power, he cannot bind the corporation by its exercise. All parties who deal with him are aifected with knowledge or notice of his want of authority, wlicther the same be actual, or con- structive and implied by law. Life and Fire Ins. Co. v. Mechanics Fire Ins, Co. 7 Wend. 31 ; Hood v. New York and New Haven R. R, Co. 22 Conn. 502 ; Goodspeed 2', East Haddam Bank, 22 Conn, 530; Frankfort Bank v. Johnson, 24 Mame, 490; Bank of Kentucky v. Schuylkill Bank, 1 Parson's Sel. Cas. 180. [156] CH. X.] AGENCY. *141 principal by acts not within the scope of such duties. Thus, the treasurer of a corporation has no right to release a claim which belongs to the corporation. ^ SECTION in. EXTENT AND DURATION OF AUTHORITY. A general authority may continue to bind a principal after its actual revocation, if the agency were known and the revocation be wholly unknown to the party dealing with the agent, without his fault.2 An authority to sell implies an authority to sell on credit, if * that be usual ; otherwise not ; ^ and if an agent sells on credit without any authority, or by exceeding his authority, the princi- pal may reclaim his goods from the purchaser,* or hold the agent responsible for their price.^ And the agent is generally respon- sible if he blends the goods of his principal with his own, in such a manner as to confuse them together, or takes a note payable to himself, unless this be authorized by the usage of the trade.^ 1 E. Carver Co. v. Manufacturers Ins. Co. 6 Gray, 214; Dedham Institution for Savings v. Slack, 6 Cush. 408. See also, Dralce v. Marryatt, 1 B. & C. 473 ; Williams V. Cliester & Holyhead Railway Co. Exch. 1851, 6 Eng. L. & Eq. 497 ; Jellinghaus v. New York Ins. Co. 6 Duer, 1. 2 Trueman v. Loder, 11 A. & E. 589 ; Beard u. Kirk, 11 N. H. 398 ; Liglitbody v. North American Ins. Co. 23 Wend. 18; Morgan v. Stell, 5 Binn. 316. ' Anonymous, 12 Mod. 514 ; Scott v. Surman, WiUes, 406, 407 ; Houghton v. Mat- thews, 3 B. & P. 489 ; M'Kinstry v. Pearsall, 3 Johns. 319 ; Van Alen v. Vanderpool, 6 Johns. 69; Delafleld v. Illinois, 26 Wend. 223 ; Laussatt v. Lippincott, 6 S. & R. 386 ; Greely v. Bartlett, 1 Greenl. 172; Goodenow v. Tyler, 7 Mass. 36 ; Hapgood v. Batcheller, 4 Met. 573 ; Forrestier v. Bordman, 1 Story, 43 ; Gerbier v. Emery, 2 Wash. C. C. 413. But an auctioneer cannot sell on credit. 3 Chitty on Com. and Manuf 218. Nor a broker employed to sell stock. Wiltshire v. Sims, 1 Camp. 258. An agent for a State, who is authorized to raise money on a sale of its stocks, cannot, without express authority from tlie State, sell such stocks on credit. State of Illinois V. Delafield, 8 Paige, 527, 2 Hill, 159, 26 Wend. 192. And an authority to sell on credit in the principal's name, does not confer an authority to collect the debts by suit. Soule V. Dougherty, 24 Vt. 92. An authority to make a contract involves an authority to rescind it, with the consent of the other party. Anderson v. Coonley, 21 Wend. 279 ; Scott V. Wells, 6 Watts & S. 357. * Anonymous, 12 Mod. 514; Paley on Agency, by Lloyd (3d Am. ed.), p. 212. See State of Illinois v. Delafield, 8 Paige, 527, 2 Hill, 159, 26 Wend. 192 ; Eobertson V. Ketchum, 11 Barb. 652; Peters v. Ballistier, 3 Pick. 495; Parsons v. Webb, 8 Greenl. 38. 6 Walker v. Smith, 4 Dall. 389 ; Barksdale v. Brown, 1 Nott & McC. 517. ^ The taking of a note by the agent, on a sale of the principal's goods, payable to 14 [ 157 ] 142* ELEMENTS OP MERCANTILE LAW. [CH. X. And if the agent or factor takes a note payable to himself, and becomes bankrupt, such note belongs to his principal, and not to the agent's assignees. ^ In our view of the law, a power to sell gives a power to warrant, where there is a distinct usage of making such sales with warranty, and the want of authority to warrant is unknown to the purchaser without his fault ; and not otherwise.^ A general authority to sell goods carries with it an ' authority to sell by sample.^ General authority to transact business, or even to receive and discharge del)ts, does not enable an agent to accept or indorse bills or notes, so as to charge his himself, ilors not jw se render the agent responsible to his princiijal in case of the pur- chaser's insolvency. If such is the usage of trade, the agent is not personally responsi- ble. Goodenow v. Tyler, 7 Mass. 36. 1 Me.'isier v. Amery, 1 Yeates, 540 ; Scott v. Surman, Willes, 400. Where the agent sells goods belonging to several principals, and takes from the vendee a note which in- cludes the purchase-money of the whole, payable to himself, he is not thereby made liable to his principals for the debt. Corlies v. Gumming, 6 Cow. 181. But where the agent sells his own goods and those of his principal, and takes in payment of both the promis^oiy note of a third person, payable to himself, he makes himself personally re- sponsil)le to his principal. Symington v. M'Lin, 1 Dev. & B. 291 ; Jackson v. Baker, 1 Wash. C. C. 394 ; Brown v. Arrott, 6 Watts & S. 402. It is hdd that, if an agent, at the expiration of the credit given at a sale, takes a note payable on a, further day to himself, he makes the debt his own. Hosmer v. Beebe, 14 Mart. La. 368. A factor who sells his principal's goods consigned to him for that purpose, and takes the notes of the vendee, which ho afterwards has discounted for his own accommodation, becomes responsible for the amount of the sales in the event of the pitrchascr's insolvency. Myers v. Entrikeu, 6 Watts & S. 44. See Wren v. Kirton, 11 Ves. 382. - An agent to sell a horse may wareant him. Alexander v. Gibson, 2 Camp. 555 ; Helj'car v. Hawke, 5 Esp. 72, 75 ; Pickering r. Busk, 15 East, 45 ; Skinner v. Grmn, 9 Port. Ala. 305 ; Bradford v. Bush, 10 Ala. 386 ; Peters v. Earnsworth, 15 Vt. 159. The distinction has been taken that a servant, with authority to sell a horse, and forbidden to warrant him, may bind his master by a warranty ; but a stranger, with the same authority .and restriction, cannot bind his principal by a warranty. Fenn v. Harrison, 3 T. n. 760, per Ashurst, J. ; Pickering r. Busk, 1.') i^ast, 45. In this last case. Bay- ley, J., said : " If the servant of a horse dealer, ivith express directions not to warrant, do warrant, the master is bound ; because the servant, having a general authority to sell, is in a condition to warrant, and the master lias not notified to the world that the general authority is circumscribed." Sec Seignior & AVolmer's ease, Godb. 360. So, it has been held, as to other articles of personal property, that the power to sell caixies with it the power to warrant their condition and quality. Williamson v. Canaday, 3 Ired. 349 ; Hunter v. Jameson, 6 Ired. 252 ; Woodford v. McClenahan, 4 Gilman, 85 ; Nelson v. Cowing, 6 HUl, 336. Where an authority to waixant is implied from an authority to sell, it is, in general at least, limited to the present state and quality of the thing sold, and docs not extuml to the future ; as, that goods sold for a distant voyage, shall not deteriorate during that voyage. Upton v. Suffolk County Mills, 11 Cush. 586. In Gibson u. Colt, 7 Johns. 390, it was held that a special agent cannot bind his master by an unauthorized wan-anty. But the decision in this case has been disap- proved. Sec Jeffrey t). Bigclow, 13" Wend. 521; Sandford c'. Handy, 23 Wend. 260. Nelson v. Cowing, supra; Bryant v. Moore, 26 Maine, 84. A warranty by a person merely intrusted to deliver goods, does not bind the owner. Woodin v. Burford, 2 Cromi). & M. 391, 4 Tynv. 264. The warranty of the agent, to bind the principal, must be made at the time of the sale. Alexander i'. Gibson, 2 Camp. 555 ; Helycar v. Hawke, 5 Esp. 72. ' Andrews v. Knoeland, 6 Cow. 354. [158] CH. X.J AGENCY. *143 principal.! Indeed, special authorities to indorse are construed strictly.2 But this authority may be implied from circumstances or from the usage of the agent recognized and sanctioned by the principal.^ An agent to receive cash, has no authority to take bills or notes, except bank-notes.* The principal is bound only for the authorized acts of his agent. He cannot be charged because another holds a commis- sion from him, and falsely asserts that his acts are within it.^ Thus an owner is not liable on a bill of lading given by the mas- ter for goods not actually put on board.^ If an agent sells, and makes a material representation which he believes to be true, and the principal knows it to be false and * does not correct it, this is the fraud of the principal and avoids the sale.' If an agency be justly implied from general employment, it may continue so far as to bind the principal after his with- drawal of the authority, if that withdrawal be not made known 1 Gardner v. Baillie, 6 T. R. 591; Kilgour v. Einlyson, 1 H. Bl. 155; Hogg v. Snaith, 1 Taunt. 347 ; Murray v. East India Company, 5 B. & Aid. 204, 210, 211 ; Esdaile v. La Nauze, 1 Younge & C. Exch. 394 ; Kossiter v. Kossiter, 8 Wend. 494 ; Paige w. Stone, 10 Met. 160. See Valentine v. Paclcer, 5 Penn. State, 333. But see Howard v. Baillie, 2 H. Bl. 618 ; Layet v. Gano, 17 Ohio, 466. An authority to get a bill diacounted does not give authority to indorse it, so as to bind the owner. Eenn v. Harrison, 3 T. R. 757. ^ A power to accept bills for a party and on his behalf, does not authorize the attor- ney to accept bills drawn on account of his principal's business as a partner. Attwood V. Munnings, 7 B. & C. 278. An authority to draw is not an authority to indorse. Robinson v. Yarrow, 7 Taunt. 455. Where A authorized B to sign his name to a note for $250, payable in six months, and B put A's name to "- note for that sum, payable in sixty days, it was hdd that A was not liable. Batty v. Carswell, 2 Johns. 48. An authority to indorse notes, it seems, does not include an authority to receive notice of their dishonor. Bank of Mobile v. King, 9 Ala. 279. ' Thus, where a confidential clerk had been accustomed to draw, and the master had in one instance authorized him to indorse, and on two other occasions had received money obtained by his indorsement, it was held that a jury might infer a general au- thority to indorse. Prescott v. Elinn, 9 Bing. 19. * Sykes v. Giles, 5 M. & W. 645. 5 Per Comstock, J., in Mechanics Bank v. N. Y. & N. H. R. E. Co., 3 Kern. 599. It was held in this case, where a railroad corporation appointed an agent to issue certi- ficates for stock, upon a transfer on the company's books by a previous owner, and a surrender of that owner's certificate, and the agent fraudulently issued certificates for his own benefit, without a compliance with either of the above donditions, that his acts were beyond the scope of his authority, and his principals not bound. " Grant v. Norway, 10 C. B. 665, 2 Eng. L. &• Eq. 337; Hubbersty v. Ward, 8 Exch. 330, 18 Eng. L. & Eq. 551 ; Sch. Freeman v. Buckingham, 18 How. 182. "See also Coleman v. Riches, 16 C. B. 104, 29 Eng. L. & Eq. 323. ' Schneider v. Heath, 3 Camp. 505 ; Cornfoot v. Fowke, 6 M. & W. 358 ; Fuller v. Wilson, 3 Q. B. 58, 68, s. c. in Exch. Ch. mm. Wilson v. Fuller, 3 Q. B. 1009; Fitz- siramons v. Joslin, 21 Vt. 129. [159] 144* ELEMENTS OF MERCANTILE LAW. [CH. X. in such way as is usual or proper, to all who deal with the agent as such.^ Revocation, generally, is always in the power and at the will of the principal, and his death operates of itself a revocation.^ But the death of an agent does not sevoke the authority of a subagent appointed by the agent under an authority given him by the principal.^ If the power be coupled with an interest, or given for a valuable consideration ; and if the continuance of the power is requisite to make the interest available, then it can- not be revoked at the pleasure of the principal.* Marriage of the principal, if a feme sole, revokes a revocable authority given by her.^ If an agent to whom commercial paper is given for collection, be in fault towards his principal, the measure of his responsi- bility * is the damage actually sustained by his principal.^ He must give notice of the dishonor of such paper to his principal, who must notify the indorsers ; and the agent need not notify the indorsers.'' 1 Monk I). Clayton, cited in 10 Mod. 110 ; v. Harrison, 12 Mod. 346 ; Salte v. Field, 5 T. R. 214, per Btiller, J. ; Spencer v. Wilson, 4 Munf. 130 ; Morgan v. Stell, 5 Binn. 305; Bowerbank v. Morris, J. B. "Wallace, 126. 2 Co. Litt. 52, (b) ; Bac. Alir. Authority, (E) ; Shipman v. Thompson, Willes, 104, note ; King v. Coi-poration of the Bedford Level, 6 East, 356 ; Wallace v. Cook, 5 Esp. 117; Smout ;;. Ilbery, 10 M. & W. 1 ; Harper v. Little, 2 Greenl. 14; Gale v. Tappan, 12 N. H. 145 ; McDonald v. Black, 20 Ohio, 185 ; Gleason v. Dodd, 4 Met. 333; Huston r. Cantrill, 11 Leigh, 136. And death operates as a revocation even before notice thereof communicated to the agent. Gait v. Gallowav, 4 Pet. 344 ; Jen- kins V. Atkins, 1 Humph. 294. But see Cassiday v. M'Kenzie, 4 Watts & S. 282. K two give ■■•. warrant of attorney to confess judgment against them, and one dies, judg- ment cannot be entered against the other. Eaw v. Alderson, 7 Taunt. 453 ; Hunt v. Chamberlin, 3 Halst. 336. But if there is a bond and warrant of attorney in favor of two, and one dies, the other may enter up judgment. Fendall v. May, 2 M.aule & S. 76. A power of attorney by deed may bo terminated by a parol revocation. Brookshire V. Brookshire, 8 Ircd. 74. But if the power be left in the agent's hands, he may bind the principal by his dealings with third parties, on faith of it, who are ignorant of the revocation. Beard v. Kirk, 11 N. H. 397. 3 Smith V. White, 5 Dana, 383. ■* " Where an agreement is entered into on a sufiScient consideration, whereby an authority is giien for the purpose of securing some benefit, such an authority is irrevo- cable. This is what is usually meant by an authority coupled with an interest, and which is commonly said to be irrevocable." Per M'ild'e, C. .J., in Smart v. Sandars, 5 C. B. 917. So, Lord Kenyan held that a power of attorney given as part of a security for money, was not revocable. Walsh v. Whitcorab, 2 Esp. 565. And where A, being indebted to B, in order to discharge the debt, executed to B a power of attorney author- izing him to sell certain lands beloni;ing to A, this was held to be an authority coupled with an interest, and not revocable, (iaussen v. Morton, 10 B. & C. 731. See further, 1 Pansons on Cont. p. 58, n. (h), and p. 61, n. (m). s 2 Kent, Com. 645 ; Anon. W. Jones, 388 ; Charnley v. Winstanley, 5 East, 266. 6 Allen V. Suydam, 20 Wend. 321 ; Hoard v. Gamer, 3 Sandf. 179 ; Arrott v. Brown, 6 Whart. 9. See Harvey v. Turner, 4 Rawlc, 223. ' Mead v. Engs, 5 C'owen, 303 ; Howard v. Ives, 1 Hill, 263 ; Bank of the United [160] CH. X.J AGENCY. *145 If a bank receive notes or bills for collection, although charg- ing no commission, the possible use of the money is considera- tion enough to make them liable as agents for compensation ; that is, liable for any want of due and legal diligence and care.^ But, by the prevailing though certainly not uniform authority, if the bank exercise proper skill and care in the choice of a col- lecting agent, or of a notary or other person or officer, to do what may be necessary in relation to the paper committed to them, the bank is not liable for his want of care or skiU.^ In general, an exigency or even necessity which would make an extension of the power of an agent very useful to his em- ployer, will not give that extension. A master of a ship, how- ever, may sell it, in case of necessity, or pledge it by bottomry, to raise money. But this is a peculiar effect of the law mer- chant, and no such general rule applies to ordinary agencies.^ * SECTION IV. OF THE EXECUTION OF ATJTHOEITY. Generally, an authority must be conformed to with great strictness and accuracy; otherwise, the principal wiU not be States V. Davis, 2 id. 451 ; Colt v. Noble, 5 Mass. 167 ; Church v. Barlow, 9 Pick. 547 ; Lawson v. Farmers Bank of Salem, 1 Ohio, State, 221 . 1 Smedes v. Utica Bank, 20 Johns. 372, 3 Coweu, 663; McKinster v. Bank of Utica, 9 Wend. 46, 11 id. 473 ; Mechanics Bank v. Merchants Bank, 6 Met. 13 ; Win- gate V. Mechanics Bank, 10 Penn. State, 104. 2 Bellemire v. Bank of United States, 4 Whart. 105. A bank, receiving bills and notes for collection payable at another place, and transmitting the same, according to usage, to a suitable bank or other agent at the place of payment for that purpose, is not responsible to the owner thereof for the default of such bank or agent. Jackson v. Union Bank, 6 Harris & J. 146 ; East Haddam Bank v. Scovil, 12 Conn. 303 ; Win- gate V. Mechanics Bank, 10 Penn. State, 104 ; Fabens v. Mercantile Bank, 23 Pick. 330 ; Dorchester and Milton Bank v. New England Bank, 1 Cush. 177 ; Warren Bank V. Suffolk Bank, 10 Cush. 582. So, it was held by the Supreme Court of New Tork, in Allen v. Merchants Bank, 15 Wend. 482 ; which decision was reversed by the Court of Errors by a vote of 14 to 10, Chancellor Walvxrth delivering an opinion in favor of affirming the judgment of the Suj)reme Court. 22 Wend. 215. This decision of the Court of EiTors is regarded as having settled the law for New York. See Hoard v. Garner, 3 Sandf. 179 ; Montgomery County Bank v. Albany City Bank, 8 Barb. 396, 3 Seld. 459. 2 Thus, where no authority is given to an agent to borrow money, he cannot borrow in case of an emergency. Hawtayne v. Bourne, 7 M. & W. 595 ; Chapman v. Morton, 11 id 534. Masters of vessels are justified in departing from precise instructions, if an 14* [161] 146* ELEMENTS OE MERCANTILE LAW. [CH. X. bound, although the agent may be bound personally.^ Thus, if A, the agent of B, signs " A for B," it has been said that this is not the act of B, but of A for him. But if he signs « B by A," this is the act of B by his instrument A. This strictness is now abated considerably ; and, whatever be the form or manner of the signature of a simple contract, it will be held to bind the principal, if that were the certain and obvious intent.^ In the case of sealed instruments, it would seem that the ancient sever- ity is more strictly maintained.^ That the authority must be conformed to with strict accm-acy, in all matters of substance, is quite certain ; but the whole instrument will be considered, in order to ascertain the intention of the parties and the extent of " authority.* A power given to two cannot be executed by one ; ^ unforeseen emergency arises, and they act in good faith and for the obTious and certain advantage of their principal. Judson v. Sturges, 5 Day, 556 ; Drummond v. Wood, 2 Cainos, 310; Liotard v. Graves, 3 Caines, 226; Lawler v. Keaquick, 1 Johns. Cas. 174; Stainbank v. Shepard, 13 C. B. 418, 20 Eng. L. & Eq. 547; Eorrestier f. Bordman, 1 Story, 34 ; Gould v. Eich, 7 Met. 556. See post, the chapter on the law of shipping. 1 Nixon V. Hyserott, 5 Johns. 58 ; North River Bank w. Aymar, 3 Hill, 262. Thus, where A authorized B to sign his name to a note for $250 payable in six months, and B put A's name to a note for that sum payable in sixty days, it was held that A was not liable. Batty v. Carswell, 2 Johns. 48. And see Andrews v. Kneeland, 6 Cowen, 357; Moody ti. Threlkeld, 13 Ga. 55; Gordon v. Buchanan, 5 Yerg. 71. Where the agent completely executes his authority and goes beyond it, and the excess can be rejected, it seems that his principal will be bound to the extent of the authority confen-ed. Co. Lift. 258, (a) ; Alexander v. Alex.ander, 2 Ves. Sen. 644 ; 1 Livennore on Agency, pp. 98-101. So, where the nature of the agency authorizes the agent to attempt its ex- ecution in part, and having done this, he is unable to complete it, the principal will be bound. Gordon v. Buchanan, 5 Yerg. 81 ; Johnson v. Blasdale, 1 Smcdcs & M. 1 ; 1 Livennore on Agency, 99. '•^ See Mechanics Bank v. Bank of Columbia, 5 Wheat. 326, 337 ; Long v. Colbui'n, 11 Mass. 97 ; Wilks c. Back, 2 East, 142; Beckham u. Drake, 9 M. & W. 79. It is now well settled that a deed purporting to be the deed of A, and executed " B for A," is well execnted as the deed of A, if 15 was duly authorized to execute it. Wilks v. Back, 2 East, 142; Hunter o. Miller, 6 B. Mon. 612; Wilburn <^. Larkin, 3 Blackf. 55 ; Mussey v. Scott, 7 Cush. 215 ; Hale i: AVoods, 10 N. H. 470. 3 Bac. Abr. Leases (I. 10). Clarke v. Courtney, 5 Pet. 319, 350; Bogart v. De Bussy, 6 Johns. 94; Townsend v. Corning, 23 Wend. 435; Elwell v. Shaw, 16 Mass. 42 ; Brinley i\ Mann, 2 Cush. 337 ; Abbey v. Chase, 6 id. 54. The opinion was inti- mated in Wood V. Goodrich, 6 Cush. 117, that the signing by an attorney of the name of his principal to an instrument, which contains nothing to indicate that it is executed by attorney, and without adding his own signature as such, is not a valid execution. But it was held, in Morse v. Green, 13 N. H. 32, that, where a party has authorized another to sub.scribe his name to a note, the fact that his signature was placed there by an agent, need not appear on the note. * Long V. Coburn, 11 Mass. 97 ; Rice v. Gove, 22 Pick. 158 ; To^vnsend v. Corning, 23 Wend. 435 ; Townsend u. Hubbard, 4 Hill, 357 ; Pinckney v. Hagadom, 1 Duer, 96. And where the agency appears from a contract made by "the agent for a domestic principal, the presumption is that the agent meant to bind his principal only. Kirkpat- rick V. Staincr, 22 Wend. 255; Dyer r. Bm-nham, 25 Maine, 13; Alexander v. Bank of Rutland, 24 Vt. 222. s Andover v. Grafton, 7 N. II. 304 ; Dispatch Line of Packets v. Bellamy Manuf. [IG-i] CH. X.J AGENCY. *147 but some exception to the rule as to joint power exists in the case of public agencies,^ and also in many commercial trans- actions. Thus, either of two factors — whether partners or not — may sell goods consigned to both.^ And where there are joint agents, whether partners or not, notice to one is notice to both.^ In commercial matters, usage, or the reason of the thing, may sometimes seem to add to an authority ; so far at least as is requisite for the full discharge of the duty committed to the agent in the best and most complete manner.* Thus, it is held that an agent, to get a bill discounted, may indorse it in the name of his principal ; ^ and a broker, employed to procure insur- ance, may adjust a loss under the same ; but he cannot give up any advantages, rights, or securities of the assured, by compro- mise or otherwise, without special authority.^ » SECTION V. LIABILITY OP AN AGENT. Generally, an agent makes himself liable by his express agree- ment,''^ or by transcending his authority, or by a material de- Co. 12 id. 226 ; Kupfer v. South Parish in Augusta, 12 Mass. 185 ; Damon v. Granby, 2 Pick. 354 ; Copeland v. Mercantile Ins. Co. 6 id. 202 ; First Parish in Sutton v. Cole, 3 id. 244 ; Low o. Perkins, 10 Vt. 532 ; Green v. Miller, 6 Johns. 39. But it is other- wise where an intention appears in the instrament creating the authority to authorize the agents to act separately. Guthrie v. Armstrong, 5 B. & Aid. 628. 1 Co. Litt. 181, b.; Com. Dig. Attorney (C) ; Bac. Abr. Authority (C); King v. Beeston, 3 T. E. 592 ; Grindley v. Barker, 1 B. & P. 229 ; The King v. Whitaker, 9 B. & C. 648. 2 Godfrey v. Saunders, 3 Wilson, 114. 8 Bank of the United States w. Dayis, 2 Hill, 463, 464. * Parsons on Contracts, p. 52 ; Sutton v. Tathara, 10 A. & E. 27 ; Le Eoy v. Beard, 8 How. 467. The application of this doctrine to cases where the authority is in writing, is at least doubtful. Attwood v. Munnings, 7 B. & C. 278; Johnston v. Usborne, 11 A. & E. 557 ; Delafield v. Illinois, 2'6 Wend. 192; Schimmelpennich v. Bayard, 1 Pet. 264. Usage may likewise limit a general authority. Dickinson o. Lilwall, 4 Camp. 279. 6 Penn v. Harason, 4 T. R. 177. See Nickson v. Birhan, 10 Mod. 109. Unless the agent be expressly forbidden to indorse the bill. Fenn v. Harrison, 3 T. R. 757. 8 Richardson v. Anderson, 1 Camp. 43, n. Therefore, a settlement made by a set- off of the premiums due from the broker to the underwriter, on general account against the sum due on the policy from the underwriter, will not bind the assured, unless as- sented to by him. Todd v. Reid, 4 B. & Aid. 210 ; Russell v. Bangley, id. 395 ; Bart- lett V. Pentland, 10 B. & C, 760; Scott v. Irving, 1 B. & Ad. 605. ' If an agent, executing a written conti-act, use language the legal effect of which is to charge himself personally, it is not competent for him to exonerate himself by show- [163] 148* ELEMENTS OE MERCANTILE LAW. [CH. X. parture from it,^ or by concealing his character as agent,^ or by such conduct as renders his principal irresponsible,^ or by his own bad faith. If he describes himself as agent for some un- named principal, he is not liable,* unless he is proved to be the real principal.*^ If he exceeds his authority, he is liable on the whole contract, although a part of it is within his authority.^ One who, having no authority, acts as agent, is personally re- sponsible." But he should be sued in an action on the case for ^ falsely assuming authority to act as agent, and not on the con- tract, unless it contains apt words to charge him personally.^ But if an agent transcends his authority through an ignorance of its limits, which is actual and honest, and is not imputable to his own neglect of the means of knowledge, it may be doubted whether he would be held.^ ing that lie acted for a iirincipal, and that the other contracting party knew this fact at the time when the agreement was made and signed. Jones v. Littledale, 6 A. & E. 480 : :\Iaj;vo v. Atliinson, 2 M. & "\V. 440 ; Higgins v. Senior, 8 id. 834. A fortiori, where the contract is under seal. Appleton v. Binks, 5 East, 148; Duvall v. Craig, 2 Wheat. 56 ; Tippets v. Walker, 4 Mass. 595 ; Eorster u. Fuller, 6 id. 58 ; White v. Skinner, 13 Johns. 307 ; Stone v. Wood, 7 Cowen, 453 ; Fash v. Eoss, 2 Hill, S. Car. 294. See Seavcr v. Coburn, 10 Gush. 324. 1 Feeter v. Heath, 11 Wend. 477; White v. Skinner, 13 Johns. 307; Johnson v. Ogilby, 3 P. Wms. 279 ; Pitman u. ICintner, 5 Blackf. 250. As where he sells for credit, contrary to the instructions of his principal. Walker v. Smith, 4 Dall. 389. But this departure from authority, in order to charge the agent, must be unknown to the other contracting party. Jones v. Downman, 4 Q. B. 235, n. (a.) 2 Franklyn v. Lamond, 4 C. B. 637 ; Evans v. Evans, 3 A. & E. 132. 8 Fenn v. Harrison, 3 T. R." 761, per Ashurst, J. ; Savage v. Rix, 9 N. H. 263. ' Lyon V. Williams, 5 Gray, 557. 6 Schmaltz v. Avery, 16 Q. B. 655, 3 Eng. L. & Eq. 391 ; Can- v. Jackson, 7 Exch. 382, 10 Eng. L. & Eq. 526. ^ Fleeter v. Heath, 11 Wend. 485. It was hdd, in Johnson v. Blasdale, 1 Smedes & JI. 1 , that, if an agent, in filling up a blank note, exceed his authority, and the third party receive the note with knowledge that the authority has been transcended, the note will not be void in toto, but only for the excess beyond the sum authorized. ' East India Go. v. Henslcy, 1 Esp. 112; Johnson v. Ogilby, 3 P. Wms. 278, 279 ; Bowen v. Morris, 2 Taunt. 385, 386 ; Jones v. Downman, 4 Q. B. 235 ; Thomas v. llewe.s, 2 Cromp. & M. 530, note (a) ; Dusenbury v. Ellis, 3 Johns. Gas. 70; Meeeh v. Smith, 7 Wend. 315 ; Woodes v. Dennett, 9 N. H. 55; Palmer t. Stephens, 1 Denio, 471. 8 Long V. Colburn, 11 Mass. 97 ; Ballon v. Talbot, 16 id. 461 ; Jefts v. York, 4 Gush. 371 ; Abbey v. Gliase, 6 id. 54 ; Harper v. Little, 2 Greenl. 14; Stetson v. Patten, id. 358; Hopkins v. Mehaffy, 11 S. & R. 126; Jenkins v. Hutchinson, 13 Q. B, 744; Lewis V. Nicholson, 18 Q. B. 503, 12 Eng. L. & Eq. 430 ; Lyon v. Williams, 5 Gray, 557. See 2 Gromp. & M. 530, note; Wilson v. Barthrop, 2 M. & W. 863 ; Jones v. Downman, 4 Q. B. 235, note ; Woodes v. Dennett, 9 N. H. 55 ; Savage v. Eix, 9 id. 263 ; JMoor v. Wilson, 6 Foster, 332. But in New York, the agent is held liable on the contract in such eases, Avhatever may be the language used. Dusenbury v. Ellis, 3 Johns. Cas. 70 ; White v. Skinner, 13 Johns. 307 ; Randall v. Van Vechten, 19 id. 60 ; JMeech r. Smith, 7 Wend. 315; Palmer v. Stephens, 1 Denio, 471. See Bay v. Cook, 2 N. J. 343. s Smout V. Ilbery, 10 M. & W. 9. See a contrary dictum of Lord Tenierden, in Pol- [164] CH. X.] AGENCY. -148 SECTION VI. RIGHTS OF ACTION GROWING OUT OF AGENCY. If an agent intrusted with goods sell the same without au- thority, the principal may affirm the sale and sue the buyer for the price, or he may disaffirm the sale and recover the goods from the vendee.^ In case of a simple contract, an undisclosed principal may show that the nominal party was actually his agent, and thus make himself actually a party to the contract, and sue upon it.^ But he cannot do this to the detriment of the other party.^ So, too, an undisclosed principal, when discovered, may be made liable on such contract ; * but would be protected if his accounts hill V. Walter, 3 B. & Ad. 124, where it was said that, if the agent " acted upon a power of attorney which he supposed to he genuine, but which was in fact a forgery, he would have incurred no liabiUty, for he would have made no statement which he knew to be false." According to a recent case in England, the agent is not liable to the party dealing with him, where there has been no fraud or concealment on his part, and the circumstances which revoked his authority before the business was transacted, were equally within the knowledge of both contracting parties. Thus, where a man who had been in the habit of dealing with the plaintiff for meat supplied to his house, went abroad, leaving his wife and family, and died abroad, it was Arf(/' that the wife was not liable for meat supplied to her after his death, and before information thereof had been received. Smout v. Ilbery, siipra. See Evans v. Collins, 5 Q. B. 804, 820. 1 See ante, p. 141, notes 4 and 5. 2 The Duke of Norfolk v. Worthy, 1 Camp. 337 ; Sadler v. Leigh, 4 id. 195; Cop- pin V. Walker, 7 Taunt. 237 ; Wilson v. Hart, id. 295 ; Iliggins v. Senior, 8 M. & W. 844; Whitmore v. Gilmour, 12 id. 808; Taintor v. Prendergast, 3 HiJJ, 72; Edwards V. Golding, 20 Vt. 30 ; Commercial Bank v. French, 21 Pick. 486 ; Huntington v. Knox, 7 Gush. 371 ; Girard v. Taggart, 5 S. & E. 27 ; Ford o. Williams, 21 How. 287. The same rule applies where the agent is a partner or joint party, acting for his copartners or the other joint parties. Skinner v. Stocks, 4 B. & Aid. 437 ; Gan-ett v. Handley, 4 B. & C. 664; Cothay v. Pennell, 10 id. 671. But if the agent describes himself .as owner in the written contract, the principal cannot sue. Humble v. Hunter, 12 Q. B. 310. 8 George v. Clagett, 7 T. E. 359 ; Stracey v. Deey, 7 id. 361, note ; Baring v. Cor- rie, 2 B.. & Aid. 137 ; Carr v. Hinchliff, 4 B. & C. 547 ; Sims v. Bond, 5 B. & Ad. 389 ; Warner v. M'Kay, 1 M. & W. 591 ; Kelley v. Munson, 7 Mass. 324 ; Lime Eock Bank v. Plympton, 17 Pick. 159; Violett v. Powell, 10 B. Mon. 347; Gardner v. Al- len, 6 Ala. 187 ; Wait v. Johnson, 24 Vt. 112. * Moore v. Clementson, 2 Camp. 22; Thomas v. Edwards, 2 M. & W. 215; Jones V. Littledale, 6 A. & E. 486 ; Nelson v. Powell, 3 Doug. 410; Trueman o. Loder, 11 A. & E. 589 ; Beebee v. Eobert, 12 -Wend. 413 ; Taintor v. Prendergast, 3 Hill, 72 ; Upton V. Gray, 2 Greenl. 373 ; Hyde v. Wolf, 4 La. 234 ; Conro v. Port Henry Iron Co. 12 Barb. 27; Clealand v. Walker, 11 Ala. 1064; Perth Amboy Manuf. Co. v. Condit, 1 N. J. 659. And the same rule holds where the party dealing with the agent knows him to be acting as agent ; but, not kno-wing who his principal is, credits the agent. Thomson v. Davenport, 9 B. & C. 78 ; Eaymond v. Crown and Eagle Mills, [165] 149 ELEMENTS OF MERCANTILE LAW. [CH. X. or relations with his agent had been in the mean time changed in good faith, so as to make it detrimental to him to be held lia- ble.i If one sells to an agent, knowing him to be an agent, and knowing who is his principal, and elects to charge the goods to the agent alone, he cannot afterwards transfer the charge to the principal.- In any transaction done through an agent, the knowledge of the principal is said to be the knowledge of the agent ;^ we should doubt whether it were so always, at the instant of the principal's acquiring it ; but it certainly is when the principal has had the means of communicating the knowledge to the agent.'' Notice to an agent before the transaction goes so far as to render the notice useless, is notice to the principal.^ And knowledge obtained by an agent in the course of the transaction itself, is the knowledge of the principal.^ Notice to an officer or 2 Mut. 319; Baxter v. Duren, 29 Maine, 434. According to the English authorities, the liability of the unnamed principal in such cases is not affected by the Statute of Frauds. HiKgins <;. Senior, 8 M. & W. 844; Trueman v. Loder, 11 A. & E. 589; Bcukham v. Drake, 9 M. & W. 79, 11 id. 315. But this has been denied in this coun- try. Fenly v. Stewart, 5 Sandf. 101. And see 1 Parsons on Cont. 48, n. (a). 1 Thomson v Davenport, 9 B. & C. 78; Kymer v. Suwercropp, 1 Camp. 109; Carr i>. Hinchliff, 4 B. & C. 551 ; Horsfall v. Fauntleroy, 10 B. & C. 755 ; Taylor v. Kymer, 3 B. & Ad. 334 ; Sims v. Bond, 5 B. & Ad. 393; Smyth v. Anderson, 7 C. B. 21. 2 ratcTson V. Gandasequi, 15 East, 62; Addison v. Gandasseqni, 4 Taunt. 574; Thomson v. Davenport, 9 B. & C. 78 ; Patapsco Ins. Co. v. Smith, 6 Haixis & J. 171 ; Frencli v. Price, 24 Pick. 13; Green v. Tanner, 8 Met. 411 ; Paige v. Stone, 10 id. 1C9 ; IIvilc V. Paige, 9 Barb. 150; Clealand v. Walker, 11 Ala. 1058. 3 Jlavljcw i: Eanics, 3 B. & C. 601 ; Powles v. Page, 3 C. B. 16. * In Willis V. Bank of En^:land, 4 A. & E. 21, 39, the doctrine of notice was thus stated by Lord Di-nmaii : " Tlie general rule of law is, that notice to the principal is notice to all liis ^ents ; at any rate, if there bo reasonable time, as there was lier-e, for the principal to communicate that notice to his agents, before the event which raises the question happens. . . . Wc liavc been pressed with the inconvenience of requiring every trading company to communicate to their agents everywhere whatever notices they may receive, but the argument ab iiiconvejiieiiti is seldom entitled to much weight in deciding legal questions ; and if it wex'C, other inconveniences of a more serious nature would obviously grow out of a different decision." 6 Astor V. Wells, 4 Wlieat. 466 ; Hovcy f. Blauchard, 13 N. H. 145. As to the time when notice may be gi^ on, see Tourville v. Naish, 3 P. Wms. 307 ; Wigg v. Wigg, 1 Atk. 384 ; Story u. Windsor, 2 Atk. 630 ; More i\ Mayhow, 1 Cli. Cas. 34 ; .Bracken u. Miller, 4 Watts & S. 102. AVhere a notice is required, and nothing is said as to the manner of notification, in gener.al it may be by parol. McEwen v. Montgomery County Ins. Co. 5 Hill, 101. If one assume to act as agent of another, the party adopting the act must take it cliargcd with notice of such matters as appear to have been at the time of the act within the knowledge of the agent. Hovey v. Blanchard, supra. •i Fitzherbert v. Mather, 1 T. R. 12; Cowen v. Simpson, 1 Esp. 290; Berkeley ti. Watling, 7 A. & E. 29 ; Sutton v. DiUaye, 3 Barb. 529. So the principal is chargeable witli notice to a duly authorized subagent. Boyd v. Vanderkemp, 1 Barb. Ch. 273. But notice to the agent, in order to affect the principal, must be obtained in the course of the same transaction. Thus, it is held that knowledge obtained by an attorney in anotlier transaction, does not bind his client. Mountford v. Scott, 3 Madd. 34 ; Wors- [166] CH. X.] ASENCY. *150 member of ' a corporation, is notice to that corporation, if the officer or member, by appointment, or by usage, had authority to receive it for the corporation ; ^ but notice to any member is not necessarily notice to a corporation.^ If money be paid to one as agent of a principal who has color of right, the party paying cannot try that right in an action against the agent for money had and received, but must sue the principal.^ But where the principal has no right, the action may be brought against the agent, unless he has in good faith paid the money over to his principal, or made himself personally liable to him for it.* And if he received the money illegally, he may be sued, although he has paid it over ; ^ or if he has paid it over when he should not have done so ; as if he pays it before a cer- tain condition, precedent to the payment, be performed.^ ley V. Scarborough, 3 Atk. 392; Hiern v. Mill, 13 Ves. 120; Hood v. rahncstock, 8 "W^atts, 489 ; Bracken v. Miller, 4 Watts & S. 102. But see Hargreaves v. Eothwell, 1 Keen, 154; Champlin ;;. Layton, 6 Paige, 189; Griffith v. Griffith, 9 id. 315, 1 HolF. Ch. 153. Where the vendor and purchaser employ the same solicitor, the purchaser is affected with notice of whatever that solicitor had notice of in that transaction, in his capacity of solicitor for either vendor or purchaser. Toulmin v. Stcere, 3 Meriv. 210 ; Fuller V. Benctt, 2 Hare, 394 ; Drydon v. Frost, 3 Mylne & C. 670. 1 Taff Vale Railway Co. v. Giles, 2 Ellis & B. 822, 22 Eng. L. & Eq. 202 ; Bank of United States v. Davis, 2 Hill, 451 ; North River Bank v. Aymar, 3 id. 274 ; Conro ;;. Port Henry Iron Co. i2 Barb. 27 ; New Hope and Delaware Bridge Co. v. Phceuix Bank, 3 Comst. 156 ; Porter v. Bank of Rutland, 19 Vt. 410. It has been held that notice to a director of a bank is not notice to the bank. Louisiana State Bank v. Sen- ecal, 13 La. 525 ; Commercial Bank v. Cunningham, 24 Pick. 276 ; Custer j;. Tomp- kins County Bank, 9 Penn. State, 27. But if a director who has received notice, commu- nicates the same to the board of directors at a regular meeting, the bank is, of course, bound. Bank of Pittsburgh v. Whitehead, 10 Watts, 397. And notice to the president or cashier of a bank, of matters relating to the ordinary business of the institution, is notice to the bank. New Hope and Delaware Bridge Co. v. Phoenix Bank, 3 Comst. 156; Conantv. Seneca County Bank, 1 Ohio, State, 298; Bank of St. Mary's u. Mum- ford, 6 Ga. 44. 2 Housatonic Bank v. Martin, 1 Met. 308 ; Bank of Pittsburgh v. Whitehead, 10 Watts, 397; Union Canal Co. v. Loyd, 4 AVatts & S. 393. And see Pulton Bank v. New York and Sharon Canal Co. 4 Paige, 136 ; National Bank v. Norton, 1 Hill, 578 ; Powles V. Page, 3 C. B. 16. 3 Pond V. Underwood, 2 Ld. Raym. 1210; Sadler v. Evans, 4 Burr. 1984; Horsfall V. Handly, 8 Taunt. 136 ; Alexander v. Southey, 5 B. & Aid. 247 ; Bamford v. Shuttle- worth, 11, A. & E. 926; Stevens v. Badcock, 3 B. & Ad. 354; Costigan v. Newland, 12 Barb. 456 ; Colvin v. Holbrook, 2 Comst. 126. But, to protect the agent, the money should be paid to him voluntarily and for the principal's use. Snowdon v. Davis, 1 Taunt. 359 ; Ripley v. Golston, 9 Johns. 209. * BuUer v. Harrison, Cowp. 565 ; Wilson v. Anderton, 1 B. & Ad. 450 ; Cox v. Prentice, 3 M. & S. 344 ; Hearsey v. Prayn, 7 Johns. 182; McDonald v. Napier, 14 Ga. 89. 6 Townson v. Wilson, 1 Camp. 396; Smith v. Sleap, 12 M. & W. 585. 6 Hardman v. Willcork, 9 Bing. 382, note. So, if the agent has received notice not to pay over, then he may be sued. Sadler v. Evans, 4 Burr. 1984 ; Hardacre v. Stew- art, 5 Esp. 103 ; Hearsey v. Pruyn, 7 Johns. 179 ; Elliott v. Swartwout, 10 Pet. 136; Bend v. Hoyt, 13 id. 263.; Gary v. Curtis, 3 How. 236. And knowledge that such pay- [167] 151 ELEMENTS OF MERCANTILE LAW. [CH. X. For an injury sustained from a third party through the default of an agent, a principal may, generally, bring an action against that third party in his own name ; and then may have the evi- dence of the agent. If an agent and a third person have used the principal's money illegally, as in the purchase of lottery tickets, though the agent could bring no action, the principal may, if personally innocent. And where an agent has been in- duced, by the fraud of a third person, to pay money which ought not to have been paid, either the agent or the principal may bring an action to recover the money back.^ An agent in possession of negotiable paper may be treated with as having full authority to dispose of the same, by any per- son not having knowledge of the absence or limitation of authority." But if the paper was given only in payment of, or as security for a preexisting debt, there is, perhaps, reason for saying that the receiver takes only the right and interest of the party from whom he receives it. Such, at least, has been the decision in some cases ; on the ground that this was not a proper business use of negotiable paper. But we are not entirely satisfied cither with the reason, or the conclusion.^ ment would be wrongful, is equivalent to express notice. Edwards v. Hodding, 5 Taunt. 815. It is held in Now York that, where an agent rightfully receives money for his principal, which ought to bo paid over by the principal to a third person, such third person cannot maintain an action against the agent to recover it, though the agent has never in fact paid it over to his principal, and though the agent had notice of the claim of such third person. Co.stigan v. Newland, 12 Barb. 456; Colvin v. Holbrook, 2 Comst. 126; McDonald r. Napier, 14 Ga. 89. 1 Stevenson v. Mortimer, Cowp. 806; Holt v. Ely, 1 Ellis & B. 795, 18 Eng. L. & E(|. 422. - Collins V. Martin, 1 B. & P. 648; Bolton v. Puller, 1 id. 539; Jarvis v. Rogers, 13 Mass. 105; Bay v. Coddington, 5 Johns. Ch. 54, 20 Johns. 637. But if a person, re- ceiving such paper from the agent, has notice of tlie extent and limitation of his authority, he is bound by it. Goodman v. Harvey, 4 A. & E. 870; tJther v. Rich, 10 id. 784 ;' Stephens v. Foster, 1 Cromp. M. & R. "849 ; Arbouin v. Anderson, 1 Q. B. 498. So, if the indorsement is restrictive ; for this is constructive notice. Treuttel v. Barandon, 8 Taunt. 100; Sigourney v. Lloyd, 8 B. & C. 622, 5 Bing. 525; Brown u. Jackson, 1 Wash. C. C. 515. 8 Bay V. Coddington, 5 Johns. Ch. 54, 20 Johns. 637 ; Payne v. Cutler, 13 Wend. 605 ; Stalker v. M'Donald, 6 Hill, 93. And see, contra, Swift v. Tyson, 16 Pet. 15 ; Chicopee Bank v. Chapin, 8 Met. 40 ; Stevens ti. Blanchard, 3 Cush.'l69 ; BramhaU v. Beckett, 31 Maine, 205. [168] CH. X.] AGENCY. 152 SECTION VII. HOW A PRINCIPAL IS AFFECTED BY THE ACTS OF HIS AGENT. If an agent make a fraudulent representation, a principal may be liable for resulting injury, although personally ignorant and innocent of the wrong ; ^ nor can he take any benefit therefrom.^ And even if, without actual fraud, he makes a false representa- tion as to a matter peculiarly within the knowledge of himself and his principal, the principal cannot claim or hold any advantage therefrom ; but the party dealing with the agent may rescind and annul the transaction, if he do so as soon as he has knowledge of the untruth ; and may then recover back money paid or goods sold or delivered.^ But such representations will not affect the principal unless they are made during and in the very course of that transaction.* A principal cannot of course restrict his liability by describing himself as an agent.^ Payment to an agent binds the principal only if made to him in the course of business, and appropriated by the payer to that specific purpose, and the agent has authority to receive the 1 Hem V. Nichols, 1 Salk. 289 ; Fitzherbert v. Mather, 1 T. E. 12 ; Doe v. Martin, 4 id. 66 ; Taylor v. Green, 8 C. & P. 316 ; Irving v. Motley, 7 Bing. 543 ; Attorney- General V. Ansted, 12 M. & W. 520; Locke v. Stearns, 1 Met. 560; Southwick v. Estes, 7 Gush. 385; Concord Bank v. Gregg, 14 N. H. 331. And he is so liable for the fraud of his agent, acting in violation of positive instruction, provided he keeps within the course of his usual employment. Johnson v. Barber, 5 Gilman, 425; Lob- dell V. Baker, 1 Met. 193 ; Concord Bank v. Gregg, 14 N. H. 331. And see Peto v. Hague, 5 Esp. 135 ; Huckman v. Fernie, 3 M. & W. 505 ; Woodin v. Burford, 2 Cromp. & M. 392 ; Sherwood v. Marwick, 5 Greenl. 302 ; United States v. Williams, Ware, 175. Aliter, if he goes beyond the scope of his business, or if he is known, by the party dealing with him, to be violating his instructions. Cases, supra. 2 Seaman v. Fonereau, 2 Stra. 1183; Taylor v. Green, 8 C. & P. 316 ; Jeffrey v. Bigelow, 13 Wend. 518; Olmsted v. Hotailing, 1 Hill, 317 ; Fitzsimmons v. Joslin, 21 Vt. 129 ; Veazie v. Williams, 3 Story, 611, 8 How. 134; Mason v. Crosby, 1 Woodb. & M. 342 ; Foster v. Swasey, 2 Woodb. & M. 217. 3 Willes V. Glover, 4 B. & P. 14 ; Fitzherbert v. Mather, 1 T. R. 16 ; Carpenter v. Am. Ins. Co. 1 Story, 57. And, it seems, the purchaser, without rescinding the con- tract, may maintain case for deceit against the principal. Fuller v. Wilson, 3 Q. B. 58. * Peto V. Hague, 5 Esp. 134 ; Dawson v. Atty, 7 East, 367 ; Snowball v. Goodricke, 4 B. & Ad. 543 ; Fairlie v. Hastings, 10 Ves. 123 ; Thallhimer v. Brinckerhoff, 4 Wend. 394 ; Hubbard v. Elmer, 7 Wend. 446 ; Sandford v. Handy, 23 id. 260 ; Bank of the United States v. Davis, 2 Hill, 464 ; Nelson v. Cowing, 6 Hill, 336 ; Hannay v. Stew- art, 6 Watts, 487 ; Hough y. Eichardson, 3 Story, 689. s See ante, p. 147, n. 5. 15 [169] 153* ELEMENTS OF MERCANTILE LAW. [CH. X. money, either by express appointment, by usage, or by the reason of the case.i Payment to a subagent appointed by the agent, * but whose appointment is not authorized by the principal, binds the agent, and renders him liable to the principal for any loss of the money in the subagent's hands.^ A legacy to a tradesman, paid to a shopman who was in the habit of receiving daily pay- ments, was held not a sufficient payment to discharge the execu- tor.3 Nor is the principal bound, if the agent be authorized to receive the money, but, instead of actually receiving it, discharge a debt due from him to the payer, and then give a receipt as for money paid to his principal,* unless it can be shown that he has special authority to receive payment in this way, or that such payment is justified by known usage.^ 1 Thomson v. Thomson, 7 Ves. 470 ; Drinkwater v. Goodwin, Cowp. 256 ; Moore v. Clementson, 2 Camp. 22; Capel v. Thornton, 3 C. & P. 352 ; Morris v. Cleasby, 1 M. & S. 566; Hodnett v. Tatum, 9 Ga. 70. 2 Taber v. Pcrrot, 2 Gallis. 565. 3 Sanderson v. Bell, 2 Cromp. & M. 313. See Monk v. Whittenbury, 2 Moody & E. 81. "If a shopman, who is authorized to loccive payment over the counter only, re- ceives money elsewhere than in the shop, that payment is not good. The principal might be willing to trust the agent to receive money in the regular course of business in the shop, when the latter was under liis own eye, or under the eyes of those in whom he had confidence, but he might not wish to trust the agent with the receipt of money elsewhere." Per Par/.c, B., in Kayc v. Brett, 5 Exch. 274. « Todd V. Eeid, 4 B. & Aid. 210 ; Russell v. Bangley, 4 id. 395 ; Bartlett v. Pent- land, 10 B. & C. 760; Scott v. Irving, 1 B. & Ad. 605 ; Kingston i: Kincaid, 1 Wash. C. C. 454; Sangston v. Maitland, 11 Gill & J. 286. An agent authorized to receive the debt in money, cannot take a note or bill, or a banker's check. Ward v. Evans, 2 Ld. Eaym. 930, 2 Salk. 442; Thorold v. Smith, 11 Mod. 71, 87; or otlier personal property. Doct. & Stud. 286. So, an agent authorized to sell, must sell for money, and cannot barter. Howard v. Chapman, 4 C. & P. 508; Guerreiro v. Peile, 3 B. & Aid. 616; Hayes v. Stone, 7 Hill, 135, 136. When authorized to receive pajTnent by a note, he cannot pledge or otherwise dispose of it. Jones o. Farley, 6 Greenl. 226 ; Hayes v. Lynn, 7 Watts, 524. ^ Stewart u. Aberdein, 4 M. & W. 211. .So, where an agent i.'s authorized to pay, out of tlie sum to be collected by him as agent, a debt due to him from the principal. In Barker v. Greenwood, 2 Youngo & C. Exch. 418, Alderson, B., says : " If a man, being indebted to his own agent, authorize that agent to receive money due to him from his debtor, intending that he should thereout pay himself his own debt, does he authorize that agent impliedly, to the extent at least of that debt, to receive payment in any way he may think fit ? I think he docs. An agent with a general authority like this, is, as it seems to mo, only bound to receive payment in such a way as thereby to put it in his power completely to discharge the duty lie himself owes to his principal. If, therefore, he is bound to pay the whole over to the principal, he must receive it in cash from the •debtor. And a person who pays such an agent, and who means to be safe, must see that the mode of payment does enable the agent to perform tliis, his duty. If, therefore, the agent be not a creditor of his principal, he must receive the whole in cash ; for, otherwise, ho does not, by the act done between him and the debtor, put himself into the situation of being able to pay it o\er. Such were the cases of Todd v. Eeid, 4 B. & Aid. 210 ; Eussell v. Bangley, 4 B. & Aid. 395 ; Bartlett ;;. Pentland, 10 B. & C. 760 ; Scott V. Irving, 1 B. & Ad. 605. Eor in those cases, the assured was entitled, as be- tween himself and the broker, to the whole amount which the latter might have received in cash from the underwriter. But if the agent be himself a creditor of the principal, [170] CH. X.] AGENCY. 154 In general, although a principal may be responsible for the deliberate fraud of his agent in the execution of his employment, he is not responsible for his criminal acts, unless he expressly commanded them.i There is, however, a class of cases in which the principal has intrusted property to his agent, and the agent has used it illegally ; and this act of the agent is primd facie evi- dence, sufficing, if unexplained, to render the principal liable criminally, without proof of his direct participation in the act itself. The smuggling of goods, the issue of libellous publica- tions, and the sale of intoxicating liquors, by agents, belong to this class.2 SECTION vni. MUTUAL RIGHTS AND DUTipS OF PRINCIPAL AND AGENT. An agent cannot depart from his instructions without making himself liable to his principal for the consequences.^ In deter- mining the purport or extent of his instructions, custom and usage in like cases will often have great influence ; because, on and the principal intends, when he makes him his agent to receive, that he shall retain his own debt ont of the sum received, his only duty is to pay over to the principal the balance, after deducting his own debt. If he, therefore, takes care to receive in cash that balance, he, as it seems to me, puts himself into a situation as completely to dis- charge his duty as if he had received the whole in cash. For, what possible difference can it make to the principal, whether his agent receives the whole and retains part, or only receives that balance which he himself is entitled to receive from the agent. A person, however, who does not take the ordinary and proper course of paying the whole in money, must take care to be able to prove that the agent is in this situation. If, therefore, he pays by settlement in account, he takes upon himself, in such a case as this, the risk of being able to show the debt due from the principal to the agent, and the specific circumstances under which the agent was appointed to receive the money." 1 Hern v. Nichols, 1 Salk. 289, per Holt, C. J. ; Crockford v. Winter, 1 Camp. 124 ; Rex V. Huggins, 2 Stra. 885. 2 Rex V. Almon, 5 Burr. 2686 ; Rex v. Gutch, Moody & M. 433 ; Attorney-Gteneral V. Siddon, 1 Cromp. & J. 220 ; Commonwealth v. Nichols, 10 Met. 259. 3 Anonymous, 2 Mod. 100; Chapman v. Morton, 11 M. & W. 540; Rundle v. Moore, 3 Johns. Cas. 36 ; Liotard v. Graves, 3 Caines, 238 ; Leverick v. Meigs, 1 Cowen, 645 ; Manella v. Ban-y, 3 Cranch, 415, 439 ; Kingston v. Kincaid, 1 Wash. C. C. 454 ; Loraine v. Cartwrightj 3 Wash. C. C. 151 ; Day v. Crawford, 13 Ga. 508 ; Evans v. Root, 3 Seld. 186. " And no motive connected with the interest of the principal, how- ever honestly entertained, or however wisely adopted, can excuse a breach of the in- structions." Per Washington, J., in Courcier v. Ritter, 4 Wash. C. C. 551. But there are cases of imexpected emergencies which have been held to justify a departure from the instructions, when such departure was for the certain benefit of the principal. Wil- liams V. Shackelford, 16 Ala. 318 ; Davis v. Waterman, 10 Vt. 526 ; Perez v. Miranda, 19 Mart. La. 494. Such emergencies arise mainly where the agent is a master of a ves- sel, a supercargo, or a foreign factor, and are peculiar to the law merchant. See Dusar V. Perit, 4 Binn. 361. [171] 155* ELEMENTS OF MERCANTILE LAW. [CH. X. the one hand, the agent is entitled to all the advantages which a known and established usage would give him ; and on the other, the principal has a right to expect that his agent will conduct himself according to such usage.^ But usage is never permitted * to prevail over express instructions.^ A principal who accepts the benefit of an act done by his agent beyond or aside from his instructions, discharges the agent from responsibility therefor.^ And any delay in renouncing the transaction as soon as he can, or any inclination to wait and make a profit out of it, is an ac- ceptance of the act.^ But if the agent has bought goods for his principal without authority, the latter may renounce the sale, and, nevertheless, hold the goods if he has advanced money on them.^ In general, every agent is entitled to indemnity from his prin- cipal, when acting in obedience to his lawful orders,^ or when he, in conformity with his instructions, does an act which is not wrong in itself, and which he is induced by his principal to sup- pose right at that time.'' An attorney or agent cannot appoint a subattorney or agent, unless authorized to do so expressly, or by a certain usage, or the obvious reason and necessity of the case.^ And a subagent. ' Marzetti v. Williams, 1 B. & Ad. 415 ; Sutton v. Tatham, 10 A. & E. 27 ; Sykes V. Giles, 5 M. & W. 645 ; Kingston v. Wilson, 4 Wash. C. C. 310. Nor need the usage be known to the principal. Pollock v. Stables, 12 Q. B. 765 ; Bayliffe v. Butter- worth, 1 Exch. 425. 2 Catliu V. Bell, 4 Camp. 184 ; Guerreiro v. Peile, 3 B. & Aid. 616 ; Parkist v. Alex- ander, 1 Johns. Ch. 394. As, where the authority is in writing. Attwood v. Munnings, 7 B. & C. 278 ; Johnston v. Usborne, 11 A. & E, 557 ; Schimmelpennich v. Bayard, 1 Pet. 264 ; Dclaflcld v. Illinois, 26 Wend. 192. 3 Clarke v. Pen-ier, 2 Ereem. 48 ; Prince v. Clark, 1 B. & C. 186 ; Owsley v. Wool- hopter, 14 Ga. 124. ' Prince v. Clark, 1 B. & C. 186 ; Coruwal v. Wilson, 1 Yes. Sen. 509. 5 Cornwal v. Wilson, 1 Ves. Sen. 509 ; per Lord Eldon, in Kemp v. Pryor, 7 Ves. 240, 247 ; per Bayley, J., in Prince v. Clark, 1 B. & C. 190. •J Wcstropp V. Solomon, 8 C. B. 345 ; D'Arcy v. Lyle, 5 Binn. 441 ; Ramsay v. Gardner, 11 Johns. 439 ; Powell v. Trustees of Newburgh, 19 id. 284 ; Hill v. Packard, 5 Wend. 375 ; Rogers v. Kneeland, 10 id. 218 ; Gower v. Emery, 18 Maine, 79. T Adamson v. Jarvis, 4 Bing. 66 ; Betts v. Gibbins, 2 A. & E. 57 ; Allaire v. Ouland, 2 Johns. Cas. 56 ; Coventry v. Barton, 17 Jolms. 142 ; Avery v. Halsey, 14 Pick. 174. ' Coombe's case, 9 Rep. 75, b, 76, a; Schmaling v. Thomlinson, 6 Taunt. 147; Tippets V. Walker, 4 Mass. 595 ; Stoughton v. Baker, 4 JIass. 522 ; Emei-son v. Provi- dence Manuf. Co. 12 Mass. 237 ; Brewster v. Hobart, 15 Pick. 302 ; Lyon v. Jerome, 26 Wend. 485 ; Hunt u. Douglass, 22 Vt. 128 ; Andovcr v. Grafton, 7 N. H. 304 ; Dispatch Line v. Bellamy Manuf Co. 12 N. H. 228 ; Wilson v. York and Maryland Line R. R. Co. 11 Gill & J. 74. A broker cannot delef;ate his authority. Cockran v. Irlam, 2 M. & S. 301, note ; Henderson v. Barnewall, 1 Young & J. 387. Nor can a factor. Solly u. Rathbone, 2 M. & S. 298 ; Catlm v. Bell, 4 Camp. 183 ; W.amcr v. Martin, 11 How. 209. But the power to perform a merely ministerial act, involving the [172] CH. X.] AGENCY. 156 appointed without such authority, is only the agent of the agent, and not of the principal.^ An agent is bound to use, in the affairs of his principal, all that care and skill which a reasonable man would use in his own. And he is also bound to the utmost good faith.^ Where, how- ever, an agent acts gratuitously, without an agreement for com- pensation, or any legal right to compensation growing out of his services, less than ordinary diligence is, in general, required of him, and he will not be held responsible for other than gross negligence.^ But a gratuitous agent will be held responsible for property intrusted to him.* For any breach of duty, an agent is responsible for the whole injury thereby sustained by his prin- cipal ; and, generally, a verdict against the principal for miscon- duct of the agent measures the claim of the principal against ^he agent.^ The loss must be capable of being made certain and definite ; and then the agent is responsible if it could not have happened but for his misconduct, although not imme- diately caused by it.* If any agent embezzles his employer's exercise of no discretion, may be delegated. Mason v. Joseph, 1 Smith, K. B. 406, per Lord Elleniorough ; Lyon v. Jerome, 26 Wend. 485 ; Commercial Bank of Lake Erie V. Norton, 1 Hill, 501 ; Powell v. Tattle, 3 Comst. 396 ; Gillis v. Bailey, 1 Foster, 149. See Blore v. Sutton, 3 Meriv. 237 ; Moore v. Wilson, 6 Foster, 332 ; Comm. Bank of Penn. v. Union Bank of N. Y. 1 Kern. 203. So, where the appointment of a subagent Is necessary and according to usage. Moon v. Guardians of Whitney Union, 3 Bing. N. C. 814 ; Dorchester and Milton Bank v. New England Bank, 1 Gush. 177 ; Warren Bank v. Suffolk Bank, 10 Gush. 582 ; Warner v. Martin, 11 How. 224. Thus, a con- signee or agent for the sale of merchandise may employ a broker for the purpose, when such is the usual course of business. Trueman v. Loder, 11 A. & E. 589 ; Warner v. Martin, 11 How. 223. The unauthorized appointment of a subagent, when ratified by the principal, binds him in the same manner as if originally authorized. Doe d. Rhodes V. Kobinson, 3 Bing. N. G. 677 ; Mason v. Joseph, 1 Smith, K. B. 406 ; McKenzie v. Nevius, 22 Maine, 138. 1 Cobb u. Becke, 6 Q. B. 930 ; Stephens v. Badcock, 3 B. & Ad. 354. But if the appointment was authorized expressly or by implication, the subagent is the agent of the principal. McKenzie v. Nevius, 22 Maine, 138 ; Wilson v. Smith, 3 How. 763. 2 Co. Litt. 89, a ; Chapman v. Walton, 10 Bing. 57 ; Lawler v. Keaquick, 1 Johns. Gas. 174 ; Kingston v. Kincaid, 1 Wash. G. C. 454. 8 Doorman v. Jenkins, 2 A. & B. 256 ; Balfe v. West, 13 G. B. 467, 22 Eng. L. & Eq. 506 ; Lyon v. Tams, 6 Eng. Ark. 189. Unless such person holds himself out as exercising one of certain privileged professions or trades, as that of attorney, in which case, it seems, he will be bound to exercise the skill appropriate to such ti-ade or profes- sion. Dartnall v. Howard, 4 B. & C. 345 ; Shiells v. Blackburne, 1 H. Bl. 158 ; Lan- phieru. Phipos, 8 G. & P. 479; Denew v. Daverell, 3 Gamp. 451. See Wilson o. Brett, 11 M. & W. 113 ; 1 Parsons on Gont. pp. 73, 581-586. * Stewart v. Frazier, 5 Ala. 114. 5 Mainwaring v. Brandon, 8 Taunt. 202 ; Green v. N. R. Go. 4 T. R. 589. f Park V. Hamond, 4 Camp. 344, 6 Taunt. 495 ; Mallough v. Barber, 4 Gamp. 150 ; Smith V. Lascelles, 2 T. R. 187 ; Da,vis v. Garrett, 6 Bing. 716 ; Short v. Skipwith, 1 Brock. 103 ; De Tastet v. Grousillat, 2 Wash. C. C. 132 ; Morris v. Summerl, 2 id. 203 ; Hays V. Stone, 7 Hill, 136. But the loss must be capable of being ascertained with lo» [173] 157* ELEMENTS OF MERCANTILE LAW. [CH. X. property, it is quite clear that the employer may reclaim it whenever he can distinctly trace and identify it. But if it be blended indistinguishably with the agent's own goods, and the agent die or become insolvent, the principal can claim only as a common creditor, as against other creditors ; ^ but as * against the factor himself, the whole seems to belong to the principal.^ An agent employed to sell property cannot buy it himself;^ and if employed to buy, he cannot buy of himself, unless ex- pressly authorized to do so.* The principal may, however, adopt and ratify such act of his agent ; and this ratification may be express, or implied from his retaining the proceeds or property a considerable time, with a full knowledge of the facts, and with- out objection. A trustee cannot purchase the property he holds in trust for another.^ Among the obvious duties of all agents is that of keeping an exact account of their doings, and particularly of all pecuniary transactions.^ After a reasonable time has elapsed, the court reasonable certainty. Webster v. De Tastct, 7 T. R. 157 ; The Amiable Nancy, 3 Wheat. 560 ; Bell v. Cunningham, 3 Pet. 84, 85 ; Smith v. Condry, 1 Ho^y. 28. 1 Thompson v. Perkins, 3 Mason, 232. ^ Lnpton V. White, 15 Vcs. 436 ; Chedworth v. Edwards, 8 id. 46 ; Wren v. Kirton, 11 Ves. 377 ; Hart v. Ten Eyck, 2 Johns. Ch. 62. 3 Wren I'. Kirton, 8 Vcs. 502; Morse v. Royal, 12 id. 355; Charter v. Trevelyan, 11 Clark & P. 714 ; Moore v. Moore, 1 Seld. 256 ; Church v. Sterling, 16 Conn. 400 ; Bartholomew v. Leech, 7 Watts, 472; Baker v. Whiting, 3 Sumner, 476; Copeland v. Mercantile Ins. Co. 6 Pick. 204. A subagent is under the same disability. Baker v. Whiting, 1 Story, 241. Nor can the agent of a principal, authorized to sell, purchase for another. Hawley v. Cramer, 4 Cowen, 717 ; Hanison v. McHenry, 9 Ga. 164. If an agent or attorney is entitled to purchase, yet if, instead of openly purchasing, he purchase in the name of a trustee or agent without disclosing the fact, no such purchase can stand. Lewis v. Hillman, 3 II. L. Cas. 630. * Lees V. Nuttall, 2 Mylne & K. 819 ; Taylor v. Salmon, 4 Mylne & C. 139. 5 Nesbitt V. Tredennick, 1 Ball. & B. 46, 47 ; De Caters v. Le Roy De Chanmont, 3 Paige, 178 ; Slade v. Van Vetchen, U Paige, 26. ^ Chedworth v. Edwards, 8 Ves. 49 ; Ormond o. Hutchinson, 13 id. 47 ; Hai'dwicke V. Vernon, 14 id. 510; Lupton v. White, 15 id. 436 ; Pearse v. Green, 1 Jacob & W. 135 ; CoUyer v. Dudley, Turner & R. 421 ; Clark v. Moody, 17 Mass. 148. A servant, intrusted with money for the payment of tradesmen's bills, it is said, is not liable to ac- count. Terry v. Wacher, 15 Sim. 448. Nor is the agent of an agent, who is not the subagent of the principal, accountable to the principal. Stephens v. ISadcock, 3 B. & Ad. 354 ; Cartwright v. Hatoley, 1 Ves. Jr. 292 ; Sims v. Brittain, 4 B. & Ad. 375 ; Tripler v. Olcot, 3 Johns. Ch. 473. A demand by the principal must precede an ac- tion against an agent for not accounting, or for not paying over the proceeds of a sale or money collected. Tophara v. Braddick, 1 Taunt. 572 ; Taylor v. Bates, 5 Cowen, 376 ; Rathbun v. Ingalls, 7 Wend. 320 ; Brink v. Dolsen, 8 Barb. 337 ; Hall v. Pecke, 10 Vt. 474; Hutchins v. Gilman, 9 N. H. 359 ; Sally v. Capps, 1 Ala. 121 ; Potter v. Sturges, 1 Dev. 79 ; White v. Miller, 3 Dev. & B. 55 ; State v. Sugg, 3 L-ed. 96 ; Waring V. Richardson, 11 id. 77 ; Armstrong v. Smith, 3 Blackf. 251 ; Judah v. Dyott, 3 id. 324. But no demand is necessary where the agent denies his agency, or unrea- sonably neglects to account, or is otherwise in default. Tillottson v. McCrillis, 11 Vt. [174] GH. X.j AGENCY. *lo8 will presume that such an account was rendered, accepted, and settled.! Otherwise, every agent might always remain liable to be called upon for such account. Moreover, he is liable not only for the balances in his hands, but for interest,^ or even, where there has been a long delay to the profit of the agent, he might, * perhaps, be liable for compound interest, on the same ground on which it has been charged in analogous cases against execu- tors, trustees, and guardians.^ No interest whatever would be charged if such were the intention of the parties, or the effect of the bargain between them ; and this intention may be inferred either from direct or circumstantial evidence, — as the nature of the transaction, or the fact that the principal knew that the money lay useless in the agent's hands, and made no objection or claim.* Although, as we have seen, the revocation of authority is gen- erally within the power of the principal, an agent ought not to suffer damage from acting under a revoked authority, if the revocation were wholly unknown to him without his fault.^ But where his authority was only a general one, he has been held liable to the assignees for acts done by him after his prin- cipal's bankruptcy.*' One requested to act as agent, and agreeing to do so, but not beginning his work, nor being intrusted with property for the employment, is not liable for not doing what he undertakes, un- less he has a consideration for his undertaking.^ 477 ; Ferris v. Paris, 10 Johns. 285 ; Cooley v. Betts, 24 Wend. 203 ; Wait v. Gibbs, 7 Pick. 146 ; Langley v. Sturt^evant, 7 id. 214; Witherup v. Hill, 9 S. & E. 11. 1 Topham v. Braddick, 1 Taunt. 572. 2 Brown v. Southouse, 3 Bro. C. C. 107 ; Williams v. Storrs, 6 Johns. Ch. 353 ; People V. Gasherie, 9 Johns. 71 ; Dodge v. Perkins, 9 Pick. 368. So the principal is entitled to all increase or profit made by the agent in the use of the principal's prop- erty. Diplock V. Blackburn, 3 Camp. 43; Brown v. Litton, 1 P. Wms. 141 ; Massey V. Davies, 2 Ves. Jr. 317 ; Hays v. Stone, 7 Hill, 135. 8 See 1 Parsons on Cont. 103, 115; Ackerman v. Emott, 4 Barb. 626. * Beaumont v. Boultbee, 11 Ves. 360; Sogers v. Boehm, 2 Esp. 704; Williams c. Storrs, 6 Johns. Ch. 353. 6 United States v. Jarvis, Daveis, 287. In this case it was held, by Ware, J., that the power of an agent may be revoked at any time by the principal without notice ; but if the agent, in the prosecution of the business of his principal, has fairly and in good faith, before notice of the revocation of his powers, entered into any engagements or come under any liabilities, the principal will be bound to indemnify him. So an agent, after accepting an agency, cannot renounce it at pleasure, without notice or good cause, without rendering himself responsible for any loss which may thereby be sustained by the principal. e Pearson v. Graham, 6 A. & E. 899. ' Elsee V. Gatward, 5 T. R. 143 ; Balfe v. West, 13 C. B. 467, 22 Eng. L. & Eq. 506 ; Thome v. Deas, 4 Johns. 84. [175] 159* ELEMENTS OF MERCANTILE LAW. [CH X. SECTION IX. OF FACTORS AND BROKERS. All agents who sell goods for their principals, and guarantee the price, are said abroad to act under a del credere cmnmission} * In this country, this phrase is seldom used, nor is such guaranty usually given, except by commission merchants. And where such guaranty is given, the factor is still but a surety, so far that his employers must first have recourse to the principal debtor.^ But his promise is not " a promise to pay the debt of another," within the Statute of Frauds.^ Nor does he guarantee the safe arrival of the money received by him in payment of the goods, and transmitted to his employer, but he must use proper caution in sending it.^ And if it is agreed that he shall guarantee the remittance, and charge a commission for so doing, he is liable although he does not charge the commission.^ If he takes a note from the purchaser, this note is his employer's ; ^ and if he takes depreciated or bad paper, he must make it good.'^ A broker or factor is bound to the care and skill properly be- longing to the business which he undertakes, and is responsible for the want of it.^ 1 A del credere commission confers no additional power on the factor. Morris o. Cleasby, 4 M. & S. 566 ; Thompson v. Perkins, 3 Mason, 232. But it does in the case of a broker. White v. Chouteau, 10 Barb. 202. - Peele v. Northcote, 7 Taunt. 478 ; Gall v. Comber, 7 id. 558 ; Thompson v. Per- kins, 3 Mason, 232 ; Wolff v. Koppel, 5 Hill, 458, 2 Denio, 368. In which last case confiictinf; opinions were given. The contrary doctrine seems to have prevailed at an early date, which made the factor liable absolutely and in the first instance. Grove v. Dubois, 1 T. R. 112; Haughton v. Matthews, 3 B. & P. 485; Leverick v. Meigs, 1 Cowen, 663, 664. " Tlie selling under a del credere commission, while it secures the amount of the sales to the principal, does not in law require the factor to anticipate the credit ; .and the principal is only entitled to have the amount passed to Ills credit when the sale is matured." Per Hubbard, J., in Upham v. Lefavour, 11 Met. 185. 3 Swan V. Nesmith, 7 Pick. 220 ; Wolff;;. Koppel, 5 Hill, 458, 2 Denio, 368 ; Brad- ley I'. Ricluardson, 2.3 Vt. 731, 732; Couturier v. Hastie, 8 Exch. 40, 16 Eng. L. &Eq. 562 ; 2 Parsons on Cont. 307. < Muhler v. Bohlens, 2 Wash. C. C. 378. But see Lucas v. Groning, 7 Taunt. 164 ; Mackenzie v. Scott, 6 Bro. P. C. 280. » Henbach v. Mollman, 2 Duer, 227. s West Boylston Manuf. Co. v. Searle, 15 Pick. 225; Pitts v. Mower, 18 Maine, 361. ' Dunnell v. Mason, 1 Story, 543. 8 See ante, p. 156, n. 3 ; Vere v. Smith, 1 Vent. 121, [176] CH. X.] AGENCY. *160 A factor intrusted with goods, may pledge them for advances to his principal, or for advances to himself to the extent of his lien.i The mere wishes or intimations of his employer bind him only so far as they are instructions ; ^ these he must obey ; but may * still, as we have already stated, depart from their letter, if in good faith, and for the certain benefit of his employer, in an unforeseen exigency.^ Having possession of the goods, he may insure them; but is not bound to do so, nor even to advise insurance ; unless requested, or unless a distinct usage makes this his duty.* He has much discretion as to the time, terms, and manner of a sale, but must use this discretion in good faith. For a sale which is precipitated by him, without reason and injuriously, is void, as unauthorized.^ If he send goods to his principal without order, or contrary to his duty, the principal may return them, or, in good faith and for the benefit of the fac- tor, may sell them as the factor's goods.^ Although a factor have no del credere commission, he is liable to his principal for his own default ; or if he sells on credit, and, when it expires, takes a note to himself;^ but if he takes at the 1 M'Combie d. Davies, 7 East, 5 ; Solly v. Eathbone, 2 M. & S. 298 ; Pultney v. Keymer, 3 Esp. 182; XJrquhart v. Mclver, 4 Johns. 116; Warner v. Martin, 11 How. 225. So, an innocent pledgee may hold the pledge where the owner has held for the agent as principal. Boyson v. Coles, 6 M. & S. 14 ; Williams v. Barton, 3 Bing. 139 ; Warner v. Martin, supra. The power of a factor to pledge the goods of his principal has recently been enlarged, by statute, in England, and in many of our States. See 1 Parsons on Cont. 50, n. (g). 2 Brown v. M'Gran, 14 Pet. 480. In Marfield v. Douglass, 1 Sandf. 360, 405, s. c. nom. Marfield v. Goodhue, 3 Comst. 62, a principal wrote to his factor, giving his views of the probable supply of the article consigned, and stating facts which indicated a short supply. In conclusion he said : " I have thought it best for you to take my pork out of the market for the present, as thirty days will make an important change in the value of the article." It was held that the letter constituted instructions to the factor to withhold the property from sale until the receipt of further directions. So, of a similar letter, saying : "But thirty days will tell the story ; with these facts before me, I have thought best to hold on to my pork, and I wish you to take it out of the market for the present." And Sandford, J., said : " In om- view, the letters were not ambiguous, nor calculated to mislead the defendants. They contain a plain direction to vrithhold the plaintiff's pork from the market; not couched in imperious or abrupt language, which was wholly unnecessary ; but in such language as any courteous man would use to another, expressing a decisive wish and conclusion that his pork should be withheld from sale. This constituted instructions from the principal to the factors to pursue the course indicated." 8 See ante, p. 154, n. 3. * De Eorest v. Fire Ins. Co. 1 Hall, 84; Brisban v. Boyd, 4 Paige, 17. 5 Shaw V. Stone, 1 Cnsh. 228, 248. " Kemp V. Pryor, 7 Ves. Jr. 237 ; Cornwall v. Wilson, 1 Ves. Sr. 509. 'i Hosmer v. Beebe, 14 Mart. La. 368. And see ante, p. 154, n. 3. [177] 161* ELEMENTS OF MERCANTILE LAW. [CH. X. time of the sale a negotiable note from a party in fair credit, and the note is afterwards dishonored, this is the loss of his employer, unless the factor has guaranteed it.^ K he sells the goods of many owners to one purchaser, taldng a note for the whole to himself, and gets it discounted for his own use or ac- commodation, he is then liable for the payment of that note.^ So, if he gets discounted for his own use a note taken wholly for his principal's goods.^ But he may discount them to reim- burse himself * for advances, without making himself liable.* If he sends his own note for the price to his employer, he must pay it.^ A factor may have a claim against a purchaser founded on his lien upon the goods for advances, while the principal has a claim for the price. But, generally, a purchaser, paying either principal or factor, will be protected against the other, unless he had knowledge or notice of the adverse valid claim of the other.^ As a factor has possession of the goods, he may use his own name in all his transactions, even in suits at law ; but a broker can buy, sell, receipt, &c., only in the name of his employer.'' So, a factor has a lien on the goods in his hands, for his advances, his expenses, and his commissions, and for the balance of his general account. He has also a personal remedy against his prin- cipal, and this is not varied by the circumstance of his having or not a del credere commission.^ And the factor may sell, from 1 Goodenow v. Tyler, 7 Mass. 36; Greely v. Bartlett, 1 Greenl. 172; Rogers v. White, 6 id. 193 ; Goldthwaite v. M'Whorter, 5 Stew. & P. 284 ; Edd v. King, 5 Ala. 84 ; Messier v. Amery, 1 Yeates, 540 ; Towns v. Birchett, 12 Leigh, 173 ; Hamilton v. Cunningham, 2 Brock. 3.50. The mere taldng by the factor of a note payable to him- self, which includes the purchase-money of goods belonging to several principals, does not render the factor personally liable for the makei-'s solvency. Corlies v. Gumming, 6 Cowen, 181. So, where the note includes a debt due to the principal, and a debt due to himself Hapgood v. Batcheller, 4 Met. 573. ^ Johnson v. O'Hara, 5 Leigh, 456 ; Byrne v. Schwing, 6 B. Mon. 199. " Myers v. Entrikcn, 6 Watts & S. 44. See Wren v. Kirton, 11 Ves. 382. * Toivns V. Birchett, 12 Leigh, 173. » Simpson v. Swan, 3 Camp. 291 ; Le Fever v. Lloyd, 5 Taunt. 749 ; Goupy v. Harden, 7 id. 159 ; Jackson v. Bossonette, 24 Vt. 611. See Shaw v. Picton, 4 B. & C. 715. ^ Drinkwater v. Goodwin, Cowp. 251 ; Coppin o. Craig, 7 Taunt. 243 ; Hudson v. Granger, 5 B. & Aid. 27 ; Atkyns v. Amber, 2 Esp. 493. 7 Baring v. Come, 2 B. & Aid. 137, 143, 148 ; Warner v. M'Kay, 1 M. & W. 591. But a broker may act in his own name, if he is specially authorized so to act. Kemble V. Atkins, 7 Taunt. 260. If he has made advances on the goods sold by him, or guar- anteed the sale, he may sue in his own name. Grove v. Dubois, 1 T. R. 112 ; Atkyns V. Amber, 2 Esp. 493; Buckbee v. Brown, 21 Wend. 110; AVhite v. Chouteau, 10 Barb. 202. " Graham v. Ackroyd, 10 Hare, 192, 19 Eng. L. & Eq. 654. [178] CH. X.J AGENCY. *162 time to time, enough to cover his advances, unless there be some- thing in his employment or in his instructions, from which it may be inferred that he had agreed not to do so.^ But a broker, having no possession, has no lien. The broker may act for both parties, and often does so.^ But, from the nature of his employ- ment, a factor should act only for the party employing him.^ A broker has no authority to receive payment for the goods he sells, unless that authority be given him, expressly or by impli- cation.* Nor will * payment to a factor discharge a debtor who has received notice from the principal not to make such pay- ment.° Generally, neither factor nor broker can claim their commis- sions until their whole service be performed, and in good faith, and with proper skill, care, and industry.^ But if the service begins, and is interrupted whoUy without their fault, they may claim a proportionate compensation." If either bargains to give his whole time to his employer, he ■will not be permitted to derive' any compensation for services rendered to other per- sons.** Nor can either have any valid claim against any one ■■ Brown v. McGran, 14 Pet. 479 ; Parker v. Brancker, 22 Pick. 40 ; !Frothingham v. Everton, 12 N. H. 239 ; Blot v. Boiceau, 3 Comst. 78; Marfield v. Goodhue, 1 Sandf. 360, 3 Comst. 62 ; Porter v. Patterson, 15 Penn. State, 229. See Smart v. Sandars, 3 C. B. 380, 5 id. 895. In Upham v. Lefavour, 1 1 Met. 174, it was held that a factor who makes advances on goods consigned to him, may maintain an action, hefore the goods are sold, to recover the money advanced, unless there is an agreement to the contrary. ^ Colvin V. Williams, 3 Harris & J. 38. 2 Kucker v. Cammeyer, 1 Esp. 105; Hinde v. Whitehouse, 7 East, 558, 569; Hen- derson V. Bamewall, 1 Young & J. 387 ; Beal v. M'Kieman, 6 La. 417. * Baring v. Come, 2 B. & Aid. 137 ; Campbell v. Hassell, 1 Stark. 233. An insm'- ance broker may receive payment, but only in money, ■ and cannot set off a debt due from himself to the purchaser. Todd v. Reid, 4 B. & Aid. -210 ; Russell v. Bangley, 4 id. 395 ; Bartlett v. Pentland, 10 B. & C. 760 ; Scott v. Irving, 1 B. & Ad. 605. Pay- ment to the broker is good if the principal has held him out as the owner. Campbell V. Hassell, supra ; Morris v. Cleasby, 1 M. & S. 566 ; Coatcs v. Lewis, 1 Camp. 444 ; Favenc v. Bennett, 11 East, 36 ; Kemble v. Atkins, 7 Taunt. 260. 5 Moore v. Clementson, 2 Camp. 22 ; Gardiner v. Davis, 2 C. & P. 49 ; Hornby v. Lacy, 6M. & S. 166; Edmond v. Caldwell, 15 Maine, 340. Payment to an agent authorized to receive it, may be made before it becomes due. Patten v. EuUerton, 27 Maine, 58. ^ ^, 6 Hamond v. Holiday, 1 C. & P. 384 ; Dalton v. Irvin, 4 id. 289 ; Broad v. Thomas, 7 Bing. 99 ; Read v. Rann, 10 B. & C. 438 ; Hill v. Kitching, 3 C. B. 299. And the factor's negligence may be given in evidence to reduce his compensation, or bar all claim therefor. Hamond v. Holiday, supra ; Denew v. Daverell, 3 Camp. 451 ; Moneypenny V. Haitland, 1 C. & P. 352; White v. Chapman, 1 Stark. 113; Hurst v. Holding, 3 Taunt. 32 ; Shaw v. Arden, 9 Bing. 287 ; Dodge v. Tileston, 12 Pick. 328. ^ See cases supra. And see further, Fenton v. Clark, 11 Vt. 557 ; Seaver v. Morse, 20 id. 620 ; Dickey v. Linscott, 20 Maine, 453 ; Fuller v. Brown, 1 1 Met. 440. 8 Thompson v. Havelock, 1 Camp. 527 ; Gardner v. M'Cutcheon, 4 Beav. 534. [179] 163* ELEMENTS OF MERCANTILE LAW. [CH. X. for illegal services, or those which violate morality or public policy.! A principal cannot revoke an authority given to a factor, after advances made by the factor, without repaying or securing the factor. 2 The distinction between a foreign and a domestic factor is quite important. A domestic factor is one who is employed and acts in the same country with his principal. A foreign factor is one employed by a principal who lives in a different country. And a foreign factor is, as to third parties, — for most purposes and under most circumstances, — a principal. Thus, they can- not sue the principal, because they are supposed to contract with the factor alone, and on his credit, although the principal may sue them.^ This, however, depends upon the question whether the contract is with the agent or with the principal. The pre- sumption would be that the contract was made with the agent, and in such case the principal would not be liable ; but if the contract was distinctly made with the principal through an agent, the principal alone would be held. And it has been held that a foreign factor is personally liable, although he * fully disclose his agency, and his principal is known.* But the remarks which we have just made apply to this case also, and it is now held in England that the liability of the agent depends on the contract, and that, if by the terms of the contract the agent purports to act only as agent, he is not responsible.^ But this doctrine is not extended to cases where a contract for personal services is made in the country where the factor is doing business, by a per- son resident there, but the contract is to be performed or executed 1 Haines v. Busk, 5 Taunt. 521 ; Joseph v. Tebrer, 3 B. & C. 639 ; Waldo r. Martin, 4 id. 319. But where the emplojniient of the agent, which was occasioned by an illegal enterprise, is subsequent to and disconnected with the illegality, he may recover his compensation. Toler v. Armstrong, 4 Wash. C. C. 297, 11 Wheat. 258 ; Wooten v. Miller, 7 Sniedes & M. 380 ; Howell v. Fountain, 3 Ga. 176. 2 Brown v. McGran, 14 Pet. 479, 495 ; Mai-field v. Goodhue, 3 Comst. 62; Blot v. Boiceau, 3 Comst. 78. But see Smart v. Sandars, 5 C. B. 895 ; Ealoigh v. Atkinson, 6 M. & W. 670. 8 De Gaillon v. Aigle, 1 B. & P. 368 ; Gonzales v. Sladen, Bull. N. P. 130 ; Pater- son V. Gandasequi, 1 5 East, 62 ; Addison v. Gandassequi, 4 Taunt. 574 ; Thompson „. Davenport, 9 B. & C. 78 ; Merrick's Estate, 5 Watts & S. 9; Newcastle Manuf. Co. c. Eed River R. R. Co. 1 Rob. La. 145. See Smyth v. Anderson, 7 C. B. 21. * McKenzie v. Novius, 22 Maine, 138. 5 Green v. Kopke, 18 C. B. 549, 36 Eng. L. & Eq. 396 ; Mahony v. Kekale, 14 C. B. 390, 25 Eng. L. & Eq. 278 ; Heald v. Kenworthy, 10 Exch. 743," 28 Eng. L. & Eq. 537. [180] CH. X.J AGENCY. -163 in the country where the principal resides. For, if such a con- tract be made in the name of the principal, he alone is responsi- ble.i One who deals with a domestic factor may sue the prin- cipal, unless it is shown that credit was given exclusively to the factor.^ And for the purpose of this distinction, and the rules founded upon it, we hold, on the weight of authority, that our States are not foreign to each other.^ Every factor is bound to reasonable care ; and he is liable for a loss by fire, or robbery, or other accident, occurring without his default, if he had previously done some wrongful act, with- out which the property might have been safe.* And this rule would apply even to a gratuitous agent.^ 1 Rogers v. March, 33 Maine, 106. ^ Paterson v. Gandasequi, 1 5 East, 62 ; Addison v. Gandassequi, 4 Taunt. 574. 8 Kirkpatrick v. Stainer, 22 Wend. 244 ; Taintor v. Pendergast, 3 Hill, 72. Eng- land and Scotland do not seem to be foreign countries in respect to this rule. Thomp- son V. Davenport, 9 B. & C. 78. * Caffrey v. Darby, 6 Ves. 496 ; Hays v. Stone, 7 Hill, 136 ; Davis v. Garrett, 6 Bing. 716 ; Evans v. Eoot, 3 Seld. 186. ^ Stewart v. Erazier, 5 Ala. 114. 16 [181j 164 ELEMENTS OP MERCANTILE LAW. [CH. XL CHAPTER XL PARTNERSHIP. SECTION I. WHAT A PAETJfEESHIP IS. When two or more persons combine their property, labor, or skill, for the transaction of business for their common profit,^ they enter into partnership. Sometimes the word " firm " is used as synonymous with partnership ; sometimes, however, it seems to mean only the copartnership name. A partnership is presumed to be general when there are no stipulations, or no evidence from the course of business to the contrary. Or it may be limited to a particular subject.^ A single joint transaction out of which, considered by itself, neither profit nor loss arises, will not create a partnership.^ K a joint purchase be made, and each party then takes his distinct and several share, this is no partnership.* But it seems that 1 The object of the joint transactions must be the common profit. Hence, a deed of assignment in the usual form to trustees for the benefit of creditors which empowers the trustees to cai-rj' on the business of the debtor, for the purpose of closing up his aifairs, does not create a partnership between the creditors. Coate v. Williams, 7 Exch. 205, 9 Eng. L. & Eq. 481 ; .Tanes v. Whitbrcad, 11 C. B. 406, 5 Eng. L. & Eq. 431. See Noyes v. Cushman, 25 Vt. 390. As to charitable associations and clubs, see Beaumont v. Meredith, 3 Ves. & B. 180; Delauney i'. Strickland, 2 Stark. 416 ; Elemyng v. Hector, 2 M. & AV. 172. 2 Ripley V. Colby, 3 Foster, 438. 8 As, if tenants in common giye a joint order for the sale of their property. Jack- son V. Robinson, 3 Mason, 140. See Hall v. Leigh, 8 Cranch, 50; Sims o. Willing, 8 S. & R. 103. * Hoare c. Dawes, Doug. 371 ; Coope v. Eyre, 1 H. Bl. 37 ; Gibson v. Lupton, 9 Bing. 297 ; Post v. Kimberly, 9 Johns. 470 ; Barton v. Williams, 5 B. & Aid. 395 ; Holmes v. United Ins. Co. 2 Johns. Cas. 329; Fclichy u. Hamilton, 1 Wash. C. C. 491 ; Ballon v. Spenser, 4 Cowen, 163 ; Harding v. Foxeroft, 6 Greenl. 76 ; Gilmore V. Black, 2 Fairf. 485 ; Brady v. Calhoun, 1 Penn. 140, 147. [182] CH. XI.] PARTNERSHIP. • *165 there is a partnership if the joint transactions actually and ma- terially enlarge the value of the property, although the respec- tive shares are divided among the holders without a sale.^ But a joint contract to do a piece of work, if the price for it is to be divided immediately among those entitled to it, will not make them partners.^ * Any persons competent to transact business on their own account, may enter into partnership for that purpose ; and no others. SECTION 11. HOW A PARTNERSHIP MAY BE FORMED. No especial form or manner is necessary. It may be by oral agreement,^ or by a written agreement,* which may have a seal or not. But the liability and authority of the partners begins with the actual formation of the partnership, and does not wait for the execution of any articles.^ In general, if there be an 1 Everitt v. Chapman, 6 Conn. 347 ; Musier v. Trumpbonr, 5 Wend. 275. See Loomis V. Marshall, 12 Conn. 69 ; Bucknam v. Barnum, 15 Conn. 73. 2 Finch V. Stacy, Sel. Cas. in Ch. 9 ; Porter ;;. M'Clure, 15 Wend. 187. ' Ex parte Owen, 4 De G. & S. 351, 7 Eng. L. & Eq. 351 ; Smith v. Tarlton, 2 Barb. Ch. 336. * In Smith v. Burnham, 3 Sumner, 435, it was held, by Siory, J., that a partnership agreement to speculate in the purchase and sale of laud must, under the Statute of Frauds, be in writing. But Ware, J., In re WaiTen, Daveis, 320, held that a written agreement was necessary in such case only as between the partners themselves, while, as far as the rights of third persons were involved, such a partnership might be proved by parol. See Ealph v. Harvy, 1 Q. B. 845 ; Vice v. Anson, 7 B. & C. 409. And from the following language of Ware, J., in the case above cited : "If the partnership is by parol only, and one of the partners makes a purchase in his own name, but in- tended for the benefit of the finn, the other, on the mere groimd of the partnership, that being by parol, cannot take advantage of the contract, for if he could, he would acquire an interest in land by parol, directly in opposition to the Statute of Frauds ; " and from the recent case of Smith v. Tarlton, 2 Barb. Ch. 336, it seems that if one purchases land in iiis own name, another cannot take advantage of it, solely on the ground of an oral agreement to make it a partnership transaction ; but if, under such an agreement, the property is actually paid for out of the joint funds, a court of equity will decree an account, although the legal title is in one alone. See Henderson v. Hud- son, 1 Munf. 510. See further. Dale v. Hamilton, 5 Hare, 369. The general princi- ples of equity which are applied to the real estate of a partnership will be considered hereafter. A partnership was entered into by a parol agreement, and was to continue thi-ee years. Walworth, Ch., held that this was not an agreement which was not to be performed within one year ; so as to require it to be in writing, under the Statute of Frauds. Smith v. Tarlton, 2 Barb. Ch. 336. 5 Battley v. Lewis, 1 Man. & G. 155. See "Wilson v. Campbell, 5 Oilman, 383 ; Williams v. Jones, 5 B. & C. 108. [183] 166* ELEMENTS OF MERCANTILE LAW. [CH. XI. agreement to enter into business, or some particular transac- tions, together, and share the profits and losses, this constitutes a partnership which is just as extensive as the business pro- posed to be done, and not more so. The parties may agree to share the profits in what proportion they choose ; but in the ab- sence of any agreement, the law presumes equal shares.^ So they may agree as to any way of dividing the losses, or even that one or more partners alone shall sustain them all, without loss to the *rest. And this agreement is valid as between them- selves;^ though not against thu-d parties, unless they knew of this agreement between the partners, and gave credit accord- ingly. The rule seems to be that, if exemption from loss is claimed on account of any special limitation of the partners' authority to bind the firm, mere knowledge of such limitation will affect third parties.^ But an agreement exempting part- ners from loss generally, or from loss beyond the amount in- vested, will only operate between the partners, unless it can be shown that the third party not only knew the agreement, but contracted with the firm on the basis of this agreement.'^ And generally stipulations in articles of copartnership limiting the power of a partner are not binding on third parties who are ignorant of them." Bach partner is absolutely responsible to every creditor of the copartnership, for the whole amount of the debt.*^ And if thereby obliged to suffer loss, his only remedy is against the other partners. Although partners may agree and provide as they wUl in their articles, a long neglect of these provisions will be treated by a court of equity, and, perhaps, of law, as a mutual waiver of them.'' 1 Peacock v. Peacock, 16 Vcs. 49 ; Farrar v. Beswick, 1 Mood. & R. 527 ; Gould ,). Gould, 6 Wend. 263; Webster w.Bray, 7 Hare, 179, per Wigram, V. Cli. ; Donel- son V. Posey, 13 Ala. 752. 2 Hesketh v. Blanchard, 4 East, 144 ; Wiuship v. United States Bank, 5 Pet. 529 ; Pollard V. Stanton, 7 Ala. 761. 8 Boardman v. Gore, 15 Mass. 336 ; Dow v. Sayward, 12 N. H. 271, 275; Ensign V. Wands, 1 Johns. Gas. 171 ; New York Fire Ins. Co. v. Bennett, 5 Conn. 579 ; Car- gill V. Corby, 15 Misso. 425. See Galway v. Matthew, 1 Camp. 403. * Danforth v. Allen, 8 Met. 341, per Wilde, J. ; King v. Dodd, 9 East, 516, 527 ; Saufley v. Howard, 7 Dana, 367, 370 ; Andrews t'. Schott, 10 Penn. State, 47, 55. See Bailey v. Clark, 6 Pick. 372 ; Batty v. M'Cundie, 3 Car. & P. 202. 5 Kimbro v. Bullitt, 22 How. 256. " Rice V. Shute, 5 Burr. 2611 ; Abbot v. Smith, 2 W. Bl. 947. ' England v. Curling, 8 Beav. 129 ; Jackson v. Sedgwick, 1 Swanst. 460; Const v. [184] CH. XI.J PARTNERSHIP. *167 Persons may be partners as to third parties, or strangers who are not partners inter se} The latter question would generally be determined by the intention of the parties, as drawn from their contoact — whether oral or written — under the ordinary rules of evidence and construction.^ But whether one is liable as a partner to one who deals with the firm, must depend in part upon his intention, but more upon his acts ; for if by them he justifies those who deal with the firm in thinking him a part- ner in that bijsiness, he must bear the responsibility ; as if he declare that he has a joint interest in the property, or conducts the * business of the firm as a partner, accepting bills, or the like,^ The declarations or acts of one cannot, however, until the partnership is proved by evidence aliunde, make another liable as partner.* The true rule, we think (although it may not be quite settled), is this, that one who thus holds himself out as a partner, when he really is not one, is responsible to a creditor who on these grounds believed him to be a partner ; but not to one who knew nothing of the facts, or who, knowing them, knew also that this person was not a partner.^ A secret partner is one who is actually a partner by partici- pation of profit, but is not avowed or known to be such ; ^ and a dormant partner is one who takes no share in the conduct or Hanis, Turner & K. 496, 523 ; Boyd v. Mynatt, 4 Ala. 79 ; McGraw v. Pulling, 1 Freem. Ch. 357. 1 Waugh V. Carver, 2 H. Bl. 235 ; Hazard v. Hazard, 1 Story, 371 ; Hesketh v. Blanchard, 4 East, 144 ; Gill v. Kuhn, 6 S. & E. 333. See Grifath v. Buffiun, 22 Vt. 181. 2 Bird V. Hamilton, 1 Walk. Ch. 361 ; Goddard v. Pratt, 16 Pick. 412 ; Gill <,-. Kuhn, 6 S. & E. 333. 8 Pox V. Clifton, 6 Bing. 776, 794 ; Guidon v. Eobson, 2 Camp. 302 ; Dickinson v. Valpy, 10 B. & C. 140 ; Steams v. Haven, 14 Vt. 540 ; Gilpin v. Temple, 4 Harring. 190; Furberu. Carter, 11 Humph. 271. * Whitney v. Ferris, 10 Johns. 66; McPherson v. Eathbone, 7 Wend. 216; Jen- nings V. Estes, 16 Maine, 323; Thornton v. Kerr, 6 Ala. 823; Tuttle i>. Cooper, 5 Pick. 414 ; Eobbins v. Willard, 6 Pick. 464 ; Cook ». Gartner, 9 Cush. 266 ; Alcott v. Strong, 9 Cush. 323 ; Button v. Woodman, 9 Cush. 255 ; Cady v. Shepherd, 11 Pick. 400; Vinal v. Burrill, 16 Pick. 401; Anderson v. Levan, 1 Watts & S. 334; Taylor V. Henderson, 17 S. & E. 453. 6 In Young v. Axtell, cited 2 H. Bl. 242, Lord Mansfield is reported as sayuig : "As she suffered her name to be used in the business, and held herself out as partner, she was certainly liable, though the plaintiff did not, at the time of dealing, know that she was a partner, or that her name was used." It now appears to be well settled that the holding out must be to the party himself, and credit given on the strength of it. Dick- inson V. Valpy, 10 B. & C. 128, 140; Pott v. Eyton, 3 C. B. 32, 39 ; Markham v. Jones, 7 B. Mon. 456 ; Buckingham v. Burgess, 3 McLean, 364, 549. See Galway v. Matthews, 1 Camp. 403 ; Brown v. Leonard, 2 Chitty, 120. 6 United States v. Binney, 5 Mason, 186, 5 Pet. 529. 16* [185] 168* ELEMENTS OP MERCANTILE LAW. [CH. XI. control of the business of the firm.^ Both of these are liable to creditors, even if they did not know them to be members of the firm, on the ground of their interest and participation in the profits, which constitute, with the property of the firm* the funds to which creditors may look for payment. A nominal partner is one who holds himself out to the world as such, but is not so in fact. He is liable to creditors of the firm, on the ground that he justifies them in trusting the firm on his credit, and, indeed, invites them to do so, by declaring himself to be a partner. It is said that a dormant partner not only need not^ join as plaintiff, but also that he shall not,^ there being no priority of con- tract between him and the person who contracted with the firm. But he may, of course, be sued and joined as defendant.* The principal test of membership in a mercantile firm is said to be the participation of profits. Thus, if one lend money to be used in a business, for which he is to receive a share in the profits, this would make him a partner ; and if he is to receive lawful interest, and, in addition thereto, a share of the profits, this would make him liable as a partner to a creditor, although the * borrower might, perhaps, treat the transaction as a usu- rious loan, and on that ground defend himself if sued for the money.^ But the mere sharing of profits without any connection what- ever in the business is not enough to constitute a partnership. Thus, if one firm agrees with another that each shall continue and carry on its own business independently, but that the profits and losses of each firm shall be divided between the t^vo, the two firms do not enter into partnership, nor do the members of one of the firms become partners with the members of the other.^ There need not, however, be a community of interest in the property if there be in the profits, and some connection in the business.'^ But the setting apart of a portion of the profits to 1 Mitchell V. Dall, 2 Harris & G. 159 ; Kelley v. Hurlburt, 5 Cowen, 534 ; Desha w. Holland, 12 Ala. 513. 2 Wood V. O'KcUey, 8 Gush. 406 ; Jackson v. Alexander, 8 Texas, 109. 3 Lloyd V. Archbowle, 2 Taunt. 324. * Boardman v. Keeler, 2 Vt. 65. ■> Grace v. Smith, 2 W. Bl. 999, and Bloxham v. Pell, there cited ; Morse v. Wilson, 4 T. R. 353 ; Gilpin v. Enderbey, 5 B. & Aid. 954 ; Oakley v. Aspinwall, 2 Sandf. 7 ; Bailey v. Clark, 6 Pick. 372 ; Ex parte Briggs, 3 Dea. & Ch. 367. » Smith V. Wright, 5 Sandf. 113. See Pattison v. Blanchard, 1 Sold. 186. ' Briggs V. Vanderbilt, 19 Barb. 222 ; Elsworth v. Tartt, 26 Ala. 733. [186] CH. XI.] PARTNERSHIP. -168 pay the debt of a third person, does not make him a partner.^ So, too, a joint purchase, but for the purpose of distinct and separate sales by each party on his own account, does not con- stitute the purchasers partners.^ Sometimes a clerk, or salesman, or a person otherwise em- ployed for the firm, receives a share of the profits instead of wages. Formerly it was held, but, as we think, on insufficient authority, that if such person received '' one tenth part of the net annual profits," this made him a partner ; but if he received " a salary equal in amount to one tenth of the net profits," this did not make him a partner. We apprehend, however, that now the courts would look more at the actual intention of the parties, and their actual ownership of an interest in the funds of the partnership, and not be governed by the mere phraseology used. If in fact he works for wages, although these wages are measured by the profits, he is no partner.^ 1 Drake v. Eanney, 3 Rich. 37. ''■ Bancher v. Cilley, 38 Me. 553 ; Stoallings v. Baker, 15 Miaso. 481. ^ The earliest case on this point was Grace v. Smith, 2 W. Bl. 999 ; and to this ease, as authority, the principle as stated has heen referred. Here, Smith dissolved a part- nership with Robinson, and agreed to lend the latter £4,000, for which lie was to re- ceive five per cent, interest, and an annuity of £300. Was Smith liable, by reason of this contract, for goods sold to Robinson ? The jury found that the annuity was not payable out of profits. -HeW, that he was not liable. Z)c ffra/, C. J., said : "The only question is, what constitutes a secret partner ■? Every man who has a share of the profits of a trade, ought also to bear his share of the loss. And if any one takes a part of the profit, he takes a part of that fund on which the creditor of the trader relies for his payment." From this it would be inferred that the court considered every person liable as a partner wlio took a part of the partnership fund. But afterwards, in the same decision, De Grey says : " I think the true criterion is, to inquure wliether Smith agreed to share the profits of tlie trade with Robinson, or wliether he only relied on these profits as a fund of payment. A distinction not more nice than usually occurs in questions of trade or usiut." There is no higher authority, by decision, for the old rule above stated, than this case. Lord Eldon, in Ex parte Hamper, 17 Ves. 404, asserts that it is the rule, but appears to refer to Grace v. Smith as his authority. See Ex parte Langdale, 18 Ves. 300. We should prefer saying that the true criterion is, lias the person sought to be charged as a partner any interest in the profits while they remain a part of the undivided stocli in trade 1 If so, he must sustain the liabilities of a part- ner. But if he has no interest in the profits, excepting that shai'e which by his bargain comes to him, and no interest or property in this specific share, until it be severed by the partners for him, he is then no partner, but one who works for wages. Any one who wishes to pm'sue this question through the authorities may refer, for EngUsh cases, to Bloxham v. Pell, cited in Grace v. Smith, supra; Waugh v. Cancer, 2 H. Bl. 235 ; Hesketh v. Blanchard, 4 East, 144 ; Wilidnson v. Frasier, 4 Esp. 182 ; Dry v. Boswell, 1 Camp. 329 ; fe parte Rowlandson, 1 Rose, 90 ; £x/)arte Watson, 19 Ves. 459; Mair V. Glennie, 4 M. & S. 240 ; Cheap v. Cramond, 4 B. & Aid. 663 ; Gilpin v. Enderbey, 5 B. & Aid. 954 ; Smith v. Watson, 2 B. & C. 401 ; Reid v. Hollingshead, 4 B. & C. 867 ; Bond v. Pittard, 3 M. & W. 357 ; Wilson v. Whitehead, 10 M. & W. 503 ; Raw- linson v. Clarke, 15 M. & W. 292 ; Pott v. Eyton, 3 C. B. 32 ; BaiTy o. Nesham, id. 641 ; Stocker v. Brockelbank, 3 Macn. & G. 250, 5 Eng. L. & Eq. 67. For American cases, see Loomis v. Marshall, 12 Conn. 69 ; Dunham v. Rogers, 1 Barr, 255 ; Burckle [187] 169* ELEMENTS OF MERCANTILE LAW. [CH. XI. Hence, factors and brokers for a commission on the profits, * masters of vessels who engage for a share of the profits, seamen employed in whale ships, are none of them partners. A partnership usually has but one business name ; but there does not seem to be any legal objection to the use of two names, especially for distinct, business transactions ; as A B & Co. for general business, and the name of A B only for the purpose of making or indorsing negotiable paper.^ SECTION III. HOW A PARTNERSHIP MAY BE DISSOLVED. K the articles between the partners do not contain an agree- ment that the partnership shall continue for a specified time, it may be dissolved at the pleasure of either partner.^ If there be such a provision, it should be regarded as binding ; and it prob- ably may be inferred from circumstances ; but only from, those of a very significant and decisive character.^ If either partner were to undertake to assign his interest, for the purpose of with- drawing from the firm, against the will of the partners, without good reason, and in fraud of his express agreement, a court of V. Eckhart, 3 Comst. 132, 1 Denio, 342 ; Cushman v. Bailey, 1 Hill, 526 ; Tliomdike V. De Wolf, 6 Pick. 120; Jackson v. Eobinson, 3 Mason, 138; Denny v. Cabot, 6 Met. 82 ; Bradley v. White, 10 Met. 303 ; Holmes ;;. Porter, 39 Me. 157 ; Chase v. Stevens, 19 N. H. 465 ; Matthews v. Felch, 25 Vt. 536. 1 South Carolina Btink v. Case, 8 B. & C. 427 ; Tarns v. Hitner, 9 Penn. State, 441, 447 ; Kinsman v. DaUam, 5 T. B. Men. 382; Palmer v. Stephens, 1 Denio, 471. ''■ It appears to be now clearly settled in England that a partnership for an indefinite period may be dissolved by any partner at a moment's notice. Peacock v. Peacock, 16 Vcs. 49 ; Featherstonhaugh v. Penwick, 17 Ves. 298, 308 ; Nurot v. Bumand, 4 Russ. 260 ; Heath v. Sansom, 4 B. & Ad. 175 ; Alcock v. Taylor, Tamlyn, 506. But in the well-considered case of Howell v. Harvey, 5 Pike, Ark. 270, it was held that the dissolution must bo in good faith, and not at an unreasonable time. The dui'ation may be gathered from the terms of the articles, although not expressly provided for. Potter t). Moses, 1 R. I. 430; Wlieeler v. Van Wart, 9 Sim. 193, 2 Jurist, 252. 8 Crawshay v. Maulc, 1 Swanst. 495, 508, 521. In this case. Lord Eldon said: "Without doubt, in the absence of express, there may be an implied contract, as to the duration of a partnership ; but I must contradict all authority if I say that, wherever there is a partnership, the purchase of a leasehold interest of longer or shorter duration, is a circumstance from which it is to be inferred that the partnership shall continue as long as the lease. On that argument, the court, holding that a lease for seven years is proof of partnership for seven years, and a lease of fotirteen of a partnership for four- teen years, must hold that, if the partners purchase a fee-simple, there shall be a part- nership forever." [188] CH. XI.] PARTNERSHIP. *170 equity might interfere.^ For the assignment of a partner's in- terest, or *of his share of the profits, operates at once a dissolu- tion of the partnership.^ Such assignment may transfer to the assignee the whole interest of the assignor, but cannot give him a right to become a member of the firm.^ But there seems to be an exception to this rule where the partnership is very nu- merous, and the manner of holding shares, by scrip or otherwise, indicates the original intention of making the shares transfera- ble.* Such a partnership is in effect a joint-stock company;- which form of association is common in England, and there regulated by many statutes ; but is not usual here, where incor- poration is so easily obtained. Death of a general ^ or even of a special partner^ operates a dissolution ; and the personal representatives of the deceased do not take his place, unless there be in the articles an express pro- vision that they shall.' And even such provisions have been construed as giving the heirs or personal representatives the right of electing whether to become partners or not.^ As far as 1 The question whether one partner may, by his own mere will, dissolve a partner-|l ship formed for a definite period, has elicited much discussion. It appears to have been assumed that there is no such power, in Peacock v. Peacock, 16 Ves. 56 ; Crawshay v. Maule, 1 Swanst. 495 ; Wheeler v. Van Wart, 9 §im. 193, 2 Jurist, 252 ; Pearpoiut v. Graham, 4 Wash. C. C. 232 ; but there are no express adjudications against it. In favor of this power are, the decision of the New York Court of Errors, in Marquand v. New York Man. Co. \^ Johns. 525, and the following cases : Mason v. Council, 1 Whart. 388 ; Skinner v. Dayton, 19 Johns. 538 ; Whitton v. Smith, 1 Freem. Ch. 231. See Bishop v. Breckles, 1 Hoff. Ch. 534. 2 Marquand v. New York Manuf. Co. 17 Johns. 525 ; Whitton v. Smith, 1 Freem. Ch. 231 ; Heath v. . Sansom, 4 B. & Ad. 175 ; Cochran v. Peny, 8 Watts & S. 262 ; Horton's Appeal, 13 Penn. State, 67. But see Taft v. Butfum, 14 Pick. 322; Buford t.. Neeley, 2 Dev. Eq. 481. s Ringman v. Spurr, 7 Pick. 235 ; NicoU v. Mumford, 4 Johns. Ch. 522. * Fox v. Clifton, 9Bing. 115, 119. If the articles designate a mode of transfer, it must be strictly followed. IQngmah v. SpuiT, 7 Pick. 235 ; Cochran v. Perry, 8 Watts & S, 262. 5 Murray v. Mumford, 6.Cowen, 441 ; Burwell v. Cawood, 2 How. 560 ; Knapp v> McBride, 7 Ala. 19. The dissolution operates as to all the survivors, however numer- ous may be the association ; and even if the deceased were a silent partner. Washburn. V. Goodman, 17 Pick. 519. And though the partnership he for a term of years, yet unexpired, unless expressly provided otherwise. Gillespie v. Hamilton, 3 Madd. 251 ; Scholefield v. Eichelberger, 7 Pet. 586 ; Goodburn v. Stevens, 5 Gill, 1. ^ Ames V. Downing, 1 Bradf 321. ' Pearce v. Chamberlain, 2 Ves. Sen. 33 ; Crawshay v. Maule, 1 Swanst. 495, 514, u., 520 ; Balmain v. Shore, 9 Ves. 500 ; . Gratz v. Bayard, 11 S. & R. 41. 8 Pigott V. Bagley, McClell. & Y. 569 ; Kershaw v. Matthews, 2 Russ. 62 ; Louisi- ana Bank v. Kenner, 1 La. 384 ; Downs v. Collins, 6 Hare, 418, 437. A partner may by will appropriate a part or the whole of his estate for the contmuance of the partner- ship business after his death, and if his copartners consent to it, the business may con- tinue but no more of his estate will be bound for the partnership debts than he appro- priates. Burwell v. Cawood, 2 How. 560; Pitkin v. Pitkin, 8 Conn. 325; Ex parte Garland 10 Ves. 110; Thompson v. Andrews, 1 Mylne & K. 116. [189] 171* ELEMENTS OF MERCANTILE LAW. [CH. XI. the estate of the deceased partner is concerned, a dissolution by death affects third persons without notice.' If citizens of differ- ent countries are in partnership, and war breaks out between the countries, the partnership is ipso yacto dissolved. And as all citizens of both countries are bound to take notice of the war, no notice to them of such dissolution need be given.^ If either party is unable to do his duty to the partnership, as by reason of insanity ,3 or a long imprisonment; or if he *be guilty of material wrongdoing to the firm, a court of equity wiU decree a dissolution.* And if the original agreement were tainted with fraud, the court will decl£h-e it void, ab initio.^ Whenever a court of equity decrees a dissolution of the part- nership, it will also decree that an account be taken between the partners, if requested by either partner. And if necessary to do justice, it will decree a sale of the effects and a distribution of the proceeds after a consideration of all the facts of the case and the whole condition of the firm. Such a decree will be made if a partner die, or become bankrupt.^ If the whole interest of 1 Scholefield v. Eichelberger, 7 Pet. 586 ; VuUiamy v. Noble, 3 Meriv. 614 ; Web- Aster V. Webster, 3 Swanst. 490, n. In Washburn v. Goodman, 17 Pick. 519, the estate of a deceased partner was held liable on bills drawn after his death ; but there were other reasons than a want of notice. Sec post, p. 192. - Griswold v. Waddington, 15 Johns. 57. ' In England, lunacy does not operate ipso facto as a dissolution of the partnership. Anonymous, 2 Kay & J. 441. But a court of equity, on the finding of lunacy, either by inquisition or by inquiry under the direction of the court, will decree a dissolution. Milne v. Bartlett, 8 Law J., Ch. 254, 3 Jurist, 358 ; Jones v. Nov, 2 Mylne & K. 125 ; Leaf V. Coles, 1 De G., M. & G. 171, 12 Eng. L. & Eq. 117. See s. c. 1 De G., M. & G. 417, 12 Bag. L. & Eq. 167. The dissolution does not take effect until the time of the decree. Besch v. Frolich, 7 Jurist, [jt. 2, 73, 1 Phillips, Ch. 172. In this country, in Isler v. Baker, 6 Humph. 85, it was hdd that an inquisition of lunacy, found against a member of a partnership, ipso facto dissolved the partnership. Story on Partnership, ij 295, and Davis «. Lane, 10 N. H. 161, per Parker, C. J., favor the same view. See Siege! v. Chidsey, 28 Penn. State, 279. * A court of eciuitv will not decree a dissolution merely because partners are dissatis- fied. Goodman v. Whitcomb, 1 Jacob & AV. 589 ; Waters v. Taylor, 2 Ves. & B. 299, 15 Ves. 10; Henn !■. Walsh, 2 Edw. Ch. 129 ; Walker v. Trott, 4 Edw. Ch. 38. But where the conduct of the partners makes it impossible for the business to be conducted according to the terras of the partnership, or with benefit to either party, a dissolution will be decreed. Smith v. Jeyes, 4 Beav. 503 ; Howell v. Harvey, 5 Pike, 278 ; Bishop V. Breckles, 1 Hoflf. Ch. 534 ; Blake v. Dorgan, 1 Greene, Iowa, 537 ; Speights v. Peters, 9 Gill, 472; Gowan v. Jeffries, 2 Ashra. 296. 5 Ex parte Broome, 1 Rose, 69 ; Green v. Barrett, 1 Sim. 45, 50 ; Howell v. Harvey, 5 Pike, 270, 281 ; H3mes v. Stewart, 10 B. Mon. 429. " After dissolution, any partner, or the executors or assignees of any partner, may, it seems, insist upon u sale of the partnership effects. Crawshay v. Collins, 15 Ves. 218; Rigdcn v. Pierce, 6 Madd. 353; Sigourney v. Munn, 7 Conn. 11; Evans v. Evans, 9 Paige, 178 ; Pierce r. Trigg, 10 Leigh, 406. Even though the articles deter- mine the mode of distributing the stock, if they cannot be literally acted upon. Wilson V. Greenwood, 1 Swanst. 471 ; Cook i'. CoUingridge, Jacob, 607. See Featherstonhaugh V. Fenwick, 17 Ves. 298; Leach v. Leach, 18 Pick. 75, per Wilde, J. [190] CH. XI.J PARTNERSHIP. *172 a copartner is levied upon and sold on execution, this makes a dissolution, and the purchaser becomes — like every other assignee of a partner — a tenant in common with the other partners ; but if the levy and sale is only of a part which may be severed from the rest, this may not operate a dissolution ex- cept as to that part.^ K one partner retires, this operates in law a dissolution, al- though in fact the old firm, frequently continues and goes on with its business, with or without new members, as if it were the same firm. The partner retiring should withdraw his name from the firm,^ and give notice, by the usual public advertise- ment, of * his retirement, and also, by personal notice, by letter or otherwise, to all who usually do business with the firm, and after such notice he is not responsible, even if his name be re- tained in the firm by the other partners, if this is done without his consent.^ Nor is he responsible to any one who has in any way actual knowledge of his retirement.* But where it is necessary to give notice, it is not sufficient that the necessary steps for this purpose were taken, if the notice was not received.^ And mere notoriety of dissolution is not enough.^ Nor is the fact of the partners becoming incorporated, without notice of dissolution.^ Whether a person has knowledge of the disso- lution of a firm is a question of fact for the jury, and not one of law for the court.^ The principle that, after a partnership is dis- solved, one partner dealing with a person who has no notice of 1 Waters v. Taylor, 2 Ves. & B. 299; Nicoll c. Muraford, 4 Johns. Ch. 525 ; Allen u. "Wells, 22 Pick. 450. 2 DoUman v. Orchard, 2 Car. & P. 104 ; Williams v. Keats, 2 Stark, 290 ; Brown !;. Leonard, 2 Chitty, 120. ' Newsome v. Coles, 2 Camp. 617 ; Jenkins v. Blizard, 1 Stark. 418. * A notice, published for a reasonable length of time in the place or places where the firm transacts business, is sufficient for the public generally. Mowatt v. Howland, 3 Day, 353 ; Lansing v. Gaine, 2 Johns. 300 ; Shurlds v. Tilson, 2 McLean, 458 ; Wat> kinson v. Bank of Pennsylvania, 4 Whart. 482. See Brown v. Clark, 14 Penn. State, 469 ; Conro v. Port Henry Ii-on Co. 12 Barb. 56. But personal notice, by letter or otherwise, should be given to those who have had dealings with the firm. Prentiss v. Sinclair, 5 Vt. 149 ; Wardwell v. Haight, 2 Barb. 549 ; Hutchins v. Hudson, 8 Humph. 426 ; Vernon v. Manhattan Co. 17 Wend. 526 ; Howe v. Thayer, 17 Pick. 91 ; Pitcher V. Barrows, 17 Pick. 361. The mere taking of a newspaper in which such notice is published, is not sufficient. Watkinson v. Bank of Pennsylvania, 4 Whart. 482 ; Ver- non V. Manhattan Co. 17 Wend. 526, 22 Wend. 192. As to what is sufficient dealing with a firm, to make actual knowledge of dissolution necessary, see Vernon ,,■. Manhat- tan Co. supra; Hutchins v. Bank of Tenn. 8 Humph. 418. 6 Johnson v. Totten, 2 Calif. 343; Page v. Brant, 18 111. 37. » Pitcher V. Barrows, 17 Pick. 361. ' Goddard v. Pratt, 16 Pick. 412. 8 Deford v. Keynolds, 36 Penn. State, 325. [191] 173* ELEMENTS OF MERCANTILE LAW. [CH. XI. the dissolution may bind his copartner, applies onJy to transac- tions in the usual course of business.^ A dormant or secret partner is not liable for a debt contracted after his retirement, although he give no notice ; because his liability does not rest upon his giving his credit to the firm, but upon his being actu- ally a partner.^ SECTION IV. OF THE PKOPERTY OF THE PARTNERSHIP. A partnership may hold real estate, as well as personal estate ; and there may be a partnership to trade in land,^ or to cultivate land for the common profit.* But the rules of law in respect to real estate, as in relation to title, conveyance, dower, inheri- tance, and the like, make some difference. As far, however, as is compatible with these rules, it seems to be agreed that the real estate of the partnership shall be treated as if it were per- sonal property, if it have been purchased with the partnership funds, and for partnership purposes.^ * Thus, it does not go to 1 Wiiitman v. Leonard, 3 Pick. 177. " Grosvenor v. Lloyd, 1 Met. 19; Magill v. Men-ie, 5 B. Mon. 168; Scott v. Colmes- nil, 7 J. J. Marsh. 416. 3 Campbell v. Cothoun, 1 Penn. 140 ; Pall Eiver Wharf Co. i . Borden, 10 Cush. 458. * Allen V. Davis, 13 Ai-lc. 28. 5 This doctrine is confined to courts of equity. The principle upon which it has been established is, that the legal estate, under the circumstances stated in the text, is clothed with a trust for the pm-poses of the partnership. The principle is well ex- plained by Shaw, C. J., in Dyer v. Clarlc, 5 Met. 562, 577. "It appears to us," said he, " that considering the nature of a partnership, and tlic mutual confidence in each other which that relation implies, it is not putting a forced constraction upon their act and intent, to hold that, when property is purchased in the name of tlie partners, out of partnership funds and for partnership use, though, by foi'ce of the common law, they take the legal estate as tenants in* common, yet that each is under a conscientious obli- gation to hold that legal estate until the pui-poses for which it was so purchased are accomplished, and to appropriate it to tliose purposes, by first applying it to the pay- ment of the partnership debts, for which both his partner and he himself are liable, and until he has come to a just account with his partner. Each has an equitable interest in that portion of the legal estate held by the other, until the debts, obligatory on both, are paid, and his own share of the outlay for partnership stock is restored to him. This mutual equity of the parties is greatly strengthened by the consideration that the part- ners may have contributed to the capital stock in unequal proportions, or, indeed, that one may have advanced the whole. Take the case of a capitalist wlio is willing to put in money, but wishes to take no active concern in the conduct of business, and a man who has skill, capacity, integrity, and industry, to make him a most useful active part- ner, but without property, and they form a partnei-ship. Suppose real estate, neces- [192] CH. XI.] PARTNERSHIP. *174 the heirs of the partner or partners in whose name it may stand, but is first subject to the debts of the firm, and then to the bal- ance which may be due to either partner on winding, up their affairs.^ But when these debts and claims are adjusted, any surplus of the real estate will go to the heir, and not to the per- sonal representative of the deceased partner.^ * Improvements made with partnership funds on the real estate of a partner, will be regarded as partnership property.^ The widow has her sary to the carrying on of the business of the partnership, should be purchased out of the capital stock, and on partnership account, and a deed taken to them as partners, without any special provisions. Credit is obtained for the firm, as well on the real estate as the other property of the firm. What are the true equitable rights of the partners, as resulting from their presumed intentions, in such real estate ? Is not the share of each to stand pledged to the othe*, and has not each an equitable lien on the estate, requuring that it shall be held and appropriated, first to pay the joint debts, then to repay the partner who advanced the capital, before it shall be applied to the separate use of either of the partners t Suppose tliis trust is not implied, what would be the condition of the parties, in the case supposed, in the various contingencies which might happen ? Suppose the elder and wealthier partner were to die. The legal estate de- scends to his heirs, clothed with no trust in favor of the surviving partner ; the latter, without property of his own, and relying on the joint fund, which, if made liable, is sufficient for the purpose, is left to pay the whole of the debt, whilst a portion, and perhaps a large portion, of the fund bound for its payment, is mthdrawn. Or, suppose the younger partner were to die, and his share of the legal estate should go to his credi- tors, wife, or children, and be withdrawn fi'om the partnership fund ; it would work manifest injustice to him who had furnished the ftind from which it was purchased. But treating it as a trust, the rights of all parties will be preserved ; the legal estate will go to those entitled to it, subject only to trust and equitable lien to the surviving partner, by which so much of it shall stand charged as may be necessary to accomplish the purposes for which they purchased it. To this extent, and no further, will it be bound ; and subject to this, all those will take who are entitled to the property ; namely, the creditors, widow, heirs, and all others standing on the rights of the deceased part- ner." 1 Dyer v. Clark, supra; Goodbum v. Stevens, 5 Gill, 1 ; Howard v. Priest, 5 Met. 582; Burnside v. Merrick, 4 Met. .537; Buchan ;;. Sumner, 2 Barb. Ch. 165, 197; Hoxie V. Carr, 1 Sumn. 173 ; Brooke v. Washington, 8 Gratt. 248 ; Delmonico v. Guil- laume, 2 Sandf, Ch. 366; Sigoumey v. Munn, 7 Conn. 11; Phillips v. Phillips, 1 Mylne & K. 663 ; Broom v. Broom, 3 Mylne & K. 443. '■^ Buckley v. Buckley, 11 Barb. 43; Goodburn v. Stevens, 5 Gill, 1; Buchan v. Sumner, 2 Barb. Ch. 165, 200. In this last case, Walworth, Ch., said: The American decisions in relation to real estate purchased with partnership funds, or [andl] for the use of the firm, are various and conflicting. But I think they may generally be con- sidered as establishing these two principles: 1. That such real estate is, in equity, chargeable with the debts of the copartnership, and with any balance which may be due from one copartner to another upon the winding up of the affairs of the firm. 2. That, as between the personal representatives and the heirs at law of a deceased partner, his share of the sui-plus of the real estate of the copartnership, which remains after paying the debts of the copartnership, and adjusting all the equitable claims of the different members of the firm as between themselves, is considered and treated as real estate." But in England, the real estate of a copartnership is considered in equity as personal property, even as between the personal representative and the heir. See Phillips v. Phil- lips, 1 Mylne & K. 649 ; Broom v. Broom, 3 Mylne & K. 443 ; Morris v. Kearsley, 2 Younge & C, Exch. 139. 8 Averill v. Loucks, 6 Barb. 19 ; Deming v. Colt, 3 Sandf 284 ; King v. Wilcomb, 7 Barb. 263. See Fiink v. Branch, 16 Conn. 260, 271. 17 • [193] 175* ELEMENTS OF MERCANTILE LAW. [CH. XI. dower only after the above-mentioned debts and claims are ad- justed. And while the legal title is protected, as it must be for the purpose of. conveyance and other similar purposes, the per- son holding this legal title will be held a trustee for the part- nership, if that be entitled to the beneficiary interest.^ But a purchaser of partnership real propei-ty, without notice or knowl- edge from a partner holding the same by a legal title, is pro- tected.2 K, however, he has such knowledge, actually or con- structively, the conveyance may be avoided as fraiidulent, or he may be held as trustee, the land being in his hands chargeable with the debts and claims of the partnership.^ A purchaser of partnership chattels is not protected.'' SECTION V. OF THE AUTHORITY OF EACH PARTNER, AKD THE JOIXT LIABILITY OP THE PARTNERSHIP. This authority is very great, because the law merchant makes each partner an agent of the whole partnership, with full power to bind all its members and all its property, in transactions which fall within the usual business of the firm ; as loans, borrowing, sales, pledges, mortgages, or assignments ; ^ and this last, we think, extends even to an honest and prudent assignment of the * whole stock and personal property to trustees to pay partner- 1 See si(j>ni, p. 172, n. 5. 2 Hoxie V. Carr, 1 Sumiior, 173; KflK-)' v. Greenleaf, 3 Story, 93 ; Buck v. Winn, 11 B. Mon. 320. See Kramer v. Arthurs," 7 Penn. State, 165. "in Walsh v. Adams, 3 Denio, 125, it was held that tliis principle was confined to real estate, and that a pitr- chaser of chattels belonging to a partnership must talce them subject to the partnership claims, whctlier he had notice that they belonged to the copartnership or not. 3 See preceding note. * Ibid. ^ Kennebec Co. v. Augusta Ins. and Banking Co. 6 Gray, 204. A partner may sell the whole stock at a single contr-act. Arnold v. Brown, 24 Pick. 89 ; AVhitton v. Smith, 1 Freem. Ch. 231. See Peai-point v. Graham, 4 Wash. C. C. 232 ; Liringston V. Rooseyclt, 4 Johns. 277. Tor a partner's authority to pledge, see Reid v. HoUings- head, 4 B. &. C. 867 ; Metcalf v. Royal Ex. Ass. Co., Barnard. 343 ; Ex patte GcUar, 1 Rose, 297. For limitations to such authority, see Ex parte Copeland, 3 Dea. & Ch. 199 ; Snaith v. Bumdge, 4 Taunt. 684. For authority to mortgage, see Jlilton v. Mosher, 7 Met. 244 ; Tapley v. Butterfield, 1 Met. 515. [194] CH. XI.] PARTNEKSHIP. -175 ship debts.i So the making or indorsing negotiable paper.^ So, in transactions out of the usual business of the firm, if they arose from and were fairly connected with that business.^ If a member of a partnership for a particular business does an act on account of the Urm, primd facie, not within the scope of his authority, evidence is admissible to show that, in the exercise of good faith and reasonable discretion, he was warranted in so doing by the course pursued by the firm in the management of their business.* And where there are no articles of copartner- ship, and one person manages the business of the concern, the others taking no part in it, it is presumed that the authority of the managing owner is unlimited with respect to the affairs of the company.^ Nor is any party dealing with a partner affected 1 Upon the question, whether a partner may assign, without the consent of his co- partners, the whole property of a firm for the benefit of its creditors, there is much con- flict both in the dicta and in the reasons upon which the decisions have been rested ; but it is believed that the following rules may be deduced from the adjudications, when considered with reference to the facts of the cases in which they were made. 1 . A bond Jide assignment directly to particular creditors, of a sufScient amount to discharge their debts, is valid, even if all the property of the firm be taken, and a preference be thereby given to such creditors. Tapley v. Butterfield, 1 Met. 515; Mills t>. Barber, 4 Day, 428 ; Walworth, Ch., in Havens v. Hussy, 5 Paige, 31. See Deming v. Colt, .3 Sandf. 284 ; Dana v. Lull, 17 Vt. 393, 394. 2. If necessary for the protection of cred- itors, an assignment of all their personal property to a trustee, for their benefit, by one partner, if his copartner is absent and cannot be consulted in season, and has, either expressly or by implication, left to him the sole management of the business, will be held valid. Anderson v. Tompkins, 1 Brock. 456 ; Robinson v. Crowder, 4 McCord, 519 ; Deckard v. Case, 5 Watts, 22 ; Harrison v. Steny, 5 Cranch, 300. Sec dicta of Felch, J., in Kirby v. IngersoU, 1 Doug. Mich. 490 ; and of Oakley, C. J., in Deming V. Colt, 3 Sandf. 292. See Hitchcock v. St. Johns, Hoff. Ch. 511, which appears to hold that such assignment must not prefer creditors. • See also, Dickinson v. Legare, 1 Desaus. 540. 3. A partner, if his copartner he engaged with him in managing the business of the firm, and is present, or can be seasonably consulted, cannot make a valid agreement of all the personal property of the firm to trustees, for the benefit of creditors, without the assent of his copartner. Deming v. Colt, 3 Sandf. 284 ; Havens V. Hussy,'5 Paige, 30 ; lOrby v. IngersoU, 1 Doug. Mich. 477 ; Dana v. Lull, 17 Vt. 390. In Hughes v. Ellison, 5 Misso. 463, it does not appear whether the copartner was present or not. In Egberts v. "Wood, 3 Paige, 517, 525, it was held that, after dissolu- tion by the death of one partner, one of two surviving partners, without the assent of the other, could not assign the whole property of the firm for the benefit of prefeiTCd creditors. The real estate of a partnership cannot be conveyed by one partner alone. Anderson v. Tompkins, 1 Brock. 463 ; per Shaw, C. J., in Tapley v. Buttei-field, 1 Met. 518, 519. 2 Pinkney v. Hall, 1 Salk. 126, 1 Ld. Eaym. 175; Smith v. Baily, 11 Mod. 401. The presumption of law is, that a note, made by one pai-tner in the name of the firm, was given in the regular course of partnership dealings, and hence is bindingupon the fli-m. Doty V. Bates, 11 Johns. 544 ; Manufacturers & Mechanics Bank v. Winship, 5 Pick. U ; Emerson v. Harmon, 14 Maine, 271. This authority to bind the firm by bills and notes is confined to partners in trade. Hedley v. Bainbridge, 3 Q. B. 316 ; Green- glade V. Dower, 7 B. & C. 635 ; Dickinson v. Valpy, 10 B. & C. 128. 8 Sandilands v. Marsh, 2 B. & Aid. 673. See Livingston v. Eoosevelt, 4 Johns, 251 ; Lea v. Guice, 13 Smedes & M. 656. * Woodward v. Windship, 12 Pick. 430. 5 Odiome v. Maxcy, 15 Mass. 39. [195] 176* ELEMENTS OF MERCANTILE LAW. [CH. XI. by his want of good faith towards the partnership, unless he colluded with the partner and participated in his want of good faith, by fraud or gross negligence. But a holder of a note or bill signed or indorsed by a partner without authority, has no claim against the partnership if he knew or should have known the want of authority.^ A partner cannot, in general, bind the firm by a guaranty, a letter * of credit,^ or a submission to arbi- tration,^ without express, or a distinctly implied, authority. By the earlier and more stringent rules of law, a partner could not bind his copartners by an instrument under seal, unless he was himself authorized under seal ; and their subsequent ac- knowledgment of his authority did not cure the defect.* It seems now, however, to be the law of this country, that a partner may bind his firm by an instrument under seal, if it be in the name and for the use of the firm, and in the transaction of their usual business, provided the other copartners assent thereto before exe- cution, or adopt and ratify the same afterwards ; and they may 1 Blair v. Bromley, 5 Hare, 542; Brydges v. BranfiU, 12 Simons, 369 ; Swan v. Steele, 7 East, 210 ; Livingston v. Roosevelt, 4 Johns. 251 ; Winship v. Bank of United States, 5 Pet. 529 ; Etheridge v. Binney, 9 Pick. 272 ; Locke v. Steams, 1 Met. 560. ^ The law on the subject of guaranty by one partner in the name of the firm, is well expressed by iletailf, J., in Swectsor v. French, 2 Cush. 309, 314 : " Whatever the English law may formerly have been as to guaranties, we consider it now settled, in England as well as in the United States, that one partner cannot bind the firm by the guaranty of the debt of another, without a special authority for that purpose, or an authority to be implied from the common course of the business of the firm, or the previous course of dealing betjveen the parties ; unless the guaranty he afterwards adopted and acted upon by the firm.'' Such authority might be implied from the usage of others in a similar business. But such authority will not be implied from the fact that it was a reasonable mode of doing the partnership business. Brettel v. WiUiams, 4 Exch. 630. The general principle is sustained in Duncan v. Lowndes, 3 Camp. 478 ; Hasleham v. Young, 5 Q. B. 833 ; Foot «. Sabin, 19 Johns. 154 ; Eollins v. Stevens, 31 Maine, 454; Sutton w. Irwine, 12 S. & R. 13; Langan v. Hewett, 13 Smedes & M. 122. The same principle applies to the making or indorsing of notes for accom- modation, when not in the hands of a bond fide holder for value. Austin o. Vander- mark, 4 Hill, 259 ; Wilson v. Williams, 14 Wend. 146 ; Beach v. State Bank, 2 Cart. Ind. 488. ^ It is well settled in England that a partner cannot bind his copartner by a submis- .sion to arbitration. Adams o. Bankhart, 1 Cromp. M. & R. 681; Stead f. Salt, 3 Bing. 101. The same principle is sustained in Hicks v. Foster, 13 Barb. 663; Bu- chanan V. Curry, 19 Johns. 137 ; Karthaus v. Ferrer, 1 Pet. 222, 228. In Southard v. Steele, 3 T. B. Mon. 435, and Taylor v. Coryell, 12 S. & R. 243, it was lidd that such submission, when not under seal, would bind the firm. See Wilcox v. Singletary, Wright, 420 ; Amstrong v. Robinson, 5 Gill & J. 412, 422 ; Skillings v. Coolidge, 14 Mass. 43, 45. * But a partner might always, by deed, release a joint claim, and thereby bind his copartners. 2 Roll. Abr. 410 (D) ; Perry v. Jackson, 4 T. R. 519, per Lord Kenyan; Phillips V. Clagett, 11 M. & W. 84, 94, per Porh^, B. ; Pierson v. Hooker, 3 Johns. 68 ; Bmen v. Marquand, 17 Johns. 58 ; Morse r. Bellows, 7 N. H. 567 ; Emerson v. ICnower, 8 Pick. 63. [196] CH. XI.] PARTNERSHIP. *177 assent or ratify by parol as well as by seal;^ or provided he * would have made the same conveyance, or done the same act effectually without a deed.^ And a deed executed by one part- ner in the presence and with the assent of the other partners, wiU bind them.* Whether a majority of the members may conclusively bind the minority, may not be settled ; but, upon the better authority and the better reason, we should say not, unless in reference to the internal concerns of the firm.* It seems to be settled that one member may, so far as he is concerned, arrest an inchoate negotiation, and prevent a bargain which would be binding on him, by giving notice to the third party of his dissent and re- fusal in season to enable him to decline the bargain without detriment.^ Partners must act as such, to bind each other. Thus, if a partner makes a note and signs it with his own and his part- 1 In the case of Gram v. Setoiij 1 Hall, 262, Jone&, C. J., after a careful review of the authorities, said : " The previous authority or permission of one partner to another to seal for him, or his subsequent adoption of the seal as his own, "wUl impart efficacy to the instrument as his deed ; and that previous authority or suhsequent adoption may be by parol." Three years later (1831), the Supreme Court of Massachusetts, on an independent investigation of the subject, arrived at the same conclusion. Cady v. Shepherd, 11 Pick. 400. These two decisions were followed by Bond v, Aitkin, 6 Watts & S. 165 ; Pike v. Bacon, 21 Maine, 280 ; Price v. Alexander, 2 Greene, Iowa, 427, 432; Swan v. Stedraan, 4 Met. 548; Smith v. Kerr, 3 Comst. 144, 150. But they were rejected in Turbeville v. Kyan, 1. Humph. 113; and some doubt may par- haps be thrown upon them, even in New York, by a recent and well-considered dictum of Paige, J., in delivering the judgment of the Court of Appeals, in Worrall v. Munn, 1 Seld, 240, in which he dissents from the principle as laid down above in Gram v. Seton, and confines the cases in which a parol authority or ratification is sufficient, to that class in which the contract would have been valid if made without a seal. See 1 Parsons on Cont. 94, n. (f.) A partner cannot bind his copartners by a confession of judgment, unless brought into court by a regular service of process against him and his copartner. Crane v. f rench, 1 Wend. 312, 326 ; Bitzer v. Shunk, 1 Watts & S. 340 ; Barlow v. Eeno, 1 Blackf. 252 ; Morgan v. Richardson, 16 Misso. 409. See Brutton w. Burton, 1 Chitty, 707. 2 Tapley v. Butterfield, 1 Met. 515 ; Anderson v. Tompkins, 1 Brock. 462 ; Law- rence V. Taylor, 5 Hill, 107 ; McCuUoch v. Sommerville, 8 Leigh, 415. See Event v. Strong, 5 Hill, 163. s Lovelace's case, W. Jones, 268, cited m Ball v. DnnsterviUe, 4 T. R. 313 ; Mackay V. Bloodgood, 9 Johns. 285 ; Halsey v. Whitney, 4 Mason, 232 ; Pike v. Bacon, 21 Maine, 280 ; McArthur v. Ladd, 5 Ohio, 514 ; Fitchton v. Boyer, 5 Watts, 159 ; Hen- derson V. Barbee, 6 Blackf. 26. * Const V. Han-is, Tm-ner & R. 496, 517, 525, 527 ; Kirk v. Hodgson, 3 Johns. Ch, 400, 405 ; Robinson v. Thompson, 1 Vt. 465 ; Falkland v. Cheney, 5 Bro. P. C. 476 ; 1 Parsons on Cont. 168 ; 3 Kent, Com. 45. 6 Gallway v. Mathew, 10 East, 264; Wilson v. Dyson, 1 Stark. 164; Viel v. Flem- ming, 1 Younge & J. 227, 230; Leavitt v. Peck, 3 Conn. 124; Monroe v. Conner, 15 Maine, 178 ; Feigley v. Sponeberger, 5 Watts & S. 564. See Wilkins v. Pearce, 5 Denio, 541. 17* [197] 178* ELEMENTS OE MERCANTILE LAW. [CH. XI.' ner's name, as a joint and several note, it does not bind his part- ner, for he had no authority to make such a note.^ If the name of one partner be also the name of the firm, it is not necessarily the name of the firm when used in a note or contract ; and if the partner carries on mercantile business for himself, it is not primd facie so.^ Persons may give a joint order for goods without becoming jointly liable, if it appear otherwise that credit was given to * them severally.^ Nor will one have either the authority or the obligation of a partner cast upon him by an agreement of the firm to be governed by his advice.* Nor shall one be charged as partner with others, unless he has incurred the liability by his own voluntary act.^ The reception of a new member constitutes, in law, a new firm ; but the new firm may recognize the old debts, as by ex- press agreement, or paying interest, or other evidence of adop- tion, and then the new firm is jointly liable for the old debt. But there must be some fact from which the assent of the new member to this adoption of the old debt may be inferred, for his liability is not to be presumed.® A notice in legal proceedings, abandonment to insurers by one who was insured for himself and others, a notice to quit of one of joint lessors who are partners in trade, notice to one part- ner of the dishonor of a note or bill bearing the name of the firm, a release to one partner, or by one partner, — will bind all 1 Pen-ing v. Hone, 2 Car. & P. 401, 4 Bing. 28. ^ Ex parte Bolitho, Buck, 100; Manufacturers & Mechanics Bank v. Winship, 5 Pick. 11 ; United States Bank v. Binney, 5 Mason, 176 ; Miner v. Downer, 19 Vt. 14. See Scott V. Colmesnil, 7 J. J. Marsli. 416. But if the partner whose name is used, be not shown to have done business on his private account, his name is presumed to be used for the firm. Tnieman u. Loder, 11 A. & E. 589 ; Bank of E. v. Monteath, 1 Denio, 402 ; Mifflin v. Smith, 17 S. & E. 165 ; South Carolina Bank v. Case, 8 B. & C. 427. 3 Gibson v. Lupton, 9 Bing. 297. 4 Barklie v. Scott, 1 Hud. & B. 83. 5 If a person's name be used in a finu without his consent, he' is not thereby made liable as partner. Ncwsome v. Coles, 2 Camp. 617 ; Fox v. Clifton, 6 Bing. 776, 794. In Pay v. Noble, 7 Cush. 188, the parties, supposing they had organized as a corpora- tion, appointed P. to act as agent for the corporation. It was found that the corpora- tion was not legally organized, from a failure to comply with the provisions of the charter. It v^as held that the shareholders were not Uable as partners on contracts entered into by F. in behalf of the supposed coqDoration. " Shirreff v. Wilks, 1 East, 48 ; Beale v. Mouls, 10 Q. B. 976; Ex parte Jackson, I Ves. Jr. 131 ; Ex parte Peele, 6 Ves. 602 ; Poindexter v. Waddy, 6 Munf. 418 ; Hart V. Tomlinson, 2 Vt. 101 ; Twyford v. Trail, 7 Sim. 92. [198] CH. XI.J PAETNBRSHI?. *179 the partners and render them jointly liable.^ But a service of process should be made upon each partner personally.^ If money be lent to a partner, for partnership purposes, it creates a partnership debt ; but not if lent expressly on the in- dividual credit of the person borrowing ; and not if the borrow^- ing partner receives it to enable him to pay his contribution to the capital of the firm.^ Though the money be not used for the firm, if it was borrowed by one partner on the credit of the firm, in a manner and under circumstances justifying the lender in trusting to that credit, it creates a partnership debt.* And if a * partner uses funds in his hands as trustee, for partnership pur- poses, the firm are certainly jointly bound if it was done with their knowledge. Whether they will be bound if it was done without their knowledge, is perhaps doubtful.^ Generally, where 1 Bignold V. Waterhouse, 1 M. & S. 259 ; Alderson v. Pope, 1 Camp. 404 ; Pitch v. Stamps, 6 How. Miss. 487 ; Barney v. Cmxier, 1 D. Chip. 315. 2 Demoss v. Brewster, 4 Smedes & M. 661. 8 Saville v. Robertson, 4 T. K. 720. * The question in these cases is^ with whom did the lender of the money make the contract, and to whom did he give the credit. If the facts of any case show that he, " knowing the existence of the finn, gave the credit to the single partner, he can look to him only for payment, although the money may have been used for partnership pur- poses. Loyd V. Freshfield, 2 Car. & P. 325 ; Bevan v. Lewis, 1 Sim. 376 ; Emly v. Lye, 15 East, 7; Jaques v. Marquand, 6 Cowen, 497; Mead v. Tomlinson, 1 Day, 148, note ; Le Roy v. Johnson, 2 Pet. 186, 198 ; Foley v. Kobards, 3 Ired. 177 ; Green V. Tanner, 8 Met. 411 ; Graeff v. Hitchman, 5 Watts, 454; Poster v. Hall, 4 Humph. 346 ; Cooke v. Seeley, 2 Exch. 746. On the other hand, if. the partner hold himself out as borrowing for the firm, and the lender, in the exercise of proper diligence and good faith, gave the credit to the firm, the firm will be liable, even if the money is fraudulently appropriated by the partner to his own use. Miller v. Manice, 6 Hill, 114; Church v. Sparrow, 5 Wend. 223; Whitaker v. Brown, 16 Wend. 505; Onon- daga Co. Bank v. De Puy, 17 Wend. 47; Winship v. United States Bank, 5 Pet. 529 ; Dickson v. Alexander, 7 Ired. 4 ; Hamilton v. Summers, 12 B. Mon. 11. In the absence of other evidence showing to whom the credit was given, the fact that money lent to one partner was applied to the uses of the firm, will make the firm liable for its payment. Jaques v. Marquand, 6 Cowen, 497; Walden v. Sherburne, 15 Johns. 409 ; Rothwell v. Humphreys, 1 Esp. 406. But the fact that the partner applied it to increase the capital of the firm, would not have that effect. Pisher v. Taylor, 2 Hare, 218 229. ^'Ex parte Watson, 2 Ves. & B. 414; Hutchinson v. Smith, 7 Paige, 26, 32. If the trustee, with the consent of the cestui que trust, apply the funds to partnership pur- poses, and the cestui que trust honestly gives credit to the partnership, and takes partner- ship security, the firm is liable, even if the money is applied and the secmity given by the trustee without the consent of his copartners, for the transaction is substantially a loan from the cestui que trust to a single partner, for the uses of the firm, and on the credit of the firm. Richardson v. French, 4 Met. 577 ; Whitaker v. Brown, 16 Wend. 505. If the fund is applied without the knowledge either of the cestui que trust or of the copartners, it is clear that the trustee is not discharged. Jaques v. Marquand, 6 Cowen, 497 ; Hutchinson v. Smith, 7 Paige, 26, 33, per Walworth, Ch. And it has been held that the copartners would not be liable to the cestui que trust. Ex parte Aspey, 3 Bro. 0. C. 265 ; Jaques v. Marquand, supra. But see Hutchinson v. Smith, supra. [199] 180* ELEMENTS OE MERCANTILE LAW. [CH. XI. the partners are distinctly and directly benefited by a transac- tion, they will be deemed to have authorized it.^ Thus, if one partner purchases goods, and immediately they are used as the property of the firm, there would be a presumption that they were bought by him as a partner and for the firm.^ So, an un- authorized act done by one partner may be recognized and rati- fied by the others, and the firm will then be liable.^ But the firm is liable only to one who deals with a partner in good faith. Thus, if one receives negotiable paper bearing their name, knowing that it is not in their business, and is given for * no consideration as to them, he cannot hold them.* And if a creditor of one partner receive for his separate debt a partnership security, this we should hold to be a fraud, unless the creditor could show that the partner had, or was supposed by him to have, the authority of the rest.^ And if the partnership security be transferred for two considerations, one of which is private and fraudulent, and the other is joint and honest, it seems to be held that the partnership is bound for so much of it as is not tainted with fraud.^ The partnership may be liable for injury caused by the crimi- 1 Odiorae v. Maxcy, 15 Mass. 39. 2 Gardiner v. Childs, 8 Car. & P. 345. And see supra, p. 178, n. 8. So, if one partner forges the name of an indorser, and tliereby obtains money from a bank, whicli money goes to the credit and use of the firm, all the members are liable, although some were ignorant of the offence. Manuf. & Mech. Bank v. Gore, 15 Mass. 75. If a pur- chaser of goods have a dormant partner, the vendor may look to both for payment, if the goods were used for partnership pm'poses, even if credit, at the time of the sale, were exclusively given to the ostensible pai-tner. Schermerhom v. Loines, 7 Johns. 311 ; Reynolds v. Cleveland, 4 Cowen, 282 ; Griffith v. Buffiim, 22 Vt. 181 ; Bisel v. Hobbs, 6 Biackf. 479. A dormant partner maybe joined, in an action upon an express contract entered into by the ostensible partners, in their O'lvn names only. Beckham v. Drake, 8 M. & W. 846. But see Beckham v. linight, 4 Bing. N. C. 243. But if the partners are all known to the vendor, and he elects to trust to the credit of a single partner, and makes the contract with him, he cannot hold the other partners liable, although the goods may be used for the finn. Sylvester v. Smith, 9 Mass. 119 ; Ketchum v. Durkee, Hoff. Ch. 538 ; Grifath v. BuiRun, 22 Vt. 181, 184, per Hcdl, J. 3 Wheeler v. Rice, 8 Cush. 205. ' Ibid. 5 Shirreff v. Wilks, 1 East. 48 ; Hope v. Cust, cited in Sliirreff v. Wilks, supra ; Green V. Deakin, 2 Stark. 347 ; Ai-den v. Sharpe, 2 Esp. 524 ; Chazovimes v. Edwards, 3 Pick. 5 ; Davenport v. Runlett, 3 N. H. 386 ; Livingston v. Hastie, 2 Caines, 246 ; Lansing V. Gaine, 2 Johns. 300; Gansevoort v. WUliams, 14 "Wend. 133 ; Clay v. Cottrell, 18 Penn. State, 408; Taylor v. Hillyer, 3 Biackf. 433; Rogers v. Bachelor, 12 Pet. 221. An express or implied authority from the partners will make the security binding upon them. Gansevoort v. Williams, 14 Wend. 133; Noble o. M'Clintock, 2 Watts & S. 152; Darling u. March, 22 Maine, 184. Bat the creditor, taking the security, must show this authority. Davenport v. Runlett, 3 N. H. 386 ; and cases cited supra. 8 Wilson V. Lewis, 2 Man. & G. 197 ; Barker v. Burgess, 3 Met. 273. [ 200 ] CH. XI.] PARTNERSHIP. *181 nal or wrongful acts of a partner, if these were done in the trans- action of partnership business, and if it was the partnership which gave to the wrongdoer the means and opportunity of doing the wrong.i But an illegal contract will not bind the copartners, for the parties entering into it must be presumed to know its illegality.^ Whether the acknowledgment of one who had been a partner, after the dissolution of the partnership, can take the debt out of the statute of limitations, so as to restore the liability of all the partners, has been much agitated. We consider, however, that it is now quite well settled in this country that it can have no such effect ; on the ground that he has no longer the right or power to make a new promise for his former partners ; and it is only as a new promise that an acknowledgment is a bar to the statute of limitations.^ * SECTION VI. REMEDIES OP PARTNERS AGAINST EACH OTHER. It is seldom that a partner can have a claim against another partner, as such, which can be examined and adjusted without an investigation into the accounts of the partnership, and, per- haps, a settlement of them. Courts of law have ordinarily no adequate means for doing this ; and therefore it is generally true that no partner can sue a copartner at law for any claim growing out of partnership transactions and involving partnership inter- ests.* But the objection to a suit at law between partners goes 1 Hawkins v. Appleby, 2 Sandf. 421 ; Locke v. Steams, 1 Met. 560 ; Eapp v. La- tham, 2 B. & Aid. 795 ; Willett v. Chambers, Cowp. 814 ; Edmondsou v. Davis, 4 Esp. 14 ; Moreton v. Hardern, 4 B. & C. 223 ; Blair v. IJroomley, 5 Hare, 542, 558. A con- tract entered into by a partner, in fraud of his copartners, if in the regular course of the firm business, will bind them, unless the third party were in some way implicated either by actual fraud or neglect. Bond v. Gibson, 1 Camp. 185; Boardman ;;. Gore, 15 Mass. 331 ; Beach v. State Bank, 2 Cart. Ind. 488. 2 Hutchins v. Turner, 8 Humph. 415. 8 Bell V. Morrison, 1 Pet. 351 ; Van Keuren v. Parmlee, 2 Comst. 523; Shoemaker V. Benedict, 1 Kern. 176 ; Exeter Bank v. Sullivan, 6rN. H. 124; Kelly v. Sanborn, 9 id. 46 ; Whipple v, Stevens,-2 Fost. 219 ; Belote v. Wynne, 7 Yerg. 534 ; Muse v. Don- elson, 2 Humph. 166. See further upon this question, 2 Parsons on Cont. 359, el seq. * Bovill V, Hammond, 6 B. & C. 149 ; Fromont rav. Co. 27 Me. 132 ; Hunters o. The Morning Star, New- foundland Rep. 270. ^ See cases in note, supra. 2 See Coggs v. Bernard, 2 Ld. Eaym. 909 ; Forward v. Pittard, 1 T. E. 27. ' Sec, in addition to tlic cases already citeil, Ewart i-. Street, 2 Bailey, 157; Fish o. Ch.apman, 2 Ga. 349; McArthur v. Scars, 21 Wend. 190; Backhouse v. Sneed, 1 Murphy, 173. The act of God, in order to excuse the common carrier for the loss, must be the immediate and not the remote cause of the loss. Smith v. Shepherd, Ab- bott on Sliipping, 385 (5th Am. ed.). This was an action brought against the master of a vessel navigating tlie River Ouse and Humbcr, from Selby to Hull, by a person whose goods had been wet and spoiled. At the trial it appeared in evidence that at the entrance of the harbor at Hull, there was a bank on whicli vessels used to lie in safety, but of which a part had been swept away by a groat flood some short time before the misfortune in question, so that it had become perfectly steep, instead of shch-ing towards tlic river ; that a few days after tliis flood a vessel sunk by getting on this bank, and her mast, which was carried away, was suffered to float in the river, tied to some part of the vessel ; and the defendant, upon sailing into the harbor, struck against the mast, which, not giving way, forced the defendant's vessel towards the bank, where she struck, and would have remained safe had the bank remained in its former situation ; but on the tide ebbing, her stern sunk into the water, and the goods were spoiled ; upon which tlie defendant tendered c^•idcnce to show that there had been no actual negli- gence. Heath, J., before whom the case was tried, rejected the evidence, and ruled that the act of God, which could excuse the defendant, must be immediate ; but this was too remote ; and directed the jury to find a verdict for the plaintiff, and they accord- ingly did so. The case was afterwards submitted to the consideration of the Court of King's Bench, who approved of tlie direction of the learned judge at the trial. In Smyrl v. Niolon, 2 Bayley, 421, it was held that a loss caused by a boat's running on an unknown " snag " in the usual channel of tlie river, is referable to the act of God. And sec Williams I'. Grant, 1 Conn. 487; Faulkner d. Wright, Rice, 107. In Friend V. Woods, 6 Grat. 189, the vessel was injured by running on a bar which had recently been formed, and the goods damaged. No bill of lading was given. The comt held that, though the defendants were ignorant of its formation, yet, if by human foresight and diligence it might have been ascertained and avoided, they would be liable. "• Thus, in Colt v. M'Mechcn, G Johns. 160, where a vessel was beating up the Hud- eon against a light and variable wind, and licing near shore, and while changing her tack, the wind suddenly foiled, in consequence of which she ran aground and sunk, it was held that the sudden failure of tlie wind was the act of God, and excused the mas- [238] CH. XII.] CAREIASB OF GOODS. *216 springs from the inherent nature of the thing ; as its fermenta- tion or decay ; always provided the carrier took all reasonable precautions, in respect of stowage, exposure, and the like, to prevent this.^ For whatever the direct and principal cause of injury may be, if the negligence or default of the carrier sub- stantially mingles with it, he is responsible.^ But if the loss can only be remotely attributable to his negligence, he is not liable. As where a canal boat started with a lame horse, and arrived at a certain point during the prevalence of a flood which wrecked the boat, and it appeared that it would have passed that point before the flood arose, but for the delay caused by the lame horse, it was held that the negligence of the carrier was too remotely the cause of the loss, and that the carrier was not liable.^ The general principles of agency extend to common carriers, and make them liable for the acts of their agents, done while in the discharge of the agency or employment. So, the knowledge of his agent is his own knowledge, if the agent be authorized ' expressly or by the nature of his employment, to receive this knowledge.* But an agent for a common carrier may act for himself, — as a stage-coachman in carrying parcels for which he is paid personally, and does not account with his employer, — and then the employer is not liable,^ unless the owner of the ter ; there being no negligence on his part. And Spencer, J., said : " The case of Amies V. Stevens, 1 Stra. 128, shows that a sudden gust of wind, by which the hoy of the carrier, shooting a bridge, was driven against a pier and overset by the violence of the shock, has been adjudged to be the act of God, or vis divina. The sudden gnst in the case of the hoyman, and the sudden and entire failure of the wind sufficient to enable the vessel to beat, are equally to be considered the acts of God. He caused the gust to blow, in the one case ; and in the other the wind was stayed by him." 1 See "Warden v. Greer, 6 Watts, 424; Leccli v. Baldwin, 5 Watts, 446; Clark v. Barnwell, 12 How. 272 ; Tarrar v. Adams, Bui. N. P. 69. 2 See Williams v. Branson, 1 Murph. 417; Williams v. Grant, 1 Conn. 487; Clark V. Barnwell, 12 How. 272 ; Campbell v. Morse, Harper, 468. And see Amies v. Ste- vens, 1 Stra. 128. 8 Morrison v. Davis, 20 Penn. State, 171. See also, Denny v. New York Central E. Co. 13 Gray, 481. * In Bnrrell v. North, 2 Car. & K. 680, in an action against a carrier for the loss of a parcel, the defendant pleaded that it was not delivered to him to be can-ied ; it was had sufficient for the plaintiff to show that it was delivered to a person and at a house where parcels were in the habit of being left for this carrier. And see Davey v. Mason, 1 Car. & M. 45 ; D'Anjou v. Deagle, 3 Harris & J. 206. 6 See Bean v. Sturtevant, 8 N. H. 146. In Chouteau v. Steamboat St. Anthony, 16 Misso. 216, it was held that, in order to make the owners of a steamboat, who were common carriers, liable for the act of the captain in taking money for ti-ansportation, it must be shown that it was ivithin the scope of the usual employment and service of the boat for the captain to carry packages of money for hire, on account of the owners. [239] 217* ELEMENTS OF MERCANTILE LAW. [CH. XII. goods supposed the stage-coachman carried the goods for his employer, and was justified by the fact and apparent circum- stances in so believing.^ A carrier may be liable beyond his own route. It is very 'common for carriers who share between them the parts of a long route, to unite in the business and the profits, and then all are liable for a loss on any part of the route.^ If they are not so united in fact, but seem to be so, and justify a sender in sup- If the captain carries them on his own account and responsibilitr, the owners are not liable. And see King v. Lenox, 19 Johns. 235; Butler v. Bas'ing, 2 C. & P. 613; "Walter v. Brewer, 11 Mass. 99; Allen v. Sewall, 2 Wend. 327; Reynolds v. Toppan, 15 Mass. 370 ; Citizens Bank v. Nantucket Steamboat Co. 2 Story, 16. ' Sec Bean v. Sturteyant, ubi supra. This subject was well considered in Farmers and Mechanics Bank v. Champlain Transportation Co. 23 Vt. 186. See the facts of the case stated ante, p. 209, n. 2. One of the points made was whether or not the de- fendants were common carriers as to the bank-bills in question. Upon this point, Red- Jield, J., said : " It seems tci us that when a natural person, or a corporation whose powers are altogether unrestricted, erect a steamboat, appoint a captain, and other agents, to take the entire control of their boat, and thus enter upon the carrying busi- ness, from port to port, they do constitute the captain their general agent, to carxy all such commodities as he may choose to contract to cany, within the scope of the powers of the owners of the boat. If tliis were not so, it would form a wonderful exception to the general law of agency, and one in which the public would not very readily acquiesce. There is hardly any business in the country, where it is so important to maintain the authority of agents, as in this matter of canying, by these invisible cor- porations, who have no local habitation, and no existence or power of action, except through these same agents, by whom almost the entire carrying business of the coun- try is now conducted. If, then, the captains of these boats are to be regarded as the general agents of the owners, — and we can hardly conceive how it can be i-egarded otherwise, — whatever commodities within the limits of the powers of the owners, the captains, as their general agents, assume to carry for hire, the liability of the owners as carriers is thereby fixed, and they will be held responsible for all losses, unless from the course of business of these boats, the plaintiffs did know, or upon reasonable inquiry might liare learned, that the captains were trusted with no such authority. Prima facie the owners arc liable for all contracts for canying, made by the captains or other gen- eral agents fur that pui-pose, within the powers of the ownere themselves, and the onus rests upon them to show that tlie plaintiff had made a private contract Avith the captain, which it was understood should bo kept from tlie knowledge of the defendants, or else had given credit exclusively to the captain. But it does not appear to us that the mere fact that the captain was, by the company, permitted to take tlie perquisites of canying these parcels, will be sufficient to exonerate the company from liability. 'I'hcir suffer- ing him to continue to cany bank-bills ought, we think, to be regarded as fixing their responsibility, and allowing the captain to take the perquisites, as an anangement among themselves." And see Allen v. Sewall, 2 Wend. 327, 6 id. 335 ; Hosea v. McCrory, 12 Ala. 349. - Thus, where an association was formed between shippers, on Lake Ontario, and the owners of canal boats on the Erie Canal, for the transportation of goods and mer- chandise between the city of New York and the ports and places on Lake Ontario and the River St. Lawrence, and a contract was entered into by the agent of such associa- tion, for the transportation of goods from the city of New York to Ogdensburgh, on the River St. Lawrence, and the goods were lost on Lake Ontario, it was held that all the defendants were answerable for the loss, although some of them had no interest in the vessel navigating the lake in which the goods were shipped. Fairchild v. Slocum, 19 Wend. 329. See also, Fromont v. Coupland, 2 Bing. 170; Hclsbv v. Mears, 5 B. & C. 504. [240] CH. XII.] CARRIAGE OF GOODS. *218 posing they are united, they are equally liable.^ But if a carrier takes goods to carry as far as he goes, and then engages to send them forward by another carrier, he is liable as carrier to the end of his own route ; he is liable also if he neglects to send the goods on ; but he is not liable for what may happen to them afterwards.^ Thus far the law is quite settled. And it seems to be the rule in England that, if a carrier takes goods which are marked or otherwise designated to go to a place beyond his own route, it will be presumed that he agrees to carry them thither, and that he has made arrangements for that purpose, which af- fect him with the liability of a carrier through the whole route,^ * unless he can show that the fact is otherwise, and that the sender understood him differently, or had good reason so to un- derstand him.* But in this country, according to the weight of recent authority, a common carrier will not be held liable, as such, beyond his own route, without evidence of a distinct con- tract to that effect ; and the mere fact of his receiving a pack- 1 Thus, where A and B were jointly intere^d in the profits of a common stage- wagon, but by a private agreement between themselves, each undertook the conducting and management of the wagon, with his own drivers and horses, for specified distances, it was hdd that, notwithstanding this private agreement, they were jointly responsible to third persons for the negligence of their drivers throughout the whole distance. Waland v. Elkins, 1 Stark. 272, s. c. nom. Weyland u. Elkins, Holt, N. P. 227. And see Weed v. S. & S. Railroad Co. 19 Wend. 534. 2 See Garside v. Trent & Mersey Navigation Co. 4 T. E. 581 ; Aekley v. Kellogg, 8 Cowen, 223. ^ See Muschamp v. Lancaster & P. Junction R. Co. 8 M. & W. 421, the leading English case upon this subject. In this case, the defendants were the proprietors of the Lancaster & Preston Junction Railway, and carried on business on their line be- tween Lancaster and Preston, as common carriers. At Preston, the defendants' line joined that of the North Union Railway. The plaintiff, a stonemason, living at Lan- caster, had gone into Derbyshire in search of work, leaving his box of tools to be sent after him. His mother, accordingly, took the box to the railway station at Lancaster, directed to the plaintiff at a place beyond Preston, in Derbyshire, and requested the clerk at the station to book it. She offered to pay the carriage in advance for the whole distance, but was told by the clerk that it had better be paid at the place of de- livery. It appeared that the box arrived safely at Preston, but was lost after it was despatched from thence by the North Union Railway. The plaintiff brought this action to recover for the loss of the box. Rolfe, B., before whom the cause was tried, stated to the jury, in summing up, that where a common earner takes into his care a parcel directed to a particular place, and does not, by positive agreement, limit his responsi- bility to a part only of the distance, that is prima facie evidence of an undertaking to carry the parcel to the place to which if is directed ; and that the same rule applied, although that place were beyond the limits within which he in general professed to carry on his trade of can-ier. And upon a motion for a new trial, the Court of Ex- chequer hdd the instructions to be con-ect. And see, to the same effect, Watson v. A., N. & B. Railway Co. 15 Jur. 488, 3 Eng. L. & Eq. 497. See also, Fowles o. Great Western Railway Co. 7 Exch. 699, 16 Eng. L. & Eq. 531 ; Scotthorn v. South Staf- fordshire Railway Co. 8 Exch. 341, 18 id. 553 ; Wilson v. Y., N. & B. Railway Co. 18 id. 557, n. (1). * See cases in preceding note. 21 [ 241 J 218- ELEMENTS OF MERCANTILE LAW. [CH. XII. age directed to a place beyond his route, will not be sufficient evidence for that purpose. ^ And if it be the general custom of a carrier to forward by sailing vessels all goods destined beyond the end of his line, he is not liable for not forwarding a particu- lar article by a steam-vessel, unless the direction to do so be clear and unambiguous.^ Whether a railroad company is re- sponsible for fire set to buildings or property along the road, without negligence on its part, has been much considered both in England and in this country. In some of our States they are made so liable by statute provision. And this fact, together with the general principles of liability for injury done, would seem to lead to the conclusion that they are not liable unless in fault, or unless made so by statute.^ ^ Thus, in the recent case of Nutting v. Conn. Eirer R. R. Co. 1 Gray, 502, it was held that a railroad corporation, receiving goods for transportation to a place situated beyond the line of their road, on another railroad which connects with theirs, but with the proprietors of which they have no connection in business, and taking pay for the transportation over their own road only, arc not liable, in the al>sence of any special contract for the loss of the goods, after tliuir deli^ cry to the proprietors of the otlier railroad. And Metcnlf, J., said : " The jdaintiff's counsel relied on the case of Mus- champ V. L. & P. Junction Railway, 8 M.'& W. 421, in which it was decided by the Court of Exchequer that, when a rail\\ay company take into their care a parcel directed to a particular place, and do not, Ity positive agreement, limit their responsibility to a part only of the distance, that is prima fnrii' evidunic of an undertaking to can-y the parcel to the place to which it is directed, > although that place be beyond the limits within which the corapau}', in i^cneral, ]a"ofess to carry on their business of caniers. And two justices of the Queen's Bcnrli suljsci|ucntly made a like decision. Watson v. A., N. & B. Railway, 3 Etl,u. L. & Eq. 497. We cannot concur in tliat view of the law ; and we are sustained in our dissent from it, Iiy the Court of Errors in New York, and by the Supreme Courts of Vermont and Connecticut. Van Santvoord v. St. John, 6 Hill, 157; Farmers and Mechanics Bank i;. Champlain Transportation Co. 18 Vt. 140, and 2-3 Vt. 200 ; Hood t. New York & New Haven R. R. 22 Conn. 1. ■ In these cases, the decision in Weed v. Saratni;a & Srlirnectady Raili-oad, 19 Wend. 5.34 (which was cited by the present plaintiff's conn.sel), was said to be distingnish.ahle ' from such a case as this, and to be reconcilable with the rule that each carrier is bound only to the end of his route, unless he makes a special contract that binds him further." And see further, 1 Parsons on Contracts, 6s<7, n. (k). - Simkins v, Norwich & New London Steamboat Co. 11 Cush. 102. ^ See Aldi-idge r. Great Western Railway Co. 2 Railway & Canal Cases, 8.52; Cook V. Champlain Transportation Co. 1 Dcnio, 91. In Baltimore & Susquehanna R. R. Co. V. Woodruff, 4 Md. 242, it was hrld that the degree of negligence reqnisite to render a railroad company liable in daniaL:rs for fire occasioned by its locomotive, is that which results from a want of reascmalili' care and diligence, and not tliat arising from the absence of the slightest or least rare and attention. And see Railroad Co. v. Yeiser, 8 Barr, 366. In Hart r. Westcm R. R. Co. 13 Met. 99, a shop adjoining a railroad track was destroyed by fire lommtmicatcd by a locomotive engine of the de- fendants ; and while the shop i\as burning, the w ind' wafted sparks from it across a street, sixty feet, upon a house, and set it on fire, whereby it was injured. Hild. that the owner of the house was entitled to recover of tlie defendants the damages caused by the fire, under statute 1840, e. 85, § 1, wliich provides that, wlien any injnrv i^ done to a building of any person " by fire communicated " l)y a locomotive engine of a rail- road corporation, the said corporation shall be rcsponsiiile in damages, to the person so [242] CH. XII.] CARRIAGE OF GOODS. -218 A frequent cause of disaster, both on land and on the ocean, is collision. For this, a carrier by land, a railroad company for example, should be held liable, in our view of this question, un- less the company could show that it took all possible care to prevent the collision ; and we do not know that the general prin- ciples of law in relation to carriers could lead to any other con- clusion.^ The common carrier at sea, whether under canvas or steam, must be held to a careful, if not a strict compliance with the rules and practice applicable to each case of meeting another vessel, which have been devised for the purpose of preventing collision ; and of which we speak in our chapter on the law of shipping. SECTION VI. OF THE CARRIER OP PASSENGERS. The carriers of passengers are under a more limited liability than the carriers of goods. This is now weU settled.^ The injured. And see further, upon this subject, Lyman v. Boston & Worcester Railroad Co. 4 Cush. 288 ; McCready v. South Carolina R. R. Co. 2 Strobh. 356. 1 See Bridge v. Grand Junction Railway Co. 3 M. & W.-244 ; Chaplin v. Hawes, 3 C. & P. 554 ; Mayhew v. Boyce, 1 Stark. 423 ; Monroe v. Linch, 7 Met. 274 ; Churchill V. Rosebeck, 15 Conn. 359 ; Little Miami Railroad Co. v. Stevens, 20 Ohio, 415 ; Pluck- vroU V. Wilson, 5 C. & P. 375 ; Kennard v. Burton, 25 Maine, 39 ; M'Lane v. Shai-pe, 2 Harring. 481 ; Wordsworth v. Willan, 5 Esp. 273 ; Turley v. Thomas, 8 C. & P. 103 ; Wayde v. Carr, 2 D. & R. 255 ; Clay v. Wood, 5 Esp. 44. 2 This distinction was recognized as early as the case of Aston v. Heavan, 2 Esp. 533. That was an action against the defendants, as proprietors of a stage-coach, to recover damages received by the plaintiff in consequence of the upsetting of the de- fendant's coach. The defence relied upon was, that the coach was driving at a regular pace on the Hammersmith road, but that on the side was a pump of considerable height, from whence the water was falling into a tub below ; that the sun shone bi-ightly, and being reflected strongly from the water, the horses had taken fright and run against the bank at the opposite side, where the coach was overset. And Eyre, C. J., said : " This action is founded entirely .on negligence. It has been said, by the counsel for the plaintiif, that whei-ever a case happens, even where there has been no negligence, he would take the opinion of the court, whether defendants, circumstanced as the present, that is, coach-owners, should not be liable in all cases, except where the injury happens from the act of God or the king's enemies. I am of opinion the cases of the loss of goods by carriers and the present are totally unlike. When that case does occur, he will be told that carriers of goods are hable by the custom, to guard against frauds they might be tempted to commit by taking goods intrusted them to cany, and then pre- tending they had lost or been robbed of them ; and because they can protect themselves ; but there is no such rule in the case of the caniage of the persons. This action stands on the grounds of negligence only." To the same effect is Christie v. Griggs, 2 Camp. 79 That was an action oi assumpsit against the defendant, as owner of the Blackwall [243] 219-220* ELEMENTS OF MERCANTILE LAW. [CH. XII. reason is, that they have not the same control over passengers as over goods ; cannot fasten them down, and use other means of securing them. Hence, the distinction applies to the carriage of slaves ; for, while they are in some respects property, they are also possessed of the same power and right of locomotion as other men.i But, while the liability of the carrier of passen- gers is thus mitigated, it is still stringent and extreme. No proof of care will excuse the carrier if he loses goods committed to him. But proof of the utmost care will excuse him for injury done to passengers. Some of the authorities, and, as we think, the reason of the case, would justify us in saying that the carrier of passen- gers is liable for injury to them, unless he can show that he took * all possible care, — giving always a reasonable construction to this phrase.^ stage, on which the plaintiff was travelling to London, when it broke down, and he was greatly bruised. The first count imputed the accident to the negligence of the driver ; the second to the insufficiency of the axle-tree of the carriage. The defendant intro- duced evidence to show that the axle-tree had been examined a few days before it broke, without any flaw being discovered in it ; and that, when the accident happened, the coachman, a very skilful driver, was driving in the usual track, and at a moderate pace. Mansfield, C. J., in summing up to the jury, said : " As the driver has been cleared of every thing like negligence, the question for the jury will be as to the sufficiency of the coach. If the axle-tree was sound, as far as human eye could discover, the defendant is not liable. There is a difference between a contract to carry goods and a contract to carry passengers. For the goods the carrier is answerable at all events. But he does not warrant the safety of the passengers. This undertaking as to them goes no further than this, that, as far as human care and foresight can go, he will provide for their safe conveyance. Therefore, if the breaking down of the coach was purely accidental, the plaintiff has no remedy for the misfortune ho has encountered." The same rule has been repeatedly declared, in subsequent cases, both in this country and in England. See Hanis v. Costar, 1 C. & P. 636 ; White v. Boulton, Peake's Cas. 81 ; Crofts v. Waterhouse, 3 Bing. 319; Dcrwort v. Loomer, 21 Conn. 245; Fuller v. Naugatuck R. E. Co. 21 Conn.'557 ; Hall v. Conn. River Steamboat Co. 13 Conn. 319 ; McKinney V. Neil, 1 McLean, 540 ; Maury v. Talmadge, 2 McLean, 157 ; Stokes v. Saltonstall, 13 Pet. 181 ; Stockton v. Frey, 4 Gill, 406; Camden & Amboy E. R. Co. v. Burke, 13 Wend. 626; HoUister u. Nowlen, 19 Wend. 236; Caldwell v. Murphy, 1 Duer, 233. ^ Boyce v. Anderson, 2 Pot. 150. This was an action brought by the owner of slaves, against the proprietors of a steamboat, on the Mississippi River, to recover damages for the loss of the slaves, alleged to have been caused by the negligence or mismanagement of the captain and commandant of the boat. The court below in- structed the jury " that the doctrine of common carriers did not apply to the case of carrying intelligent beings, such as negroes ; " and tlie Supreme Court held such in- struction correct. And see Clark v. McDonald, 4 McCord, 223 ; Williams v. Taylor, 4 Port. Ala. 234. 2 See Hegcman v. Western Railroad Corp. 16 Barb. 353 ; and cases supra. In Ware V. Gay, 11 Pick. 106, it was held that, if, in an action by a passenger against the pro- prietors of a stage-coach for an injury occasioned by the insufficiency of the coach, the plaintiff proves that, wliile the coach was driven at a moderate rate upon a plain and level road, without coming in contact \\Ax\\ any other object, one of the wheels came off, and the coach overset, whereby the plaintiff^ was hurt, the law will imply negligence, and the burden of proof will rest upon the defendants to rebut this legal inference, by showing that the coach was properly fitted out and provided. And see, to the same [244] CH. XII.] CARRIAGE OP GOODS. -220 SECTION VU. OF A NOTICE BY THE CARRIER, RESPECTING HIS LIABILITY. It is now settled — though formerly denied — that the common carrier has a right to make a special agreement with the senders of goods, which shall materially modify, or even wholly prevent his liability for accidental loss or injury to the goods.^ "Whether effect, Christie v. Griggs, supra; Cai^pue v. L. & B. Railway Co., 5 Q. B. 747; Skinner v. Brighton & Southcoast Railway Co. 5 Exch. 787, 2 Eng. L. & Eq. 360 ; Stokes V. Saltonstall, 13 Pet. 181 ; Stockton v. Erey, 4 Gill, 406 ; McKinney u. Neil, 1 McLean, 540. 1 In England, no question is ever made as to the validity of such a contract, and al- though there are few, if any, cases where the point was expressly adjudged, yet in all the cases such was assumed to be the law. Nor until the case of Cole v. Goodwin, 19 Wend. 251, was the validity of such a contract ever denied in this country. In that case, which was an action against the defendants as coinmon carriers, the only question was, whether a notice published by them, that all baggage conveyed over their line would be at the risk of the owners, such notice having been brought home to the knowl- edge of the plaintiff, would discharge the defendants from their common-law liability. It was held that it should not ; and Cowen, J., in the opinion delivered by him, insisted that common carriers, from their public employment, owe duties at common law from which public policy demands that they should not be discharged, and that, consequently, they cannot limit their common-law liability, even by express agreement. And in Jones V. Voorhees, 10 Ohio, 145, although this question was not directly involved in the decision, the court intimated a strong inclination to adopt the views of Mr. Justice Cowen. In Gould v. Hill, 2 Hill, 623, the question as to the validity of such a contract was directly before the court. In that case the defendants, who were common caniers, on receiving goods for transportation, gave the owner a memorandum by which they promised to forward the goods to their place of destination, danger of tire, &c., excepted. And Cowen, J., who delivered the opinion of the court, referring to his opinion in Cole V. Goodwin, supra, hdd that common carriers could not limit their liability as such by an express agreement or special acceptance of the goods to be transported ; and that, therefore, the defendants were liable for loss of the goods by fire while in their posses- sion, though not resulting from negligence. Nelson, C. J., dissented. With the excep- tion of Eish V. Chapman, 2 Ga. 349, we are not aware that the case of Gould v. Hill has ever been sanctioned by any court in this country. On the contrary, the Supreme Court of the United States, in New Jersey Steam Navigation Company v. Merchants Bank, 6 How. 344, expressly deny the doctrine of Gould v. Hill, and hold such a con- tract to be valid. Mdson, J., said : " As the extraordinary duties annexed to his employment concern only, in the particular instance, the parties to the transaction, in- volving simply rights of property, — the safe custody and delivery of the goods, — we are unable to perceive any well-founded objection to the restriction, or any stronger reasons forbidding it, than exist in the case of any other insurer of goods, to which his obligation is analogous ; and which depends altogether upon the contract between the parties. The owner, by entry into the contract, virtually agrees that, in respect to the particular transaction, the carrier is not to be regarded as in the exercise of his public employment, but as a private person who incurs no responsibility beyond that of an ordinary bailee for hire, and answerable only for misconduct or negligence." Since that time, Gould v. Hill has been expressly overruled in New York, by the Court of Appeals. Dorr v. N. J. Steam Navigation Co. 4 Sandf. 136, 1 Kern. 485. This was an action against the defendants, as common carriers upon Long Island Sound, be- tween New York and Stonington, to recover damages for the loss of goods. The 21* [245] 221-222* ELEMENTS OF MERCANTILE LAW. [CH. XII. he could make such a bargain with his passengers, to prevent his liability for injury to their persons, is much more doubtful. The question does not seem to have come directly before. the courts. And although the language used to express the carriers' rights is sometimes broad enough to extend to the persons or passengers as well as to their goods, we think it open to doubt whether this was meant, or would be generally admitted as law. And if it were admitted, we should expect the carrier held to stricter proof and of a more definite bargain with regard to per- sons, than might * suffice as to goods. The principal question is, what constitutes such a bargain. It seems to be well set- tled, by the weight of authority in this country, that a mere declaration stated that the plaintiffs, merchants in New York, shipped the goods in question on board the steamer Lexington, in the defendants' line, to be carried to Stonington ; that, on the same evening, the steamer was consumed by fire on her pas- sage, and the plaintiffs' goods destroyed. The defendants pleaded that the goods in question were received by them under a special contract, by reason of a clause and notice inserted in their bill of lading, which was set forth in the plea, and contained, among otlaer things, that the goods in question were to be transported to Stonington ; danger of fire, &c., excepted. The plea then averred that the liability of the defendants was restricted by the exception of the casualties mentioned in the bill of lading, and that the loss in question was occasioned by one of the excepted casualties, and was without the fault or negligence of the defendants. Upon a demurrer to this plea, the Superior Court of the city of New York gave judgment for the defendants. The case was afterwards carried to the Court of Appeals, where the judgment of the Superior Court was afSrmed. Parker, J., in delivering the opinion of the Court of Appeals, said : " The plaintiffs rely upon the case of Gould v. Hill, 2 Hill, 62.3. It was there broadly decided, by a majority of the late Supreme Court, Chief Justice Nelson dissent- ing, that common carriers could not limit their liability, or evade the consequences of a breach of their legal duties, as such, by an express agreement or special acceptance of the goods to be transported. That decision rested upon no earlier adjudication in this State, though the question had been previously discussed and obiter opinions some- times expressed upon it by judges, in deciding the question whether the common car- rier could lessen the extent of his liability, by notice. But the case of Gould v. Hill has been deliberately overruled by the present Supreme Court, in two carefully consid- ered cases, namely, Parsons v. Monteatli, 13 Barb. 353 ; .and Moore v. Evans, 14 id. 524. In both those cases the question is examined with much ability, and I think the unsoundness of the conclusion in Gould v. Hill, most satisfactorily shown. I am not aware tliat Gould v. Hill has been followed in any reported case. In Wells v. Steam Navigation Co. 2 Comst. 209, Branson, J., who seems to have concm-red with Judge Cowen in deciding Gould r. Hill, speaks of the question as being still, perhaps, a debatable one." And see Stoddard v. Long Island E. R. Co. 5 Saudf 180; Mer- cantile Muttial Ins. Co. o. Cliase, 1 E. D. Smith, 115 ; 1 Parsons on Cont. 703, n. (d). It should be observed that the Supreme Court of Michigan, in the recent case of Michi- gan Central R. R. Co. v. Ward, 2 Mich. 538, held that the rule we are now considering did not apply to the plaintiffs, on the ground that their charter is in the nature of a contract between the company and the State, permanently bmding upon each, and the principal engagement on the part of the company is, that they shall become, and con- tinue to remain, common carriers. Their liability as common carriers, consequent upon the contract, and the law appertaining thereto, becomes irrevocably fixed ; and, there- fore, they cannot alter or modify this liability by any stipulation or contract. This case has, however, been recently overruled. Michig.an Central R. Co. v. Hale, 6 Mich. 243. [246] CH. XII.j CARRIAGE OP GOODS. *223 notice that the carrier is not responsible, or his refusal to be responsible, although brought home to the knowledge of the other party, does not necessarily constitute an agreement.^ The reason is this. The sender has a right to insist upon sending his goods, and the passenger has a right to insist upon going himself, and leave the carrier to his legal responsibility ; and the carrier is bound to take them on these terms. If, therefore, the sender or the passenger, after receiving such no- tice, only sends or goes in silence, and without expressing any assent, especially if the notice be given at such time or under such circumstances as would make it inconvenient for the sender not to send, or for the passenger not to go, then the law will not presume from his sending or going an assent to the carriers' terms. But the assent may be expressed by words, or made manifest by acts; and it is a question of evidence for the jury whether there was such an agreement. It seems to be conceded also, that a notice by the carrier, which only limits and defines his liability to a reasonable ex- tent, as one which states what kind of goods he will carry, and what he will not ; or to what amount only he will be liable for * passengers' baggage, without special notice ; or what informa- tion he will require, if certain articles, as jewels or gold, are 1 It was held in England, prior to the passage of the statute of 1 1 Geo. IV., and 1 Will. IV. c. 68, commonly called the Gamers' Act, that such notices were valid, and the sender of goods was bound by their terms, although some of the courts regretted that such was the rule. See Maving v. Todd, 1 Stark. 72 ; Ellis v. Turner, 8 T. R. 531 ; Lyon v. Mells, 5 East, 428 ; Evans v. Soule, 2 M. & S. 1 ; Leeson v. Holt, 1 Stark. 186. Tlie Carriers' Act, above referred to, put an end to this question. In this country, the courts have generally adopted the rule as stated in the text ; as in Cole v. Goodwin, 19 Wend. 251, and HoUister v. Nowlen, id. 234. In both these cases the defendants were coach-proprietors, and had published notices to the effect that all baggage sent by their lines would be at the risk of the owners. The Supreme Court of New York de- clared that such notices were of no avail, and that the defendants were subject to their common-law liability. In the latter case, Couieii, J., delivering the opinion, held, as we have seen, that such notices were invalid, and that even a special agreement would not avail the defendants in such case. In the former case, Branson, J., held that such notice did not amount to a special contract. And the following cases hold the same doctrine. Farmers & Mechanics Bank v. Champlain Transportation Co. 23 Vt. 186, per JRed- Jield, J.; Clark v. Eaxton, 21 Wend. 153 ; New Jersey Steam Navigation Co. v. Mer- chants Bank, 6 How. 344 ; Moses v. Boston & Maine E. R. 4 Foster, 71 ; Fish v. Chapman, 2 Ga. 349 ; Stoddard v. Long Island Railway Co. 5 Sandf. 180 ; Parsons V. Monteath, 13 Barb. 353; Dorr v. New Jersey Steam Navigation Co. 4 Sandf. 136, 1 Kem. 485. The following cases, however, hold, although with apparent reluctance, that such notices are binding. Sager v. Portsmouth, &c. Railroad Co. 31 Maine, 228 ; Camden & Amboy R. R. Co. v. Baldauf, 16 Penn. State, 67 ; Laing v. Colder, 8 Barr, 479 ; Bingham u. Rogers, 6 Watts & S. 500. [247] 223- ELEMENTS OP MERCANTILE LAW. [CH. XII. carried, or what increased rates must be paid for such things, — any notice of this kind, if in itself reasonable and just, will bind the party receiving it.^ But no party will be affected by any notice, — neither the car- rier, nor a sender of goods, nor a passenger, — unless a knowl- edge of it can be brought home to him.^ But this may be done by indirect evidence. As by showing that it was stated on a receipt given to him, or on a ticket sold him, or in a newspaper which he actually read, or, perhaps, in one which he was in the habit of reading, or even that it was a matter of usage and gen- erally known.3 This question is one of fact, which the jury 1 This was decided in Nicholson v. Willan, 5 East, 507. There the defendant was a coach-proprietor, and had published a notice, the purport of which was that he would not be accountable for any package whatever (if lost or damaged), above the value of £5, unless insured and paid for at the time of delivery. The action was brought to recover for the loss of a parcel delivered to the defendant to cany, containing goods to the value of £58. No disclosure was made of the true value of the parcel, nor was any extra freight paid; and the court held that the defendant was protected by his notice. And in the English courts, from this time to the passage of the Gamers' Act, effect was given to similar notices. See Harris v. Packwood, 3 Taunt. 26-t ; Buck v. Evans, 16 East, 244 ; Levi v. "Waterhouse, 1 Price, 280 ; Bodenham v. Bennett, 4 Price, 31; Smith v. Home, 8 Taunt. 144; Bu-kett v. Willan, 2 B. & Aid. 356; Batson v. Donovan, 4 B. & Aid. 21 ; Sleat v. Fagg, 5 B. & Aid. 342 ; Dutf v. Budd, 3 Brod. & B. 177; Marsh v. Home, 5 B. & C. 322; Brooke v. Pickwick, 4 Bing. 218; Riley v. Home, 5 Bing. 218; Bradley v. Waterhouse, Moody & M. 154. In this country, very few cases have been decided upon notices of this nature. In Fanners and Mechanics Bank v. Champlain Transportation Co. 23 Vt. 186, Redfield, J., says ; " We regard it as well settled that the carrier may, by general notice brought home to the owner of the things delivered for caniage, limit his responsibility for carrying certain commodities beyond the line of his general business, or he may make his responsibility dependent upon certain conditions, as having notice of the kind and quantity of the things depos- ited for caniage, and a certain reasonable rate of premium for the insurance paid, be- yond the mere expense of carriage." And dicta to the same effect may be found in the following cases. Bean o. Green, 3 Eairf. 422 ; Orange County Bank v. Brown, 9 Wend. 115 ; Cole v. Goodwin, 19 Wend. 251, per Cowen, J. 2 Sec HoUister v. Nowlen, vli supra ; Brooke v. Pickwick, 4 Bing. 218. In Camden & Amboy Railroad Co. v. Baldauf, 16 Pcnn. State, 67, where the notice was in the English language, and the passenger was a German, who did not understand English, it was held incumbent on the carrier to prove that the passenger had actual knowledge of the limitation in the notice. And see Beckman v. Shouse, 5 Rawle, 189; Kerr v. Willan, 2 Stark. 53; Clayton v. Hunt, 3 Camp. 27. 3 Thus, in Whitesell v. Crane, 8 Watts & S. 369, it was AcH.that the contents of notices restricting the liability of a line of public coaches, was sufficiently made known to passengers by being posted up at the place where they book their names. And see Hollister v. Nowlen, supra ; Story on Bailments, § 558 ; 2 Stark, on Ev. 338 ; Harris V. Packwood, 3 Taunt. 264 ; Garnett v. Willan, 5 B. & Aid. 53 ; Duff a. Budd, 3 Brod. & B. 177. But the carrier is generally held to very strict proof that the bailee had knowledge of the notice. See the very strong case of Brown v. Eastern Railway Co. 11 Cush. 97. That was an action of assumpsit for lost baggage. There was a notice printed on the back of the passage-ticket given to the plaintiff, that the defendants would not be responsible beyond a specified sum; but no other notice was given, nor was plaintiff's attention called to this. Held, that these facts did not furnish that certain notice which must be given to exonerate such carrier from his liability. And see Bean V. Green, 3 Fairf. 422; Cobden <,. Bolton, 2 Camp. 108; Bulter u. Heane, id. 415. [248] CH. XII.] CARRIAGE OF GOODS. *224 will determine upon all the evidence, under the direction of the court. * Any fraud towards the carrier, as a fraudulent disregard of a notice, or an effort to cast on him a responsibility he is not obliged to assume, or to make his liability seem to be greater than it really is, — will extinguish the liability of the carrier so far as it is affected by such fraud.^ If a carrier gives a notice -which he is authorized to give, the party receiving it is bound by it, and the carrier is under no ob- ligation, to make a . special inquiry or investigation to see that the notice is complied with, but may assume this as done.^ It should, however, be remarked, that such notice affects the liability of the common carrier only so far as it is peculiar to him ; that is, his liability for a loss which occurs without his agency or fault ; for he is just as liable as he would be with- out notice, for a loss or injury caused by his own negligence or default.^ Whether a common carrier could make a valid bargain by which he should be free from all liability, however the loss might And if the notice- is ambiguous, it will be construed against the caiTier. Camden & Amboy Railroad Co. v. Baldauf, 16 Penn. State, 67 ; Beckman v. Shouse, 5 Rawle, 179. So, where two valid notices are given, the carrier will be bound by the one least beneficial to himself. Munn v. Baker, 2 Stark. 255 ; Cobden v. Bolton, 2 Camp. 108. 1 See Kenrig v. Eggleston, Aleyn, 93 ; Gibbon v. Paynton, 4 Burr. 2298; Tyly v. Morrice, Carth. 485 ; Titchburne v. White, 1 Stra. 145 ; Anonymous, cited in Morse v. Slue, 1 Vent. 238 ; Batson v. Donovan, 4 B. & Aid. 22. 2 Batson v. Donovan, supra ; Harris a. Packwood, 3 Taunt. 264 ; Marsh v. Home, 5 B. & C. 322 ; Duff t). Budd, 3 Brod. & B. 177 ; Bodenham v. Bennett, 4 Price, 31 ; Sleat V. Fagg, 5 B. & Aid. 342. But contra, per Branson, J., in HoUister v. Nowlen, 19 Wend. 234. 8 Although there is a considerable degree of uncertainty in the English cases upon this question, we believe the decided weight of authority is in accordance with the rule stated in the text. Thus, in Wyld v. Pickford, 8 M. & W. 443, it was held that the carrier, notwithstanding his notice, was bound to use ordinary care. And Parke, B., after reviewing the cases, said : " The weight of authority seems to be in favor of the doctrine, that, in order to render a carrier liable after such a notice, it is not necessary to prove a total abandonment of that character, or an act of wilful misconduct, but that it is enough to prove an act of ordinary negligence, — gross negligence, in the sense in which it has been understood in the last-mentioned cases ; and that the effect of a notice, in the form stated in the plea, is, that the c.irrier will not, unless he is paid a premium, be responsible for all events (other than the act of God and the queen's ene- mies) by which loss or damage to the owner may arise, against which events he is, by common law, a sort of insurer ; but still, he undertakes to carry from one place to another, and for some reward in respect of the carriage, and is therefore bound to use ordinary care in the custody of the goods, and their conveyance to, and delivery at, their place of destination, -and in providing proper vehicles for their carriage; and after such a notice, it may be that the burden of proof of damage or loss by the want of such care, would lie on the plaintiff." And see Bodenham v. Bennett, 4 Price, 34 ; Beck v. Evans, 16 East, 244; Garnett v. Willan, 5 B. & Aid. 57 ; Batson v. Donovan, 4 B. & Aid. 30; Duffw. Budd, 3 Brod. & B. 182 ; 1 Parsons on Cont. 713, n. [249] 225-226* ELEMENTS OF MEECANTILB LAW. [CH. XII. occur, may not be certain. But in the present state of the law, we are inclined to thiak he might ; so far, that such a bargain would protect him against every thing but his own wilful or fraudulent misconduct.' Beyond this no bargain could lawfully extend. SECTION vni. OF THE CAREIEK'S LIABILITY FOR GOODS CARRIED BY PASSENGERS. A carrier of goods knows precisely what goods, or rather what parcels and packages he receives and is responsible for. A car- rier of passengers is responsible for the goods they carry vi^ith them as baggage ; but only to the extent of what might be fairly and naturally carried as such.^ This must always be a question of fact, to be settled as such by the jury upon all the evidence, and under the direction of the court. But there can be no pre- cise and definite standard. A traveller on a long journey needs more money and more baggage than on a short one ; one to some places, and for some purposes, more than to other places or for other purposes.^ The rule is well settled, and a reasonable * con- ^ A series of English cases since the passage of the Carriers' Act, seem to have set- tled this point in England. See Chippendale v. L. & Y. Railway Co. 21 Law J., u. s. 22, 7 Eng. L. & Eq. 39.5; Austin v. M. S. & L. Railway, 10 C. B. 454, 11 Eng. L. & Eq. .506 ; Carr v. L. & Y. Railway, 7 Exch. 707, 14 Eng. L. & Eq. 344. But in this country the settled doctrine has been that the carrier cannot exempt himself from loss arising from his own negligence. N. J. Steam Nav. Co. v. Merchants Bank, 6 How. 144 ; Laing v. Colder, 8 Barr, 479 ; Don- v. N. J. Steam Nav. Co. 4 Sandf. 136 ; Slocum V. Fairchild, 7 Hill, 292; Camden & Amboy E. Co. v. Baldanf, 16 Penn. State, 67 ; Sager v. Portsmouth, &c. R. R. Co. 31 Maine, 228 ; Reno v. Hogan, 12 B. Mon. 63. " In Hawkins v. Hoffman, 6 Hill, 586, it was said, per Bronson, J., that the term harjijage, in such cases, does not embrace money in a trunk, or articles usually earned^ about the person, and not as baggage. And in Orange County Bank v. Brown, 9 Wend. 85, it was held tliat, where the baggage of a passenger consists of .an ordinary travelling trunk, in which there is a large sum of money, such money is not considered as included under tlie term baggage, so as to render the carrier responsible for it. But a passenger may carry, as baggage, money, not exceeding an amount ordinarily carried for travelling expenses. Thus, it was held, in Jordan v. Fall River Railroad Company, 5 Cush- 69, that common carriers are responsible for money hona fide included in the baggage of a iiassenger, for travelling expenses and personal use, to an .amount not ex- ceeding what a prudent person would deem proper and necessary for the purpose. And sec Johnson v. Stone, 11 Humph. 419; Bomar v. Maxwell, 9 Humph. 621 ; Weed u. S. & S, Railroad Co. 19 Wend. 534. •' In ilcGiU V. Rowand, 3 Barr, 451, carriers were held responsible for ladies' trunks containing ajiparel and jewels. And in Woods c. Devin, 13 111. 746, a common earner of passengers was held liable for the loss of a pocket-pistol, and a pair of duelling pis- [250] CH. XII.] CARRIAGE OF GOODS. -226 struction and application of it must always be made ; and for this purpose, the passenger himself, and all the circumstances of the case must be considered. The purpose of the rule is, to pre- vent the carrier from becoming liable by the fraud of the passen- ger, or by conduct which would have the effect of fraud ; for this would be the case if a passenger should carry merchandise by way of baggage, and thus make the carrier of passengers a car- rier of goods without knowing it, and without having been paid for it.i For, generally, a common carrier of passengers, by stage, packet, steamer, or cars, carries the moderate and reasonable baggage of a passenger, without being paid specifically for it. But the law considers a payment for this so far included in the payment of the fare, as to form a sufficient ground for the car- rier's liability.^ The carrier is only liable for the goods or baggage delivered to him and placed under his care.^ Hence, if a sender of goods send with them his own servant,, and intrust them, to him and not to the carrier, the carrier is not responsible.* So, if a pas- senger keeps his baggage, or any part of it, on his person, or in his own hands, or within his own sight and immediate control, tols, contained in the carpet-bag of a passenger, which was stolen out of the possession of the earner. But see Bomar v. Maxwell, 9 Humph. 621, where it was hdd that " a silver watch, worth about thirty-fivo dollars ; also, medicines, handcuffs, locks, &c., worth about twenty dollars," were not included in the term baggage, and that the car- rier was not responsible for their loss. In Jones v. Voorhees, 10 Ohio, 145, it was held that a gold watch, of the value of ninety-iive dollars, was a part of the traveller's 1 lag- gage, and his trunk a proper place to carry it in. And see Hawkins v. Hofiman, 6 Hill, 586, per Branson, J. ; Brooke v. Pickwick, 4 Bing. 218. 1 In Pardee v. Drew, 25 Wend. 459, it was held that the owners of steamboats were liable as common earners for the baggage of passengers ; but to subject them to dam- ages for loss thereof, it must be strictly baggage ; that is, such articles of necessity and personal convenience as are usually carried by travellers. It was accordingly hdd in that case, that the earner was not liable for the loss of a trunk, containing valuable mer- chandise and nothing else, although it did not appear that the plaintiff had any other trunk with him. And see, to the same effect, Hawkins v. Hoffman, 6 Hill, 586. But in Porter v. Hildebrand, 14 Penn. State, 129, where the plaintiff was a carpenter moving to the State of Ohio, and his trunk contained carpenter's tools, to the value of $55, which the jury found to be the reasonable tools of a carpenter, it was held that he was entitled to recover. And see Mad River & Lake Erie Railroad Co. v. Pulton, 20 Ohio, 318 ; Great Northern Railway Co. v. Shepherd, 8 Exch. 30, 9 Eng. L. & Eq. 477, 14 Eng. L. & Eq. 367 ; Dwight v. Brewster, 1 Pick. 50 ; Bomar v. Maxwell, 9 Humph. 621 ; Beckman v. Shouse, 5 Rawle, 179. 2 See Orange County Bank v. Brown, 9 Wend. 85 ; Powell v. Myers, 26 Wend. 591 ; Richards v. London, &c.. Railway Co. 7 C. B. 839; McGill u. Rowand, 3 Barr, 451 ; Camden & Amboy R. R. Co. v. Burke, 13 Wend. 611. ^ See Selway v. HoUoway, 1 Ld. Raym. 46 ; Buckman v. Levi, 3 Camp. 414; Pack- ard V. Getman, 6 Cowen, 757; Having v. Todd, 1 Stark. 72. See ante, p. 204. * See Brind v. Dale, 8 C. & P. 207 ; Lovett v. Hobbs, 2 Show. 127 ; Leigh v. Smith, 1 C. & P. 640 ; Orange County Bank v. Brown, 9 Wend. 85. [251] 227* ELEMENTS OF MERCANTILE LAW. [CH. XIT. instead of delivering it to the carrier or his servants, the carrier is not liable, as carrier, for any loss or injury which may happen to them ; that is, not without actual default in relation to these specific things.^ But if the baggage of a passenger is delivered * to a common carrier, he is liable for it in the same way, and to the same extent, as he is for goods which he carries. There has grown up in this country a very peculiar exception to the rules of evidence, in relation to travellers' baggage. This exception permits the traveller to maintain his action against the carrier, by proving, by his own testimony, the contents of a lost trunk or box, and their value.^ It is said to rest altogether upon necessity. And, therefore, the testimony of the wife of the owner is similarly admissible.^ But it is always limited to such things — in quantity, quality, kind, and value — as might reasonably be supposed to be carried in such a trunk or valise.* The rule, with this limitation, seems reasonable and safe, and is quite gen- erally adopted. In Massachusetts, it was distinctly denied by the Supreme Court, and afterwards established by statute." The common carrier of goods or of passengers is Hable to third parties for any injury done to them by the negligence or default of the carrier, or of his servants.^ And it would seem that he is ^ Thus, in an action brought to charge a raih'oad Company, as common carriers, for the loss of an overcoat, belonging to a passenger, it appeared that the coat was not delivered to the defendants, but that the passenger, having placed it on the seat of the car in which he sat, forgot to take it with him when he left, and it was afterwards stolen. Held, that the defendants were not liable. Tower v. Utica & Schen. R. R. Co. 7 Hill, 47. And sec Boys v. Prink, 8 C. & P. 361 ; Syms v. Chaplin, 5 A. & E. 634 ; Cole 1. Goodwin, 19 Wend. 251 ; Robinson v. Dunmore, 2 B. & P. 416. - Span- i: Wellman, 11 Misso. 230; Mad River, &c. R. R. Co. v. Fulton, 20 Ohio, 318 ; Whitesell v. Crane, 8 Watts & S. 369 ; Sneider v. Geiss, 1 Yeates, 34 ; Clark v. Spence, 10 Watts, 335; Oppcnheimcr v. Edney, 9 Humph. 385; Johnson r. Stone, H Humph. 419. 8 Mad River, &e. R. R. Co. u. Fulton, 20 Ohio, 318; McGill u. Rowand, 3 Barr, 451. * In Pudor v. Boston & IMnine Railroad, 26 Maine, 458, where the plaintiff proved that he had delivered to the defendants a box to be earned to a certain place ; that the box was not delivered ; that he had made a demand thereof; and that the defendants admitted its loss; and then "offered to show by his own testimony (it not appearing that he had any other means of showing it), what was in said box, and the value of the articles," the declaration having alleged that the box contained medical books, surgical instruments, and chemical apparatus, it was held that the plaintiff's oath was inadmis- sible. And see Bingham o. Rogers, 6 Watts & S. 495; Mad River, &c. R. R. Co. u. Fulton, 20 Ohio, 318. '■ It was entirely repudiated by the Supreme Court of Massachusetts, in Snow o. Eastern Railroad Co. 12 Met. 44. The statute by which the legislature interfered, and made the law on this point to conform substantially with what we have stated, was passed 1851, chapter 147. The 5th section contains this provision. " Thus, in Boss v. Litton, 5 C. & P. 407, which was an action of trespass for injuring [252] CH. XII.J CARRIAGE OF GOODS. *228 liable even for the wilful tort of his servants, if it was committed while in his employ, and in the management of the conveyance under his control, although the wrong was done in direct oppo- sition to the express commands of the owner.i So he is for injury to property * by the wayside, caused by his fault.^ But the negligence of the party suffering the injury, if it was material and contributed to the injury, is a good defence for the carrier; unless malice on his part can be shown.^ The responsibility of a carrier for injuries sustained by a pas- senger while being transported by the carrier, does not rest en- tirely on the consideration paid for the service. But it would the plaintiff by driving a cart against him, it appeared that the plaintiff was walking in the carriage-way in the neighborhood of Islington, about ten o'clock in the evening, when the defendant, who was driving a taxed cart, turned out from behind a post-chaise, and drove against the plaintiff, and knocked him down. It was hdd that the plaintiff was entitled to recover. It was proved that the footpath was in a bad state, and seldom used ; but Lord Denman observed that " a man has a right to walk in the road if he pleases. It is a way for foot-passengers as well as carnages." And see Stables v. Ely, 1 C. & P. 614 ; Sleath v. Wilson, 9 C. & P. 607 ; Joel v. Morrison, 6 C. & P. 501 ; Clay V. Wood, 5 Esp. 44 ; Kathbun v. Payne, 19 Wend. 399 ; Wynn v. Allard, 5 Watts & S. 524 ; Cook v. Champlain Transp. Co. 1 Denio, 91 ; Tonawanda R. R. Co. V. Hunger, 5 Denio, 255 ; Cotterill v. Starkey, 8 C. & P. 691 ; Hawkins v. Cooper, id. 473. And in Illidge v. Goodwin, 5 C. & P. 190, it was hdd that, if a horse and cart are left in the street, without any person to watch them, the owner is liable for any damage done by them, though it be occasioned by the act of a passer-by, in striking the horse. And see Lynch v. Nurdin, 1 Q. B. 29. 1 Weed V. Panama Railroad Co. 5 Duer, 193, 17 N. Y. 362 ; Philadelphia and Read- ing Railroad Co. v. Derby, 14 How. 468. '■^ Cook V. Champlain Transportation Co. 1 Denio, 91 ; Davies u. Mann, 10 M. & W. 546. ^ In Butterfield v. Eorrester, 11 East, 60, Lord EUenborough said : "A party is not to cast himself upon an obstruction which has been made by the fault of another, and avail himself of it, if he do not himself use common and ordinary caution to be in the right." And see Cotterill v. Starkey, 8 C. & P. 691 ; Woolf v. Beard, id. 373. And this doctrine, as laid down in the text, has been frequently recognized by the court, in this country. See Willetts v. Buffalo & Rochester R. R. Co. 14 Barb. 585 ; White V. Winnisiramet Co. 7 Cush. 160; Trow v. Vt. Cent. R. R. Co. 24 Vt. 487 ; Brown v. Maxwell, 6 Hill, 592 ; Tonawanda R. R. Co. v. Hunger, 5 Denio, 255, 4 Comst. 349 ; Parker v. Adams, 12 Met. 415; May v. Princeton, 11 Met. 442 ; Cook v. Champlain Transportation Co. 1 Denio, 91 ; Barnes v. Cole, 21 Wend. 188; Rathbun v. Payne, 19 Wend. 399 ; Perkins v. Eastern and B. & M. R. R. Co. 29 Maine, 307. And see Willoughby v. Horridge, 12 C. B. 742, 16 Eng. L. & Eq. 437. In Brownell v. Flagler, 5 Hill, 282, it was hdd that, though the plaintiff was guilty of negligence, still he might recover in an action on the case, if the evidence showed intentional wrong on the part of the defendant. So, where the person injured is incapable of exercising ordinai'y care and caution. Therefore, where the defendant's servant left a horse and cart unattended in a public street, and the plaintiff, a child under seven years of age, during the driver's absence, climbed on the wheel, and other children urged fonvard the horse, whereby the plaintiff was thrown to the ground and hurt, it was held that the jury were justified in finding a verdict for the plaintiff, although the plaintiff was a trespasser, and contributed to the injury by his own act. Lynch v. Nurdin, 1 Q. B. 29. And see Birge v. Gardi- ner, 19 Conn. 507 ; Robinson v. Cone, 22 Vt. 213. But see, contra, Hartfield v. Roper, 21 Wend. 615; Brown u. Maxwell, 6 Hill, 592; Hunger v. Tonawanda B. R. Co. 4 Comst. 349. 22 [253] 228- ELEMENTS OF MERCANTILE LAW. [CH. XII. seem that the carrier is liable, although the person was carried gratuitously.^ In such a case, however, the carrier is not liable, except for gross negligence, though it is said that where the transportation is by steam, public policy and safety require that the carrier be held to the greatest possible care and diligence, and that any negligence, in such cases, may well deserve the epithet of gross.^ 1 Philadelphia & Reading Railroad Co. v. Derby, 14 How. 468 ; Steamboat New World V. King, 16 How. 469. ^ Same cases. [254] en. Xlir.] LIMITATIONS. 230 CHAPTER XIII. OF LIMITATIONS. SECTION I. OF THE STATUTE OF LIMITATIONS. In 1623, the statute of 21 James I. c. 16, commonly called the Statute of Limitations, was passed in England. Among its provisions, it enacts that all actions of account, and upon the case, other than such accounts as concern the trade of merchan- dise between merchant and merchant, their factors or servants, aU actions of debt grounded upon any lending, or contract with- out specialty, and all actions for arrearages of rerit, shall be commenced and sued within six years next after the cause of such actions or suit, and not after. The provisions of this statute were copied, without much important variation, in the statutes of all our States ; and upon them as they are explained, and in some respects materially modified by adjudication, the law of limitation rested, in Eng- land and in this country, until 1827, when the statute of 9 Geo. IV. c. 14, commonly called Lord TenterderCs Act, was passed. This statute, after reciting the statute of James, provides : " That in actions of debt, or upon the case, grounded upon any simple contract, no acknowledgment or promise by words only shall be deemed sufficient evidence of a new continuing contract, whereby to take a case out of the operation of the said enactment, or to deprive any party of the benefit thereof, unless such acknowledgment or promise shall be made or con- tained by or in some writing, to be signed by the party charge- able thereby ; and that, where there shall be two or more joint [255] 231* ELEMENTS OF MERCANTILE LAW. [CH. XIII. contractors, or executors, or administrators of any contractor, no such joint * contractor, executor, or administrator, shall lose the benefit of said enactment, so as to be chargeable in respect or by reason only of any written acknowledgment or promise made and signed by any other or others of them ; provided always, that nothing herein contained shall alter, or take away, or lessen the efi'ect of any payment of any principal or interest, made by any person whatsoever ; provided, also, that in actions to be commenced against two or more such joint contractors, or executors, or administrators, if it shall appear at the trial, or otherwise, that the plaintiff, though barred by the said recited act or this act, as to one or more of such joint contractors, or executors, or administrators, shall nevertheless be entitled to re- cover against any other or others of the defendants, by virtue of a new acknowledgment or promise, or otherwise, judgment may be given and costs allowed for the plaintiff as to such defendant or defendants against whom he shall recover, and for the other defendant or defendants against the plaintiff." ^ SECTION II. CONSTRITCTIOK^ OP THE STATUTE. For the law of limitation there is 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 is the reason of the silence of the creditor.^ But besides this reason, there is the inexpediency and injustice of permitting 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.^ In truth. ^ Statutes substantially similar have been passed in Maine, Massachusetts, Vermont, New York, Indiana, Michigan, Arkansas, and California. ^ " The Statute of Limitations is a bar, on the supposition, after a certain time, that a debt has been paid, and vouchers lost ; and wherever it appears, by the acknowledgment of the party, that it is not paid, that takes the case out of the statute." Per Bai/ley, J., in Clark v. Hougham, 2 B. & C. 154. '■' Thus, in Dickson v. Thomson, 2 Show. 125, where the claim was more than six years old, it was held that the confession or acknowledgment of the debt within six years was not sufficient to renew the claim. Sec also, Lacon v. Briggs, 3 Atk. 105 ; Bass V. Smith, 12 Vin. Abr. 229, pi. 4. [256] CH. xiil] limitations. *232 these two reasons mingle ; but as one or the other prevails, its effect is seen in the construction of this law, and in its applica- tion to cases. * If, for example, the statute is considered as only a statute of presumption, or, in other words, if it is supposed to say that a debt which is six years old, shall not be demanded, because the law presumes that so old a debt must have been paid, it is ob- vious that courts will look to the evidence offered to meet the law, mainly for the purpose of requiring that it shall rebut this presumption, by proving that the debt still exists.^ And in this view, and for this purpose, any acknowledgment or admission of the mere existence of the debt, by the debtor, would be sufficient to do away with the law.^ If, however, courts regarded the statute rather as a statute of repose, or, in other words, as in- tended to prevent the enforcement of stale claims, whether they were paid or not, then it is obvious that a mere admission that the debt was legal and remains unpaid, amounts to nothing. The law says it has remained unpaid so long, that it is too late now to bring it forward.^ But if the debtor is willing to waive the protection of the law, and not only acknowledges the debt, but promises to pay it, there is no reason why he should not be held upon this promise. Between these two views, it may be said that the courts have 1 In Bryan «. Horseman, 5 Esp. 81, evidence was offered that the defendant said that he had no recollection of the debt, but relied on the statute ; and this was not con- sidered sufficient to rebut the presumption that a debt of above six years' standing was paid. See also, Beale v. Nind, 4 B. & Aid. 568 ; Lloyd v. Maund, 2 T. E. 760 ; Clark V. Hougham, 2 B. & C. 149 ; Erost v. Bengough, 1 Bing. 266 ; East India Co. v. Prince, Ryan & M. 407. 2 In Truman v. Fenton, Cowper, 548, Lord Mansfield said : " The slightest acknowl- edgment has been held sufficient to rebut the presumption that an old debt has been paid ; as saying, ' Prove your debt and I will pay you ; ' ' I am ready to account, but nothing is due to you ; ' and much slighter aclinowledgments than these will take a case out of the statute." And see Tea v. Eouraker, 2 Burr. 1099 ; Richardson v. Pen, Lofft, 86 ; Catling v. Skoulding, 6 T. E. 189 ; Lawrence v. WoiTall, Peake, N. P. 93 ; Clarke v. Bradshaw, 3 Esp. 155 ; Rucker v. Hannay, 4 East, 604, n. (a) ; Gainsford v. Grammar, 2 Camp. 9 ; Leaper v. Tatton, 16 East, 420 ; Loweth v. Pothergill, 4 Camp. 184 ; Dowthwaite v. Tibbut, 5 M. & S. 75 ; Triggs v. Newnham, 1 C. & P. 631 ; Slu- by V. Champlin, 4 Johns. 461 ; De Forest v. Hunt, 8 Conn. 179 ; Glen v. McCuUough, Harper, 484 ; Burden v. M'Elhenny, 2 Nott & McC. 60 ; Sheftall u. Clay, R. M. Charlt. 7 ; Aiken v. Benton, 2 Brev. 330. * In Tanner v. Smart, 6 B. & C. 603, Lord Tenterden, after reviewing the authorities on this point, says : " All these cases proceed upon the principle that, under the ordi- nary issue on the Statute of Limitations, an acknowledgment is only evidence of a promise to pay ; and unless it is conformable to, and maintains the promises in the de- claration, though it may show to demonstration that the debt has never been paid, and is still subsisting, it has no effect." 22* [257] 233*-234* ELEMENTS OF MERCANTILE LAW. [CH. XIII. fluctuated from the beginning. As soon as the statute was passed, whenever it was pleaded by the defendant in bar of the action, if the plaintiff sought to remove this bar by any words of * the defendant, he was obliged to allege in his replication " a new promise " by the defendant. This rule of pleading remains good at the present day, wherever the old system of pleading is in force. And it tends to show that, at the beginning, the statute was regarded as a statute of repose, which could not be set aside by a mere acknowledgment that" the debt was un- paid. But, although the rule itself indicates this, the practice of the courts took the opposite direction. An impression pre- vailed, not, perhaps, at the beginning,^ but early, and continued long, that the statute itself was not to be favored,^ that a resort to it was generally a dishonorable attempt to escape the pay- ment of a just debt ; and that the court should give its aid to the creditor who endeavored to do away the effect of this law. Such language as this was not used, but such was the practice ; and, accordingly, any sort of acknowledgment, proved in almost any way, was permitted to remove the bar of the statute.^ At length, however, a different, and, as we think, a far more just and rational view prevailed. It began to be admitted by the profession and by the courts, although it never has been, perhaps, by the community, that it was a necessary and benefi- cial law, to be, if not favored, at least applied fairly and ration- ally, and permitted to do its very useful work in suppressing stale claims.* * These views are now very general, both in the 1 In Green v. Rivfft, 2 Salk. 422, the Court of King's Bench said : " The Statute of Limitations, on whicli the security of all men depends, is to be favored." ^ WiUett V. Atterton, 1 W. Bl. 35 ; Perkins v. Burbank, 2 Mass. 81. ' Thus, in Leaper v. Tatton, 16 East, 420, in assumpsit against the defendant, as ac- ceptor of a bill of exchange, and upon an account stated, evidence that the defendant acknowledged his acceptance, and that he had been liable, but said that he was not liable then, because it was out of date, and that he could not pay it, was held sufficient to renew the claim. And see Eichardson v. Fen, Lofft, 86 ; Lloyd v. Maund, 2 T. R. 760 ; Bryan v. Horseman, 4 East, 599 ; Clark v. Hougham, 2 B. & C. 154 ; Mount- Stephen V. Brooke, 3 B. & Aid. 141. See also ante, p. 232, n. 2. * In Spring v. Gray, 5 Mason, 523, Story, J., said : " I consider the Statute of Lim- itations a highly beneficial statute, and entitled, as such, to receive, if not a liberal, at least a reasonable construction, in fnthcrance of its manifest object. It is a statute of repose ; the object of which is, to suppress fraudulent and stale claims from springing up at great distances of time, and surprising the parties, or their representatives, when all the proper evidence and vouchers are lost, or the facts have liccome obscure, from the lapse of time, or the defective memory, or death, or removal of witnesses. The de- fence, therefore, which it puts forth, is an honorable defence, which does not seek to avoid the payment of just cl.aims or demands, admitted now to be due, but which en- [258] CH. XIII.] LIMITATIONS. -234 English courts and in our own. One effect of them was Ten- terden's Act, which we have given already, and which, as may be seen, guards against the admission of loose and uncertain testimony in proof of a new promise. Before inquiring into the rules of law which now apply to the case of an acknowledgment or new promise, it should be re- marked that a prescription, or limitation, much more ancient than the statutes above quoted, is still in full force. This is the presumption of payment after twenty years, which is applica- ble to all debts ; not only the simple contracts to which these statutes refer, but to specialties, or contracts, or debts under seal or by judgment of court.^ Of these it will not be necessary to speak here, excepting to remark that, in one or two of our States, the statute of limitation excepts a promissory note which is counters, in the only practicable manner, such as are ancient and unacknowledged; and, whatever may have been their original validity, such as are now beyond the power of the party to meet, with all the proper vouchers and evidence to repel them. The natural presumption certainly is, that claims which have been long neglected, are un- founded, or at least are no longer subsisting demands. And this presumption the statute has erected into a positive bar. There is wisdom and policy in it, as it quickens the diligence of creditors, and guards innocent persons from being betrayed by their ignorance, or their over-confidence in regard to transactions which have become dim by age. Yet, I well remember the time when courts of law exercised what I cannot but deem a most unseemly anxiety to suppress the defence ; and when, to the reproach of the law, almost every effort of ingenuity was exhausted to catch up loose and inad- vertent phrases from the careless lips of the supposed debtor, to construe them into admissions of the debt. Happily, that period has passed away ; and judges now con- fine themselves to the more appropriate duty of construing the statute, rather than de- vising means to evade its operation." In A'Court v. Cross, 3 Bing. 329, the defendant, being arrested on a debt more than six years old, said : " I know that I owe the money, but the bill I gave is on a three-penny stamp, and I will never pay it ; " and it was held that sucli an acknowledgment of a debt would not revive it against a plea of the statute. So, in Ayton v. Bolt, 4 Bing. 105. And in Tanner v. Smart, 6 B. & C. 603, in assumpsit, brought to recover a sum of money, it was proved, in answer to the plea of the Statute of Limitations, that the defendant said within six years, " I cannot pay the debt at present, but I will pay it as soon as I can ; " held, that this acknowledgment was not sufiicient to entitle the plaintifi^ to a verdict, no proof being given of the de- fendant's ability to pay. In Hart v. Prendergast, 14 M. & W. 741, defendant, on being requested to pay his debt, wrote the following letter to the plaintiff's clerk : " I will not fail to meet Mr. H. on fair terms, and have now a hope that, before, perhaps, a week from this date, I shall have it in my power to pay him, at all events, a portion of the debt, when we shall settle about the liquidation of the balance." Held, that this letter was not suflBcient to defeat a plea of the Statute of Limitations. And Parke, B. said : " There is no doubt of the principle of law applicable to these cases, since the decision in Tanner v. Smart ; namely, that the plaintiff' must either show an unqualified ac- knowledgment of the debt, or, if he show a promise to pay, coupled with a condition, he must show performance of the condition ; so as in either case to fit the promise laid in the declaration, which is a promise to pay on request. The case of Tanner v. Smart put an end to a series of decisions which were a disgrace to the law, and I trust we shall be in no danger of falling into the same course again." 1 See Christophers v. Sparke, 2 Jac. & W. 223 ; DufSeld v. Creed, 5 Esp. 52 ; Cooper V. Turner, 2 Stark. 497. [259] 235*-236* ELEMENTS OF MERCANTILE LAW. [CH. XIII. signed in the presence of an attesting witness, and is put in suit by the original payee, or his executor or administrator.^ Bank- bills and * other evidences of debt issued by banks, are every- where excepted from the operation of the statute.^ SECTION m. OP THE NEW PROMISE. The first question we propose to consider, is, what is the new promise which suffices to take a 'Case out of the statute. If the promise be made, the former debt, although not in itself enforce- able, is considered a sufficient consideration for the new promise.^ This might be made as well orally as in writing, until Lord Tenterden's Act. But, although this act requires, as matter of evidence, that the new promise shall be in writing, it does not afi'ect at all any question respecting the character or sufficiency of the new promise ; they remain to be decided by the same principles, and in the same manner as before.* By the general consent of the courts of this country and of England, a mere acknowledgment, which does not contain, by any reasonable implication or construction, a new promise, and still more, if it expressly excludes a new promise, is not suffi- cient.^ A new promise is * not now implied by the law itself, from a mere acknowledgment.^ 1 This ia the case in Massachusetts, Walker t), 'Warfield, 6 Met. 466 ; Earle v. Reed, 10 id. 387; Drury v. Vannevar, 1 Cush. 276; Eockwood v. Browne, 1 Gray, 261. And in Maine. Boody v. Lunt, 19 Maine, 72 ; Stone v. Nichols, 23 Maine, 497. - Dougherty v. Western Bank of Georgia, 13 Qa. 287. ^ Geer v. Archer, 2 Barb. 424. * Thus, in Morrell v. Frith, 3 M. & W. 405, the defendant stated, in a letter, that he daily expected to be able to give a satisfactory reply to the plaintiff's demand ; and altliough this was in writing, Parke, B., said : " The document, in order to take the case out of the statute, must either contain a promise to pay the debt on request, or acknowledgment from which such promise is to be inferred." And see Haydon u. WUliams, 7 Bing. 166, 167. 6 In the leading American case upon this point, Bell v. Morrison, 1 Pet. 351, which was assumpsit for goods sold and delivered, it was proved, in answer to the plea of the Statute of Limitations, that the defendant, one of the partners of a firm then dissolved, ^ As, "I sliould be happy to pay if I could," Ayton ii. Bolt, 4 Bing. 105 ; or, "I have no recollection of the debt, but rely on the statute," Bryan v. Horseman, 5 Esp. 81 ; or such other acknowledgments from which a court or jury might be led to believe, [260] CH. XIII.] LIMITATIONS. -236 Whether an acknowledgment of an existing debt is sufficient to take it out of the statute, or, in other words, whether it carries with it a promise to pay that debt, is a question of law for the court, when it is only a question as to the legal mean- ing and effect of the words used, for this would be a mere ques- tion of construction ; which is always a matter of law only.^ But if the question is as to what words were used, and what was the intention of the parties to be gathered from the words and acts, this is a question of fact, and it is for the jury to determine. The acknowledgment need not define the amount of the debt.^ said to the plaintiff: " I know we are owing you ; " "I am getting old, and I wish to have the -business settled ; " it was held that these expressions were insufficient to revive the debt. So, in Ventris v. Shaw, 14 N. H. 422, assumpsit on a promissory note, de- fendant, on being asked to pay the note, said : " He guessed the note was outlawed, but that would make no difference, he was willing to pay his honest debts, always." As he did not state in direct terms that he was willing to pay the note, this was held not sufficient to revive the debt. And see Laforge v. Jayne, 9 Penn. State, 410 ; Mitchell v. Sellman, 5 Md. 376 ; Butler v. Winters, 2 Swan, 91 ; Eoss v. Ross, 20 Ala. IC) ; Sherman v. Wakemau, 11 Barb. 254 ; Brainard v. Buck, 25 Vt. .573 ; Williams v. Grif- fith, 3 Exch. 335 ; Hard v. Prendergast, 14 M. & W. 741. In Deloach v. Turner, 7 Rich. 143, it was held that a slight acknowledgment, made before the statutory period is complete, is sufficient to take the case out of the statute. But, in Tompkins v. Brown, 1 Denio, 247, where' a conditional promise was made for the payment of a debt before the six years had expired, it was held that the law was the same, whether the promise or acknowledgment was made before or after the statute had ban-ed the demand. And see Dean v. Hewitt, 5 Wend. 257 ; Watkins v. Stevens, 4 Barb. 168 ; Shoemaker v. Benedict, 1 Kern. 176. 1 In Lloyd v. Maund, 2 T. B. 760, the acknowledgment was contained in a letter, and yet the question, whether the acknowledgment was sufficient, was submitted to the jury. The same course was pursued in Erost v. Bengough, 1 Bing. 266, and in Bird v. Gammon, 3 Bing. N. C. 883. But the authority of these cases was much shaken, if not entirely overthrown, by the case of Morrell v. Frith, 3 M. & W. 402, where Parke, B., said : " If I am called upon to give an opinion, I think the case of Lloyd v. Maund is not law. The construction of a doubtful instrament itself is not for the jury, although the facts by which it may be explained, are." See Clarke v. Dntcher, 9 Cowen, 674 ; Martin v. Broach, 6 Ga. 21. See 2 Parsons on Contracts, 4, 5. 2 Thus, in Dickinson i-. Hatfield, 1 Moody & B. 141, the plaintiff produced a letter from the defendant, in which he promised to pay " the balance " due from him to the plaintiff, but did not specify any particular amount. Held, that it was not necessary that the amount of the debt should be specified. And see, to the same effect, Lechmere V. Fletcher, 1 Cromp. & M. 623 ; Bird v. Gammon, 3 Bing. N. C. 883 ; Williams v. Griffith, 3 Exch. 335 ; Gardner v. M'Mahon, 3 Q. B. 561 ; Waller v. Lacy, 1 Man. & G. 54 ; Hazlebaker v. Beeves, 12 Penn. State, 264 ; Dinsmore v. Dinsmore, 21 Maine, 433 ; Davis v. Steiner, 14 Penn. State, 275. or from which it might be legally implied, that the debt has not been paid ; but in which the law can find no promise to pay, either express or implied. See Tanner v. Smart, 6 B. & C. 603, and Bell v. Morrison, 1 Pet. 351, in which this doctrine was fully established by Lord Tenterden and Justice Story. And see Sherman v. Wake- man, 11 Barb. 254 ; Eoutledge v. Kamsay, 8 A. & B. 221 ; Smith v. Thorn, 18 Q. B. 134, 10 Eng. L. & Eq. 391 ; Morgan v. Walton, 4 Penn. State, 321 ; Gilkyson v. Larue, 6 Watts & S. 213. [261 J 237* ELEMENTS OF MERCANTILE LAW. [CH. XIII. That can be done by evidence, if only the existence of the debt and the purpose of paying it are acknowledged. Still, the ac- knowledgment must be of the specific debt, or must distinctly include it ; ^ if wholly general and undefined, it is not enough.^ * A testator who provides for the payment of his debts generally, does not thereby make a new promise as to any one of them.^ If the new promise is conditional, the party relying upon it must be prepared to show that the condition has been fulfilled.* Even if it is wholly unconditional and unqualified in its terms, it is competent for the defendant to show, by the attendant cir- cumstances or other proper evidence, that it was not intended, nor understood as an acknowledgment or a promise.^ On the other hand, if the expressions in themselves are doubtful, the plaintiff may make them clear by evidence. As the acknowledgment should be voluntary, we doubt whether those made under process of law, as by a bankrupt, or by answers to interrogatories which could not be avoided, should ever have the effect of a new promise.^ 1 See B.irnard v. Bartholomew, 22 Pick. 291 ; Clark v. Dutcher, 9 Cowen, 674; Stafford c. Bryan, 3 Wend. 532 ; Arey v, Stephenson, 11 Ired. 86 ; Martin v. Broach, 6 Ga. 21. But if only one debt is shown to exist, the acknowledgment will be pre- sumed to refer to tliat." Woodbridge v. Allen, 12 Met. 470 ; Guy v. Tams, 6 Gill, 82. ^ In Roljbins v. Farley, 2 Strobh. 348, the defendant's intestate said to her attorney, " that the plaintiff was to receive compensation for his services " to her, and " that she had never paid him." Held, that such an acknowledgment was too general to remove the bar of the Statute of Limitations. And see Moore v, Hyman, 13 Ired. 272 ; Shaw V. Allen, 1 Busbee, 58 ; McBride v. Gray, id. 420 ; Harbald v. Kuntz, 16 Penn. State, 210. ^ Bloodgood V. Brucn, 4 Sandf 427 ; Canington v. Manning, 13 Ala. 611 ; Braxton V. Wood, 4 Graft. 25 ; Murray v. Mechanics Bank, 4 Edw. Ch. 567 ; Evans v. Tweedy, 1 Beav. 55 ; Walker v. Campbell, 1 Hawks, 304 ; Freake t.. Cranefeldt, 3 Mylne & C. 499. * Tanner i'. Smart, 6 B. & C. 603 ; Tompkins v. Brown, 1 Denio, 247 ; Ayton v. Bolt, 4 Bing. 105 ; Ilaydon v. Williams, 7 Bing. 163 ; Humphreys v. Jones, 14 M. & W. 1 ; Liiforge v. Jayne, 9 Penn. State, 410; Sherman v. Wakeman, 11 Barb. 254; Hill r. Kendall, 23 Vt. 528; Butterfield v. Jacobs, 15 N. H. 140. "5 Cripps V. Davis, 12 M. & W. 159. ° In Brown v. Bridges, 2 Miles, 424, where the defendant, as an insolvent debtor, had stated a claim against him in a schedule of his debts, it was held that such an acknowledgment was not sufficient to take the case out of the statute. And the court said : " An acknowledgment of a debt, to prevent the operation of the Statute of Lim- itations, must at least be consistent with a promise to pay. This is the law of Penn- sylvania. Tlie aeknowdedgment in defendant's petition for the benefit of the insolvent laws, is not of tills character; for, the very basis on -which an insolvent asks his dis- cliatgc is, that he is unable to pay his debts. Hoav this can be tortured into o promise to pay, or as being consistent with such a promise, we are at a loss to discover." And see, to the same efl'ect, Cbristy r. Flemington, 10 Penn. State, 129 ; Kennett ;;. Mil- bank, 8 Bing. 38 ; \Vellman v. Soutbarcl, 30 Maine, 425 ; Pott ;•. Clegg, 16 M. & W. 321 . But see the opposite doctrine, in Eicke v. Nokes, 1 Moody & E. 359. [•2(;2] CH. XIII.] LIMITATIONS. *238 A doctrine has prevailed, and, perhaps, has at present the weight of authority in its favor, according to which every new iteni and credit in a mutual and running account is an acknowl- edgment, by the party making it, that the account is open and unsettled, and so draws after it all preceding items as to have the same effect as a recognition of them, and a promise to pay the balance, when that should be struck. This doctrine grew up, we think, in those days when courts disliked the Statute of * Limitations, and sought opportunities, or at least favored at- tempts, to defeat it. Such is not the view of courts at present ; and we should say that the general principles now prevalent would eventually limit this doctrine to cases where the account was mutual and open, and there was evidence that the items relied upon were intended to be charged in offset, so as to have the effect of a part-payment.^ SECTION IV. OF PART-PAYMENT. A part-payment of a debt is such a recognition of it as im- plies a new promise ; ^ even if it be made in goods or chattels, ^ In a leading case upon this point, Catling v. Skoulding, 6 T. E. 189, it was held that if there be a mutaal account of any sort between the plaintiff and defendant, for an item of which credit has been given within six years, it is evidence that there is an open account between the parties, and a promise to pay the balance, which would re- move the bar of the statute. See the decision of Lord Kenyon in this case, which is, perhaps, consistent with the views then prevailing in respect to new promises and ac- knowledgments ; but it is submitted that it cannot be sustained upon principle since the decision in Tanner v. Smart, in England, and Bell v. Morrison, in this countiy. And a more distinct line is drawn in Blair v. Drew, 6 N. H. 235, where it is shown that new items in mutual accounts, within six years next before action brought, do not, of them- selves, constitute an admission of an unsettled account, extending beyond six years, nor furnish any evidence of a promise to pay a balance, so as to take the case out of the Statute of Limitations. The same view is adopted in Kentucky. Lansdale v. Bra- shear, 3 T. B. Mon. 330 ; Smith v. Dawson, 10 B. Mon. 112 ; and in Tennessee, Craig- head V. The Bank, 7 Yerg. 399. It must, however, be admitted that the main current of American decisions is still in accordance with Catlin v. Skoulding. See Abbott v. Keith, H Vt. 529; Hodge w. Manley, 25 id. 210; Cogswell v. DoUiver, 2 Mass. 217; Kimball v. Brown, 7 Wend. 322 ; Chamberlin v. Cuyler, 9 id. 126 ; Sickles v. Mather, 20 id. 72; Todd v. Todd, 15 Ala. 743; Wilson v. Calvert, 18 id. 274. This question was set at rest in England, by Lord Tenterden's Act, very soon after Tanner v. Smaj-t was decided. See Williams v. GrifiSth, 2 Cromp. M. & E. 45 ; Mills v. Fowkes, 7 Scott, 444 ; Cottam v. Partridge, 4 Scott, N. E. 819. The cases cited above must not be confounded with the cases concerning " merchants' accounts," which will be consid- ered hereafter. 2 In Whipple v. Stevens, 2 Foster, 219, the court said : " It is well settled that a par- [263] 239* ELEMENTS OP MERCANTILE LAW. [CH. XIII. if agreed to be received as payment,^ or by negotiable promis- sory note or bill.^ But it has this effect only when the payment is 'made as of a part of a debt.^ If it is made in settlement of the whole, of course it is no promise of more. And a bare pay- ment, without words or acts to indicate its character, would not be construed as carrying with it an acknowledgment that more was due, and would be paid.* If a debtor owes several debts, and pays a sum of money, he has the right of appropriating that money as he pleases. If he pays it without indicating his own appropriation, the general rule is, that the creditor who receives the money may appropri- ate it as he will.^ There is, however, this exception. If there tial payment of a debt amounts to an acknowledgment of a present subsisting debt, which the party is liable and willing to pay ; from which, in the absence of any act or declaration, on the part of the party making the payment, inconsistent with the idea of a liability and willingness to pay, a jury may and ought to infer a new promise." 1 In Hooper v. Stephens, 4 A. & E. 71, where defendant owed plaintiif for hay, and gave him, as part-payment of it, a gallon of gin, which plaintiff received as such ; heldy that such part-payment was sufficient to take the original debt out of the statute. And see Cottam v. Partridge, 4 Scott, N. R. 819 ; Hart v. Nash, 2 Cromp., M. & E. 337. ^ It was so held in Ilsley v. Jewett, 2 Met. 168; but the decision was put upon the ground that, in Massachusetts, the giving of such note or bill is prima facte evidence of payment and discharge of the debt for which it was given. A similar decision, how- ever, has been made in the recent case of Turney v. Dodwell, 3 Ellis & B. 136, 24 Eng. L. & Eq. 92, in England, where no such rule prevails. That was an action on a promissory note, by the payee against the maker. The defendant gave the plaintiff, on the 5th of May, 1843, a note for .£108 15s. In February, 1848, the defendant accepted a bill of exchange drawn on him by the plaintiff, for £30, in part-payment of the note ; and this was held sufficient to take the case out of the statute. Lord Campbell said : "In mercantile transactions, nothing is more usual than to stipulate for a payment by bills, where there is no intention of their being t.aken in .absolute satisfaction. We are satisfied that a transaction of this nature is properly described by the word " payment," and that it is clearly within the class of acknowledgments intended to be unaffected by the statute ; and we ar-e satisfied that there is no reason whatever to restrict the expres- sion in the statute to that species of payment which imports a final satisfaction." ^ Tippets V. Hiane, 1 Cromp., M. & R. 252. This was an action of assumpsit for meat, lodging, &c., furnished by plaintiff for defendant's son. At the trial, before Vaw/ham, B., the plaintiff, to take the case out of the statute, proved by one A B, that he had paid .£10 to the plaintiff, by direction of defendant, in the year 1829, but could not speak to the account on which it was paid, or give any evidence beyond the mere fact of liaving paid the money by the defendant's direction. Held, that this was not sufficient evidence of part-payment to go to the jurv. And see Arnold i;. Downing, 11 Barb. 554 ; Hodge v. Mauley, 25 Vt. 210 ; Alston v. State Bank, 4 Eng. 455 ; State Bank v. Wooddy, 5 id. 638 ; Wood v. Wylds, 6 id. 754 ; Linsell v. Bonsor, 2 Bing. N. C. 241 ; Waters v. Tompkins, 2 Cromp., M. & R. 726 ; Waugh v. Cope, 6 M. & W. 824; Wainman v. Kynman, 1 Exch. 118 ; Davies v. Edw.ards, 7 Exch. 22. * McCuUough V. Henderson, 24 Missis. 92 ; Smith v. Westmoreland, 12 Smedes & M. 663. And see cases cited in jireceding note. '> In Ayer v. Hawkins, 19 Vt. 26, it was held that a creditor, having several notes against his debtor, all of which arc barred by the Statute of Limitations, may appropri- ate a general payment of such debtor to any one of the notes, even the largest, and revive that particular note, but he cannot distribute such general payment itpon all his claims, and thus avoid the statute as to all. [264] CH. XIII.] LIMITATIONS. *240 be two or more debts, some of which are barred by the statute, and others are not barred by it, the creditor cannot appropriate the payment to a debt that is barred, for the purpose of taking it out of the statute by such part-payment.^ If a debt consists of both principal and interest, a payment specifically on account of either of these, will take the remainder of that and the whole of the other out of the statute.^ If mutual accounts are settled, and a balance struck, allthe items vhich are within the admitted * account are so many payments, and may have the effect of part- payments in taking a debt towards which they go, out of the statute.^ So, a payment for a creditor to a third party, is the same thing as a payment to the creditor.* The Tenterden Act requires that the new promise should be in writing ; but provides also, that nothing izi it shall alter, or take away, or lessen the effect of any payment of any principal or interest. This, therefore, remains a new promise as before. But does the rest of the statute apply to it, and is it necessary that the evidence of the part-payment should be in writing? The American doctrine is, that there is no such requirement, and the whole matter of part-payment, both as to evidence and as to effect, remains as before.^ 1 Mills V. Fowkea; 5 Blng. N. C. 455. 2 Bradfield v. Tupper, 7 Exch. 27, 7 Eng. L. & Eq. 541 ; Sanford v. Hayes, 19 Conn. 591; Pai-sonage Eund v. Osgood, 21 Maine, 176; Bealy v. Greenslade, 2 Cromp. & J. 61. ^ Thus, in Ashby v. James, 11 M. & W. 542, it was held that, where A has an ac- count against B, some of the items of which are more than six years old, and B has a cross account against A, and they meet and go through both accounts, and a balance is struck in A's favor, this amounts to an agreement to set oS B's claim against the earlier items of A's, out of which arises a new consideration for the payment of the balance, and takes a case out of the operation of the Statute of Limitations, notwithstanding the provisions of Lord Tenterden's Act. Alderson, B., said : " The truth is, that the going through an account, with items on both sides, and striking a balance, conveits the set- off into payments ; the going through an account, where there are items on one side only, as was the case in Smith v. Forty, 4 C. & P. 126, does not alter the situation of the parties at all, or constitute any new consideration. Here, the striking of a balance between the parties is evidence of an, agreement that the items of the defendant's account shall be set off against the earlier items of the plaintiff, leaving the case unaffected either by the Statute of Limitations or the set-off." * Worthington v. Grimsditch, 7 Q. B. 479. 5 Thus, in Williams v. Gridley, 9 Met. 482, where the payee sued the maker of a promissory note, it was held that the plaintiff, in answer to the plea of the Statute of Limitations, might introduce parol evidence to show a part-payment of the note by the defendant within six years. And see Sibley v. Lumbert, 30 Maine, 253. It is so held now in England also. Cleave v. Jones, 6 Exch. 573, overruling WilUs v. Newham, 3 Younge & J. 518. 23 [ 265 ] 241* ELEMENTS OF MEKCANTILE- LAW. [CH. XIII. SECTION V. OF THE PROMISE OF ONE OE SEVERAL JOINT DEBTORS. The question has frequently arisen, whether a new promise by one of two or more joint debtors has the effect of reviving the debt as to the others, who make no promise. If the statute be one of presumption, such an admission would prove the debt and remove the statute as to all. So it has been held.'- But the * present weight of authority and of reason, limits the effect of the new promise to him who makes it.^ He may, however, be I In Whitcomb v. Whiting, 2 Dong. 652, where the defendant and three other per- sons liad executed a joint and several promissory note, and one of the other thi'ee had paid the interest and jjart of the principal within six years, it was held that this was suf- ficient to take the case out of the statute, as to the defendant. Lord Mansfield said : " Payment by one is payment for all, the one acting virtually as agent for the rest ; and, in the same manner, an admission by one is an admission by all ; and the law raises the promise to pay when the debt is admitted to be due." This decision is based partly on the then prevalent view, that any thing said or done, which showed that a debt had not been paid, was sufficient to remove the statutory bar, and partly on the ground of an implied agency. ^ The doctrine that one joint debtor is virtually the agent of the rest, as laid down by Lord Mansfield, in the opinion quoted above, has been, Avith a few exceptions, and is now regarded as sound law in England. See Perham v. Raynal, 2 Bing. 306 ; Chan- nell V. Ditchbnrn, 5 M. & W. 494, where Parke, B., after giving a very elaborate opin- ion, said ; " The result is, that we must consider the case of Whitcomb v. Whiting as good law.'' And see Burleigh v. Stott, 8 B. & C. 36 ; Pease v. Hirst, 10 id. 122 ; Wy- att V. Hodson, 8 Bing. 309 ; Manderston v. Robertson, 4 Man. & E. 440. The principle of Whitcomb u. Whiting is limited, if not restricted, by the two following eases : Bran- don V. Wharton, 1 B. & Aid. 463 ; Atkins v. Tredgold, 2 B. & C. 23. But in the Supreme Court, of the United States, in Bell v. INIorrison, 1 Pet. 351, the authority of Whitcomb v. Whiting was repudiated. The same view is supported in Van Keuren v, Parmcleu, 2 Comst. 523. But see Bogert v. Vermilya, 10 Barb. 32 ; Dunham v. Dodge, id. 566 ; Reid v. McNaughton, 15 id. 168. In Shoemaker v. Benedict, 1 Kern. 176, it was laid that payments made by one of the joint and several makers of !\ promissory note, before an action upon it is barred by the Statute of Limitations, and within six years before suit brought, do not affect the defence of the statute as to the others. It would seem, from the decisions in these cases, that a joint debtor is not an agent, or at least such an agent, for the rest of the debtors, that he can remove the bar of the statute for them by any word or act of his own. The law is the same in Xcw Hampshire. Exeter Bank !■. Sullivan, 6 N. H. 124 ; KcUey r. Sanborn, 9 id. 46 ; Whipple v. Stevens, 2 Foster, 219. So, in Tennessee, Belote v. Wynne, 7 Yerg. 534; Muse v. Donelson, 2 Humph. 166. The following cases support the opposite A-iew : In Vermont, Joslyn V. Smith, 13 Vt. 353 ; Whcelock v. Doolittle, 18 id. 440. In Connecticut, Bound v. Latln-op, 4 Conn. 336 ; Coit v. Tracy, 8 id. 268 ; Austin v. Bostwick, 9 id. 496 ; Clark V. Sigourney, 17 id. 511. In Massachusetts, Huntj-. Bridgham, 2 Pick. 581 ; White v. Hale, 3 id. 291 ; Frye v. Barker, 4 id. 382 ; Sigoumey v. Drury, 14 id. 387. In Maine, Getchell V. Heald, 7 Greenl. 26 ; Greenleaf v. Quincy, 3 Fairf. 11 ; Pike v. Warren, 15 Maine, 390 ; Dinsmore v. Dinsmore, 21 id. 433 ; Shepley v. Waterhouse, 22 id. 497. See also the recent cases of Zent r. Heart, 8 Penn. State, 337 ; Goudy v. Gillan, 6 Rich. 28 ; Bowdre v. Hampton, id. 208 ; TiUinghast v. Nourse, 14 Ga. 641. [266] CH. XIII.] LIMITATIONS. *242 authorized to promise for the rest, and then he binds them. Thus, if A, B, and C are in partnership, and a note of theirs is more than six years old, the new promise of either of them, given while the partnership continues, binds all three, because either could give a new note binding the firm. But if the partnership has ceased, the new promise of A binds only himself, because he has no longer authority to bind the others.^ Tenter devS s Act provides that no joint contractor shall be chargeable by reason of any promise by a co-contractor. Where this clause also is adopted, this question is settled.^ ♦SECTION VI. TO WHOM THE NEW PROMISE SHOULD BE MADE. Whether the new promise must be made to the creditor him- self (or to his agent), or is insufficient if made to a third party, as by saying, " I cannot pay you, because I owe him and shall pay him first," is not settled.^ In Pennsylvania, it seems set- tled that such a promise or acknowledgment is not sufficient, and this we think the better rule.* But in New York, the old rule which makes such an acknowledgment sufficient, seems not to have passed away." And this may be true in Massachusetts,^ and some other States. 1 Bell u. Morrison, 1 Pet. 351 ; Van Keureu v. Parmelee, 2 Comst. 523. See also other cases cited supra. 2 As in Massachusetts. See Mass. Kev. Sts. c. 120, § 18; Peirce v. Tobey, 5 Met. 168 ; Balcom v. Richards, 6 Cush. 360. And in Maine. See Maine Eer. Sts. c. 146, § 24 ; Quimby v. Putnam, 28 Maine, 419. And, perhaps, in some other States. 8 Peters v. Brown, 4 Esp. 46 ; Mountstephen v. Brooke, 3 B. & Aid. 141, where de- fendants, in a deed to a third person, acknowledged that they owed a certain debt to the plaintiff, who was a stranger to the deed ; held, that this declaration to a third per- son was sufficient to take the case out bf the Statute of Limitations. See, to the same effect, Halliday v. Ward, 3 Camp. 32 ; Clark v. Hougham, 2 B. & C. 149 ; Oliver v. Gray, 1 Harris & G. 204. * In Kyle v. Wells, 1 7 Penn. State, 286, it was held that a declaration made by the defendant to a stranger to the suit or cause of action, that he owed to the plaintiff a debt " of about $800, which he intended to have settled within twelve months from that date," is not sufiBcient to take the case out of the Statute of Limitations. See, to the same effect, Farmers & Mechanics Bank v. Wilson, 10 Watts, 261 ; Morgan v. Wal- ton, 4 Penn. State, 323 ; Christy v. Flemington, 10 id. 129 ; Gilliogham v. Gillingham, 17 id. 302. 5 In Watkins v. Stevens, 4 Barb. 168, where defendant said to a third person that he s Whitnev v. Bigelow, 4 Pick. 110. [ 267 ] 243* ELEMENTS OF MERCANTILE LAW. [CH. XIII. We should say that an admission by the maker of a negotia- ble promissory note to the payee, would take the case out of the statute as to all who are parties to the note after the payee, from the peculiar nature and purpose of negotiable paper.^ But the cases are in some conflict on this point. ♦SECTION VII. OF ACCOCNTS BETWEEN MERCHANTS. An important provision of the statute is that which excepts from its operation " accounts that concern the trade of merchan- dise, between merchant and merchant." There are three requi- sites before a debt is exempted from the effect of the statute, on this ground. It must be an " account ; " it must " concern mer- chandise ; " it must be " between merchants." The first ques- tion has been one of some difficulty in England, and has been there determined by a reference to the rules of pleading ; that only being an account within the meaning of the statute, which would sustain an action of account, or an action on the case for not accounting.^ Where these rules are in force in this country, they might have the same effect ; but almost any trans- action which was between merchants, and related to the buying and selling of merchandise, and ended in a debt, would, per- haps, be here held as an " account," within the meaning of the statute.^ owed the plaintiffs $700 for goods received, it was hdd that such an acknowledgment was sufficient to restore the right of action, which had been baiTcd by the statute. Soulden v. Van Eensselaer, 9 Wend. 293 ; Bloodgood v. Bruen, 4 Sandf 427. 1 Bird V. Adams, 7 Ga. 505 ; Dean v. Hewitt, 5 Wend. 257 ; Little v. Blunt, 9 Pick. 488; Howei). Thompson, 2 Fairf. 152; Cripps v. Davis, 12 M. & W. 159; Gale v. Capern, 1 A. & E. 102. But sec p. 241, supra. 2 Inglis V. Haigh, 8 M. & W. 769 ; Cottam v. Partridge, 4 Scott, N. R. 819. A col- lection of the earlier cases may be found in Webber v. Tivill, 2 Saund. 121. 3 In Spring V. Gray, 6 Pet. 151, Marshall, C. J., after quoting the language of the statute, said : " From the association of actions on the case, a remedy given by the law for almost every claim for money, and for the redress of every breach of contract not under seal, with actions of account, which lie only in a few special cases, it may reason- ably be conceived that the legislature had in contemplation to except those actions only for which account would lie. Be this as it may, the words certainly require that the action should be founded on an account." See also, Toland u. Sprague, 12 Pet. 300; Didier v. Davison, 2 Barb. Ch. 477. [268] CH. Xm.] LIMITATIONS. *244 Formerly, none were considered as. " merchants," in England, who did not trade " beyond seas." i But the construction of this word is far more liberal there at the present time.^ We have no exact standard or definition which will determine who is a mer- chant. The word "trader" is often used in this country, and sometimes as synonymous with merchant. A wide significance * of the word, but, perhaps, not too wide, would include all of those whose business it is to buy goods and sell them again, whether by wholesale or retail. In Scotland, the phrase " trav- elling merchant " is frequently applied to a peddler ; but we do not know that it is so used here. A similar difficulty exists as to what is meant by the word " merchandise." There is here also no definil;e standard ; but we should be disposed to include in it every thing that is usually bought and sold by merchants in the way of their business, and nothing more.^ Thus, if a merchant sold another his horse or carriage, or a load of hay from his fields, or a picture from his house, we should say this debt would be barred by the statute, even' if the charge were in- cluded in an account made up otherwise of mercantile items. 1 Thus, in Sherman v. Withers, 1 Ch. Cas. 152, which was a bill in equity for an account of fourteen years' standing, it appeared that the plaintiff was an inland mer- chant, and the defendant, his factor. The defendant pleaded the Statute of Limita- tions. And "the Lord Keeper conceived the exception in the statute as to merchants' account, did not extend to this case, but only to merchants trading beyond the sea." 2 In The Mayor, &c. u. Wilks, 2 Salk. 445, Lord Holt said : " A merchant includes all sorts of traders, as well and as properly as merchant adventurers. A merchant tailor is a common term. See a review of English cases upon this point, in Thomson V. Hopper, 1 Watts & S. 469. 3 In Forbes v. Skelton, 8 Sim. 335, an account made up of money advanced by one party, and goods received from another, was not considered a mercantile account within the meaning of the statute. So it was held, in Spring v. Gray, 5 Mason, 505, 6 Pet. 151, that a special contract between ship-owners and a shipper of goods, to receive half profits, in lieu of freight, on the shipment for a foreign voyage, was not a case of " mei-- chants' accounts," within the meaning of the statute. And Marshall, C. J., said : " The case protected by the exception is not every transaction between merchant and merchant, not every account which might exist between them ; but it must concern the trade of merchandise. It is not an exemption from the act, attached to the merchant merely as a personal privilege, but an exemption which is conferred on the business, as well as on the persons between whom that business is carried on. The accouut must concern the trade of merchandise ; and this trade must be, not an ordinary traffic be- tween a merchant and any ordinary customers, but between merchant and merchant." See Watson v. Lyle, 4 Leigh, 236. In Farmers & Mechanics Bank v. Planters Bank, 10 Gill & J. 422, it was held that the exception did not apply to transactions between banking institutions. See also, Button v. Hutchinson, 1 Jur. 772 ; Smith v. Dawson, 10 B. Mon. 112; Lansdale v. Brashear, 3 T. B. Mon. 330; Patterson v. Brown, 6 id. 10; Coster v. Murray, 5 Johns. Ch. 522, 20 Johns. 576; Fox v. Fisk, 6 How. Miss. 328; Price v. Upshaw, 2 Humph. 142; Marseilles v. Kenton, 17 Penn. State, 238; Cod'man v. Eogers, 10 Pick. 118 ; Sturt v. Mellish, 2 Atk. 612 ; Blair v. Drew, 6 N. H. 235. 23* [269] 245* ELEMENTS OF MERCANTILE LAW. [CH. XIII. It has also been held that no account was exempted from the statute, although between merchants, and concerning merchan- dise, unless some item of it accrued within six years ; and then that item drew in the whole account.^ This rule or construc- tion may not have wholly disappeared.^ But, we think, the later as well as the better authority, both in England and in this country, and much the stronger reason, would negative this re- quirement, and exempt the whole of such an account, however old in all its items, from the operation of the statute.^ * SECTION VIII. OF THE OTHER STATUTORY EXCEPTIOXS. The original English statute also provides, that, if a creditor is, at the time when the cause of action accrues, a minor, or a mar- ried woman, or not of sound mind, or imprisoned, or beyond the seas, the six years do not begin to run ; and he may bring his action at any time within six years, after such disability ceases to exist. And by the 4th of Anne, c. 16, s. 19, it was provided, that, if any person, against whom there shall be a cause of action, shall, when such cause accrues, be beyond the seas, the action may be brought at any time within six years after his re- turn. These exceptions and disabilities, in both the statutes, are usually contained in our own statutes. The effect of these is, that, while the disability continues to exist, the statute does not take effect, provided the disability existed at the time the debt accrued. But it is a general rule that, if the six years begin to run, they go on without any interruption or suspension from any 1 Martin v. Heathcote, 2 Eden, 169 ; Barber v. Barber, 18 Ves. 286 ; Eoster v. Hodg- son, 19 id. 179. 2 Watson V. Lyle, 4 Leigh, 236 ; Coster v. Mun-aj^ 5 Johns. Ch. 522, 20 Johns. 576 ; Didier v. Davison, 2 Barb. Ch. 477. 3 This requirement seems to have been generally negatived in England. Sec Catling M. Skoulding, 6 T. R. 189; Robinson v. Alexander, 8 Bligh, 352;'lngUs ;•. Haigh, 8 M. & W. 769. But the case of Tatam v. Williams, 3 Hare, 347, is an exception. The weight of authority in America is the same as in England. Mandeville v. Wilson, 5 Cranch, 15 ; Bass v. Bass, 6 Pick. 362; Coalter v. Coalter, 1 Rob. Va. 79; Lansdale V. Brashear, 3 T. B. Mon. 330 ; Patterson v. Brown, 6 id. 10. [270] CH. XIII.J LIMITATIONS. *246 intervening disability .^ Thus, if a creditor be of sound mind, or a debtor be at home, when the debt accrues, and one month afterwards the creditor becomes insane, or the debtor leaves the country, nevertheless the six years go on, and, after the end of that time, no action can be commenced for the debt. Or, if the disability exists when the debt accrues, and some months after- wards ceases, so that the six years begin to run when it ceases, and afterwards the disability recurs, it does not interrupt the six years. So, too, if there be several disabilities existing at the time the debt accrues, the statute takes no effect until all have ceased.^ But if there be one or more disabilities at the begin- ning, so as to prevent the six years from running, and, before these are removed, * other disabilities occur, as soon as those existing at the beginning cease, the six years begin, although the others have not ceased.'^ In this country, a rational construction has been given to the disability of being beyond seas, and its removal ; and it is not understood to be terminated merely by a return of the debtor for a few days, if during those days he was not within reach.* If, however, the creditor knew that he had returned, or might have known it, by the exercise of reasonable care and diligence, soon enough to have profited by it, this removal of the disability brings the statute into operation, although the return was for a short time only.^ In some of our States, it is, however, 1 Coventry v. Atherton, 9 Ohio, 34 ; EufF v. Bull, 7 Harris & J. 14 ; Young v. Mackall, 4 Md. 362 ; Smith v. Hill, 1 Wilson, 134 ; Gray v. Mendez, Stra. 556 ; Pren- dergrast v. Foley, 8 Ga. 1 . 2 Jackson v. Johnson, 5 Cowen, 74 ; Dugan v. Gittings, 3 Gill, 138 ; Scott v. Had- dock, 11 Ga. 258 ; Butler v. Howe, 13 Maine, 397. ' Mercer v. Selden, 1 How. 37 ; Eager v. The Commonwealth, 4 Mass. 182 ; Dease V. Jones, 23 Missis. 133 ; Demarest v. Wynkoop, 3 Johns. Ch. 129 ; Jackson v. Wheat 18 Johns. 40 ; Doe d. Caldwell v. Thorp, 8 Ala. 253 ; Bradstreet v. Clark, 12 Wend. 602 ; Scott V. Haddock, 11 Ga. 258. * In Hysinger v. Baltzells, 3 Gill & J. 158, where defendant, a resident of another State, appeared in Baltimore, where plaintiff resided, in six months after the cause of action accrued, and " purchased other goods from the plaintiff, and remained there for two days," it was held that the statute did not begin to run, because it did not appear but that the defendant made his purchase just before he left ; so that the plaintiff had no opportunity to sue out a writ against him with effect. See White v. Bailey, 3 Mass. 271 ; Fowler v. Hunt, 10 Johns. 464 ; Randall v. Wilkins, 4 Denio, 577 ; State Bank 77. Seawell, 18 Ala. 616 ; Byrne v. Crowninshield, 1 Pick. 263 ; Howell v. Burnet, 11 Ga. 303; Alexander v. Burnet, 5 Rich. 189; Dorr v. Swartwout, 1 Blatchf. C. C. 179. 6 Fowler v. Hunt, 10 Johns. 464 ; State Bank v. Seawell, 18 Ala. 616 ; Didier v. Davison, 2 Sandf. Ch. 61. But, from the following cases, it seems that, in order to put the statute in operation, the defendant must show that the plaintiff had knowledge of his return, or constructive notice thereof. Little v. BJunt, 16 Pick. 359 ; Hill v. Bel- lows, 15 Vt. 727 ; Mazozon v. Foot, 1 Aikens, 282. [271] 247* ELEMENTS OF MERCANTILE LAW. [CH. XIII. expressly provided that, if a defendant leaves the State after the action accrues, the time of his absence shall not be taken as any part of the period within which the action must be brought. Under this clause a question has arisen, whether successive absences can be accumulated and the aggregate deducted ; but it is now quite well settled that this may be done, and that the statute is not confined to a single departure and return.^ The question has also arisen whether this clause contemplates tem- porary absences, or only such as result from a permanent change of residence. And this has been decided differently by different courts.^ * This disability applies as well where the debtor is a foreigner, residing permanently abroad,^ even if he have an agent here,* as to our own citizens who are only visiting abroad. It has been held, that if there be joint creditors, all of whom are absent when the debt accrues, and one of them returns, the six years begin as to all of them.^ And the reason is, that he may bring his action at once, and use the names of the other creditors. But it has also been held, that if several debtors are abroad, the limitation does not begin to run until all return ; ^ ' It was so decided by the Court of Appeals in New York, in tlie recent case of Cole V. Jessup, 10 How. Pr. 515, reversing the decision of tlie Supreme Court in tlie same case, in 2 Barb. 309, and overrulinf; Dorr v. Swartwout, 1 Blatchf C. C. 179. And see i)idier a. Davison, 2 Barb. Ch. 477 ; Pord v. Babcock, 2 Sandf. 518 ; Burroughs V. Bloomer, 5 Denio, 532. A similar decision has been made in New Hampshire. Gil- man V. Cutts, 3 Foster, 376. And see Smith v. The Heurs of Bond, 8 Ala. 386 ; Chenot V. Lefevre, 3 Gilman, 637. ^ In Gilman v. Cutts, supra, it was hdd that every absence from the State, whether temporary or otherwise, if it be such that tlic creditor cannot, during the time of its con- tinuance, make legal service upon the debtor, must be reckoned. And see Valand- ingham v. Huston, 4 Gilman, 125. But, in Wheeler v. Webster, 1 E. D. Smith, 1, it was field that, in order to intciTupt the running of the statute, it is not sufficient to prove that the debtor, after the cause of action accrued, from time to time departed, and was repeatedly absent from the State ; he must be shovn to have departed from and resided out of the State. 2 Thus, in Ruggles v. Keeler, 3 Johns. 261 , Kent, C. J., after speaking of the English construction of the statute, said : " The word rettim has never been construed to confine the proviso to Englishmen, who went abroad occasionally. The exception has been considered as general, and extending equally to foreigners who reside always abroad." The same construction is supported in Strithorst v. Graeme, 3 Wilson, 145, 2 W. Bl. 723 ; Lafonde v. Ruddock, 13 C. B. 813, 24 Eng. L. & Eq. 239 ; King v. Lane, 7 Misso. 241 ; Tagart v. State of Indiana, 15 id. 209 ; Estis v. Eawlins, 5 How. Miss. 258 ; Dunning v. Chamberlin, 6 Vt. 127 ; Graves i'. Weeks, 19 id. 178 ; Chomqua v. Mason, 1 Gallis. 342 ; Alexander v. Burnet, 5 Rich. 189. But see contra, Snoddy v. Cage, 5 Texas, 106 ; Moore v. Hendrick, 8 id. 253. « Wilson V. Appleton, 17 Mass. 180. 5 Perry v. Jackson, 4 T. R. 516 ; Marsteller v. M'Clean, 7 Cranch, 156 ; Henry v. Means, 2 Hill, S. C. 328 ; Riggs v. Dooley, 7 B. Mon. 236 ; Wells v. Ragland, 1 Swan, 501. But see contra, Gourdine v. Graham, 1 Brev. 329. ° Pannin v. Anderson, 7 Q. B. 811. [272] CH. XIII.] LIMITATIONS. *248 for otherwise the creditor might be obliged to bring his action against the returning party alone, and he might be insolvent ; and yet an action and judgment against him would extinguish the creditor's right of proceeding against the others. SECTION IX. WHEN THE PERIOD OP LIMITATION BEGINS. It is sometimes a question from what point of time the six years are to be counted. And the general rule is, that they begin when the action might have been commenced.^ If a credit is given, this period does not begin until the credit has expired ; ^ * if a note on time be given, not until the time has expired, in- cluding the additional three days of grace ; ^ if a bill of exchange be given, payable at sight, then the six years begin after present- ment and demand ; * but if a note be payable on demand,^ or money is payable on demand,*" then the limitation begins at once ; if there can be no action until a previous demand, the limitation 1 Emery v. Day, 1 Cromp., M. & R. 245 ; Odlin v. Greenleaf, 3 N. H. 270. 2 Thus, in Witershiem v. Lady Carlisle, 1 H. Bl. 631, it was held that where a bill of exchange is drawn, payable at a future period, for the amount of a sum of money lent by the payee to the drawer, at the time of drawing the bill, the payee may recover the money in an action for money lent, although six years have elapsed since the time when the loan was advanced ; the Statute of Limitations beginning to run only from the time when the money was to be repaid, namely, when the bill became due. See Wheatley v. Williams, 1 M. & W. 533 ; Irving v. Veitch, 3 id. 90 ; Fryer v. Eoe, 12 C. B. 437, 22 Eng. L. & Eq. 440. ^ Thus, in Pickard v. Valentine, 13 Maine, 412, an action of assumpsit was brouglit by plaintiff as indorsee against defendant as drawer of a bill of exchange, payable four months after date ; and it was held, that the Statute of Limitations did not begin to run from the day it would have fallen due by its terms, but from the last day of grace. * Holmes v. Kerrison, 2 Taunt. 323 ; Wolfe v. Whiteman, 4 Harring. 246. 5 Little 0. Blunt, 9 Pick. 488; Newman v. Kettelle, 13 Pick. 418; Wenman v. Mohawk Ins. Co. 13 Wend. 267 ; Hill v. Henry, 17 Ohio, 9 ; Norton v. EUam, 2 M. & W. 461. ^ In Coffin V. Coffin, 7 Greenl. 298, it was held that an attorney at law is liable to an action for money collected by him, in the same manner as any other agent, and without a special demand ; and the Statute of Limitations begins to run from the time he receives the money. And see Lillie v. Hoyt, 5 Hill, 395 ; Stafford v. Richardson, 15 Wend. 302 ; Hickok v. Hickok, 13 Barb. 632 ; but in Taylor v. Spear, 3 Eng. 429, and in Denton v. Embury, 5 id. 228, it was held that in an action against an agent or attorney, the cause of action does not accrue until demand, and consequently the Statute of Limitations does not begin to run until after demand. If no demand is made by the principal, in a reasonable time after notice of sale by the agent, the statute will begin to run. Lyle v. Murray, 4 Sandf. 590 ; McDonnell v. Branch Bank, 20 Ala. 313. [273] 249* ELEMENTS OF MEKCANTILE LAW. [CH. XIII. begins as soon as the demand is made ; ^ if money be payable on the happening of any event, then the limitation begins after that event has happened.^ If several successive credits are given, as, if a note is given which is to be renewed ; or if a credit is given, and then a note is to be given ; or if the credit is longer or shorter, at the purchaser's option, as, if it be agreed that a note shall be given at two or four months, — then the six years begin when the whole credit, and the longer credit has expired.^ But a credit * may be given on condition ; as, that a bill or note of a certain kind or amount, shall be given at once, or when the credit ex- pires. Then if the bill or note is not given when it should be, the creditor may at once bring his action, and the limitation begins. But we should say, that if a purchaser agreed that after a certain credit he would give a certain bill or note, the seller must demand the bill or note at the proper time, and if it be refused, he has his action at once ; but if there is a mere neglect, and not a refusal to give the bill or note, the credit does not expire until the period for which the bill or note should be made has expired also. The same reason and the same rule run through many cases in which the interests of third parties are brought into question. Thus, if a surety pays for his principal, the limitation begins as soon as he pays, and begins on each payment, if there be many, as soon as each is made ; for the surety may sue the principal at once.* If there be many sureties, and one pays at sundry times what is in the whole more than his share, he has a claim 1 Where it is understood that the principal should draw upon his agent after receiving a notice from him (and such is generally the understanding between a factor and his principal), the statute does not begin to run until after the demand is made ; Clark v. Moody, 17 Mass. 145 : Lyle v. Murray, 4 Sandf. 590 ; Topham v. Braddick, 1 Taunt. 572 ; Little v. Blunt, 9 Pick. 488. Wright i\ Hamilton, 2 Bailey, 51, shows that the statute will not begin to ruu in favor of a sheriff who has received money by an execu- tion, xmtil the money has been demanded. 2 Waters v. The Earl of Thanet, 2 Q. B. 757 ; Shutford v. Borough, Godbolt, 437 ; Fenton v. Emblors, 1 W. Bl. 353. And in Wilcox v. Plummer, 4 Pet. 172, which was an action of assumpsit to recover the amount of a loss occasioned by the neglect or un- skilful conduct of the defendant, an attorney at law, it was held that the Statute of Lim- itations began to run as soon as tlie error was committed, and not afterwards, when it was made known. So in the following cases : Battley v. Faulkner, 3 B. & Aid. 288 ; Short V. M'Carthy, id. 626 ; Brown v. Howard, 2 Brod. & B. 73 ; Granger a. George, 5 B. & C. 149 ; Howell v. Young, id. 259 ; Argall v. Bryant, 1 Sandf. 98 ; Troup v. Smith, 20 Johns. 33 ; Kerns v. Schoonmaker, 4 Ohio, 331 ; The Governor v. Gordon, 15 Ala. 72. 3 Helps V. Winterbottom, 2 B. & Ad. 431. « Davies r. Humphreys, 6 M. & W. 153; Bullock v. Campbell, 9 Gill, 182; Gilles- pie V. Creswell, 12 Gill & J. 36; Ponder v. Carter, 12 ted. 242. [274] CH. XIII.] LIMITATIONS. *250 for contribution against all his co-sureties ; and the statute does not begin to run against him from his first payment, but as soon as his payments, whether one or more, amount to more than his share.i If one lends his note, the limitation against the bor- rower begins when the lender is obliged to pay the note,^ and generally, if there be any promise of indemnification, for the breach of which an action may be brought, the limitation against this action begins not until there is that actual injury or loss for which the indemnity is promised ; ^ and if the prom- isor had a certain time in which to give the indemnity, not until that time has expired. So, if one sells property which is partly his own and partly another's, the other is entitled to his share of the price, but not until payment is made by the buyer to the seller ; and therefore the limitation does not begin until then.* Even if the seller takes * a note, the limitation does not begin from the maturity of the note, but from its payment, because only then is he liable for the share of the other.^ But the seller may guaranty the note, or otherwise become bound to pay the other owner his share, without reference to the payment to him ; and then the limitation begins as soon as he should pay. SECTION X. THAT THE STATUTE DOES NOT AFFECT COLLATEEAL SECUKITY. It is important to remember that the Statute of Limitations does not avoid or cancel the debt, but only provides that " no action shall be maintained upon it " after a given time. But it does not follow that no right can be sustained by the debt, al- 1 Davies v. Humphrey, supra. ''^ Reynolds v. Doyle, 2 Scott, N. E. 45. 3 Huntley v. Sanderson, I Cromp. & M. 467 ; Collinge v. Heywood, 9 A. & E. 633 ; Gillespie v. Creswell, 12 Gill & J. 36; Sims v. Gondelock, 6 Eich. 100; Ponder v. Carter, 12 Ired. 242. * As in Miller v. Miller, 7 Pick. 133, where defendant, a co-tenant with the plaintiff, sold some trees growing on the land, and received payment. It was hdd that the Statute of Limitations began to ran from the time the defendant received the payment, and not from the time of the gale. 5 See Miller v. Miller, supra. [275] 250- ELEMENTS OF MERCANTILE LAW. [CH. XIIL though the debt cannot be sued.^ Thus, if one who holds a common note of hand, on which there is a mortgage or pledge of real or of personal property, without valid excuse neglects to sue the note for more than six years, he can never bring an action upon it ; but his pledge or mortgage is as valid and effectual as it was before ; and as far as it goes, his debt is secure ; and for the purpose of realizing this security, by fore- closing a mortgage, for example, he may have whatever process is necessary on the note itself. 1 In Higgins v. Scott, 2 B. & AH. 413, an attorney for a plaintiff had obtained a, judgment, and the defendant was aftenvards discharged under the Lord's Act, but at a subsequent period & fi.fa. issued against his goods, upon which the sheriff levied the damages and costs, it was held, that the attorney (though he had taken no step in the cause, or to recover his bill of costs, within six years) had still a lien on the judgment for his bill of costs, and the Court directed the sheriff to pay him the amount out of the proceeds of the goods. And see Spears v. Hartley, 3 Esp. 81 ; Mavor o, Pyne, 2 G. & P. 91 ; Williams v. Jones, 13 East, 450 ; Quantock v. England, 5 Bun-. 2628. [276] CH. XIV.] INTEREST AND USURY. 251 CHAPTER XIV. OF INTEREST AOT) USURY. SECTION I. WHAT INTEREST IS, AND WHEN IT IS DUE. Interest means a payment of money for the use of money. In most civilized countries the law regulates this ; that is, it de- clares how much money may be paid or received for the use of money ; and this is called legal interest ; and if more is paid or agreed to be paid than is thus allowed, it is called usurious in- terest. By interest, is commonly meant legal interest ; and by usury, usurious interest. Interest may be due, and may be demanded by a creditor, on either of two grounds. One, a bargain to that effect ; the other, by way of damages for withholding money that is due. Indeed, it may be considered as now the settled rule, that wherever money is withheld which is certainly due, the debtor is to be re- garded as having promised legal interest for the delay.^ And upon this implication, as on most others, the usage of trade,^ and the customary course of dealings between the parties,^ would have great influence. 1 Dodge V. Perkins, 9 Pick. 368 ; Selleck v. Frencli, 1 Conn. 32 ; Reid v. Rensselaer Glass Factory, 3 Cowen, 393 ; and see 1 American Leading Cases, 341, where, in a note to Selleck v. French, the whole subject is ably considered. 2 See Meech v. Smith, 7 Wend. 315. In this case, A sued B upon an account for the transportation of a quantity of flour from Rochester to New York, and claimed interest upon the same. He offered to prove that it was the uniform custom of all those engaged in the same business to charge interest upon their accounts ; and that the defendant knew this. This evidence having been rejected in the court below, it was held, that such usage being proved, the plaintiff was entitled to interest, and that the evidence should have been received ; see also, Koous v. Miller, 3 Watts & S. 271. 3 Esterly v. Cole, 1 Barb. 235, 3 Comst. 502. And where it is known to one party 24 [ 277 ] 252* ELEMENTS OF MERCANTILE LAW. [CH. XIV. In genera], we may say that interest is allowed by law as fol- * lows : on a debt due by judgment of court, from the rendition of judgment ; ' and on an account that has been liquidated, from the day of the liquidation ; ^ for goods sold, from the time of the sale, if there be no credit, and if there be, then from the day when the credit expires ; ^ for rent, from the time that it is due,* and this even if the rent is payable otherwise than in money, but is not so paid ; ^ for money paid for another,^ or lent to another,''' from the payment or loan.^ that it is the uniform custom of the other to charge interest upon articles sold or mann- facturcd by him after a certain time, the latter will be allowed to charge interest accord- ingly. McAllister v. Reab, 4 Wend. 483. 1 Gwinn u. Whitaker, 1 Han-is & J. 754 ; Prescott v. Parker, 4 Mass. 170. And the rule applies where the original cause of action did not caiTy interest. Klock v. Rob- inson, 22 Wend. 157; Marsliall v. Dudley, 4 J. J. Marsh. 244. And where partial payments liave been made upon the judgment, interest is to be cast in the same man- ner as upon a note of hand, upon which partial payments have been made. Hodgdon r. Hodgdon, 2 N. H. 169. '•^ Elliott V. Minott, 2 McCord, 125 ; Liotard v. Graves, 3 Gaines, 226; Walden v. Sherburne, 15 Johns. 409; Blaney v. Hendrick, 3 Wilson, 205. But, upon an unset- tled claim, interest will only be allowed from the time of demand ; and if no demand Ijc proved, tlien from the commencement of the suit. Barnard v. Bartholomew, 22 Pick. 291 ; Gammell v. Skinner, 2 Gallis. 45; Mcllvaine v. Wilkins, 12 N. H. 474; Goff V. Rchobotli, 2 Gush. 475. '"^ Porter ;;. Jlunger, 22 Yt. 191; Esterly n. Cole, 3 Comst. 502; Bate v. Burr, 4 Harring. 130. •* Donnison v. Lee, 6 Gill & J. 383 ; Glark v. Barlow, 4 Johns. 183 ; Elkin v. Moore, 6 B. Mon. 462 ; Buck v. Fisher, 4 Whait. 516. 6 Van Rensselaer v. Jcwctt, 5 Denio, 135, 2 Gomst. 135; Lush v. Druse, 4 Wend. 313; Van Rensselaer n. Jones, 2 Barb. 643 ; Livingston t'. Miller, 1 Kern. 80. Bat see Philips v. Williams, 5 Gratt. 259. In the recent case of Dana v. Fiedler, 1 E. D. Smith, 463, 2 Kern. 40, it was held that in an action on a contract to recover damages for the non-delivery of mcicliandisc, the plaintiff is entitled to recover the difference Ijetween the contract price and the market value of the article at the time and place specified for its delivery, with interest thereon ; and it is not Avithin the discretion of the jury to allow interest or not ; the plaintiff is Icgallv entitled to interest. Sims V. Willing, 8 S. & R. 103; Gibbs t>.' Bryant, 1 Pick. 118 ; Goodloe v. Clay, 6 B. Mon. 236; Rcid v. Rensselaer Glass Factory," 3 Gowen, 393, 5 id. 589. ' Liotard u. Graves, 3 Caines, 226 ; Dilworth v. Sinderling, 1 Binn. 488. And whore one has wrongfully received or retained the money of another, interest is charge- able from the time of such unlawful receipt or detention. Wood v. Eobbins, 11 Mass. 504; Bedell ;>. Jauncy, 4 Gilman, 193; Duly v. Perkins, 9 Pick. 368; Hudson v. Tenny, 6 N. H. 455; People v. Gasherie, 9 Johns. 71 ; Crane v. Dygert, 4 Wend. 675. But where an account at a bank was overdrawn by accident, and there was no fraud in obtaining the money and no fault in retaining it, it was Iield that interest was not recoverable, ttntil after a demand made, or some default in payment. Hubbard v. Charlestown Branch R. R. Co. 11 Met. 124. So where money had been paid by mis- take, it was held that interest could only be allowed from a demand and refusal. Simons V. Walter, 1 MeCord, 97. Sec also, King ;•. Diehl, 9 S. & R. 409. ' Interest is not generally recoverable upon claims for unliquidated damages, nor in actions founded ou tort. Holmes v. Misroon, 3 Brev. 209 ; Hull v. Caldwell, 6 J. J. Marsh. 208. But although interest, eo nomine, is not allowed in actions of tliis sort, jm'ies are sometimes at liberty to consider it in estimating the damages. See Suydam V. Jenkins, 3 Sandf 614; Hyde v. Stone, 7 AVend. 354; Bcals r. Guernsey, 8 Johns. 446 ; Kennedy v. Whitwell, 4 Pick. 466 ; Rowley v. Gibbs, 14 Johns. 385; Ancrum v. Slone, 2 Speers, 594 ; Dox v. Dey, 3 Wend. 356 ; Arnott r. Redfern, 3 Bing. 353. [278] CH. XIV.] INTEREST AND USURY. *253 It sometimes happens that money is due, but not now paya- ble; and then the interest does not begin until the money is * payable.^ As if a note be on demand, the money is always due, but is not payable until demand ; and therefore is not on interest until demand.^ But a note payable at a certain time, or after a certain period, carries interest whether it be demanded or not.^ SECTION II. OF INTEREST AND USURY. The laws which regulate interest and prohibit usury are very various, and are not perhaps precisely the same in any two of our States. Formerly, usury was looked upon as so great an offence, that the whole debt was forfeited thereby. The law now, however, is — generally, at least — much more lenient. The theory that money is like any merchandise, worth what it will bring and no more, and that its value should be left to fix itself in a free market, is certainly gaining ground. Already there are continual efforts to change the statutes of usury, so that parties may make any bargain for the use of money which suits them ; but when they make no bargain, the law shall say what is legal interest. Azid generally, the forfeiture is now much less than the whole debt. In our notes we state the vari- ous rules in our States, as nearly as we can ascertain them.* 1 As in Henderson v. Blanchard, 4 La. Ann. 23, where A purchased land of B, who acted as the agent of C, and paid a part of the purchase-money down, and was to pay the balance as soon as the sale should be approved by C ; it was held that, inasmuch as this balance was not payable until notice was given to A of C's approval of the sale, interest could only be recovered from the date of such notice. 2 Nelson v. Cartmel, 6 Dana, 7 ; Jacobs v. Adams, 1 Dall. 52; Hunt v. Nevers, 15 Pick. 500 ; Breyfogle v. Beckley, 16 S. & K. 264. 3 See Jacobs v. Adams, supra; Byles on Bills, 242, and cases there cited. * In Maine, the excess above the legal rate of interest, six per cent., is not recovera- ble, and if paid, may be recovered back at any time within a year. Rev. Stat, of Maine, c. 69, ^ 2, 5, 8. In New Hampshire, the legal rate of interest being six per cent., the party taking the usury is subjected to a penalty of three times the amount of the usury taken, to be deducted from the debt. Kev. Stat, of N. H. c. 190,^ § 3. In Vermont, lawful interest only (six per cent.) is recoverable, and a party paying more than legal interest may recover it back. Comp. Stat, of Vt. c. 76, § 4. Seven per cent, however, may bo charged upon railway bonds. In Massachusetts, a party re- ceiving more than legal interest, six per cent., forfeits three times the amount of the unlawful interest taken. And where a party has paid more than legal interest, he may recover of the person receiving it three times the amount of the unlawful interest. [279] 254 ELEMENTS OF MERCANTILE LA"VV. [CH. XIV. There is no especial form or expression necessary to consti- tute a usurious bargain. It is enough for this purpose ^ if there Gen. Stats. Mass. c. 53, § 4, 5. In Khode Island, upon an usurious contract, legal interest only is recoverable ; and where more than legal interest, six per cent., has been paid, it may be recoyerod back. Public Laws of R. I. p. 286. In Con- necticut, upon usurious contracts, the legal rate of interest being six per cent., the whole interest is forfeited. Pub. Acts of Conn. (1849), c. 46, In New York, all usu- rious contracts are void, and where more than the legal rate of interest, seven per cent., has been paid, it may be recovered back. Rev. Stat, of N. Y., Pt. 2, c. 4, tit. 3. In New Jersey, the legal rate of interest being six per cent., usury avoids the whole con- ti-act. Statutes of N. J. Title 28, e. 1. However, in the township of Hoboken and in Jersey City, seven per cent, may be charged. In Pennsylvania, the party taking the usury forfeits the amount of the money or other thing lent, one half to the State, the other to the party suing for the same. The legal rate of interest is six per cent. Laws of Penn. e. 34, § 2. It has been decided under this act that the contract itself is not void ; and a party is entitled to recover the sum actually lent, together with lawful in- terest ; otherwise the State might be deprived of its share of the penalty by the bor- rower's refusing to enforce the statute. Wycoff v. Longhead, 2 Dall. 92 ; Tm-ner v. Calvert, 12 S. & R. 46. In Delaware, the party taking the usury forfeits the amount of the whole debt, one half to the State, the other to the informer. The legal rate is six per cent. Laws of Delaware, p. 314. In Maryland, the excess paid above the leg.al rate of interest, six per cent., is recoverable back. Statutes of Maryland, c. 69. In Virginia, the party taking more than the legal rate of interest, six per cent., forfeits the whole debt. Laws of Va. 374. In North Carolina, the taking of unlawful interest renders tlie whole contract void. The legal rate is six per cent. Rev. Statutes of N. C. e. 117. In South Carolina, the party taking the usury forfeits the whole interest. The legal rate is six per cent. Stats, of S. C. p. 409. In Georgia, where the legal rate of interest is seven per cent., by the taking of usury the party forfeits the whole in- terest. Prince's Laws of Ga. p. 295. In Alabama, the interest only is forfeited where usury is taken. The legal rate is eight per cent. In Arkansas, the legal rate is six per cent., and the taking of usury avoids the contract ; but parties may agree in writing for ten per cent, interest. Stats, of Ark. c. 90, § 2. In Florida, usury avoids the contract. The legal rate is six per cent. Statutes of Florida, c. 661. In Illinois, in all actions brouglit upon usurious contracts, the defendant shall recover his costs, and the plaintiff shall forfeit three times tlic amount of the whole interest. And a party paying more than the legal rate of interest, si.^ per cent., may recover of the pax-ty receiving the same, three times the amount so p.aid. But banks may charge seven per cent., and in- dividuals may make special contracts for ten per cent. Rev. Stats, of 111. c. 54. In Indiana, the taking of usury causes a forfeiture of five times the amount of the whole interest. Si.x per cent, is the legal rate. Rev. Stats, of Ind. Art. 3, ^ 29, 30. In Iowa, where the legal rate of interest is six per cent., the taking of usury forfeits the whole interest, but ten per cent, is allowed on special contracts. Code of Iowa. In Kentucky, usury subjects the party to a forfeiture of the whole interest. The legal rate is six per cent. Stats, of Ky. vol. 2, p. 857. In Louisiiina, the legal rate being five per cent., usury causes a forfeiture of the whole interest ; but eight per cent, may be agrecil upon by the parties. See Civil Code of La. In jlicliigan, seven per cent, is the legal rate of interest. Ten per cent, may be charged upon special contracts. There is no penalty for taking usury. In Mississiiqii, the legal rate is six ]icr cent., and the receipt of usury forfeits the wliole interest, llcv. Stats, of Miss. c. "4. Eight per cent., however, may be charged on special contraits. In Missouri, the legal rate is six pur cent., and the receipt of usury forfeits the whole interest. Rev. Stats, of Missouri, c. 88. In Ohio, whore the legal rate is six per cent., the receipt of usury causes a for- feiture of the whole interest ; but eight per cent, is chargeable upon special contracts. Rev. Stats, of Ohio, c. 60. In Tennessee, six per cent, is the legal rate, and an excess avoiils the wliole interest. Statutes of Tcnn. c. 50. In Texas, the taking of usiuy avoids tlie whole interest. The legal rate is eight per cent., but on special contracts twelve per cent, is chargeable. In Wisconsin, the legal rate is seven per cent., but special contracts may be made for twelve per cent. Rev. Stats, of Wis. c. 45. In California, the legal rate is "ton per cent,, and there is no penalty for taking usury. 1 Burton's case, 5 Rep. 69 ; Symonds v. Coekerill, Noy, 151 ;' Marsh v. Martindale, [280] CH. XIV.J INTEREST AND USURY. *255 be a * substantial payment or promise of payment, of more than the law allows, either for the use of money ]ent,i or for the for- bearance of money due and payable.^ One thing, however, is certain : there must be a usurious intention, or there is no usury .^ That is, if one miscalculates, and so receives a prom- ise for more than legal interest, the error may be corrected, the excess waived, and the whole legal interest claimed.^ But if one makes a bargain for more than legal interest, believing that he has a right to make such a bargain, or that the law gives him all that he claims, this is a mistake of law, and does not save the party from the effect of usury .^ 3 B. & P. 160. In Richards v. Brown, Cowp. 776, Lord Mansfield said : " The ques- tion is, what was the substance of the transaction, and the true intent and meaning of the parties 1 For they alone are to govern, and not the words used." See also, the opinion of Marshall, C. J., in Scott v. Lloyd, 9 Pet. 446 ; Tate v. WeUings, 3 T. R. 531 ; Chesterfield v. Janssen, 1 Atk. 340 ; Lawley v. Hooper, 3 Atk. 278 ; Mansfield v. Ogle, 24 Law J., n. s., Ch. 450, 31 Eng. L. & Eq. 450; Hammett v. Yea, 1 B. & P. 151 ; Douglass v. McChesney, 2 Rand. 109; Andrews v. Pond, 13 Pet. 65; Tyson v. Rickard, 3 Harris & J. 109 ; Bank of XJ. S. v. Owens, 2 Pet. 536 ; Seymour v. Strong, 4 Hill, 255 ; Shober v. Hauser, 4 Dev. & B. 91 ; Clarkson v. Garland, 1 Leigh, 147 ; Steptoe V. Harvey, 7 Leigh, 501 ; Drewu. Power, 1 Sch. & L. 182 ; Dowdall v. Lenox, 2 Edw. Ch. 267 ; Brown v. Waters, 2 Md. Ch. 201 ; Wright v. McAlexander, 11 Ala. 236 ; Williams v. Williams, 3 Green, N. J. 255 ; Pratt v. Adams, 7 Paige, 616. '■ Thus, where a purchaser, at the time of the sale, reserved to himself the right of returning the thing purchased, and then compelling the vendor to repay the considera- tion with more than lawful interest, it was hdd, that the whole contract was usurious. Delano v. Rood, 1 Gilman, 690. And see cases cited in preceding note. ^ The following cases hold that a contract for the payment of illegal interest for the forbearance of an existing debt, or the actual payment of money for such forbearance, constitutes usury. Craig v. Hewitt, 7 B. Mon. 475 ; Young v. Miller, 1 id. 540 ; Par- ker V. Ramsbottom, 5 Dowl. & R. 138 ; Evans v. Negley, 13 S. & R. 218 ; Hancock v. Hodgson, 3 Scam. 333; Carlis v. M'Laughhn, 1 D. Chip. 112; Seneca County Bank u. Schermerhorn, 1 Denio, 135; Gray ti. Belden, 3 Fla. 110. 2 In 1 Freem. 253, North, C. J., said : "If a scrivener, in making a mortgage, &c., do through mistake make the money payable sooner than it ought to be, or reserve more interest than ought to be, this will not make it void within the statute, because there was no corrupt agreement." And see, also, Marvine v. Hymers, 2 Kern. 223 ; Gibson v. Stearns, 3 N. H. 185; Livingston v. Bird, 1 Root, 303; Lloyd v. Scott, 4 Pet. 224; Nevison v. Whitley, Cro. Car. 501 ; Buckley v. Guildbank, Cro. Jac. 678; Doe d. Metcalf v. Brown, Holt, N. P. 295. * Marvine v. Hymers, 2 Kern. 223 ; Glassfurd v. Laing, 1 Camp. 149 ; Childers v. Deane, 4 Rand. 406. 5 Thus, in Maine Bank v. Butts, 9 Mass. 49, where the defendant agreed to pay the plaintiffs more than the legal rate of interest, but the excess was owing to the mode of computation adopted by the plaintiffs, and which was usual among banks, Sewall, J., said : " It is probable that in this case there was no intentional deviation on the part of the bank ; but a mistake of their right. This, however, is a consideration which must not influence our decision. The mistake was not involuntary, as a miscalculation might be considered, where an intention of conforming to the legal rule of interest was proved, but a voluntary departure from the rate. An excess of interest was intention- ally taken, upon a mistaken supposition that banks were privileged in this respect to a certain extent. This was, therefore, in the sense of the law, a corrupt agreement ; for ignorance of the law will not excuse." The question has been much discussed whether the use of tables calculated on the ■ 24* [281 J 256 ELEMENTS OF MERCANTILE LAW. [CH. XIV. It is also settled, that only the contract which is itself usurious can be affected by the usury.^ If by one contract, or by one completed transaction, as the payment of a debt for another, a party acquires a valid claim for a certain amount, and lawful interest, and then by a new contract, as a new note for instance, the debtor agrees to pay him usurious interest, this new note, it has been held, will be affected by the usury, but the original claim will not be.^ So, if a borrower promises to pay a certain sum, and then more than interest, as a penalty if he does not pay the first sum, this is not usurious ; first, becaiise by paying the first sum he can escape the penalty ; and secondly, because all penal- ties are reducible by the court to the sum originally due, and interest.^ So, if a debtor requests time, and promise to pay for supposition that a year consists of 360 days, is usurious. In New York, it is held that it is. See New York Firemen Ins. Co. v. Ely, 2 Cowen, 678; Utica Ins. Co. !•. Till- man, 1 Wend. 555 ; Bank of Utiea v. Wagar, 8 Cowen, 398. But in Massachusetts and some other States, it is held that the use of such tables does not render the trans- action usurious. See Agricultural Bank v. Bissell, 12 Pick. 586; Bank of St. Albans V. Scott, 1 Vt. 426 ; Duncan v. Maryland Savings Institution, 10 Gill & J. 299 ; Du- vall V. Farmers Bank, 7 Gill & J. 44 ; Planters Bank v. Snodgrass, 4 How. Miss. 573 ; Lyon V. State Bank, 1 Stew. 442 ; State Bank v. Cowan, 8 Leigh, 253. We think this latter the better opinion. 1 Anonymous, 1 Bulst. 17. In this case, the defendant borrowed £60 of the plaintiff, for one year, at the legal rate of interest. Several days before the end of the year, he paid the plaintiff the interest for the whole year, but failed to pay the principal when it became due ; to recover which the present action was brought. The defendant set up the defence of usury, contending that the plaintiff had taken above ten pounds in the hundred, because he received his interest within the year. But it was resolved that this was no usury. And Williams, J., said : " AVhere the first contract is not usu- rious, this shall never be made usury within the statute by matter ex post facto ; as if one contract with another to borrow £100 for a year, and to give him £10 for interest at the end of the year ; if he pays the interest within the year, this is not usury within the statute to avoid the obligation, or to give a forfeiture of the money within the statute, because this contract was not usurious at the beginning." And in FeiTall v. Shaen, 1 Saund. 294, which was debt upon a bond, to which the defendant pleaded that, after the making of the bond, the plaintiff had received more than the legal rate of interest, and the plaintiff demurred, the court adjudged for the plaintiff. See also, Nichols v. Lee, 3 Anst. 940, where to debt upon a bond the defendant pleaded the subsequent receipt of usury. And per MucDonald, C. B. : " There is nothing more settled than this point. To avoid a security as usurious, you must show that the agreement was illegal fi'om its origin." And the following cases will be found to establish the same doctrine : Radley V. Manning, 3 Kehlc, 142 ; Parr v. Eliason, 1 East, 92 ; Ballard v. Oddey, supra ; Rex V. Allen, T. Eaym. 196 ; Parker v. Earasbottom, 3 B. & C. 257 ; Gray v. Fowler, 1 H. Bl. 462; Phillips v. Cockayne, 3 Camp. 119; Daniel v. Cartony, 1 Esp. 274 ; Bush V. Livingston, 2 Caines Cas. 66 ; Nichols v. Fearson, 7 Pet. 103 ; Pollard v. Bay- lors, 6 Munf. 433 ; Merrils v. Law, 9 Cowen, 65 ; Rice v. Welling, 5 Wend. 597 ; Crane v. Hubbel, 7 Paige, 417 ; Brown v. Dewey, 1 Sandf. Ch. 56 ; Gaither v. F. & M. Bank, 1 Pet. 43 ; Gardner v. Flagg, 8 Mass. 101 ; EdgcU o. Stanford, 6 Vt. 551 ; Sloan V. Sommcrs, 2 Green, N. J. 509 ; Indianapolis Ins. Co. v. Brown, 6 Blackf 378 ; Collier v. Nevill, 3 Dev. 32 ; Vareck o. Crane, 3 Green, Ch. 128 ; Brown v. Toells, 5 Rand. 543 ; Abrahams v. Bunn, 4 Burr. 2253. - Hughes V. Wheeler, 8 Cowen, 77 ; Johnson v. Johnson, 1 1 Mass. 359 ; Edgell v. Stanford, supra. ^ In Burton's case, 5 Rep. 69, where a rent of £20 was granted in consideration of [282] CH. XIV.J INTEREST AND USURY. 257 the forbearance legal interest, and as much more as the creditor shall be obliged to pay for the same money, this is not a usmious contract.! And even if usurious interest be actually taken, this, although very strong evidence of an original usurious bargain, is not conclusive, but may be rebutted by adequate proof or ex- planation.2 When a statute provides that a usurious contract is wholly void, such a contract cannot become good afterwards ; and there- fore a note which is usurious, if therefore void in its inception, is not valid in the hands of an innocent indorsee.^ But if a note, or any securities for a usurious bargain, be delivered up by the creditor and cancelled, and the debtor thereupon promises to pay the original debt and lawful interest, this promise is valid.* £100 lent, and the first payment was to be made more than a year and a quarter after making the grant, and there was a condition in tlio deed that the rent should cease if the grantor should repay the £100 in twelve months, it was hdd that the transaction was not usurious, because it was at the election of the grantor to repay the £100, and thus defeat the rent. And in Floyer v. Edwards, Lofft, 596, Lord Mansjield said : " An actual borrowing of money, with a penalty on forbearance, is no usury, if the borrower can discharge himself within the time." And in Shuck o. Wight, 1 Greene, Iowa, 128, it was held that a note payable two years after date, to bear interest at fifty per cent, after it was due until paid, was not usurious. See also, Vin. Abr. Usury (C.) ; Roberts v. Trenayne, Cro. Jac. 507 ; Garret v. Foot, Comb. 133 ; Groves v. Graves, 1 Wash. Va. 1 ; Winslow v. Dawson, 1 Wash. Va. 118 ; Cutler v. How, 8 Mass. 257 ; PoUard v. Baylors, 6 Munf. 483 ; Brock v. Thompson, 1 Bailey, 322 ; Campbell v. Sliields, 6 Leigh, 517 ; Gambril v. Kose, 8 Blackf 140; Long v. Storie, 9 Hare, 142, 10 Eng. L. & Eq. 182 ; Lawrence v. Cowles, 13 111. 577 ; Moore v. Hylton, 1 Dev. Eq. 429 ; Call v. Scott, 4 Call, 409 ; Brockway v. Clark, 6 Ohio, 45. 1 Kimball v. Proprietors of the Boston Athena^um, 3 Gray, 225. The principal ground of the decision was, that the gist of all the usury laws from 1641 to 1846, is the taking of unlawful profits, and here there is no taking of any profit by the creditor, wlio is, in fact, tlie agent of the debtor for raising the money. ^ Thus, in Eussil v. Brookes, 2 C. &P. 318, which was an action of debt upon abond for the payment of money with bl. per cent, interest, it was held that proof that the obligee had received interest on the bond at 1^1. per cent., would not avoid the bond, unless the jury were satisfied that it was agreed at or before the execution of the bond, that more than U. per cent, should be paid. And see New York Firemen Ins. Co. v. Ely, 2 Cowen, 705 ; Hammond v. Smith, 17 Vt. 231 ; Cummins v. Wire, 2 Halst. Ch. 73 ; Varick v. Crane, 3 Green, Ch. 128 ; Quarles v. Brannon, 5 Strobh. 151. 2 Thus, in Lowe v. Waller, Doug. 736, where the plaintiff was the indorsee of a bill of exchange originally made upon a usurious contract, although he received it for a valuable consideration, and was entirely ignorant of its vice, the Court of King's Bench, after great consideration, hdd that, inasmuch as the statute made all usmious contracts void, the plaintiff could not recover. See also, Ackland v. Pearce, 2 Camp. 599 ; Wil- kie V. Eoosevelt, 3 Johns. Cas. 66 ; Shober v. Hauser, 4 Dev. & B. 91 ; Chadbourn v. Watts, 10 Mass. 121 ; Hackley v. Sprague, 10 Wend. 113 ; Lloyd v. Scott, 4 Pet. 228 ; Bridge v. Hubbard, 15 Mass. 96; Faris v. King, 1 Stew. 255 ; Payne v. Trezevant, 2 Bay, 23 ; Gaillard v. Le Seigneur, 1 McMuUan, 225 ; Townsend v. Bush, 1 Conn. 260. But it is otherwise, if the statute does not declare the contract void on account of the usury. Young v. Berkley, 2 N. H. 410 ; McGill v. Ware, 4 Scam. 21 ; Tucker v. Wilamouicz, 3 Eng. Ark. 157 ; Creed' v. Stevens, 4 Whart. 223 ; Turner v. Calvert, 12 S. & K. 46 ; Fenno v. Sayre, 3 Ala. 458 ; per Story, J., in Fleckner v. IT. S. Bank, 8 Wheat. 354. * Thus, in Barnes v. Hedley, 2 Taunt. 184, where the parties had made and acted [283] 258* ELEMENTS OP MERCANTILE LAW. [CH. XIV. New securities for old ones which are tainted with usury, are equally void with the old ones, or subject to the same defence. ^ * Not so, however, if the usurious part of the original securities be expunged, and not included in the new ; ^ or if the new ones are given to third parties, who are wholly innocent of the original usurious transaction.^ And if a debtor suffer his usurious debt upon a usurious agreement, but had afterwards stated an account, and agreed upon the snm that would be due for the principal with legal interest, after deducting all that had l>cen paid for usurious interest, and a new promise v/as made to pay that sum, it was held that such promise was free from the original usury, and was valid in law. See Wicks V. Gogerley, 1 Ryan & M. 123. And see infra, n. 2. ' In Tuthill V. Davis, 20 Johns. 285, where a new note, without any new considera- tion, was given to take up a note tainted with usury, which was in the hands of the original party to the usurious contract, it was held that the last note was tainted with the usury of the first. And in Walker v. Bank of Washington, 3 How. 62, Wayne, J., said : " The mere change of securities for the same usurious loan, to the same party who received the usury, or to a person liaving notice of the usury, does not purge the origi- nal illegal consideration, so as to give a right of action on the new security. Every subsccjuent security given for a loan originally usurious, however remote or often re- newed, is void." See also, Preston v. Jackson, 2 Stark. 237 ; Pickering v. Banks, For- rest, 72 ; Chapman v. Black, 2 B. & Aid. 589 ; Bridge v. Hubbard, 15 Mass. 96 ; Simp- son I'. PuUenwider, 12 Ired. 338 ; Hazard v. Smith, 21 Vt. 123 ; Jackson v. Jones, 13 Ala. 121 ; Torrcy v. Grant, 10 Smedes & M. 89 ; Lowell v. Johnson, U Maine, 240 ; Warren v. Crabtrce, 1 Greeul. 167 ; Wales v. Webb, 5 Conn. 154; Botsfordi'. Sanford, 2 Conn. 276 ; Scott v. Lems, id. 135 ; Moncure v. Dermott, 13 Pet. 345 ; Steele i'. Wliipple, 21 Wend. 103; Jackson v. Packard, 6 Wend. 415; Eeed u. Smith, 9 Cowen, 647 ; Powell v. Waters, 8 Cowen, 685 ; Miirsh v. Martindale, 3 B. & P. 154 ; Edwards V. Skirving, 1 Brev. 548. 2 See Wright v. Wheeler, 1 Camp. 165, n. In this case, it appeared that the plain- tiff had, in 1 791, lent the defendant £1,000, for the secui-ity of which, with lawful interest, a bond was given, and the defendant also agreed to give the plaintiff a salary of £50 a year, as a clerk in his brewery. It was not intended that the plaintiff should perform any service for the defendant there, but the salary was a mere shift, to give the plaintiff more than lawful interest for his money. In 1793, one year's salai-y having been paid, the parties agreed that it should be deducted from the principal, the deed securing the salary cancelled, and a fresh bond taken for the remaining principal, with 5 per cent, interest ; and on this bond the present action was brought. Lawrence, J., said : " The act of Parliament only makes void contracts whereby more than 5 per cent, is secured. The original contract between these parties was certainly usurious, and no action could have been maintained on the first bond ; but there was nothing illegal in the last bond ; it was not made to assure the performance of the first contract, nor does it secure more than 5 per cent, interest to the plaintiff. The parties saw they had before done wrong ; they rectified the error they had committed, and substituted for an illegal contract one that was perfectly fair and legal. I see no objection to their cloing that, and therefore am of opinion that the present action is maintainable." M'Clure v. Williams, 7 Vt. 210. Where the maker of a note infected with usm-y, in consideration that the holder should cancel the same, promised to give a new note deducting the usurious excess, it was held, such promise was enforceable in law. See also, De Wolf v. Johnson, 10 Wlieat. 367 ; Cummins v. Wire, 2 Halst. Ch. 73 ; Postlethwait i'. Garrett, 3 T. B. J\Ion. 345 ; Bank of Monroe v. Strong, Clarke, 76 ; Chadbom-n v. Watts, 10 Mass. 121 ; Hammond w. Hopping, 13 AVend. 505; Miller i'. Hull, 4 Deuio, 104. And see supra, p. 257, n. 4. 3 Thus, where A made a usurious note to B, who transferred it to C for a valuable consideration, without notice of the usury, and afterwards A gave a bond to C for the amoirnt, the bond was held not to be affected with the usmy. Cuthbart v. Haley, 8 T. R. 390. And see, per Kent, C. J., in Jackson v. Henry, 10 Johns. 185 ; Ellis i'. W.arnes, [284] CH. XIV.J INTEREST AND USURY. *259 to be merged in a judgment against him, it is then too late for him to take advantage of the usury.i So, if land or goods be mortgaged to secmre a usurious debt, and afterwards conveyed to an innocent party, subject to such mortgage, the latter cannot set up the defence of usury in an- swer * to an action to enforce the mortgage.^ And if A owes B a usurious debt, against which A could make a complete or par- tial defence, but pays the debt, usury and all, by transferring to B a valid note or debt of C, then when C is called upon to pay this debt to B, C cannot make the defence which A could have done ; for the debt due from C is not affected by the usurious taint of the original debt from A to B.^ Usurers resort to many devices to conceal their usury ; and sometimes it is very difficult for the law to reach and punish this offence. A common method is for the lender of money to sell some chattel, or a parcel of goods, at a high price, the buyer paying this price in part as a premium for the loan.* In England, Cro. Jac. 33; Powell v. Waters, 8 Cowen, 669 ; Wales v. Webb, 5 Conn. 154; Brown V. Waters, 2 Md. Ch. 201 ; Aldrich v. Reynolds, 1 Barb. Ch. 43. 1 Day V. Cummings, 19 Vt. 496 ; Thatcher v. Gammon, 12 Mass. 268; Thompson V. Berry, 3 Johns. Ch. 395; Jackson i'. Bowen, 7 Cowen, 20; Jackson o. Henry, 10 Johns. 185. 2 Mechanics Bank v. Edwards, 1 Barb. 271 ; Green v. Kemp, 13 Mass. 515 ; Stoney V. Am. Life Insm-ance Co. 11 Paige, 635 ; Sands v. Church, 2 Seld. 347. 8 Stanley v. Kempton, 30 Maine, 118 ; Marchant v. Dodgin, 2 Moore & S. 632. * See Pratt v. Willey, 1 Esp. 40, where to an action upon a promissory note usuiy was pleaded, the defendant attempted to prove that the plaintiff had, in discounting the note, given in part-payment a diamond ring, for which he charged much more than its actual value. It was said by Erskine, of counsel for the plaintiff, and assented to by Lord Kenyan, that his lordship and Mi". Justice Buller had ruled, on former occasions, that if, in discounting a bill, the party discounting it gives goods in part ; that if these goods are of a certain ascertained value, and given at that value, that is not usury ; but if the party so discounting the bill makes the holder of it take the goods at a higher value, that shall be deemed usury ; for a party, by substituting goods for money, shall not, by color of their pretended value, take above legal interest, and evade the statute. And in Doe d. Davidson v. Barnard, 1 Esp. 11, where a loan was effected by the bor- rower's taking stock at 75 per cent., when it was worth only 73 per cent.. Lord Kenyan held the transaction usurious. See also, Lowe v. Waller, Doug. 736 ; Barker v. Van- sommer, 1 Brown, Ch. 149. And where, upon a contract or loan, property of any kind is received of less value than the actual value of the loan, the transaction is usurious. Morgan v. Schermerhorn, 1 Paige, 544 ; Delano v. Rood, 1 Gilman, 690 ; Grosvenor v. Flax & Hemp Manuf. Co. 1 Green, Ch. 453 ; Moore v. Vance, 3 Dana, 361 ; Warfield V. Boswell, 2 Dana, 224 ; Bumham v. Gentrys, 7 T. B. Mon. 354 ; Collins v. Secreh, id. 335 ; Weatherhead v. Boyers, 7 Yerg. 545 ; Pratt v. Adams, 7 Paige, 615 ; Eagleson V. Shotwell, 1 Johns. Ch. 536 ; Ehringhaus v. Ford, 3 Ired. 522 ; Stribbling v. Bank of the Valley, 5 Rand. 132 ; Douglass v. McChesney, 2 Rand. 109 ; Dry Dock Bank v. Life Ins. & Trust Co. 3 Comst. 344; Rose v. Dickson, 7 Johns. 196 ; Swanson v. White, 5 Humph. 373 ; Greenhow v. Harris, 6 Munf. 472 ; Bank of IT. S. v. Owens, 2 Pet. 527 ; Archer v. Putnam, 12 Smedes & M. 286. But if the transaction is a bond Jide sale, the law does not prohibit the sale of depreciated stock or bank-notes at more [285] 260* ELEMENTS OF MERCANTILE LAW. [CH. XIV. it would seem from the books to be quite common for one who discounts a note, to do this nominally at legal rates, but to fur- nish a part of the amount in goods at a very high valuation.^ In all cases of this kind, or rather in all cases where questions of this kind arise, the court endeavors to ascertain the real character of the transaction.^ It is always suspicious, for the obvious reason * that one who wants to borrow money, is not very likely to desire at the same time to buy goods at a high price. But the jury decide all questions of this kind ; and it is their duty to judge of the actual intention of the parties, from all the evidence offered.^ If that intention is substantially that one should loan his money to another, who shall therefor, in any manner whatever, pay to the lender more than legal interest, it is a case of usury. " Where the real truth is a loan of money," said Lord Mansfield,'^ " the wit of man cannot find a shift to take it out of the statute." If this great judge meant only that, whenever legal evidence shows the transaction to be a usurious loan, the law pays no respect whatever to any pretence or disguise, this is certainly true. But the wit of man does undoubtedly contrive some " shifts," which the law cannot detect. There seems to be a general rule in these cases in reference to the burden of proof; the borrower must first show that he took the goods on compulsion ; and then it is for the lender to prove that no more than their actual value was received or charged for them.^ than their par valnc. Bank of United States v. Wagener, 9 Pet. 400 ; Willoughby v. Comstock, 3 Edw. Ch. 424 ; Slossoii v. Duff, 1 Barb. 432. 1 See cases cited in preceding note. " Andrews v. Pond, 13 Pet. If, ; Beete v. Bidgood, 7 B. & C. 458. * Thus, in Doe d. Metcalf v. Browne, 1 Holt, N. P. 295, where A, in consideration of a certain sura of money, conveyed premises to B, and at the same time an agreement was entered into between them that A should repurchase the same premises within fifteen months, at a considerable advance upon the original purchase-money, and B agreed to sell and reconvey at such advance, it was held that, in point of law, such contr.act was not usurious, unless it was meant as a cover for a loan of money, which was a question of fact for the jury. And see Andrews v. Pond, supra ; Stevens v. Davis, 3 Met. 211 ; Carstairs v. Stein, 4 M. & S. 192 ; Smith v. Brush, 8 Johns. 84 ; Thomas v. Cartheral, 5 GiU & J. 23 ; Tyson v. Rickard, 3 Harris & J. 109. * In Floyer v. Edw.ards, Cowp. 112. ^ See per Lord EUenborough, in Davis v. Hardacrc, 2 Camp. 375 ; Rich v. Topping, 1 Esp. 176 ; Hargreavcs v. Hutchinson, 2 A. & E. 12. But in Grosvenor v. Flax & Hemp Manuf. Co. 1 Green, Ch. 453, it was Iidd that proof that part of the loan was advanced in goods or stock, would not throw on the opposite party the burden of prov- ing tlio value of such goods or stock ; but tlio party charging the usury must not only prove that the goods or stock constituted a part of the loan, but also that they were put off at a price lieyond their value. [286] CH. XIV.] INTEREST AND USURY. *261 If one should borrow stock at a valuation much above the market rate, and agree to pay interest on this value for the use of the stock to sell or pledge, this would be usurious.^ Whether it would be sufficient to discharge this taint, for the lender to show that, the dividends on the stock actually were, and were expected to be, as high as the interest on the valuation, so that he makes no gain by the transaction, may not be certain. So, one may lend his stock, and without usury give the bor- rower the option * to replace the stock,^ or to pay for it at even a high value, with interest.^ Bat if he reserves this option to himself, the bargain is usurious, because it gives the lender the right to claim more than legal interest.* So, the lender may re- serve either the dividends or the interest, if he elects at the time of the loan ; ^ but he cannot reserve the right of electing at a fu- ture time, when he shall know what the dividends are. A contract may seem to be two, and yet be but one, if the seeming two are but parts of a whole.^ Thus, if A borrows one 1 Parker v. Eamsbottom, 3 B. & C. 257. In Astor v. Price, 19 Mart. La. 408, it was held that where the lender gave bank shares, and charged interest upon them at a higher price than that of the market, the contract was usurious. '^ Forrest u. Elwes, 4 Ves. 492. * In Tate v. Wellinga, 3 T. R. 531, A lent money to B, which was produced by the sale of stocks, on an agreement that B should replace the stock by a certain day, or re- pay the money on a subsequent day, with such interest as tlie stock itself would have produced in the mean time. The jury having found that the transaction was an honest loan of stock, the court refused to set aside the verdict. And per Ashirst, J. : " The agreement 'was, that the defendant should have the use of the money, which was the produce of the stock, paying the same interest which the stock would have produced, with liberty to replace the stock on a certain day, till which day the lender was to run the risk of a fall in the stocks ; but he stipulated that, if it were not replaced by that time, he would not run that risk any longer, but would be repaid the sum advanced at all events. And from this contract he derived no advantage, for he was only to receive in the mean time the same interest which the stock would have produced. * Thus, in White v. Wright, 3 B. & C. 273, where A loaned stock to B, and re- served the dividends to himself by way of interest, and also the option of deciding at a future day whether he would have the stock replaced, or the sum arising from the sale of it repaid to him in money, with 5 per cent, interest, the court hdd the transaction usu- rious, and per Bayhy, J. : " It is not illegal to reserve the dividends by way of interest for stock lent, although they may amount to more than 5/. per cent, on the produce of it, for the price of the stock may fall, and the borrower would then be the gainer; but the option must be made at the time of the loan. The instruments set out in this case, show that an option to l)e exercised in the future was reserved. It has been argued that the agreement enabled the defendant, at all events, if she chose, to replace the stock ; but the agreement is to replace it if required, and the bond gave the lender power to enforce the repayment of the principal, which was never put in hazard. Upon princi- ple, therefore, as well as on the authority of Barnard v. Young, 17 Ves. 44, I think that the plaintiffs are not entitled to recover in this action." See also, to the same effect, Barnard v. Young, 17 Ves. 44 ; Chippindale v. Thurston, 1 Moody & M. 411. ^ Potter V. Yale College, 8 Conn. 52 ; White v. Wright, supra. ^ See Warren v. Crabtree, 1 Greenl. 171. [287] 262* ELEMENTS OF MERCANTILE LAW. [CH. XIV. thousand dollars, and gives a note promising to pay legal interest for it, and then gives another note for (or otherwise promises to pay) a further sum, in fact for no consideration but the loan, this is all one transaction, and it constitutes a usurious contract.^ But if there be a loan on legal terms, with no promise or obli- gation on the part of the borrower to pay any more, this would * not be invalidated by a mere understanding that the borrower would, when the money was paid by him, make a present to the lender for the accommodation. And if, after a payment has been made, which discharged all legal obligation, the payer volun- tarily adds a gift, this would not be usurious. But in every such case the question for a jury is, what was this additional transfer of money, in fact ; was it a voluntary gift, or was it the payment of a debt ? A foreign contract, valid and lawful where made, may be enforced in a. State in which such a contract, if made there, would be usurious.2 But if usurious where it was made, and, by reason of that usury, wholly void in that State, if it is put in suit in another State where the penalty for usury is less, it can- not be enforced under this mitigated penalty, but it is wholly void there also.^ SECTION m. OF A CHARGE FOR RISK OR FOR SERVICE. It is undoubtedly lawful for a lender to charge an extra price for the risk he incm-s, provided that risk be perfectly distinct from the merely personal risk of the debtor's being unable to pay. If any thing is paid for this risk, it is certainly usury. But if it is 1 See White v. Wright, 5 B. & C. 273 ; Swai-twout v. Payne, 19 Johns. 294 ; Clark V. Bartgley, 3 Halst. 233 ; Postlethwait v. Gan-ett, 3 T. B. Jlon. 345 ; Fitch d. Ham- lin, 1 Root, 110 ; Gray ?'. Brown, 22 Ahi. 273 ; Lear v. Yamel, 3 A. K. Marsh. 419 ; Willard o. Reeder, 2 McCord, 369. And it has been held, that if the promise to pay the usury be by parol, the principal agreement being in writing, this would avoid the whole contract. Macombcr v. Dunham, 8 Wend. 5.50 ; Hammond v. Hopping, 13 Wend. 505; Merrills v. Law, 9 Cowen, 65 ; contra, Butterfleld v. Kidder, 8 Pick. 512. 2 Turpin !'. Povall, 8 Leigh, 93; Davis v. GaiT, 2 Seld. 124; Harvey v. Archbold, 3 B. & C. 626 ; Thompson ;■. Powles, 2 Sim. 211 ; De Wolf v. Johnson, 10 Wheat. 367 ; Pratt v. Adams, 7 Paige, 615 ; Nichols v. Cosset, 1 Root, 294 ; M'Queen v. Bums, 1 Hawks, 476 ; Gale v. Eastman, 7 Met. 14; M'Guire v. Warder, 1 Wash. Va. 368. 3 Houghton V. Paige, 2 N. H. 42. [288] CH. XIV.J INTEREST AND USURY. *263 a part of the bargain that the debt shall not be paid if a vessel or goods do not arrive in safety, as is the case in a loan on bot- tomry, or on respondentia (as we state in our chapter on the Law of Shipping), this is not usury.^ And by the same prin- * ciple, if one buys an. annuity to end at the annuitant's death,^ or a life-estate,^ even on exorbitant and oppressive terms, against which a court of equity would relieve, still, it is not a usurious contract, provided the purchase be actual, and not a mere dis- guise. So, one may charge for services rendered,* for brokerage,^ or for rate of exchange,^ and may even cause a domestic loan or ^ In Soome v. Gleen, 1 Sid. 27, which was debt upon a bond, the condition of the bond was, that, if a certain ship should go to the East Indies, and return safely to Lon- don, or if the owner or the goods should return safe, the defendant should pay the plain- tiff the principal, together with £AQ for every £100; but if the ship, &c., should perish by fire, &c., then the plaintiff should hare nothing. It was objected that the cftntract was usurious. But the court held that such contracts, called " bottomry," tend to the increase of trade, and that they were not usurious. See also, to the same effect, Sharp- ley V. Hurrel, Cro. Jac. 208 ; Chesterfield v. Janser, 1 Wilson, 286, 1 Atk. 342 ; Eob- erts V. Tremayne, Cro. Jac. 507 ; Racher v. Conyngham, 1 Pet. Adm. 295 ; The Sloop Mary, 1 Paine, C. C. 675; Thorndike v. Stone, 11 Pick. 183. 2 Fountain v. Grymes, 1 Bulst. 36. The plaintiff, in this case, lent the defendant £100, who therefore executed to the plaintiff a bond, which was conditioned for the payment to the plaintiff of £20 a year for three lives, and no mention was made of the return of the principal sum ; it was hdd that this was not within the statute, and judg- ment was given for the plamtiff. See also, Roberts v. Tremoille, 1 RoUe, 47 ; Ployer V. Sherard, Ambl. 18 ; Lloyd v. Scott, 4 Pet. 205. But, in Richards v. Brown, Cowp. 770, it was hdd that an annuity upon the borrower's life, with a right to redeem within three months, was usurious, as involving only flie contingency of the borrower's dying within the three months. Murray v. Harding, 2 W. Bl. 859 ; King v. Drury, 2 Lev. 7 ; White V. Wright, 3 B. & C. 273. 3 Symonds v. Cockerill, Noy, 157; Cotterel v. Hanington, Brownl. & G. 180; Fuller's case, 4 Leon. 208 ; King v. Drury, 2 Lev. 7. But see Doe v. Gooch, 3 B. & Aid. 664. * Thus, where A received of B a sum exceeding the lawful rate of interest, as com- pensation for obtaining money for him at a bank, on A's own security, this was held not to constitute usury. Hutchinson v. Hosmer, 2 Conn. 341. See, also, Fussel v. Daniel, 10 Exch. 581, 29 Eng. L. & Eq. 369 ; Harris v. Boston, 2 Camp. 348 ; Ex parte Patrick 1 Mont. & A. 385 ; Brown v. Harrison, 17 Ala. 774; Rowland v. IJuU, 5 B. Mon. 146 ; M'Kesson a. M'Dowell, 4 Dev. & B. 120; Auriol v. Thomas, 2 T. R. 52; Coliot V. Walker, 2 Anst. 496; Hammett v. Yea, 1 B. & P. 156; Masterman v. Cow- . rie, 3 Camp. 488 ; Ex parte Jones, 17 Ves. 332 ; Ex parte Henson, 1 Madd. 112 ; Ex parte Gwynn, 2 Dea. & Ch. 12; Kent v. Phelps, 2 Day, 483; Hall v. Daggett, 6 Cowen, 657 ; Nourse v. Prime, 7 Johns. Ch. 79 ; Trotter v. Curtis, 19 Johns. 160 ; Saydam v. Westfall, 4 Hill, 211 ; Suydam v. Bartle, 10 Paige, 94; Bullock v. Boyd, Hoff. Ch. 294 ; Holford v. Blatchford, 2 Sandf. Ch. 149 ; Seymour v. Marvin, 11 Barb. 80. But the amount so charged or taken must not exceed what is usually taken in the course of business ; otherwise, the contract will be usurious. Kent v. Phelps, 2 Day, 483; Bartlett v. Williams, 1 Pick. 294; Stevens v. Davis, 3 Met. 211 ; De Forest v. Strong, 8 Conn. 519. 5 Brown v. Harrison, 17 Ala. 774. And see cases cited in the precedmg note. " Merritt v. Benton, 10 Wend. 116. In this case, A gave his promissory note to B, which included one per cent, above the legal rate of interest, as the difference of ex- change between the place where B, the payee, resided, and the place where the note 25 C 289 ] 264* ELEMENTS OF MERCANTILE LAW. [CH. XIV. discount to be actually converted into a foreign one, so as to charge the exchange ; and this would not be usurious.^ But here, as before, and, indeed, throughout the law of usury, it is necessary to remember that the actual intention, and not the ap- parent purpose or the form of the transaction, must determine its character. So, if one lends money to be used in business, and lends it upon such terms that he becomes a partner in fact with * those who use it, taking his share of the profits, and becoming liable for the losses, this is not usurious.^ So, if one enters into a partnership, and provides money for its business, and the other party is to bear all the losses, and also to pay the capitalist more than legal interest as his share of the profits, this is not usurious, because there is no loan, if there be in fact a partnership.^ If, however, there be only a pretended partnership, in order to disguise the fact of the loan, this would be usurious, although very possibly the lender might, as to a third party, lay himself open to a liability for debts incurred, by reason of his interest in the profits.* The banks always get more than legal interest by their way of discounting notes and deducting the whole interest from the amount they give. This is perfectly obvious if we take an extreme case ; as if a bank discounted a note of a thousand dollars at ten years, in Massachusetts, the borrower would receive four hundred dollars, and, at the end of ten years, he was payable ; and it was held that this did not amount to usmy. See also, Man'ine V. Hymers, 2 Kern. 22.3 ; Leayitt v. Dc Launy, 4 Comst. 364 ; Commercial Bank v. NoUn, 7 How. Miss. 508 ; Andrews v. Pond, 13 Pet. 65 ; Buekinj^diam n. McLean, 13 How. 151 ; Slcrritt v. Benson, 10 Wend. 116 ; Williams c. Hance, 7 Paige, 581 ; Ontario Bank v. Schermerhorn, 10 Paige, 109 ; Cayuga County Bank v. Hunt, 2 Hill, 635 ; Holford v. Blatcliford, 2 Sandf. Ch. 149. 1 Cuyler v. Sandford, 13 Barb. 339. 2 Pereday v. Hordern, 1 Jac. 144 ; Morisset v. King, 2 Burr. 891. ^ Endcrljy v. Gilpin, 5 J. B. Moore, 571, s. c. nam. Gilpin v. Enderby, 1 Dowl. & R. 570, 5 B. & Aid. 954. In this case, A, being established in trade, and yrishing to increase his capital, entered into a deed of copartnership for ten years ivith B, who advanced £20,000, upon v, covenant that ho should receive £2,000 a year during the partnersliip, out of the profits, if there were any, and if none, out of the capital ; that he should not be answerable for any of the losses or expenses incident to the concern, and that tlie business should be carried on in the name of A only; that, at the end of the ten years, if the pai-tnership determined liy efflux of time, he should be repaid the £20,000, by instalments, at three months' date, bearing legal interest ; and that, if default should be made in the annual payment of £2,000, or the joint capital should be at any time reduced to £20,000, then he should be at libeity to teripinate the partner- ship, and repay himself the £20,000 advanced, immediately. Held, that, upon the face of the deed, A and B were partners, and that there was no loan of money within the meaning of the statute of usury. And sec Pereday v. Hordern, supra. * Huston !'. Moorhead, 7 Ban-, 45 ; Morse v. Wilson, 4 T. R. 353. [290] CH. XIV.] INTEREST AND USURY. *265 would pay back the four hundred dollars, and six hundred dol- lars for the use of it. But this method is now established by usage and sanctioned by law.^ * SECTION IV. OP THE SALE OF NOTES. There are, perhaps, no questions in relation to interest and usury, of more importance than those which arise from the sale of notes or other securities. In the first place, there is no doubt whatever that the owner of a note has as good a right to sell it for the most he can get, as he would have to sell any goods or wares which he owned. There is here no question of usury, because there is no loan of money, nor forbearance of debt. But, on the other hand, it is quite as certain that no one has a right to make his own note, and sell that for what he can get ; for this, while in appearance the sale of a note, is in fact the giving of a note for money. It is a loan and a borrowing, and nothing else. And if the apparent sale be for such a price that the seller pays more than legal interest, or, in other words, if the note bear interest, and is sold for less than its face, or is not on interest, and more than interest is discounted, it is a usurious 1 In Thornton v. Bank of Washington, 3 Pet. 36, Mr. Justice Story says : " The de- fence set up against this action by the defendant is, that the transaction is usurious within the meaning of tlie statute of Maryland against usuiy, which (it is admitted) is substantially like the English statute upon the same subject. To sustain the defence, it has been urged that the receipts of the interest in advance for sixty-four days, upon the discount of the note, is usury. But we are all of opinion that the taking of interest in advance upon the discount of notes, in the usual course of business, by a bank, is not usury. The doctrine has been long settled, and is not now open for controversy." The following cases hold the same : Hoyt v. Bridgewater Co. 2 Halst. Ch. 253, 625 ; Manhattan Co. v. Osgood, 15 Johns. 162 ; Duncan v. Maryland Savings Institution, 10 Gill & J. 311 ; Bank of Utica v. Phillips, 3 Wend. 408 ; Utica Ins. Co. v. Blood- good, 4 Wend. 652 ; Bank of Utica v. Wager, 2 Cowen, 712 ; Marvine v. Hymers, 2 Kern. 223 ; Stribbling v. Bank of the Valley, 5 Band. 132; Sessions u. Richmond, 1 R. I. 298; Haas u. Flint, 8 Blackf. 67; State Bank v. Hunter, 1 Dev. 100; Ticorno Bank v. Johnson, 31 Maine, 414 ; Cole v. Lockhart, 2 Cart. Ind. 631 ; McGill v. Ware, 4 Scam. 21. Sec also, Fleckner v. United States Bank, 8 Wheat. 354 ; Maine Bank V. Butts, 9 Mass. 49 ; N. Y. Firemen Ins. Co. u. Ely, 2 Cowen, 703. But this prac- tice is strictly confined to negotiable paper, having a short time to run. Mowry v. Bishop, 5 Paige, 98; per Sutherland, J., in N. Y^ Firemen Ins. Co. v. Ely, supra; Eaton V. Bell, 5 B. c& Aid. 40 ; Caliot v. Walker, 2 Anst. 496. And see Barnes v. Worlich, Cro. Jac. 25 ; Grysill v. Whichcott, Cro. Car. 283 ; Quinsigamond Bank v. Hobbs, S. J. C. Mass. 1858, 21 Law Eep. 564. [291 J 266* ELEMENTS OF MERCANTILE LAW. [CH. XIV. transaction. Supposing these two rules to be settled, the , question in each case is, under which of them does it come, or to which of them does it draw nearest. We are not aware of any general principle so likely to be of use in determining these questions as this ; if the seller of a note acquired it by purchase, or if it is his for money advanced or lent by him to its full amount, he may sell it for what he can get ; but if he be the maker of the note or the agent of the maker, and receives for the note less than its face after a lawful discount, it is a usurious loan. In other words, the first holder of a note (and the maker of a note is not, and cannot be, its first holder) must pay the face of the note, or its full amount. And after paying this he may sell it, and any subsequent purchaser may * sell it, as merchandise.^ The same rule (if it be law, of which we cannot doubt) must apply to corporations and all other bodies or persons who issue their notes or bonds on interest.^ K sold by brokers for them, for less than the full amount, it is usurious. Nor can such notes come into the market free from the taint and the defence of usury, unless the first party who holds them, pays for them their full value. But then comes another question. If a note be offered for sale, and be sold for less than its face, and the purchaser supposes himself to buy it from an actual holder and not from the maker, can the maker interpose the defence that it was actually usu- rious, on the ground that the seller was only his agent. We should say that he could not ; that there can be no usury unless this is intended ; and that the guilty intention of one party can- not affect another party who was innocent. Undoubtedly, a note, originally usurious, is not healed, so far as the owner is concerned, by transfer to an innocent holder. The indorsers 1 The following cases will be found to uphold the principles laid down in tlie text. Lloyd V. Reach, 2 Conn. 179; Tuttle v. Clark, 4 Conn. 153; King v. Johnson, 3 McCord, 365 ; Musgrove v. Gibbs, 1 Dall. 217 ; Metcalf v. Pilcher, 6 B. Mon. 529 Wycoff u. Longhead, 2 Dall. 92; French v. Grindle, 15 Maine, 163 ; JTarmer v. Sewall 16 Maine, 456; Lane v. Steward, 20 Maine, 98; Hansbrough v. Baylor, 2 Munf. 36 Shackleford v. Morriss, 1 J. J. Marsh. 497 ; Oldham v. Tm-ncr, 3 B. Mon. 67 ; Churchili V. Suter, 4 Mass. 162; Ingalls v. Lee, 9 Barb. 647 ; Nichols u. Fearson, 7 Pet. 107 ; Moncure v. Dermott, 13 Pet. 345 ; Powell v. Waters, 8 Cowen, 685 ; Eice v. Mather] 3 Wend. 65 ; Cram v. Hendi-icks, 7 Wend. 569 ; Eapelye v. Anderson 4 Hill 472 ' Holmes v. Williams, 10 Paige, 326 ; Holford v. Blatchford, 2 Sandf. Ch. 149. 2 Saltmarsh v. Planters & Merchants Bank, 17 Ala. 768 ; Munn u. Commission Co 15 Johns. 55. [292] CH. XIV.] INTEREST AND USURY. *267 may be liable to the holder ; but, whatever defence the maker could have, on the ground of usury, against the first holder, he may always have against any subsequent holder. This is be- cause there was actual usury at the beginning ; that is, one lent and the other borrowed, both knowing that more than legal in- terest was paid. But in the case of an innocent purchaser, or, rather, of one who supposes, and has a right to suppose, that he is a purchaser, he did not lend his money at all ; he only bought a security with it ; and, therefore, there is no usury.i We should, however, say that, when a maker shows that the apparent seller was only his agent, as evidence that the note passed from him usuriously, he thereby casts upon the buyer * the burden of proving his innocence, or, in other words, his be- lief that he was only a purchaser. As one may sell the notes or other securities which he holds as property, under no other restriction than that which attends the sale of merchandise, so we think that a man may sell his credit. The cases which relate to this question are far from harmonious. In the dread of usury, which was formerly enter- tained, and the determination — so strongly expressed by Mans- field — that it should not, by any device, escape the law, it has undoubtedly been held that the indorser of a note should be liable upon it only for what he received, with lawful interest.^ But, although we have not much positive authority for setting this rule aside, we are quite confident that a better understand- ing of the nature of negotiable paper, of the contract of in- dorsement, and, perhaps, of the rules which properly belong to the sale and purchase of money, would lead the courts to a dif- ferent conclusion. If A holds the note of B, and sells it to C, without indorsing it, he can certainly sell it for what he pleases ; if he chooses to 1 Whitworth 0. Adams, 5 Rand. 333 ; Law v. Sutherland, 5 Gratt. 357 ; Shackle- ford V. Morriss, 1 J. J. Marsh. 497 ; Hansbrough v. Baylor, 2 Munf. 36 ; Holmes v. Williams, 10 Paige, 326. 2 Lane v. Steward, 20 Maine, 98 ; May v. Campbell, 7 Humph. 450 ; French v. Grindle, 15 Maine, 163; Metcalf v. Pilcher, 6 B. Men. 530; Cram v. Hendricks, 7 Wend. 569 ; Rapelye v. Anderson, 4 Hill, 472 ; Ingalls v. Lee, 9 Barb. 647 ; Brock v. Thompson, 1 Bailey, 322; Freeman v. Brittice, 2 Harrison, 191. * And some of the cases even hold that, where the purchaser of the paper holds the person to whom the money is advanced responsible for the payment of the debt, this, per se, renders the transaction usurious. M'Elwee w. Collins, 4 Dev. & B. 209 ; Ballinger v. Edwards, 4 ied. Eq. 449 ; Cowen, J., in Rapelye v. Aiiderson, 4 Hill, 472. 25* [293] 268* ELEMENTS OP MERCANTILE LAW. [OH. XIV. add his indorsement, he will do so, and he will probably do this if the additional value which he thus imparts to it, exceeds the risk he incurs. K, then, he indorses the note, it is to make his merchandise more valuable ; and it would seem to be little less than an absurdity to say, that a merchant may not thus give a paper he holds more value, or that he may give the paper this value, but must not realize this value by the sale. If, however, the rule is, that, when called upon by the indorsee, he may plead usury as between them, and pay either nothing, or so much only as he received, without regard to the amount he agreed by his indorsement to pay, it is obvious that the whole effect and util- ity of the indorsement would be very .much impaired. We think that a seller with indorsement should be, and that he now generally would be, held as liable for the full amount of the note ; at least where the question is stiU an open one. * We should apply the same reasoning to the case of one who, having no interest in a note, indorses or guarantees it for a cer- tain premium ; thus, not adding his credit to the value of his property, and selling both together, as where he indorses a note which he holds himself, but selling his credit alone. This trans- action we should not think usurious.^ And if it was open to no other defence, as fraud, for example, and was in fact what it purported to be, and not a mere cover for a usurious loan, we know no good reason why such indorser or guarantor should not be held Liable to the full amount of his promise. 1 Thus, where A, being desirous of raising money upon a note, drawn by himself, and indorsed for his accommodation by B and C, authorized a broker to buy an addi- tional name or guaranty, for the purpose of getting the note discounted, and applica- tion was accordingly made to D, who thereupon indorsed the note, receiving a commis- sion of two and one half or three per cent, therefor ; it was held that the taking of the commission by D, did not render the transaction usurious. Ketchum v. Barber, 4 Hill, 224. See also. More v. Howland, 4 Denio, 264 ; Dry Dock Bank v. Am. Life Ins. & Trust Co. 3 Comst. 344; Dunham ;;. Gould, 16 Johns. 367. The earlier cases, how- ever, seem to have hdd that the compensation thus received must not exceed the law- ful rate of interest for the time the paper has to run. Bullock v. Boyd, Hoff. Ch. 294 ; Dey V. Dunham, 2 Johns. Ch. 182 ; Fanning v. Dunham, 5 Johns, Ch. 122 ; Moore v. Vance, 3 Dana, 361. [294] CH. XIV.] INTEREST AND USURY. *269 SECTION V. OF COMPOUND INTEREST. Compound interest is sometimes said to be usurious ; but it is not so ; and even those cases which speak of it as " savoring of usury," may be thought to go too far, unless every hard bar- gain for money is usurious. As the authorities now stand, however, a contract or promise to pay money with compound interest, cannot, generally, be enforced.^ On the other hand, it is neither wholly void, nor attended with any penalty, as it would be if usurious ; but is valid for the principal and legal interest only.^ * Nevertheless, compound interest is sometimes recognized as due by courts of law, as well as of equity ; and sometimes, too, by its own name. Thus, if a trustee be proved to have had the money of his cestui que trust for a long time, without account- ing for it, he may be charged with the whole amount, reckoned at compound interest, so as to cover his unlawful profits.^ If compound interest has accrued under a bargain for it, and been actually paid, it cannot be recovered back, as money usuriously paid may be.* And if accounts are agreed to be settled by an- nual rests, which is in fact compound interest, or are actually 1 As early as the case of Davis v. Higford, 1 Ch. Rep. 28, the covirt laid down the rule that interest upon interest could not be allowed. And in Waring v. CnnlifFe, 1 Ves. Jr. 99, Lord Thurlow said that he had found the court in the constant habit of thinking compound interest not allowable, and that he must overturn all the proceed- ings of the court if he gave it. And see, to the same effect, Connecticut v. Jackson, 1 Johns. Ch. 13 ; Ossulston v. Yarmouth, 2 Salk. 449 ; Mowry v. Bishop, 5 Paige, 98 ; Hastings v. Wiswall, 8 Mass. 455 ; Terry v. Ferry, 2 Cush. 92 ; Doe v. Warren, 7 Greenl. 48 ; Eodes v. Blythe, 2 B. Mon. 336 ; Childers v. Deane, 4 Eand. 406 ; contra, Pawling V. Pawling, 4 Yeates, 220. But in the following cases it waj hdd that an ex- press contract to pay interest upon interest, is valid and enforceable. Peirce v. Howe, 1 N. H. 179 ; Doig v. Barkley, 3 Rich. 125; Kennon v. Dickens, 1 Taylor, 231 ; Gibbs V. Chisolm, 2 Nott & McC. 38 ; Singleton v. Lewis, 2 Hill, S. C. 408. 2 Kellogg V. Hickok, 1 Wend. 521 ; Otis v. Lindsey, 1 Pairf. 316 ; Wilcox v. How- land, 23 Pick. 169. 2 Thus, where a trustee, under a marriage settlement, allowed the sum of £350 to remain in the hands of a trading firm for a period exceeding fifteen years after the death of the tenant for life, he was held to account for the principal sum, with com- pound interest. Jones v. Foxall, 15 Beav. 388, 13 Eng. L. & Eq. 140. And see Evertson v. Tappen, 5 Johns. Ch. 497 ; Shieffelin v. Stewart, 1 Johns. Ch. 620. And see 1 Parsons on Contracts, 103, (b). * Mowry v. Bishop, 5 Paige, 98 ; Dow v. Drew, 3 N. H. 40. [295] 269- ELEMENTS OF MERCANTILE LAW. [CH. XIV. settled so in good faith, the law sanctions this.^ Sometimes, in cases of disputed accounts, the courts direct this iriethod of set- tlement. Where money due on interest has been paid by sundry instal- ments, the mode of adjusting the amount, which has the best authority and the prevailing usage in its favor, seems to be this : Compute the interest due on the principal sum to the time when a payment, either alone or in conjunction with preceding pay- ments, shall equal or exceed the interest due on the principal. Deduct this sum, and upon the balance cast interest as before, until a payment or payments equal the interest due ; then de- duct again, and so on.^ 1 Stoughton V. Lynch, 2 Johns. Ch. 210; Bruce v. Hunter, 3 Camp. 467 ; Ossulston V. Yarmoutli, 2 Salt. 449 ; Childers v. Deane, 4 Eand. 406 ; Tarleton v. Backhouse, Cooper's Ch. 231 ; Fobes v. Cantfleld, 3 Ohio, 18. But this is only allowed under a specific agreement, and after the mutual dealings of the parties have ceased. Von Hemert v. Porter, 11 Met. 210 ; Denniston v. Imbrie, 3 Wash. 0. C. 396. 2 See Connecticut v. Jackson, 1 Johns. Ch. 13 ; Story v. Livingston, 13 Pet. 371 ; Jones V. Ward, 10 Yerg. 170; Smith v. Shaw, 2 Wash. C. C. 167. [296] CH. XV.] BANKRUPTCY AND INSOLVENCY. 270 CHAPTER XV. OF BANKRUPTCY AND INSOLVENCY. SECTION I. OF THE HISTORY OP THE LAW OF BANKRUPTCY. Centuries ago, dealers in money, or "exchangers," as they ■were called in England, sat behind a bench, on which lay heaps of the coin they bought or sold ; and some remains of this prac- tice may now be seen in various parts of the old continent. This bench, or " banco," in the Italian language, gave its name to the moneyed institutions of deposit, or of currency, of which the earliest of great importance, if not the first in time, was the " Bank " of Venice. When such a trader became insolvent, or unable to meet his engagements, those who had charge of such things, whether as a police or as an association or guild of such dealers, broke his bench to pieces, as a symbol that he could carry on that business no longer. In Italian, the words " banco rotto " mean a broken bench ; and from this phrase grew the word "bankrupt." There are some, however, who deny any such practice as that of actually breaking a bench, but consider the phrase as merely figurative of insolvency. In this we see nothing of alleged criminality, or of punish- ment. But the laws of England went to an earlier source than the Italian commerce of the middle ages, and found in the Roman law the principle which governed, and perhaps still governs, their system of bankrupt laws. This principle is, that the bankrupt may be presumed to be dishonest and criminal, and treated accordingly. By the English common law, the body of a freeman could not [297] 271* ELEMENTS OP MERCANTILE LAW. [CH. XV. be arrested for debt, whether he was a trader or not. And the earliest processes of that law included none for imprisonment for debt. This was of later origin. In the reign of Edward I. * a law was passed authorizing an arrest of a defendant in cer- tain cases, for the purpose of more effectually securing the per- formance of commercial contracts. This was extended in its operation by a law of Edward III., and sundry statutes followed, applying further regulations to this subject, until, late in the reign of Heirry VIII. (1544), a statute was passed so nearly resem- bling a modern statute of bankruptcy, that it is generally consid- ered the first bankrupt law. In a statute of the 13 Elizabeth, the operation of the law was confined to traders ; or, in the words of the law, " to such persons as had used the trade of merchandise in gross or in retail." And thus an important prin- ciple was introduced which has since been constantly adhered to, although somewhat liberally construed. In those, and in still earlier days, there was perhaps more reason for regarding a mercantile bankrupt as a criminal than there is now. Even at present, many insolvencies are undoubt- edly fraudulent, and the innocent bankrupt generally, if not always, owes his failure to guilty intent or guilty imprudence in some quarter. But it is also certain that, in the vast complica- tions of the commercial word, all who engage in business are subject to casualties which imply no crime, and which no saga- city could avert. If the Roman law, — that the merchant who failed in business should be expelled from the college (or guild) of merchants and never suffered to trade again, — if that law prevailed here, many of our most eminent and useful merchants would have lost the opportunity of retrieving their affairs by ultimate success, and paying off, by the fruits of a later industry, the debts of an earlier insolvency. The community are now sensible of this. And to this con- viction we owe the gradual, but of late years, rapid, change in the spirit of our laws for the collection of debt. Now the en- deavor is carefully to discriminate between an innocent and a wrongful insolvency; and to treat the latter only as criminal. That our laws do not yet effect this purpose perfectly, and with- out any injurious result, may be true ; but the purpose and the principle are certainly right. [298] CH. XV.] BANKRUPTCY AND INSOLVENCY. *272 The Constitution of the United States authorizes congress to establish " uniform laws on the subject of bankruptcies through- out the United States." But not until eleven years after the adoption of the constitution, was a bankrupt law passed, in 1800, * which, by its own terms, was limited to five years, but was in fact repealed after it had been in operation two years and eight months. Sundry attempts were made from time to time for a new one ; and whenever the vicissitudes of trade pressed more heavily than usual on the community, these efforts were more urgent. And to the general dulness in the country, or rather the wide prevalence of actual insolvency, was due the law which was passed in 1841, after an earnest but unsuccessful endeavor in the year previous. If the amount or number of applications for the law is a true measure of its need or its utility, this law was not passed top soon. In Massachusetts, for example, there were 3,389 appli- cants for relief, and the creditors numbered 99,619, more than a third of the adult male population of the State, and the amount of their claims exceeded thirty millions of dollars, averaging about three hundred and fifty dollars to a creditor. This law was repealed March 3, 1843, one year six months and fourteen days after it was enacted ; and in this short period it affiscted more property, and gave rise to more numerous and more difficult questions, than any other law has ever done, in the same period. It was repealed because it had done its work. The people demanded it that it might settle claims and remove incumbrances and liens, and sweep away an indebtedness that lay as an intolerable burden on the community. When it had done this, it began, or was thought to have begun, to favor the payment of debt by insolvency too much, and the people de- manded its repeal. We have no national bankrupt law now. We shall probably never have one until another similar national emergency shall arise ; and perhaps not then, because the State insolvent laws are now so well constructed and systematized, that they effect, though not quite so well, nearly all the purposes of a national law. But these State laws are entirely independent of each other ; and their provisions are so different, that it is difficult, or indeed [299] 273* ELEMENTS OF MERCANTILE LAW. [CH. XV. impossible, to present a view of the bankrupt law of the United States, which can have the unity and system of such a view of the laws of any one nation, as of England for example. But there is enough of system and of similarity, and enough of prin- ciple running through the whole, to make it expedient *to endea- vor to present a general view of the generally admitted principles, leaving local details and peculiarities, for the most part, to be learned elsewhere. SECTION II. OP THE DIFFERENCE BETWEEN BANKRUPTCY AND INSOLVENCY. The difference was not, perhaps, perfectly clear in its begin- ning, and has gradually grown dim with time, until now, in this country at least, it has become almost obliterated. But from it arose, and upon it in some measure depends, our present Amer- ican law of insolvency. The earliest difference between these was, perhaps, that insol- vent laws applied not only to traders, but to all who were indebted and unable to pay their debts. The more prominent distinction, however, was this, that the process under the bank- rupt law was in invifum against the bankrupt by his creditors, in order to obtain a sequestration of his effects, and prevent a fur- ther waste, or fraudulent or unequal misapplication of them, and secure the payment of their debts as far as these effects would go. But the insolvent laws were intended for the relief of debt- ors who sought to be protected, by the delivery of all their prop- erty, from further molestation. This distinction is now so far lost sight of, that the last national bankrupt law, and most of the State insolvent laws, provide separately for a process in invitum, and also for one on the application and request of the insolvent. It has also been supposed that another ground of distinction lay in the fact that the bankrupt law discharged the debt, while the insolvent law left the debt in full force, but protected the debtor himself from arrest or imprisonment. But this distinction has also faded away. For a long time, in England, these two systems of law — [300] CH. XV.] BANKRUPTCY AND INSOLVENCY. *274 Bankruptcy Statutes and Insolvency Statutes — ran along to- gether, those of Insolvency being the more numerous, but the two subjects were kept quite apart. At length, they began to assimilate, and in the recent legislation, especially by the 7 & 8 Viet. c. 96, they have continued to approach nearer and nearer * together, until there is now scarcely any discrimination between them.i In this country, there has not been any very clear distinction between them, at any time ; but one consequence from the nom- inal distinction was important. These colonies, from the earliest times, enacted insolvent laws, but not bankrupt laws. And when the Constitution of the United States gave to congress the power to pass a bankrupt law, it seems to have been thought that this in no wise affected the rights which the States contin- ued to possess, of enacting what insolvent laws they chose to. This right they have continued to exercise to the present day ; and always under the name of insolvent laws. But, so far as we may affirm with much positiveness any conclusions on this obscure subject, we may say that the distinction between insol- vent laws and bankrupt laws is now, in this respect at least, nothing, and that a State can pass no law by calling it an insol- vent law, which it could not pass under the name of a bankrupt law ; and that the power given to congress, to pass a bankrupt law, does not take it away from the States, who may pass what bankrupt laws they will for their own citizens, whenever there is no general bankrupt law enacted by congress.^ And even if 1 1 Spence's Equitable Jurisdiction of the Court of Chancery, 202 ; Stat. 5 & 6 Vict, c. 70. 2 Bradford v. Russell, 13 Mass. 1. The doctrine of the text is admirably stated by Marshall, C. J., in the loading case of Sturges v. Crowninshield, 4 Wheat. 191. " The subject is divisible in its nature into bankrapt and insolvent laws ; though the line of partition between them is not so distinctly marked as to enable any person to say, with positive precision, what belongs exclusively to the one, and not to the other class of laws. But if an act of congress should discharge the person of the bankrupt, and leave his future acquisitions liable to liis creditors, we should feel much licsitation in saying that this was an insolvent, not a bankrupt act ; and, therefore, unconstitutional. Another distinction has been stated, and has been uniformly observed. Insolvent laws operate at the instance of an imprisoned debtor ; bankrupt laws at the instance of a creditor. But should an act of congress authorize a commission of bankruptcy to issue on the application of a debtor, a court would scarcely be warranted in saying tliat the law was unconstitutional, and the commission a nullity." " This difficulty of discriminating with any accuracy between insolvent and bankrupt laws, would lead to the opinion, tbat a bankrupt law may contain those regulations which are generally found in insolvent laws ; and that an insolvent law may contain those which are common to a bankrupt law. If this be correct, it is obvious that much 26 [301] 275 ELEMENTS OF MERCANTILE LAW. [CH. XV. there be such a law, any State may, perhaps, pass any bankrupt law which in no way interferes with or contravenes the statute of the United States. This last remark, even if admitted to be true, cannot have much practical value, for it can hardly be supposed that congress will pass any general bankrupt law which would be so inadequate or incomplete that a State could pass an insol- vent law of any importance, which should not interfere with it. Where cases had been begun under the State insolvency laws, before the bankrupt law went into force, it was decided that they might go on to maturity, and were not superseded by this na- tional law.' At present, we have no general bankrupt law, but a great variety of State insolvent laws. Of their special provisions, we inconvenience would result from that constraction of the constitution, which should deny to the State legislatures the power of acting on this sulijcct, in consequence of a grant to congress. It may be thought more convenient that much of it should be reguhitcd Ijy State legislation, and congress may purposely omit to provide for many cases to which their power extemls. It does not appear to be a ^'iok'nt construction of the constitution, and is certainly a convenient one, to consider the power of the States as existing over such cases as the hiws of the Union mav not reach. But be thi.s as it mav, the power granted to congress may be exerciseil or declined, as the wisdom of that body shall decide. If, in the opinion of congress, uniform laws concerning bank- ru](t''ies ought not to be esral)lisiic(l, it docs not follow that partial laws may not exist, or that State legislation on the subject must cease. It is not the mere existence of the power, liut its exercise, which is incompatible with the exercise of the same power by the States. It is not the riglit to establisli tliese uniform laws, but their actual estab- lislmicnt, which is inconsislcnt with the partial acts of the States. It has been said, that congress has exex'cised this po'\^'er ; and, liy doing so, has extinguished the power of the States, which cannot be revived by repealing the law of congress. We do not think so. If the right of the States tn pass a bankrupt law is not taken awav 1)V the mere grant of that power to rcmgress, it cannot be extinguished; it can only be sus- pended by the enactment of a general bankrupt law. The repeal of that law cannot, it is true, confer the power on tlie States ; Ijut it removes a disability to its exercise, which was created by the act of rmigros." And .see Storv on the Constitution, 1 1 ; Ogden r. Saunders, 'l2 Wheat. 213; 2 Kent, 394, and note." 1 Er parte Eames, 2 Story, 322, and 5 Law Rep. 325, 360 ; Judd v. Ives, 4 Met. 401. In this case, tlie rule was stated Avith the limitation only that the bankrupt law did not suspend tlie operation of the insolvent law in cases ivhere the proceedings under the State law had been commenced previously to the existence and operation of the bankrupt law. And the same limitation is sustained in the cases above cited, and in Griswold V. Pratt, 9 Met. 16. But in Ziegcnfii>s' tase, 2 Ired. 463, it was held, in the opinion delivered by Mv. Justice Battle, and concurred in by the full bench of the Supreme Court of Nnvth Carolina, that a State insolvent law may exist and operate with fidl vigor until the bankrupt law attaches itself upon the person or property of the debtor by proceedings instituted in bankruptcy ; and it was further held, that no case of conflict could arise until after the proceedings in bankruptcy had reached that stage in which the debtor had been judicially declared a bankrupt. The doctrine of the court is maintained with great ability, and the objections to it are met and answered. Yet it has not met with subsequent f ivor, anil it is certainly opposed to the contemporaneous authorities, and is the only case we have met with where the view is adopted. Sec, as sustaining the doctrine of the cases above cited, a case in the District Court of Kcw York, rejiortod 1 New York Legal Oh>crvcr, 211. [302] CH. XV.] BANKRUPTCY AND INSOLVENCY. *276 do not propose to speak ; but shall confine our remarks, prin- cipally at least, to those general principles which may be sup- posed common to them all, where not specifically excluded. And of these, what may be called the fundamental principle, is an equal division of the assets of an insolvent among his creditors. ,At common law, any person, whether a trader or otherwise, may pay any debt at his own pleasure, whether he be insolvent * or not ; and if such payment exhaust his means, so that he can pay no other creditor, the common law makes no objection. In other w^ords, it permits a preference among creditors, to any ex- tent and in any form. Nor does the statute of fraudulent con- veyance affect this question, because, although no debtor may " hinder, delay, or defraud a creditor," it is not considered that he does this by paying one more than another, or paying to some of his creditors all their debts, and to others nothing, provided his reason for paying them nothing is, that he had nothing left for them. At this right of preference, the bankrupt system was directly aimed. Since the reign of Elizabeth, it has been restrained and almost suppressed in England. But in this country, where, as has been said, the English bankruptcy system was never intro- duced, and this whole matter was regulated by common law, a system of voluntary assignment, with preferences of all kinds, prevailed extensively. The frauds and mischiefs resulting from this, gradually produced a conviction that both expediency and justice imperatively demanded an equal distribution of the as- sets of an insolvent among all his creditors. In Maine, New Hampshire, Massachusetts, Connecticut, New Jersey, Delaware, Pennsylvania, Ohio, Missouri, Georgia, and Louisiana, special assignments, with preferences, are no longer permitted.^ In 1 BufFum V. Green, 5 N. H. 79. Richardson, C. J. : "It is very clear that an insol- vent debtor may give a preference to one creditor by paying his debt in full, to the ex- clusion of all the rest of the creditors, provided it be done in good faith." Stevens v. Bell, 6 Mass. 342. Parsons, C. J.: "At common law, every man might prefer any creditor, and might pledge his property and convey it in trust, so that no fraud resulted to others ; and if he stripped himself of all his property in favor of any one creditor, leaving himself quite destitute, no other creditor had legal cause of complaint, if the transaction was honest and for a valuable consideration. This right in a debtor is founded on the acknowledged principle that he may prefer or secure any one creditor, in a way that is not a fraud on another." And to the same point, Tompkins v. Wheeler, 16 Pet 106; Tvvyne's case, 3 Co. 80; Marbury v. Brooks, 7 Wheat. 556; Estwick v. [303] 277* ELEMENTS OF MERCANTILE LAW. [CH. XV. other * states, particularly in New York, there seems to be a growing disposition to encourage an equal division, by provid- Caillaud, 5 T. R. 420 ; Brooks v. Marbiny, 1 1 Wheat. 78 ; Cadogan v. Kennet, Cowp. 432; Hull v. Jeffrey, 8 Ohio, 390; M'CuUouffh v. Sommerville, 8 Leigh, 415 ; Skip- with V. Cunningliam, 8 id. 271 ; Hicklcy v. Farmers & Merchants Bank, 5 Gill & J. 377 ; Crawfords o. Taylor, 6 id. 323 ; McMenomy v. Roosevelt, 3 Johns. Ch. 446 ; Bell V. Thompson, 3 Misso. 84; Pearson v. Rockliill, 4 B. Mon. 296. In Kew York, it seemed, for some time, to be doubted ivhcther the right of preference of creditors was maintainable at the common law, and the expediency of allowing it was greatly doubted. In liiggs V. Murray, 2 Johns. Ch. 577, it is said, by Chancellor Kent : " As we have no bankrupt system, the right of the insolvent to select one creditor and to exclude .an- other, is applied to every case, and the consequences of such partial payments are ex- tensively felt, and deeply deplored. Creditors out of view, and who reside abroad or at a distance arc usually neglected. This checks confidence in dealing, and hurts the credit and character of the country. These partial assignments are, no doubt, founded, in certain cases, upon meritorious considerations, yet the temptation leads strongly to aliusc, and to the indulgence of improper motives. The Master of the Rolls, in Small f. Oudley, 2 P. Wms. 427, and the Lord Chancellor, in Cock v. Goodfellow, 10 Mod. 489, admit that such preferences, by a sinking debtor, may, and in certain cases ought to be given, and are called for by gratitude and benevolence ; yet, at the same time, it is acknowledged that the power may be abused, and be rendered subservient to fraud. Experience shows that preference is sometimes given to the very creditor who is the least entitled to it, because he lent to the debtor a delusive credit, and that, too, no doubt, under assurances or a well-grounded confidence of priority of payment, and perfect indemnity, in case of failure. How often has it happened that the creditor is secured who was the means of decoying others, while the real business creditor, who parted with his property on liberal terms, and in manly confidence, is made the victim. Perhaps some influential creditor is placed upon the privileged list, to prevent disturb- ance, while those who are poor, or are minors, or are absent, or want the means or the spirit to engage in litigation, are abandoned." Whether an assignment for the benefit of such creditors as should sign a release to all claims against the debtor, was good at common law, has been the subject of much judicial controversy. In Riggs v. Murray, 2 Johns. Ch. 565, it was held that a reservation of a similar nature rendered the assign- ment fraudulent and void. In this case, tlie assignment wjis of all the property of the debtor in trust, to pay the trustees and such other creditors as the debtor in one year, by deed, might direct and appoint, &c., reserving a power to appoint new trustees, and to revoke, alter, add to, or vary the trusts, at his pleasure, is void. This judgment was reversed in error, 15 Johns. 571 ; and the cases are reviewed at length by Mr. Chief Justice Thompson. But in Grover v. Wakeman, 11 Wend. 187, the doctrine of 15 Johns. 571, was denied; and it was held that a provision making the preference depend upon the execution by the prefen-ed creditors of a release to the debtor of all claims against him, is void. And the doctrine is laid down, which seems to be the law at this day when preferences are allowed, that an assignment, to be valid, must be absolute and unconditional, and must contain no reservation or condition for the benefit of the debtor, and that it must not extort from the fears or apprehensions of the creditors an absolute discharge as a consideration for a partial dividend. An assignment containing a stipulation for a release, was sustained in Lippincott v. Barker, 2 Binn. 174, and by Washington, J., in Pearpoint v. Graham, 4 Wash. C. C. 232. In Ingi-aham v. Wheeler, 6 Conn. 277, such a provision Avas held to invalidate an assignment. And the same point was decided in Atkinson u. Jordan, 5 Ohio, 293. In Halsey v. Whitman, 4 Mason, 230, Stori/, J., though admitting the weight of authority to be, on the whole, in favor of the validity of such a clause in an assignment, declared that, if the question were entirely new, and many estates had not passed on the strength of such assign- ments, the strong inclination of his mind would be against their validity. The authori- ties are reviewed in the learned opinion of Ware, J., in the District Court of Maine, in Lord r. Brig Watchman, and the validity of an assignment with a clause providing for a release, is denied. 8 Am. Jur. 284. The same doctrine is maintained in Ramsdell v. Sigerson, 2 Oilman, 78 ; Shcppards v. Turpin, 3 Gratt. 372 ; Stevenson v. Agiy, 7 Ohio, pt. 2, 247. And in those States where an insolvent law is in force, and assign- [304] CH. XV.] BANKRUPTCY AND INSOLVENCY. *278 ing not only, as is now generally done, that the insolvent shall be discharged only when his effects are equally divided, but that all preferences shall be void. This system is found to operate so well wherever it is tried, that we cannot doubt that it will be, at no distant day, universal. We are not aware that any State which has suppressed * special assignments with preferences, has ever returned to them.^ SECTION III. OP THE TRIBUNAL AND JURISDICTION. The bankrupt law of the United States gave the jurisdiction of all cases to th"e District Court ; and the reasons for this ' are so obvious, that it would undoubtedly be so provided in every future law.2 The State insolvent laws, for the most part, pro- vide commissioners of insolvency, and among these the judges of probate are sometimes placed ex officio ; but there is no uni- formity on this point.^ There is, certainly in general, and we think always, a supervisory power in the Supreme Court, or in the Court of Chancery. If a creditor's claim be doubted, the assignees may have the ments with preferences are not forbidden, sueli assignments must conform to the pro- visions of the Insolvent Act, and a conflict vitiates the assignment. Eepplier v. Orrich, 7 Ohio, pt. 2, 246 ; Hicldey v. Farmers & Merchants Banlc, 5 Gill & J. 377 ; Harsh- man V. Lowe, 9 Ohio, 92. But in later decisions, and previous to the enactment of the provisions mentioned in the text, the right was fully vindicated. See Murray v. Riggs, 15 Johns. 571 ; Grover v. Wakeman, 11 Wend. 187. 1 N. H. Rev. Stat. c. 134; Beard v. Kimball, 11 N. H. 471 ; Mass. Rev. Stat. c. 238, § 3 ; Mfinn v. Huston, 1 Gray, 250 ; Conn. Stat, of 1828 ; Bates v. Coe, 10 Conn. 280 ; Laws of Penn,, ed. of 1847, c. 592. No preference among creditors allowed, except for wages of labor, provided that the claims of laborers thus preferred shall not severally exceed the sum of fifty dollars. Rev. Stat, of New Jersey, tit. 9, c. 1, § 1. All prefer- ences of one creditor over another, or whereby any one or more shall be first paid, or have a greater proportion in respect of his or their claim than another, shall be deemed fraudulent and void, excepting mortgage and judgment creditors when the judgment has not been by confession for the purpose of preferring creditors. Ohio Rev. Stat, c. 57 (69), § 1. So in Iowa. Code of Iowa, 1851, c. 62, § 977. 2 See Ex parte Foster, 2 Story, 131 ; Ex parte Morris, before Eophinson, J., 1 Law Reporter, 354. ^ In Massachusetts, by the Act of 1858, u. 93, the Courts of Probate and Insolvency- are united, and are presided over in each court by a person who is styled the Judge of Probate and Insolvency. 26 * [ 305 ] 279* ELEMENTS OF MERCANTILE LAW. [CH. XV. question decided by a jury ; and so may the creditor, if his claim be disallowed ; by the provisions of many States.^ As to the manner of initiating the proceedings in bankruptcy, the national law contained some provisions, copied substantially from the English laws ; and in the short time during which the law was in force, various rules were made by the courts, or re- sulted from adjudication. At present, each board of commis- sioners, or each commissioner, seems to have the power of fram- ing their own rules of practice, always, however, subordinate to the principles, first, that each case shall begin with an applica- tion, either from the creditor (where that is permitted) or the debtor, under oath, and then full notice, by advertisement or * otherwise, to all interested, with sufficient delay, and convenient arrangement as to time and place. And, secondly, all the facts material to any party, are to be proved before the proper tribunal, by proper evidence, verified by oath, and subject to cross-exami- nation, and generally governed by the law of evidence. There is also introduced into most of these codes a rule derived from equity practice, by which the debtor may be compelled to answer, under oath, upon the interrogatories put to him by the commissioners, or by one or more creditors ; especially upon matters bearing on the question whether he has made any fraud- ulent or favoring assignments of property, with a view to bank- ruptcy, or while actually insolvent.^ But the common-law privilege would in most cases still be allowed him (but with some qualification perhaps), of refusing to answer any question, if the question could expose him to punishment for a crime." 1 And in like manner it was provided, by tlio 7tli section of the U. S. Act of 1841, that " as well the iissiynce as the creditor shall have a right to a trial by jury, upon an issue to be dircctLil by such court to ascertain the validity of such debts or other claims." 2 It was provided, in the U. S. Banla-upt Act of 1841, that the bankrupt should be subject to examination under oath, " in all matters relating to such bankruptcy and his acts and doings, and his property and rights of property, which, in the judgment of such court, are necessary and proper for the purposes of justice." And in the Act 12 & 13 Vict. c. 106, ^§ 117, 260, a similar provision occurs ; and the bankrupt may be com- pelled, under pain of committal, to disclose any secret grant, conveyance, or conceal- ment of his lands, tenements, goods, money, or debts, and to reduce his answers into writing, which examination, so reduced into writing, the said bankrupt shall sign and subscribe. Ex parte Page, 1 B. & Aid. 568. 3 Archbold on Bankruptcy, 277 ; Ex parte Cossens, in the matter of Worrall, Buck's Cases, 531, it is said, by Lord Chancellor Eldon: " I conceive that there is no doubt that it is one of the most sacred principles in the law of this countrr, that no man can be called upon to criminate himself, if he chose to object to it ; but I have always under- [306] CH. XV.] BANKRUPTCY AND INSOLVENCY. 280 The povirer to compel an answer is given to the commissioners, by authorizing them to issue a capias^ and commit a recusant for contempt, as a common-law court could do.^ At common law, any kind or amount of preference of one or more creditors over others, was, as we have seen, valid. That is, the law required of a debtor to pay his debts ; but permitted him to pay any debt at his own election, although by such an appropriation of his means, he could pay no part of any other.^ As, however, the general purpose of the insolvent laws is to secure an equal division of all the assets among all the creditors, for this purpose they avoid any payment, assignment, or transfer which would have, or was intended to have, the effect of favoring a part of the creditors at the expense of the others. There is, however, an obvious difficulty in applying this rule. stood that proposition to admit of a qualification with respect to the jurisdiction in banlcruptcy, because a bankrupt cannot refuse to discover his estate and effects, and the particulars relating to them, though, in the course of giving information to liis creditors or assignees of what his property consists, that information may tend to show he has property whicli ho has not got, according to law ; as in the case of smuggling, and the case of a clergyman carrying on a farm, which he could not do according to the act of parliament, except under the limitation of the late act ; and the case of persons having the possession of gunpowder in unlicensed places, whereby they become liable to great penalties, whether the crown takes advantage of the forfeitures or not ; in all these cases the parties are bound to tell their assignees, by the examination of the commissioners, what their property is, and where it is, in order that it may be laid hold of for the pur- poses of the creditors." And in 1 Rose's Cases in Bankruptcy, 407, in Ex parte Oliver, seven years before the case in Buck was decided, it was held, by Lord Eldon, that the conit had power to punish a bankrupt for contempt, who refused to answer any questions regarding his estate, even though the answer would criminate himself 2 Ves. & B. 244, s. c. In Pratt's case, 1 Glyn & J. 58, and Mont. & B. 203, the doctrine was broadly stated that the bankrupt was bound to disclose all circumstances respecting his property, be the consequences what they might. And see Ex parte Meymot, 1 Atk. 200; Ex parte Nowlan, 11 Ves. 514. But in Ex parte Kuby, 1 Mont. & McA. 229, Lord Lyndhurst was unfailing to admit that the commissioners could dispense with the general rule of law, that no person can be compelled to eliminate himself. The rule, however, in view of later cases, which went to a great extent upon the opinion of Lord Eldon, above quoted, we think may be stated as follows : The bankrupt may be com- pelled to answer any question relating to the disposition of his property, even though the answer may tend to criminate him. The principle of the rule is well illustrated in the case put by Erskine, C. J., in 2 Dea. & Cli. 214, Jn re Heath : " Now, with respect to the proposition put by Mr. Montague, I agree with him that you could not ask a man whether he had not robbed another of a sum of money ; because, if he had so robbed, the money would not be the property of the assignees, but of the party robbed ; it would be, in fact, no discovery of the estate of the bankrupt. But I can see no objection to this question (unless it might be regarded as a chain in evidence, to convict the party of robbery), namely: 'Had you not on such day, and at such a place, £100?' And, according to the answer, you might then interrogate what he had done with it. In the present case, tlie question is, ' What have you done with this property ? ' not, ' How did you obtain it ? ' And I think all the cases have been decided in that way of looking at the question." And the same doctrine is maintained In re Smith, 2 Dea. & Ch. 230 ; In re Feaks, 2 id. 226. 1 Kimball v. Morris, 2 Met. 573, Archbold, 278. 2 In relation to the matter of preference, see cases above cited, p. 276, n. [307] 281* ELEMENTS OE MERCANTILE LAW. [CH. XV. If a trader, as is usually the case, passes gradually into a state of insolvency, almost any creditor, who has the good fortune to be paid in full, gains an advantage over the rest, and reduces the means of the insolvent to their injury. A line, however, must be drawn somewhere. If an assignment or appropriation of property be made with fraudulent intent at any time, and this fraud is known to the assignee,^ the assignment itself is void at * common law. But, as was said, the mere intention of giving to a creditor priority or jDreference, is not fraudulent. And the national law contained, and most, if not all, our insolvent laws contain a provision defining a period of time prior to which an assignment of property from a bankrupt, unless there be a fraud at law on his part with the knowledge and connivance of the assignee, is valid ; but any assignment or transfer or payment after it, if made by the bankrupt in contemplation of bankruptcy or insolvency, is void, however innocent or ignorant the assignee.^ 1 In Cook V. Calilecott, Moody & JI. 525, the law is clearly stated by Lord Tenterden, C. J. : " All other proof of any act of bankruptcy previous to the sales in question having failed, the only question is, whether the transactions in themselves, or either of thcni, arc to be considered as acts of bankruptcy within the 6 G. 4, c. 16, s. 3. The words of the clause are ' fraudulent gift, delivery, or transfer,' the word ' fraudulent ' of course applying to each of those which follow it. Now the sale is a ' transfer,' and therefor may come within the provisions of the statute as a 'fraudulent transfer.' But though it may do so, it is not, from its nature, a transaction exposed to the same sus- picion as some of those whicli would be comprehended under the former words ; and I think that a sale cannot in reason be hold to be a fraudulent transfer, unless it takes place under such circumstances that the buyer, as a man of business and understanding, ought to suspect and believe that the seller means by it to get money for himself in fraud of his creditors, and that the sale is made for that purpose. The question, there- fore, for the jury is, whether they think that the defendant, as a man of business, ought to have known that Doum must have effected these sales, or either of them, for the pur- pose of putting the proceeds in his own pocket and defrauding liis creditors f If so, the verdict should be for the plaintiffs, for all goods comprised in that transaction or deliv- ered subsequently to it." ^ The claitse "in contemplation of bankruptcy " has received judicial construction in several cases. In Arnold y. Maynard, 2 Story, 349, it was held by Judge Story that the claim does not necessarily mean in contemplation of his being declared a bankrupt within the statute, but in contemplation of his actually stopping his business, because of his insolvency and incapacity to carry it on. In this case, the English authorities are rcvicivcd, and the conclusion reached is, that if, when the party " is deeply involved in debt, auil intending to fail and break up his whole business at once, he makes a con- veyance to a particular creditor to give him a preference over all the rest, it seems to me irresistible evidence that he does the act in contemplation of bankruptcy. I do not think that it is necessary for this piu-pose tliat ho should contemplate the conveyance as an act of bankruptcy, or that he should make it with a present and Immediate intention to take the benefit of that statute." And in Jones v. Howland, 8 Met. 385, it was held that, though insolvency in fact exists, yet if the debtor honestly believes he shall be able to go on in his business, and with such belief pays a just debt, without design to give a preference, such payment is not fraudulent, though bankruptcy subsequently ensue. And the same doctrine was held in the District Court of Vermont, by Prentiss, J., In re Pearce, 6 Law Kep. 261, and in Mitchell v. Gazzam, 12 Ohio, 325. But con- fession of a jiiclgraent is valid, in view of this provision, if it be not voluntary, btit the [308] CH. XV.J BANKRUPTCY AND INSOLVENCY. *282 In the national law this was two months ; it differs in the differ- ent States, but is about the same time generally.^ * In computing this time, it is said that the day on which the transaction took place, or the day on which the petition is filed, must be excluded.^ In legal computations of time, generally, the law knows no fractions of a day. But in the application of the insolvent laws, the very hour is inquired into. The reason effect of measures taken by the creditor, or in his power to take. Haldcman v. Mi- chael, 6 Watts & S. 128, tliough the confession bo but ten days before tiie filing of tlie petition. Taylor v. Whitthorn, 5 Humph. 340. And security given to a creditor in contemplation of bankruptcy, with a view to prefer, is not void, if the act l)e not strictly voluntary. Phoenix !>. Ingraham, 5 Johns. 412 ; M'Mechen v. Grundy, 3 Har- ris & J. 185. As to the effect of a discharge obtained after such transfer, in contem- plation of bankruptcy, see Brereton v. Hull, 1 Denio, 75; Beekman v. Wilson, 9 Met. 434. The English cases on the construction of this clause are numerous. Wedge w. Newlyn, 4 B. & Ad. 831 ; Newton v. Chantler, 7 East, 138 et seq. ; Pulling v. Tucker, 4 B. & Aid. 382 ; Fidgeon v. Sharpe, 5 Taunt. 539 ; Flook v. Jones, 4 Bing. 20 ; Po- land V. Glyn, 4 Bing. 22, n. ; Ridley v. Gyde, 9 Bing. 344 ; Morgan v. Brundrett, 5 B. & Ad. 289 ; Baxter v. Pritchard, 1 A. & E. 456 ; Abbott v. Burbage, 2 Bing. N. C. 444 ; Compton v. Bedford, 1 W. Bl. 362 ; CaiT v. Burdiss, 1 Cromp., M. & E. 447 ; Hartshorn v. Slodden, 2 B. & P. 582 ; Gibbins v. Phillips, 7 B. & C. 529 ; Atkinson v. Brindall, 2 Bing. N. C. 225 ; Belcher v. Prittie, 10 Bing. 408. 1 The clause of the late national law was : " Provided that all deahngs and transac- tions by and with any bankrupt bona fide made and entered into more tlian two months before the petition filed against him or by him, shall not be invahdated or affected by this act." And a similar provision occurs in the English Bankrupt Law. Cuwie v. Harris, 1 Moody & M. 141. In this case the commission in bankruptcy was issued on the 14th of May, 1825. Goods of the bankrupt had been deposited with a pawn- broker on the 14th of March, 1825. The Attorney-General for the plaintiffs, did not contend that they were deposited within the two months, and Lord Tenterdm, C. J., said : " With respect to the goods deposited on the 14th, the right of the plaintiffs will depend upon the validity of the transaction, as between the bankrupt and tlic creditor; for both days cannot be reckoned inclusively, so as to make March the 14th not more than two calendar months before May the 14th, the date of the commission." S. P., Ex parte Parqnhar, 1 Mont. & McA. 7. ^ Thomas v. Desanges, 2 B, & Aid. 586. In this case the facts were, that the bank- rupt was surrendered in discharge of his bail, on June 1st, 1818, between six and eight o'clock in the evening, and on the same day, between one and two o'clock in the after- noon, a writ of fieri fiicias was delivered to the defendants, who, by their officer, en- tered into the bankrupt's premises and seized the goods. The bankrupt lay in prison more than two months afterwards. The plaintiff's insisted that the act of bankruptcy having been committed on the same day that the goods were taken in execution, the plaintiffs must in law be considered as having the property of the goods vested in them during the whole of that day, because there can be no fraction of a day. Abbott, C. J., thought that the court might notice the fraction of a day in this case, and nonsuited the plaintifls, and a rule to set aside the nonsuit was refused. In the matter of Richardson, 2 Story, 571, Story, J., said : "I am aware that it is often laid down that in law there is no fraction of a day. But this doctrine is true only sub modo, and in a limited sense, where it will promote the right and justice of the case. It is a mere legal fiction, and, therefore, like all other legal fictions, is never allowed to operate against the riglit and justice of the case. S. P., Sadler v. Leigh, 4 Camp. 195 ; Ex parte Farquhar, 1 Mont. & McA. 7; Ex parte D'Obree, 8 Ves. 82; Wydown's case, 14 Ves. 80. We are aware of no cases where the technical rule of the law, that no fraction of a day can be allowed, has been adhered to in bankruptcy, save The matter of David Howes, 6 Law Reporter, 297 ; and In the matter of Wellman, 7 id. 25, where the doctrine laid down in the first case is maintained and defended. The authorities are reviewed in the opin- ion of the court at some length, and the views of the judge, though savoring of techni- cality, are ably sustained. 283* ELEMENTS OF MERCANTILE LAW. [CH. XV. of this, or at least its justice, is obvious. If one's rights depend upon whether he has lain in prison two months, or whether a certain thing was done more or less than two months before another, or whether a petition was filed under a law before that law was repealed or not, it is as proper to ascertain the exact time, as it is when there is a question whether an attachment of land or a record of a conveyance was first made. This has been denied in some cases, but not, we think, on good grounds.^ It would seem that this question of fraudulent preference should stand upon the same footing as questions of fraud gen- erally. It is a mixed question of fact and of law ; and so far as it depends upon law, or upon construction, the court may decide it, and the parties have a right to have it decided by the court. But so far as it rests upon proof, or is to be inferred from evi- dence, * direct or circumstantial, it would seem to be a question of fact, upon which a jury might pass. It may be remarked in this connection, although true also without any reference to the laws of bankruptcy or insolvency, that if one purchases of another property, either real or per- sonal, for its full value, and pays the price in money, it is still a fraudulent transaction, provided the purchaser did it with intent to aid the seller in defrauding his creditors. And in this case the sale is wholly void, and the assignee of the seller, if he goes into bankruptcy, will recover the property, although the sale take place before the limited period above referred to.^ The very important influence of bankruptcy or insolvency in extending the lien of a seller, so that he may reclaim his goods, unless they have come into the actual possession of the insol- vent, or, in other words, the right which insolvency gives to the seller, of stopping the goods in transitu, is fully considered in the chapter on Stoppage in Transitu. This right depends of course upon insolvency, but not necessarily upon legal and for- mal, or, as it is sometimes called, notorious insolvency.'^ I Sec oiises cited in the preceding: note. " Arnold r. Mayiiard, 2 Story, 350 ; Fi(lj;vuu c. Sharpe, 5 Taunt. 539 ; Hassels v. Simpson, 1 IJoitg. 89; Worseiey v. de Mattns, 1 Burr. 467 ; Newton a. Cliantler, 7 East, 1.38 ; Chase v. Goble, 2 ftlan. & G. 930 ; Can- v. Burdiss, 1 Cromp., M. & E. 443 ; Siebert t . Spooner, I H. & W. 714 ; Cook ( . Caldecott, 4 C. & P. 315 ; Baxter V. Pritcliard, 1 A. & E. 456, 460 ; Graham c. Chapman, 12 C. B. 85, 11 Eng. L. & Eq. 498; Newnham v. Stevenson, 10 C. B. 713, 3 Eug. L. & Eq. 512; Butler r.^Hildreth, 5 Jlet. 49. i* Sec the chapter on Stoppage in Transitu, and cases cited there. [310] CH. XV.] BANKRUPTCY AND INSOLVENCY. *284 SECTION IV. "WHO MAY BE INSOLVENTS. The statutes provide with much minuteness, as to who may become, or may be made bankrupt.^ In England, the statute of * Geo. III. c. 16, § 2, collects in one clause the various kinds of persons whom the bankrupt law considered as traders,^ and 1 Thus in the late National Bankrupt Law, provision was made for voluntary and involuntary bankrupts. In the first section of the act it was provided that: "All persons whatsoever, residing in any State, district, or tenitory of the United States, owing debts which shall not have been created in consequence of a defalcation as a public officer ; or as executor, administrator, guardian, or trustee, or while acting in any otlicr judiciary capacity, wlio shall, by petition, setting forth to the best of his knowledge and belief, a list of his or their creditors, their I'espective places of residence, and the amount due to each, together with an accurate inventory of his or their prop- erty, rights, and credits, of every name, kind, and description, and the location and situation of each and every ])arcel and portion thereof, verified by oath, or if conscien- tiously scrupulous of taking an oath, by solemn affirmation, apply to the proper court, as hereinafter mentioned, for the benefit of this act, and therein declare themselves to be unable to meet their debts and engagements, shall be deemed banlu'upts within the provisions of tliis act, and may bo so declared accordingly by a decree of sueli court ; all persons being merchants, or using the trade of merchandise, all retailers of mer- chandise, and all bankers, factoi'S, brokers, underwriters, or marine insurers, owing debts to the amount of not less than two tliousand dollars, shall be liable to become banknipts within the true intent and meaning of this act, and may, upon the petition of one or more of their creditors, to wliom tlic}^ owe debts amounting in the whole to not less than five hundred dollars, to the appropriate court, be so declared accordingly, in the following cases, to wit : wlienever such person being a merchant, or being a retailer of merchandise, or actually using the trade of merchandise, or being a banker, factor, broker, underwriter, or marine insux'cr, shall depart from the State, district, or territory, of wlaich he is an inhabitant, witli intent to defraud his creditors ; or shall conceal him- self to avoid being an'csted ; or shall willingly or fraudulently procure himself to be arrested, or liis goods and chattels, lands or tenements, to be attached, distrained, or sequestrated, or taken in execution ; or shall remove his goods, chattels, and effects, or conceal them to prevent their being levied upon, or taken in execution, or by any otiier process ; or make any fraudulent conveyance, assignment, sale, gift, or other transfer of his lands, tenements, goods or chattels, credits, or evidence of debt." And similar provisions occur in otlier statutes. 2 In this note wo give the enumeration which occurs in the English Statute of Con- solidation of the Bankrupt Laws, 12 & 13 Vict. c. 106, § 65. Wc cite important cases upon the construction the courts have put upon several of their classes of traders. They will be mostly found collected in the notes of Chitty's Statutes of Practical Utilitv, but which may not be accessible to the general reader. " That all alum makers, apothecaries, auctioneers, bankers: Ex parte Wilson, 1 Atk. 218; Ex parte Wyndham, \ Mont., D. & De G. 156 ; Ex parte Plall, 3 Deac. 405 ; E.c parte Brun- drett, 2 Deac. 219; Ex parte Brown, 2 IVIont., D, & De G. ".'j2. Bleachers, brokers : Pott V. Turner, 6 Bing. 702 ; Highmore v. MoUoy, 1 Atk. 206 ; Eawlinson v. Pearson, 5 B. & Aid. 124 ; Ex parte Stevens, 4 Madd. 256" ; Ex parte Phipps, 2 Deac. 487 ; Ex parte Harvey, I Deac. 570 ; 2 Mont. & A. 593 ; Hankey v. Jones, Cowp. 745 ; Ex parte Gem, 2 Mont., D. & De G. 99; Ex parte Moore, 2 Deac. 287. Brickmakers : Wells V. Parker, 1 T. R. 34 ; Sutton v. Weeley, 7 East, 442 ; Ex parte Harrison, 1 Bro. C. C 173 Builders: Ex parte Noirinckx, 2 Mont. & A. 384; Ex parte Edwards, I [311] 280* ELEMENTS OF MERCANTILE LAW. [CH. XV. somewhat * enlarged the provisions of former statutes in this particular. But still the operation of the law was confined to traders. It will be remembered, however, that the insolvent laws originally differed from the bankrupt laws, in the fact that tliry were not confined to traders ; that is, only a trader could be proceeded against in invifum, and being so proceeded against, his debt was discharged. But any debtor liable to arrest might seek relief under the insolvent laws, and would be by them pro- Jloiit., T). & De G. 3 ; Ex parte Stewart, 18 L. .J. Bankr. 14 ; Stuart v. Sloper, 3 Exch. 7U(I. Calcndereis, caqjcntcrs : Cooke, B. L. 49; Chapman v. Lamphire, 3 Mod. 155 ; Kimcy v. Smith, 1 Ltl. l!:ivni. 741. Carriers, cattle or sheep salesmen ; Ex jjiirle Newall, 3 Dcac. 333. Coacli' proprietors : Ex imrte Walker, 2 Mont. & A. 267 ; Martin (,'. Ni'^htiiinale, 11 J. B. Muore, 305. Cow-keepurs : Carter v. Dean, 1 Swanst. 64; /s r parte Deerina, De (iex, 398. Dvcrs, fullers, keepers of inns: Smith r. Scott, 9 Biu'^. 14; Ex parte Birch, 2 Mont.,'D. & De G. 659; see also, Ex parle Willes, 2 Dear. 1 ; Ex /nrti- Bowers, 2 Deae. 99 ; Gibson u. King, 10 M. & W. 667 ; ICinp; v. Siiiimonds, 12 Jur. 903; Ex parte Daniell, 7 Jm'. 334. Taverns, hotels, or coffee- houses, lime-burners, livery stalile keepers : Ex parte Lewis, 2 Deac. 318; Cannan u. Deucw, 10 Bing. 292. jiarkct gardeners: Ex parte Hammond, 1 De G. 93; also Carter c. Dean," 1 Swanst. 64. Millers, ]iaekers, printers, ship-owners : Ex parte Bowes, 4 Ves. 1G8; Ex parte Wiswould, JIunt. 263. Shipwrights, \ictuallers, ware- houseni")!, wharfingers, persons using the trade or profession of scrivener receiving other men's moneys or estates into their trust or custody: Adams v. Malkin, 3 Camp. 534 ; Lei V. Melville, 3 Man. & G. 52 ; Hamson v. Harrison, 2 Esp. 555 ; Jn re Lewis, 2 l!i.,-e, 59; Hurd r. Brydges, 1 Holt, X. P. 654; 7n re Warren, 2 Sch. & L. 414 ; Hutcliinson v. Gascoigne.'llolt, N. P. 507 ; Er parte Bath, Mont. 82 ; Ex parte Gem, 2 i\Iont., D. & ])e G. 99. Persons insuring ships or their freight, or other matters, against ]ierils of the sea, and all persons using the trade of merchandise by way of bar- gaining, exchange, bartering, commission, consignment, or othenvisc, in gross or by retail, and all ]ierrtiins who, either for themselves or as agents or factors for others, seek their liviii!.' by buyini;' and selling- : Ex parte Herbert, 2 Rose, 248; Hale v. Small, 2 Brtiil & li. 25 ; Parker v. Wells, Cooke, 58 ; Summcrsett v. Jarvis, 3 Brod. & B. 2; Bolton r. S.inevby, 11 East, 274; Patten ?•. Browne, 7 Taunt. 409; Ex parte Salkeld, 3 Wout., U & De G. 125 ; Ex parte Atkinson, 1 Mont., D. & De G. 300 ; Dally v. Smith, 4 Burr. 2148; Heannv c. Birch, 3 Camp. 233; Port v. Turton, 2 Wilson, 169; Paul r. Dowliug, 3 C. & P. 500 ; Ex parte Buru'ess, 2 Glvn & J. 183 ; Heane r. Rog- ers, 9 ]'.. & C. 577; /•:.■ parli- Bowers, 2 Deac. 99 ; Er 'parte AViswould, .Almit. 263; Patman v. Vauglian, I T. K. 572 ; Ex parte Cromwell, 1 Jluut., D. & De G. 15S ; Ex parlr Blackmore, 6 "Ws. 3: Hankey v. Jones, Cowp. 748; Gale !■. Half knight, 3 Stark, all; E.r parle Ijavender, 4 Dear. & Ch. 484; Valentine r. Vaughan, Pcake, 70; Xe'wton r. Tri-u, 1 Salk. 109; JIayo v. Archer, 1 Stra. 513; Stewart f. Ball, 2 N. R. 78 ; Cobb r. Svnion.ls, 5 B. & Aid. 516; Saunderson !'. Rowles, 4 Burr. 2066; Ex parle Meymot, 1 Atk, 196 ; MiUikin i'. Brandon, 1 C. & P. 380; Colt v. Xetter- vill, 2 P. ^Vms. 308. Dr by buying and letting for hire, or by the workmanship of goods or commodities, shall be deemed traders liaiile to I lecome bankrupt ; ]iroyided tluit no farmer, grazier, common laborer, or workmen for hire, receiver-general of the taxi s, or member of, or subscriber to any incorporated commercial or trading com- pany established by cliarter or act of parliament, shall be deemed as such a trader liable to become bankrupt." xVnd in this coimtry it was held, that a distiller whose business consisted in the ])urchase and sale of grain and the conversion of it into alco- hol ; and the sale of alcohol, and in the purchase of domestic animals and the sale of them, or of their flesh after being fattened, was of such an occupation as subjected him to the operation of the bankrupt act, on the petition of a creditor. In the mat- ter of Im'Ics, 5 Law Reporter, 273. And see the iustructive opinion of Conkling, J., in tins case. [312] CH. XV.] BANKRUPTCY AND INSOLVENCY. *286 tected from imprisonment.^ Now, all our present statutes are called insolvent laws ; and their operation is very wide. In England, for example, no feme covert could be a bankrupt who was not lawfully a sole trader ; ^ but here, it may be presumed that any woman, whether married or not, who, by the present or any future law of a State, should be liable to suit upon a debt, could go into insolvency.^ An infant cannot be made a bankrupt ; * but we do not know why he may not be declared insolvent on his own petition ; ^ for the modern rule is, that none of his debts are absolutely void, * but only — if not for necessaries — voidable by him. And there- fore unless, or until, they are avoided, he is the same as any other debtor.® A lunatic, while insane, could perhaps incur no debt for which he could be held responsible ; unless, possibly for his own benefit, it was permitted to him to make a valid contract for necessaries.^ In such case, he could become insolvent for that, and he certainly could be declared insolvent on the petition of a guardian, for debts contracted before insanity, or in a lucid interval." If a debtor attempts to place his property in the hands of assignees, for the benefit of his creditors, this, where there is a bankrupt law, is an act of bankruptcy. That is, the debtor may be proceeded against as a bankrupt, and his voluntary assign- 1 Upon this distinction between banknipt .ind insolvent laws, which prevailed till re- cently, see Shee v. Hale, 13 Ves. 404 ; and Eochford v. Hackman, 9 Hare, 475, 10 Eng. L. & Eq. 64. 2 La Vie v. Philips, 1 W. Bl. 570 ; Ex parte Carrington, 1 Atk. 206. And the wives of convicts may be decreed bankrupts. Ex parte Eranks, 7 Bing. 762. ' Thus, in Magrath v. Robertson, 1 Desaus. 445, it was held that a wife may become a sole trader or dealer by permission of her husband, even without deeds ; and she be- comes entitled to all her earnings as her separate estate. King v. Paddock, 18 Johns. 141 ; Baker v. Barney, 8 Johns. 72. * Ex parte Adam, 1 Ves. & B. 494; Stevens v. .Jackson, 4 Camp. 164; 6 Taunt. 106; Ex parte Moule, 14 Ves. 603; O'Brien v. Currie, 3 C. & P. 283; Belton v. Hodges, 9 Bing. 365; Thornton v. Blingworth, 2 B. & C. 826; Mason v. Denison, 15 Wend. 64. But when he had held himself out as an adult, and ti-aded as such two years, it was hdd that he might be decreed a bankrupt. Ex parte Watson, 16 Ves. 265 ; Ex parte Bates, 2 Mont., D. & D. 337. 5 See In the matter of Cotton, 6 Law Reporter, 546. i> Upon this point see the cases cited in the Chiipter on Infancy, on the modern doc- trine of contracts void and voidable. ' See Gore v. Gibson, 13 M. & W. 627; Niell v. Morley, 9 Ves. 478; McCrillis v. Baitlett, 8 N. H. 569; Richardson v. Strong, 13 Ired. 106; Baxter v. Earl of Ports- mouth, 5 B. & C. 170. 6 Molton ti. Camroux, 4 Exch. 17; Anon. 13 Ves. 590; Ex parte VniXAj, Archh. Bankruptcy, 56 ; Ex parte Layton, 6 Ves. 440 ; Jackson dem. Caldwell v. King, 4 Cowen, 207. 27 [313]' 287* ELEMENTS OF MERCANTILE LAW. [CH. XV. ment is void, and the assignee appointed under the bankrupt commission, takes all his effects. And this is applied, even where there is no intention to defraud : and even where the debtor provided by the express terms of the assignment, that his effects should be applied and distributed according to the pro- visions of the bankrupt law.i This would now be true in this * country, only where the State statutes expressly or by implica- tion supersede all voluntary assignments, and do not merely offer the relief they provide, to those who seek it, leaving them at lib- erty to assign their effects for their debts, if they choose to do so.^ SECTION V. OF THE PROOF OF DEBTS. As the insolvent laws purpose io divide all the assets of the debtor ratably among all the creditors, it follows that they open the way very widely to all persons who have claims to present '■ Mann v. Huston, 1 Gray, 25.3. Provision is usually made in the banlcrupt laws, that all assignments or conveyan(.'es shall he void, ^vhicli arc made within a certain time before petition filed, and shall constitute in themselves acts of bankruptcy. Stats. 12 & 13 Vict. c. 106, ^ G8. In Barton o. Tower, 5 Law Reporter, 214, an assignment of their property hail been maile by two partners, with a direction that it should be distrib- uted among their creditors by the assignees, " in the same manner as if the same were in the hands of an assignee under the bankrupt act of the United States, by virtue of proceedings duly had in bankruptcy." This assignment was held an act of bankrui)tcy and void. And Coiikling, J., delivering the oijiiiion of the court, said : " There are three descriptions of fraudulent conveyances, assignments, &c., which bring a merchant, banker, factor, iLc, within the oitcration of the hr.^t section of the bankrupt at't. 1. Such as are fraudulent, or against the common law, or tlic provision of sucli JEnglish statutes as have been incorporiited into the jurisprudence of this country. 2. (As I am now well satisfied, whatei'cr doubts I may have originally entertained"), such as are voluntarily made, in contemplation of bankruptcy, and for the purpose of giving a preference to one or more of the creditors of the debtor over his other creditors. The making of a con- veyance of the description has always been lield to be an act of bankrujitcy under the English bankrupt law, as being contrary to the [lolicy ot law, without any express words in the statute. But in our a Wheeler v. Fisk, 3 Fairf. 241 ; Robinson v. Mansfield, 13 Pick. 139; Pomroy v. Kingsley, 1 Tyler, 294; Carter v. Champion, 8 Conn. 549 ; Dunklee v. Fales, 5 N. H. ."528 ; Kittredge d. Bellows, 7 id. 427 ; Fettyplace r. Dutch, 13 Pick. 392 ; Arnold u. Brown, 24 Pick. 95 ; Grosvenor v. Gold, 9 Mass. 210. [ 322 ] CH. XV.J BANKRUPTCY AND INSOLVENCY. -295 tachment on real estate, at the commencement of the suit, in a State in which it was permitted by law, and every day's prac- tice, and had been always spoken of by the courts as a " lien," was nevertheless none under the bankrupt law, and that such attachment was superseded and avoided by that law. He how- ever conceded that a lien by a judgment was recognized by the statute and valid against it.^ The same or a similar question coming before other judges of the United States courts was de- cided in different ways. It afterwards came up before the Su- preme Court of New Hampshire, which — Chief Justice Parker delivering the opinion — elaborately and fully sustained the doc- trine that such attachment was a lien, to be respected by the bankrupt law. And so far as subsequent adjudication instructs us, we are satisfied that the New Hampshire view is adopted not only by the State courts, but also by those of the United States.^ 1 In the matter of Cook, 2 Story, 380. " I have never doubted that the lien of a judgment at the common law upon real estate since the Statute of Westminster, 13 Ed- ward I. Stat. 1, c. 18, which has been adopted in many States in the Union, is within the proviso of the second section of the Bankrupt Act of 1841, and saved thereby, and is wholly unaffected by the proceedings in bankruptcy, when it has been obtained in the regular course, before any petition or decree, or discharge in bankruptcy. See to the point, that a judgment is a lien on the property of a defendant. Conard v. Atlantic Ins. Co. 1 Pet. 386 ; Cathcart v. Potterfield, 5 Watts, 1 63 ; . Van Rensselaer v. Sheriff of Albany, 1 Cowen, 501 ; Eidge v. Prather, 1 Blackf. 401 ; United States v. Morrison, 4 Pet. 124; Porter v. Cocke, Peck, 30; Moliere v. Noe, 4 Dall. 450; Kerper v. Hoch, 1 Watts, 9 ; Codwise i>. Gelston, 10 Johns. 507 ; Coutts v. Walker, 2 Leigh, 268 ; Mut. Assurance Soc. v. Stanard, 4 Munf. 539 ; Eoads v. Symmes, 1 Ohio, 140 ; Towner v. Wells, 8 id. 136; Talbert v. Melton, 9 Smedes & M. 9; Buckingham v. McLean, 13 How. 151 ; Pollard v. Cocke, 19 Ala. 188; Bycrs v. Fowler, 7 Eng. 218. ^ The cases upon this conflict of laws, with regard to the effect of an attachment in creating a lien, are cited in this note. They arc more fully considered in the notes to the chapter on Bankruptcy and Insolvency, in the 2nd vol. of Parsons on Contracts. The principal conflict arose between the Circuit Court of the United States for the first circuit, and the Superior Court of Judicature in New Hampshire. The doctrine which is referred to in the text as emanating from Judge Story, was first laid down in the ease of Ex parte Foster, 2 Story, 131, 5 Law Reporter, 55. This case was cited and con- sidered in Kittredge v. Warren, 14 N. H. 509 ; and an opposite opinion on this point was adopted by the court. It was held that an attachment of property upon mesne pro- cess, bond fide made before any act of bankruptcy, was a lien or security upon property, valid by the laws of New Hampshire, and within the proviso of the second section of the bankrupt act. In the matter of Bellows & Peck, 5 Law Reporter, 119, this matter came again before the Circuit Court, Judge Story presiding, and the authorities, arrd espec- ially Kittredge v. Warren, were considered at length. The opinion of the court in Ex parte Foster, was reaffirmed, and, going further, it was held, that where an attachment on mesne process was made, and the defendant subsequently obtained his discharge in bankruptcy, and a State court where the case was pending should, as in Kittredge v. Warren, hold that the attachment prevailed as against the subsequent proceedings ; and the discharge invalid as against creditors who had secured their rights by such attach- ment ; it would be the duty of the District Court to grant an injunction against the creditor his agent and attorneys, and the sheriff who had charge of the property attached, {323] 296 ELEMENTS OF MERCANTILE LAW. [CH. XY. SECTION VII. OF THE ASSIGNEE. The assignee is usually selected or chosen by the creditors, at their first meeting ; a majority in value of the creditors choosing, with some restrictions, that such a number must concur in the choice, in order to prevent one or two very large creditors from deciding the question. If the creditors fail or decline to choose, usually the judge or commissioner presiding may appoint. The assignee, or assignees, thus chosen, must signify their assent within a certain time, which is usually a short one.^ to restrain the creditor from proceeding to judgment,or if the suit had been prosecuted to judgment, to restrain him from levying his execution on the property attached, or, if the property had been sold under the execution, to compel the sheriff to bring the money into court. In Kittredge v. Emerson, 15 N. H. 227, which came before the court of New Hampshire subsequent to the decision in Bellows & Peck, the doctrines of that case wore assailed, and that of Ivittredge v. Warren afSrmed, with conspicuous ability, by Mr. Chief Justice Parker, in an opinion of great length, in which the cases are reviewed, both with regard to the matter of attachment, and the power of the courts of the United States to grant injunctions to restrain plaintiffs in the State courts from pursuing their rights and remedies in those tribunals. And denying this power, and in order to be clearly understood, tlie court say that if such plaintiffs shall ask their interference, it will be their duty to enjoin and prohibit any person from attempting to procure any process, from any court not acting under the authority of the State of New Hampshire, with a view to prevent the entry of judgments in such suits, or to prevent the execution of the final process issued upon those judgments, when obtained. The case of Bellows & Peck was taken to the Supreme Court of the United States on a writ of error, and the decision of Parkei', C. J., sustained. Peck v. Jenncss, 7 How. 612. This matter is considered also l)y Prentiss, J., in the District Court of A'^ermont. Downer t'. Brackett, 5 Law Reporter, 392, where a view is adopted like that of the court of New Hampshire, above cited. Houghton v. Eustis, 5 Law Rep. 505. The view adopted by Mr. Justice Story was ((incurred in liy Colliding, J. In the matter of Allen, 5 Law Reporter, 362. The following cases are cited in verification of the last paragraph of the text on this subject. Tyrell v. Rountree, 1 McLean, 95, 7 Pet. 464 ; Wallace v. M'Connell, 13 Pet. 151 ; Beaston y. Farmers Bank of Delaware, 12 Pet. 128; Savage y. Best, 3 How. Ill ; Colby i\ Ledden, id. 626 ; Shawhan r. Wherritt, id. 627 ; Downer v. Brackett, 21 Vt. 599; Sh.affer v. MoJIakin, 1 Smith, 148, 1 Carter, Ind. 274; Langford v. Raiford, 20 Ala. 532 ; Kilborn v. Lyman, 6 Met. 299 ; Hubbard v. Hamilton" Bank, 7 Met. 340 ; Davenport v. Tilton, 10 Met. 320. 1 But by the provisions of some of the bankrupt and insolvent laws, the power of appointment is vested in the court. Sec § 3 of the late National Law. And where such power is vested in the court, no person will ordinarily be appointed who is inter- ested in the bankrupt estate. Nor any person who has an interest hostile to that of the creditors. Kx parte De Tasted, 1 Rose, 324 ; Ex parte Surtees, 12 Ves. Jr. 10. And if accidentally a large proportion of the creditors have been absent at the choice of the assignee, a new choice may be ordered. Ex parte Greignier, 1 Atk. 91 ; Ex parte Hawkins, Buck, 520 ; Ex parte Dcchapeaurouge, 1 Jlont. & McA. 174 ; Ex parte Ed- wards, Buck, 411. And if, after choice made, the commissioner should decide that the person chosen is for any reason unfit for the discharge of the duties, and refuse to admit [324] CH. XV.] BANKRUPTCY AND INSOLVENCY. 297-*298 It is his duty to act as a faithful trustee for all concerned; and ' with impartial justice to all.i It w^ould be impossible to enu- him to the care of the estate, an appeal lies to the Supremo Court of bankruptcy. Ex parte Candy, 1 Mont. &McA. 197. And the court also in general has power to remove an assignee who proves incompetent, from any reason, to discharge his office ; or if there has been a fraud in procuring the appointment. In Ex parte Shaw, 1 Glyn & J. 157, Lord Eldon said : " Assignees owe a duty to every creditor, and each creditor owes a duty to the other creditors. V^itli respect also to the solicitors under the commission, I can only say, that it sometimes happens that the best men are employed for parties having adverse interests, yet I cannot permit my observations to be closed without saying, that it is the duty of the solicitor employed by the bankrupt, if he find that he is employed by the assignees, to see that he can do his duty to every creditor, as well as to the bankrupt. If he is the agent of all, he must do his duty to each and all of them, however difficult it may be to discharge that duty. I must say, that I never saw pro- ceedings in any bankruptcy in which there was a necessity for the interference of the court more imperious than in this, for whether Can-oil can or cannot prove the rest of his debt (and it would be improper in me to express an opinion on that part of the sub- ject, even if I had formed an opinion upon the merits of it), yet I cannot read the pro- ceedings without observing, that the case calls for much adverse examination. I take into consideration all the other circumstances that have occurred, and without saying whether if I were bound to decide this question merely upon the interposition of the bankrupt, I could get satisfactorily to the conclusion what were the motives which induced the nomination of these parties ; after a laborious research into the evidence I have no difficulty in stating, that, taldng the case altogether, if the nomination had been can-icd into execution by assignment, I should have been of opinion tliat Carroll stands under circumstances, in which he should not be assignee." The case was, a petition to remove assignees under a commission of bankruptcy, and to charge interest for money, part of the banlcrupt's estate, received by one of the assignees, paid in at his banker's, to his own account, and used as his own property. The Lord Chancellor said : " Under these circumstances, therefore, the former assignees having been actu- ally discharged for this very reason, using money, part of the banknipt's estate, as their own, the new assignees chosen in execution of tbe principle respecting such use of the property, no substantial reason appearing for not having made this money the subject of dividend, being taken by this person, one of the new assignees, placed by him at his banker's, used as his own money, his clerk furnished with authority to draw it out, as he pleased, and actually doing so, I must, by enforcing this rule, i^ possible, convince persons, standing in the situation of trustees, as assignees in bankruptcy, that they are not to make use of the bankrupt's estate for their own private pui-poses. Por that rea- son alone I shall direct a meeting to be called for the purpose of choosing an assignee instead of that one, who has made this use of the property." And in an early case. Ex parte Haliday, 7 Vin. Abr. 77, where the commissioners of the bankrupt's estate had charged more than 20s. apiece at each meeting, and likewise ordered great sums to be charged for their eating and drinking, the Lord Chancellor declared them incapable of longer holding their office. Ex parte Reynolds, 5 Ves. Jun. 707. So, if the assignee remove from the State in which the decree issued, or beyond the jurisdiction of the 1 And the duties of an assignee are spoken of in the books as closely resembling those of trustees. Belchier v. Parsons, 1 Kenyon, 44 ; Lord Eldon held, that an assignee or trustee is not liable for accidental losses without blamable negligence, s. c. Ex parte Belchier, Amb. 218; Primrose v. Bromley, 1 Atk. 89 ; Ex parte Lane, id. 90. And if the assignee appoint an agent, he must exercise the care that is required of a trustee in such selection. Belchier v. Parsons (above cited). In the matter of the Earl of Litch- field, 1 Atk. 87, where Lord Hardwicko held an assignee liable for loss who had ap- pointed as clerk " a person of very little credit," and " did not consult the body of the creditors, who are his cestui que trusts." Knight v. Plimouth, 3 Atk. 480 ; Adams v. Claxton, 6 Ves. jun. 226. And the same doctrine is laid down by Tindal, C. J., in Raw V. Cutten, 9 Bing. 96. But the general authority of assignees cannot be delegated. Douglas V. Browne, Montagu's Cases in Bankruptcy, 93. 28 [ 325 ] 299* ELEMENTS OF MERCANTILE LAW. [CH. XV. merate all his duties. The principal among them are, to ascer- tain the regularity and sufficiency of the proceedings thus far ; to take immediate possession of all the assets of the insolvent, and demand and take any necessary steps to collect all outstanding assets of every kind.^ And he must take due care of the prop- * erty thus collected. In general, he is clothed with the power, court by wliidi the dccvLC was issued. In Ex parte Grey, 13 Ves. 274, the Lord Chan- cellor said ; " I am clearly of opinion that the assignee ought to be removed. He is trustee for the bankrupt and the creditors. Yet, whilst he is resident in Scotland, I have no hold over him, and can reach him with no process." Belchier v. Parsons, 1 ICenyon, 44. " I am of opinion that there are no grounds to make Mrs. Parsons answerable in this cause for any more of the money than what she actually received. Were it once to be laid down, as a rule in this court,' that an assignee oi- trustee, should be answerable in all events for the people they employ, no man in Iris senses would ever undertake those offices. In the case of executors and administrators, the common law does, in most cases, consider tlie jjersons receiving Iiy tlieir directions only as the hanils by which they receive ; and tliis court likewise, to ])reserve some consistency with the common law, does confine them to stricter rules, and wliat is a devastavit at law, must bo so here. But in the case of trustees and assignees particularly, who are acting immediately under the autliority of this court, it has always admitted of greater latitude ; nay, in the former case, tins court, and sometimes even the courts of law, have dispensed with that rigor. In cases of this kind, it is not to be expected tliat the assignees will themselves attend to the disposition of the bankrupt's effects, and less so still in the present ease, from the sex of the person wliom the creditors liavc thought proper to choose assignee ; nor would it indeed be for tlie benefit of the creditors, if they did ; brokers, and such sort of people, licing more conversant with the effiicts to be disposed of, better judges of their value, and more capable of disposing of tliem to advantage." 1 And to enable him to do so, it is usually provided, that the clerk or other officer of the court of bankruptcy shall, on the day of the issuing of tlie decree, deliver to the assignee a certified copy of tlie decree. Late U. S. National Bankrupt Law. But a discretionary power is I'csted in the assignee in this respect, and any property, the possession of which would be a burden rather than a benefit to the estate, may be declined. }^ias v. Adam- son, 3 B. & Aid. 225 ; Wheeler v. Braniah, 3 Camp. 340 ; Turner v. Richardson, 7 East, 335; Cppeland v. Stephens, 1 B. & Aid. 593 ; BourdiUou i>. Dalton, 1 Esp. 233. In Smith v. Gordon, 6 Law Rep. 313, ir. Foster, id. 597 ; Larrabee v. Talbott, 5 Gill, 437 ; The opinion of the Supreme Com-t of the United States, in the leading case of Ogden V. Saunders, 12 AVheat. 213, et seq., where the whole matter of discharge, with reference to the conflict of laws, .and especially with regard to the constitutional provision alluded to in tlie text, is examined. Babcock v. Weston, 1 Gallis. 168 ; Woodbridge v. Allen, 12 Met. 470; M'Millan v. M'Neill, 4 Wheat. 209 ; Tebbetts o. Pickering, 5 Cush. 83. The courts of Pennsylvania seem to have adopted, to an extent, the principles of comity which have prevailed in the English couils, and hold that the same effect shall be given to a discharge in insolvency in another State, which that St.ato gives to dis- charges in the State of Pennsylvania. Smith v. Brown, 3 Binn. 201 ; Boggs v. Teakle, 5 Binn. 332 ; Walsh v. Nom-se, 5 Binn. 381. But if the debt is both contracted and to be discliarged in the foreign State, a discharge there will bind the creditor, even if he be a resident of this country. Shaw, C. J., in May i;. Breed, 7 Cush. 15 ; Sherrill v. Hop- kins, 1 Cow. 103. In May v. Breed, the numerous cases on this subject are collected on the one side and the other, and reviewed to some extent in the elaborate and learned opinion of Mr. Cliief Justice Shaw. S. P., Very v. McHenry, 29 Maine, 206. 1 Bronson v. Kinzie, 1 How. 311 ; Green v. Biddle, 8 Wheat. 1, 75 ; McCracken v. Hayward, 2 How. 608, 614. [344] CH. XV.J BANKRUPTCY AND INSOLVENCY. *316 tended to apply only to subsequent debts, because it shall be held to be intended to be constitutional rather than otherwise. But if it expressly * covers all debts, whether subsequent or prior, equally, it is unconstitutional as to all subsequent debts.^ A State may, however, perhaps, make partial exemptions, as of apparel, tools, or even of a homestead, to a reasonable extent.^ And a discharge in a State of which both parties were citizens at the time of making the contract, and at the time of the dis- charge, is valid, although the defendant is sued in another State, of which, at the time of suit, he is a citizen.^ The courts of the United States have held, that no State in- solvent law or process can discharge the debts of the citizens of that State, as against the citizens of another State,* unless they choose to come into the assignment.^ But it has been held in Massachusetts that a certificate of discharge under the insolvent laws of that State is a bar to an action on a contract made with a citizen of another State, who did not prove his claim under those laws, if the contract was by its express terms to be performed in that State.^ But this distinction has been repu- 1 Sturges 0. Crowninshield, 4 Wheat. 122 ; Mason v. Haile, 12 Wheat. 370 ; Beera V. Haughton, 9 Pet. 359; Gray i;. Munroe, 1 McLean, 528; Starr v. Robinson, 1 D. Chip. 257 ; Fisher v. Lacky, 6 Blackf. 373 ; Woodfin v. Hooper, 4 Humph. 13 ; Bron- son V. Newberry, 2 Doug. Mich. 38 ; M'Millan v. M'Neill, 4 Wheat. 209 ; Ogden v. Saunders, 12 Wheat. 213; Boyle v. Zacharie, 6 Pet. 348; Planters Bank v. Sharp, 6 How. 328 ; Mather v. Bush, 16 Johns. 233 ; Hicks v. Hotchkiss, 7 Johns. Ch. 297 ; Blanchard v. Russell, 13 Mass. 1 ; Kimberly v. Ely, 6 Pick. 440; Norton v. Cooke, 9 Conn. 314; Smith v. Parsons, 1 Ohio, 107; James v. StuU, 9 Barb. 482; Bruce v. Schuyler, 4 Gilman, 221, 227 ; Stocking v. Hunt, 3 Denio, 274 ; Howard v. K. & L. M. Ins. Co. 13 B. Mon. 285 ; Braynard v. Marshall, 8 Pick. 194; WoodhuU v. Wag- ner, Baldw. 296. ^ The authorities on this question ai-e not uniform. See Quackenbnsh v. Sanks, 1 Denio, 128, 3 id. 594, and 1 Comst. 129; also, Vedder v. Alkenbrack, 6 Barb. 327. These cases would limit such a statute to subsequent debts. Not so in Rockwell v. Hubbell, 2 Doug. Mich. 197. And see Bronson v. Newbeny, 2 Doug. 38 ; Evans v. Montgomery, 4 Watts & S. 218 ; Bumgardner v. Circuit Court, 4 Misso. 50 ; Tarpley v. Hamer, 9 Smedes & M. 310. 8 Pugh V. Bussel, 2 Blackf. 294. See also, May v. Breed, 7 Cush. 15. * See some of the cases cited supra, n. 1 ; and Cook v. Moffat, 5 How. 295 ; Van Eeimsdyk v, Kane, 1 Gallis. 371 ; Hinkley v. Moreau, 3 Mason, 88 ; Baker v. Wheaton, 5 Mass. 509 ; Watson v. Bourne, 10 id. 337 ; Bradford v. Earrand, 13 id. 18 ; Hicks v. Hotchkiss, 7 Johns. Ch. 297 ; Norton v. Cook, 9 Conn. 314. As to what constitutes the assent of a creditor, see Kimberly v. Ely, 6 Pick. 440 ; Agnew v. Piatt, 15 id. 417. * Thus if a citizen of another State comes in and receives his dividend, he cannot sue for the balance of his debt. Clay v. Smith, 3 Pet. 411. Bat an appearance of a creditor merely to oppose the petition is held to be no waiver. Norton v. Cook, 9 Conn. 314. ^ Scribner v. Fisher, 5 Gray, 43, Metcalf, J., dissenting. This case was aflBrmed in Burrall v. Kice, 5 Gray, 539 ; Capron v. Johnson, id. note. [345] 316- ELEMENTS OF MERCANTILE LAW. [CH. XV. diated in New York ^ and Maryland,^ and by Curtis, J.,^ in the United States Circuit Court for the first Circuit. It has been also held that the Massachusetts rule does not apply unless the contract is expressly made payable in the State, under the laws of which the defendant claims a discharge.* It is, however, generally true, that a discharge by the insolvent law of a State in which the contract was made, and of which the debtor was a citizen at the time it was made, is valid in another State.^ And it has been held that a certificate of discharge under the insol- vent laws of Massachusetts is a bar to an action on a contract between two citizens of that State, though the contract is made and to be performed in another State.^ 1 Donnelly v. Clark, 3 Seld. 500. 2 Poe r. Duck, 5 Md. 1. s Dcmei-itt v. Exchange Bank, U. S. C. C. Mass. 1857, 20 Law Reporter, 606. * Dinsmore v. Bradley, 5 Gray, 487 ; Houghton v. Maynard, 5 Gray, 552. ^ Blanchard v. Russell, 13 Mass. 1. ^ Marsh v. Putnam, 3 Gray, 551. [346] CH. XVI.] THE LAW OF PLACE. 317 CHAPTER XVI. OF THE LAW OF PLACE. SECTION I. WHAT 18 EMBKACED WITHIN THE LAW OF PLACE. If the parties to a contract were not at home and at the same home when they entered into it, or if the contract comes into litigation before a foreign tribunal, then the rights and the obli- gations of the parties may be affected either by the law of the place of the contract (lex loci contractus), or by the law of the domicil of a party (lex domicilii), or by the law of the place where the thing is situated to which the contract refers [lex loci rei sita), or by the law of the tribunal before which the case is litigated {lex fori). All of these are commonly included in the lex loci, or, as we translate the phrase, the Law of Place. It is obvious that this law must be of great importance wher- ever citizens of distinct nations have much commercial inter- course with each other. But in this country it has an especial and very great importance, from the circumstance that, whUe the citizens of the whole country have at least as much business connection with each other as those of any other nation, our country is composed of more than thirty separate and indepen- dent sovereignties, which are, for most purposes, regarded by the law as foreign to each other. [347] 318* ELEMENTS OF MERCANTILE LAW. [OH. XVI, SECTION II. OP THE GENERAL PRINCIPLES OF THE LAW OF PLACE. The general principles upon which the law of place depends, are four. First, every sovereignty can bind, by its laws, all per- * sons and all things within the limits of the State.^ Second, no law has any force or authority, of its own, beyond those limits.^ Third, by the comity of nations, aided in our case, as to the sev- eral States, by the peculiar and close relation between the States, and for some purposes by a constitutional provision, the laws of foreign States have a qualified force and influence, which it is perhaps impossible to define or describe with precision.^ The fourth of these general rules is, that a contract which is not valid where it is made, is valid nowhere else ; and one which is valid where it is made, is valid everywhere.* As contracts relate either to movables or immovables, or, to use the phraseology of our own law, to personal property or to 1 See Ruding v. Smith, 2 Hagg. Consist. E. 383 ; per Lord Mansfield, in Campbell V. Hall, Cowp. 208. , 2 Blanchard v. Russell, 13 Mass. 4; Bank of Augusta v. Earle, 13 Pet. 584; Le Louis, 2 Dods. 210. 8 Story on Confl. of Laws, § 29, and note (3). * Thus, in Hougliton r. Page, 2 N. H. 42, where the contract sued on was made in Massachusetts, and hy the law of that State was void, on the ground that its consider- ation was usuriou? interest, it was held that such contract was void in New Hampshire also. And sec D\cr v. Hunt, 5 N. H. 401 ; Bank of United States v. Donally, 8 Pet. 361 ; Andrews r.Pond, 13 id. 65 ; Wilcox v. Hunt, id. 378 ; Whiston v. Stodder, 8 Mart. La. 95 ; Andreivs i\ His Creditors, 11 La. 464 ; Van Reimsdvki'. Kane, 1 GalUs. 371 ; Robinson v. Bland, 2 Burr. 1077; Touro v. Cassin, 1 Nott"& McC. 173 ; Bur- rows V. Jemino, 2 Stra. 733 ; Smitli v. Mead, 3 Conn. 253 ; Medbury v. Hopkins, id. 472 ; Pearsall v. Dwight, 2 Mass. 88 ; AVillings v. Consequa, Pet. C. C. 31 7 ; De Sobry V. Le Laistrc, 2 Han-is & J. 191 ; Trimbey v. Vignier, 1 Bing. N. C. 151 ; Alves v. Hodgson, 7 T. R. 241. But, it seems, courts do not take notice of foreign revenue laws, and will enforce foreign contracts made in violation of them. Sea James v. Catlicrwood, 3 Dowl. & R. 190; Boucher v. Lawson, Cas. Temp. Hardw. 85, 194; Biggs v. Lawrence, 3 T. R. 454 ; Clugas v. Penaluna, 4 T. R. 466 ; Holman v. John- son, Cowp. 341 ; Planclid v. Fletcher, 1 Doug. 251 ; Ludlow v. Van Rensselaer, 1 Johns. 94. See also, Wynne v. Jackson, 2 Euss. 351. If contracts are made only orally, where by law they should be in writing, they cannot be enforced elsewhere where writing is not required ; but if made orally where writing is not required, they can be enforced in other countries where such contracts should be in writing. Vidal v. Thompson, 11 Mart. La. 23 ; Alves v. Hodgson, 7 T. E. 241 ; Clegg v. Levy, 3 Camp. 166. The rule laid down in the text is applicable to contracts of marriage. Compton ?>. Bearcroft, BuUer, N. P. 113, 1 14 ; Medway v. Needham, 16 Mass. 157 ; Williams v. Gates, 5 L-ed. 535; Dickson v. Dickson, 1 Yerg. 110. [348] CH. XVI.J THE LAW OF PLACE. *319 real property, the following distinction is taken. If the contract refers to personal property (which never has a fixed place, and is therefore called, in some systems of law, movable property), the place of the contract governs by its law the construction and effect of the contract.^ But if the contract refers to real property, *it is construed and applied by the law of the place where that real property is situated, without reference, so far as the title is concerned, to the law of the place of the contract.^ SECTION III. OF ITS EFFECT UPON THE CAPACITY OF PERSONS TO CONTKACT. As to the capacity of persons to enter into contracts, it is un- doubtedly the general rule, that this is determined by the law of his domicil ; and whatever that permits him to do, he may do anywhere. But it must be taken, we think, — for the law on this point is not certainly settled, — with this qualification, that a home incapacity, created entirely by a home law, and having no cause or necessity existing in nature, would not go with the party into another country.^ Thus the law of France once 1^ Holmes v. Eemsen, 4 Johns. Ch. 460; Hai-vey u. Eichards, 1 Mason, 412 ; Thome V. Watkins, 2 Ves. Sen. 35 ; SomerviUe v. Somerville, 5 Ves. 750 ; Brace v. Bruce, 2 B. & P. 229, u. (a) ; In re Ewin, 1 Cromp. & J. 156. See also, Milne v. Moreton, 6 Binn. 353, where Tilghman, C. J., states the rale in the text with some qualification. He says : " This proposition is trae in general, but not to its utmost extent, nor without several exceptions. In one sense, personal property has locality, that is to say, if tangi- ble, it has a place in which it is situated, and if invisible (consisting of debts), it may be said to be in the place where the debtor resides." ^ See Warrender v. Warrender, 9 Bligh, 127 ; Dnndas v. Dundas, 2 Dow & C. 349 ; Kerr v. Moon, 9 Wheat. 565 ; M'Cormick v. Sullivant, 10 id. 192 ; Darby v. Mayer, id. 465 ; United States v. Crosby, 7 Cranch, 115 ; Coppin v. Coppin, 2 P. Wms. 291 ; Cutter V. Davenport, 1 Pick. 81 ; Hosford v. Nichols, 1 Paige, 220 ; Wills v. Cowper, 2 Ohio, 312. Prom these cases, it is clear that the title to land can only be given or re- ceived as the law of the place where the land is situated, requires and determines. In Kobinson v. Bland, 2 Burr. 1079, Lord Mansfield applies this rule to public stock. And Mr. Justice Stori/, Confl. of Laws, § 383, says : " The same rule may properly apply to all other local stock or funds, although of a personal nature, or so made by the local law, such as bank-stock, insurance stock, turnpike, canal, and bridge shares, and other incorporeal property, owing its existence to, or regulated by, peculiar local laws. No positive transfer can be made of snch property, except in the manner prescribed by the local regulations." 3 In Saul V. His Creditors, 17 Mart. La. 597, the court say: " Supposing the case of our law iixing the age of majority at twenty-five, and the country in which a man was bom and lived, previous to his coming here, placing it at twenty-one, no objection could 30 [ 349 ] 320* ELEMENTS OE MEECANTILE LAW. [CH. XVI. fixed the age of twenty-five as that of majority. K, then, a Frenchman, *in England or in this country, twenty -four years old, made a purchase of goods, and gave his note for it, we have no doubt that note would be valid where it was made. But if a woman, nineteen years of age, whose home was in Vermont, where women are of age at eighteen, made in Massa- chusetts her note for goods, we incline to think this note could not be enforced in Massachusetts ; but if a woman of that age went from Massachusetts into Vermont, and there made her note, we think it could be sued there successfully. If this last note were sent back to Massachusetts, and there put in suit, we think the note should be open to no defence there that could not be urged where the note was made (unless it was expressly to be paid in Massachusetts) ; but it is quite possible that, as the law of the domicil and the law of the place of the contract were in conflict, that would prevail which was also the law of the forum, and, therefore, such a note might not be enforced by the courts in Massachusetts.^ be, perhaps, made to the rale just stated ; and it may be, and we believe would be tnie, that a contract made here at any time between the two periods already mentioned, would bind him. But reverse the facts of this ease, and suppose, as is the truth, that our law placed the age of majority at twenty-one ; that twenty-five was the period at which a man ceased to be a minor in the country where he resided, and that at the age of twenty-four, he came into this State, and entered into contracts, — would it be per- mitted that he should, in our courts, and to the demand of one of our citizens, plead, as a protection against his engagements, the laws of a foreign country, of which the people of Louisiana had no knowledge, and would we tell them that ignorance of for- eign laws, in relation to a contract made here, was to prevent them enforcing it, though the agreement was binding by those of their own State "! Most assuredly we would not. 16 Martin, 193. Talcc another case. By the laws of this country, slavery is permitted, and the rights of tlic master can be enforced. Suppose the individual sub- ject to it is carried to England or Massachusetts, would their courts sustain the argu- ment that his state or condition was fixed by the laws of his domicil of origin ? We know they would not." 1 In Saul V. His Creditors, 17 Mart. La. 595, the court say: "No nation will suffer the laws of another to interfere with her own, to the injury of her citizens ; whether they do or not, must depend upon the condition of the country in which the foreign law is sought to be enforced — the particular nature of her legislature — her policy, and the character of her institutions. In the conflict of laws, it must be often a matter of doubt which should prevail, and whenever that doubt does exist, the court which decides will prefer the law of its own country to that of a stranger." [350] CH. XVI.J THE LAW OP PLACE. *321 SECTION IV. OF THE PLACE OF THE CONTRACT. A contract is made ivhen both parties agree to it, and not be- fore. It is therefore made where both parties agree to it, if this is one place. But if the contract be made by letter, or by separ- ate signatures to an instrument, the contract is then made where that signature is put to it or that letter is written, which in fact completes the contract ;i and it is the law of this place of con- *tract, as we have seen, which, in general, determines its con- struction, and its force and effect. But this rule is subject to a very important qualification, when the contract is made in one place, and is to be performed in another place ; for then, in gen- eral, the law of this last place must determine the force and effect of the contract, for the obvious and strong reason, that parties who agreed that a certain thing should be done in a cer- tain placcj intended that a legal thing should be done there, and therefore bargained with reference to the laws of the place, not in which they stood, but in which they were to act.^ But for many commercial transactions, both of these rules seem to be in force ; or rather to be blended in such a way as to give the parties an option as to what shall be the place of the contract, and what the rule of law which shall apply to it. Thus, a note written in Boston, and expressly payable in Bos- 1 See Chapter on Agreement and Assent. In M'lntyie v. Parks, 3 Met. 207, it was held, that where a proposal to purchase goods is made by letter sent to another State, and is there assented to, the contract of sale is made in that State, and if it is valid by the laws of the latter State, it will be enforced in the State whence the letter was sent, although it would have been invalid if made there. Where A, in America, orders goods from England, and the English merchant executes the order, the contract is gov- erned by the law of England, for the contract is there consummated. Whiston v. Stod- der, 8 Mart. La. 95. And see Sortwell v. Hughes, 1 Curtis, C. C. 244 ; Orcutt v. Nel- son, 1 Gray, 536. 2 Per Lord Mansfield, in Robinson v. Bland, 2 Burr. 1077 ; Baldwin, J., in Strother V. Lucas, 12 Pet. 410, 436 ; Andrews v. Pond, 13 id. 65 ; Cox v. United States, 6 Pet. 172; Bell v. Bruen, 1 How. 182; Prentiss v. Savage, 13 Mass. 23; Thompson v. Ketcham, 8 Johns. 189; Panning v. Consequa, 17 Johns. 511; LeBreton v. Miles, 8 Paige, 261 . In this last case, the principle was applied to an antenuptial contract, and it was held, that when parties marry in reference to the laws of another country as their intended domicil, the law of the intended domicil governs the construction of their marriage contract as to the rights of personal property. [361] 322* ELEMENTS OF MERCANTILE LAW. [CH. XVI. ton, is, to all intents and purposes, a Boston note ; and if more than six per cent, interest is promised, it is usurious, whatever may be the domicil of the parties. If made in Boston, and no place of payment is expressed, it is payable and may be de- manded anywhere,! but would still be a Boston note. But if expressly payable in California (where there are at this time no usury laws), and promising to pay twenty per cent, interest, we are strongly of opinion that when payment of the note was de- manded in California, the promise of interest would be held valid. So, if the note were made in California, payable in Bos- ton, and promising to pay twenty per cent, interest, we think it would not be usurious. In other words, if a note is made in one place, but is payable in another, the parties have their op- tion to make it bear the interest which is lawful in either place.^ If the note made * in Boston and payable in California, were demanded in California and unpaid, and afterwards put in suit in Massachusetts, and personal service made on the promisor there, we should say that this same interest should be recovered. And indeed, generally, that such a note being made in good faith, should always bear this interest. So if made in Boston, and payable in New York, with seven per cent, interest. But a note made in Boston, and intended to be paid in Boston, and 1 Blake v. Williams, 6 Pick. 286; Braynard v. Marshall, 8 id. 194. ' Depau V. Humphreys, 20 Mart. La. 1 ; Pecks v. Mayo, 14 Vt. 33. This last case was an action of assumpsit on two promissory notes given by Horatio Gates & Co., of Montreal, to the defendants, payable in Albany, N. Y., and by the defendants indorsed to the plaintiffs. It appeared that the notes were made at Montreal, where the makers resided, and that the indorsers and the plaintiffs resided in Vermont. The lawful rate of interest in Montreal was six per cent, per annum, and in New York, seven per cent. Eedjield, J., after examining all the authorities, said : " From all which I consider the following rules in regard to interest on contracts made in one country, to be executed in another, to be well settled : 1 . If a contract be entered into in one place, to be per- formed in another, and the rate of interest differs in the two countries, the parties may stipulate for the rate of interest of either country, and thus, by their own express con- tract, determine with reference to the law of whicli countiy that incident of the contract shall be decided. 2. If the contract so entered into, stipulate for interest generally, it shall be the rate of interest of the place of payment, unless it appear the parties in- tended to contract with reference to the law of the other place. 3. If the contract be so entered into for money, payable at a place on a day certain, and no interest be stip- ulated, and payment be delayed, interest, by way of damages, shall be allowed, accord- ing to the law of the place of payment, where the money may be supposed to have been required by the creditor for use, and where he might be supposed to have boiTOwed money to supply the deficiency thus occuning, and to have paid the rate of interest of that country." See also. Chapman v. Robertson, 6 Paige, 627 ; 2 Parsons on Cont. 95, et seq. See, generally, Boyce v. Edwards, 4 Pet. HI ; Fanning v. Consequa, 17 Johns. 511; Winthrop v. Carloton, 12 Mass. 4; Foden u. Sharp, 4 Johns. 183; Dewar v. Span, 3 T. R. 425. [352] CH. XVI.] THE LAW OF PLACE. *323 bearing seven per cent, interest, could not escape the usury laws of Massachusetts merely by being written payable in New York. In every thing relating to process and remedy, the law of the forum, or of the place where the suit is brought, prevails over every other.^ This is true not only of arrest,^ but limitation and * prescription. Thus, a foreigner, bringing in Massachusetts an action on a simple contract debt more than six years after it accrued, would find his action barred by our statute of limita- tion, although the debt accrued in his own country, where there might be a longer limitation or none at all.^ 1 Thus, in a suit between A & B, both resident in England, on a contract made be- tween them in Portugal, the contract is to be interpreted according to the laws of Por- tugal, but the remedy must be taken according to the laws of England where the suit is brought ; that is, A could arrest B in England for a debt which accrued in Portugal, while both resided there, although the Portuguese law does not allow of arrest for debt, De La Tega v. Vianna, 1 B. & Ad. 284. See also, Eobinson v. Bland, 2 Burr. 1077 ; Smith V. SpinoUa, 2 Johns. 198 ; Nash v. Tupper, 1 Caines, 402 ; Don v. Lippman, 5 Clark & E. 1 ; British Linen Co. v. Drummond, 10 B. & C. 903 ; Trimbey v. Vieguier, 1 Bing. N. C. 151, 159 ; Van Reimsdyk v. Kane, 1 Gallis. 371 ; Jones o. Hook, 2 Band. 303 ; Lodge v. Phelps, 1 Johns. Cas. 139 ; 2 Caines, Cas. in Error, 321 ; Peck V. Hozier, 14 Johns. 346 ; Wilcox v. Hunt, 13 Pet. 378 ; Pickering v. Eisk, 6 Vt. 102. In New York, where a seal is necessary to constitute a deed, an action of covenant will not lie on a contract to be performed in Pennsylvania, with a scrawl and the word seal in the hctis sigilli, though by the law of Pennsylvania, this constitutes a seal. The form of action relates to the remedy, and is governable by the lex fori. Andrews v. Her- riot, 4 Cowen, 508, oven-uling Meredith v. Hinsdale, 2 Caines, 362. And see Bank of United States v. DonnaUy, 8 Pet. 361 ; Douglas v. Oldham, 6 N. H. 150; Trasher v. Bverhart, 3 Gill & J. 234 ; Adam v. Kerr, 1 B. & P. 360. 2 See De La Vega v. Vianna, stated supra. In Hinkley v. Marean, 3 Mason, 88, it was held, that a discharge of the person and present estate under the insolvent acts of Maryland could not be pleaded in bar of a suit in the Circuit Court in Massachusetts, so as to discharge the party from the common execution. Story, 3., said : " When the right exists, the remedy is to be pursued according to the lex fori where the suit is brought." See also, Imlay v. Bllefsen, 2 East, 453 ; Peck v. Hozier, 14 Johns. 346 ; Titus V. Hobart, 5 Mason, 378 ; Woodbridge v. Wright, 3 Conn. 523 ; Atwater v. Townsend, 4 Conn. 47 ; Smith v. Healy, id. 49 ; Wbittemore v. Adams, 2 Cowen, 626 ; Smith V. SpinoUa, 2 Johns. 198. 3 Nash V. Tupper, 1 Caines, 402 ; Bank of United States v. Donally, 8 Pet. 361 ; Kuggles V. Keeler, 3 Johns. 263; Decouche v. Savetier, 3 Johns. Ch. 190; Dupleix v, De Roven, 2 Vem. 540 ; Lincoln v. Battelle, 6 Wend. 475 ; M'Elmoyle v. Cohen, 13 Pet. 312 ; Le Roy v. Crowninshield, 2 Mason, 151 ; Van Reimsdyk v. Kane, 1 Gallis, 137 ; British Linen Co. v. Drummond, 10 B. & C. 903. Where the Statute of Limita- tions of New York was pleaded in bar of an action brought in Connecticut, on a con- tract entered into in New York, by parties residmg there at the time, it was held that the plea was insufficient, that the lex fori prevails. Medbury v. Hopkins, 3 Conn. 472. And see Pearsall v. Dwight, 2 Mass. 84; WiUiams v. Jones, 13 East, 439. In Bulger V. Roche, 11 Pick. 36, Shaw, C. J., said: "That the law of limitation of a foreign country cannot of itself be pleaded as a bar to an action in this Commonwealth seems conceded, and is indeed too well settled by authority to be drawn in question. Byrne V. Crowninshield, 17 Mass. 55. The authorities, both from the civil and the common law, concur in fixing the rule, that the nature, validity, and construction of conti-acts is to be dete'rmined by the law of the place where the contract is made, and that all remedies for enforcing such contracts are regulated by the law of the place where such 30* [353] 324* ELEMENTS OF MERCANTILE LAW. [CH. XVI. SECTION V. OF DOMICIL. It is sometimes important, and equally difficult, to determine where a person has his domicil. In general, it is his residence ; or that country in which he permanently resides. He may change it, by a change of place, both in fact and in- intent, but not by either alone.^ But his words or declarations are not the * only evidence of his intent ; and they are much stronger evi- dence when against his interest than when they are in his favor. Thus, one goes from Boston to England. If he goes intending not merely to travel, but to change his residence permanently, and not to return to this country unless as a visitor, he changes his domicil from the day that he leaves this country. Let us suppose, however, that he is stUl regarded by our assessors as residing here although travelling abroad, and is heavily taxed remedies are pursued. Whether a law of prescription or statute of limitation, which takes away every legal mode of recoYering a debt, shall be considered as affecting the contract lilie payment, release, or judgment, which in effect extinguish the contract, or whether they are to be considered as affecting the remedy only by detennining the time within which a particular mode of enforcing it shall be pursued, were it an open question, might be one of some difficulty. It was ably discussed upon general princi- ples in a late case (Le Roy v. Crowninshield, J2 Mason's Eep. 151), before the Cir- cuit Court, in which, however, it was fully conceded by the learned judge, upon a full consideration and review of all the authorities, that it is now to be considered a settled question." But see Don v. Lippman, 5 Clark & F. 16 ; Huber v. Steiner, 2 Bing. N. C. 202. 1 Not merely by intention, as we see from Hallowell v. Saco, 5 Greenl. H3 ; The Attorney-General v. Dunn, 6 M. & W. 511 ; The State v. Hallett, 8 Ala. 159; Wil- liams V. Whiting, 11 Mass. 423. Nor merely by an absence, without the intent of re- maining. Granby v. Amherst, 7 Mass. 1 ; Lincoln i'. Hapgood, 11 Mass. 350; Wilton v. Palmouth, 15 Maine, i79 ; Harvard College v. Gore, 5 Pick. 370; Cadawalader v. Howell, 3 Hareison, 138. One may have his domicil in one place, and yet dwell for a large part of liie time in another. Frost v. Brisbin, 19 Wend. 11. But no person can have more than one domicil. Crawford ti. Wilson, 4 Barb. 504 ; Abington v. North Bridgewater, 23 Pick. 170. It is agreed that "residency" and "inhabitancy" mean the same thing. Roosevelt v. Kellogg, 20 Johns. 208. In the matter of Wrigley, 4 Wend. 602, 8 id. 134. But as to the meaning of domicil, see Thomdike v. City of Boston, 1 Met. 242, where the court said : "If a seaman without family or property, sails from the place of his nativity, which may be considered his domicil of origin, al- though he may return only at long intervals, or even be absent for many yeai-s, yet if he does not, by some actual residence or other means, acquire a domicil elsewhere, he retains his domicil of origin." So in Crawford v. Wilson, 4 Barb. 522, where the court put soldiers and seamen on the same footing with foreign ministers in regpect to domi- cil. And see Sears v. City of Boston, 1 Met. 250 ; Jefferson v. Washington, 19 Maine, 293 ; In the matter of Thompson, I Wend. 45 ; McDaniel v. King, 5 Cush. 473. [354] CH. XVI.J THE LAW OE PLACE. -324 accordingly. K he can prove that he has abandoned his original home, he escapes from the tax which he must otherwise pay.^ Now, his declarations, that he has no longer a home here, and that his residence is permanently fixed in England, and the like, would be very far from conclusive in his favor, and could indeed be hardly received as evidence at all, unless they were connected with facts and circumstances.^ But if it could be shown that he had constantly asserted that he was still an American, that he had no other permanent residence, no home b.ut that which he had temporarily left as a traveller, such decla- rations would be almost conclusive against him. In general, such a question would be determined by all the words and acts, the arrangement of property at home, the length and the char- acter of the residence abroad, and all the facts and circum- stances which would indicate the actual intention and under- standing of the party .^ 1 Thorndike v. City of Boston, 1 Met. 242. 2 See ibid. ; Sears v. City of Boston, 1 Met. 250 ; Kilburn v. Bennett, 3 Met. 199 ; Burnliam v. Kangeley, 1 Woodb. & M. 7 ; Pennsylvania v. Eavenel, 21 How. 103 ; The Venus, 8 Cranch, 253. ' In Shelton v. TiiEn, 6 How. 185, the court said: "On a change of domicil from one State to another, citizenship may depend upon the intention of the individual. But this intention may be shown more satisfactorily by acts than declarations. An exercise of the right of suffrage is conclusive on the subject ; but acquiring a right of suffrage, accompanied by acts which show a permanent location, unexplained may be sufficient." See also, Bruce v. Bruce, 2 B. & P. 229, n. (a). [355] 325 ELEMENTS OF MEKCANTILE LAW. [CH. XVII. CHAPTER XVII. OF THE LAW OF SHIPPING. SECTION I. OF THE OWNEKSHIP AND TRANSFER OF SHIPS. The Law of Shipping may be considered under three divis- ions. First, as to ownership and transfer of ships. Second, as to the employment of ships as carriers of goods, or passengers, or both. Third, as to the navigation of ships. We begin with the first topic. Ships are personal property ; or, in other words, a ship is a chattel ; and yet its ownership and transfer are regulated in this country by rules quite analogous to those which apply to real property. The Constitution of the United States gives to Congress the power to enact laws for the regulation of commerce. And in execution of this power, acts were passed in 1792, and immedi- ately after, which followed substantially (with one important ex- ception, to be hereafter noticed) the Registry and Navigation Laws of England, one of which had been in force about a cen- tury and a half, and to which it was supposed that the commer- cial prosperity of England was in a great measure due.^ 1 The first statute regulating the registry of shipping in England, appears to have been the 12 Car. 2, ch. 18, s. 10, a. d. 1660. But the most important one, and that from which our own statute on that subject was for the most part taken, was the 26 Geo. 3, ch. 60. A Ship Eegistry Act was passed by Congress, September 1, 1789, ch. 11, 1 U. S. Stats, at Large, 55. But the act now in force, regulating the registry of vessels, was passed December 31, 1792, ch. 45, 1 U. S. Stats, at Large, 287. Acts, additional or amendatory to the above have been passed at various times since. Feb. 18, 1793, 1 U. S. Stats, at Large, 305 ; March 2, 1797, ch. 61,a U. S. Stats, at Large, 498 ; June 27, 1797, ch. 5, 1 U. S. Stats, at Large, 523 ; March 2, 1803, ch. 71, 2 U. [356] CH. XVII.] THE LAW OF SHIPPING. *326 To secure the evidence of the American character of a vessel, the statute of 1792 provides for an exact system of registration in the custom-house. There is no requirement of registration. * The law does not say that any ship shall or must be registered ; but that certain ships or vessels may be. And the disadvantage of being without registry operates as effectually as positive re- quirement with a heavy penalty could do. The ships which may be registered, are those already regis- tered, 31 Dec. 1792, under the act of Sept. 1789 ; those built within the United States, and owned wholly by citizens thereof; and those captured and condemned as prizes, or adjudged for- feited by violation of law, if owned whoUy by citizens of this country. No ship can be registered, if an owner or part-owner usually reside abroad, although a citizen, unless he be a consul of the United States, or agent for, and a partner in, a mercantile house established and doing business here ; ^ nor if the master be not a citizen of the United States ; ^ nor if the owner or part- owner be a naturalized citizen, and reside in the country whence he came more than a year, or in any foreign country more than two years, unless he be consul or public agent of the United States. But a ship which has lost the benefits of registry, by the non-residence of an owner in such a case, may be registered anew if she become the property of a resident citizen, by bond fide purchase ; ^ nor can a ship be registered which has been, at any time, the property of an alien, unless she becomes the prop- erty of the original owner or his representative.* S. Stats, at Large, 209, 210 ; March 27, 1804, ch. 52, 2 TJ. S. Stats, at Large, 296, 297 ; March 3, 1813, ch. 192 ; 1825, ch. 99, 4 U. S. Stats, at Large, 129 ; July 29, 1850, ch. 27. For the origin of Navigation Laws, see Eeeves's Hist, of Shipping, p. 35 ; 2 Browne's Civ. & Ad. Law, p. 125. 1 Act of Dec. 31, 1792, ch. 45, ^§ 1, 2, 1 TJ. S. Stats. atLarge, 288. The owner of the legal interest only is entitled to a register, unless the equitable interest belong to foreigners. Weston v. Penniman, 1 Mason, 306. 2 Act of Dec. 31, 1792, ch. 45, § 4, 1 TJ. S. Stats, at Large, 288. But the master, if a native citizen of the United States, may reside in a foreign country. United States v. Gillies, Pet. C. C. 159. 3 Act of March 27, 1804, ch. 52, H. 2 U. S. Stats, at Large, 296, 297. * Act of June 27, 1797, ch. 5, 1 U. S. Stats, at Large, 523 ; Act of March 27, 1804, ch. 52, § 2, 2 U. S. Stats, at Large, 296, 297. If an American vessel is assigned to a foreigner, she loses, ipso facto, her American character. United States v. Willings, 4 Dall. 374 ; Philips v. Ledley, 1 Wash. C. C. 229. The more natm-al construction of the act of 1797, ch. 5, would seem to exclude a vessel which has been sold to a foreigner, from the benefits of registry, even if it should come back into the hands of the original owner ; but in practice the act seems to have been construed otherwise. But see Uni- ted States V. Willings, 4 Cranch, 48, per Marshall, C. J. [357] 327* ELEMENTS OF MEKCANTILB LAW. [CH. XVII. Sometimes Congress, by special acts, permits the registratiozi, as an American ship, of a vessel which has become, by purchase, American property. If a registered American ship be sold or transferred, in whole or in part, to an alien, the certificate of registry must be delivered up, or the vessel is forfeited ; but if, in case of a sale in part, it can be shown that any owner of a part not so sold * was ignorant of the sale, his share shall not be subject to such forfeiture.i And as soon as a registered vessel arrives from a foreign port, her documents must be deposited with the collector of the port of* arrival, and the owner, or, if he does not reside within the district, the master, must make oath that the register contains the names of all persons who are at that time owners of the ship, and at the same time report any transfer of the ship, or of any part, that has been made within his knowledge since the registry ; and also declare that no for- eigner has any interest in the ship.^ If a register be issued fraudulently, or with the knowledge of the owners, for a ship not entitled to one, the register is not only void, but the ship is forfeited.^ K a new register is issued, the old one must be given up ; * but where there is a sale by process of law, and the former owners withhold the register, the secretary of the treasury may authorize the collector to issue a new one.^ If a ship be transferred while at sea, or abroad, the old register must be given up, and all the requirements of law, as to registry, &c., be complied with, within three days after her arrival at the home port.^ Exclusive privileges have at various times been granted to registered vessels of the United States. By the statute of 1817, it is provided, that no merchandise shall be. brought from any 1 Act of Dec. 31, 1792, eh. 45, § 7-16, 1 U. S. Stats, at Large, 288. 2 Act of 1799, ch. 128, § 63, 1 U. S. Stats, at Large, 675 ; Act of Dec. 31, 1792, ch. 45, § 17, 1 U. S. Stats, at Large, 288. 3 Act of Dec. 31, 1792, ch. 45, § 27, 1 U. S. Stats, at Large, 298. See the case of The Neptune, 3 Wheat. 601. * Act of Dec. 31, 1792, ch. 45, i 14, 1 U. S. Stats, at Large, 295. And when the certificate of registry is given up, the collector of the district in wliich it was registered will cancel the bond given at tlie time tlie certificate was granted. ^ 18. "J Act of 1797, ch. 61, § 1, 1 U. S. Stats, at Large, 498. Act of March 2, 1803, ch. 71, § 3, 2 U. S. Stats, at Large, 210 ; Act of 1799, ch. 128, § 30, 1 U. S. Stats, at Large, 649. But where a vessel was sold at sea to Ameri- can citizens, and repurcliased on her arrival and before entry at the custom-house, by the original owners, it was held that a now registry was unnecessary. United States v. Willings, 4 Cranch, 48, 4 Dall. 374. [358] CH. XVII.] THE LAW OF SHIPPING. *328 foreign country to this, except in American vessels, or in vessels belonging to that country of which the merchandise is the growth. Also, that no merchandise shall be carried from port to port in the United States, by any foreign vessel, unless it formed a part of its original cargo.' A ship that is of twenty tons burden, to be employed in the fisheries, or in the coasting trade, need not be registered, but must be enrolled and licensed " accordingly .2 If under twenty tons burden, she need only be licensed. If licensed for the fisheries, she may visit and return from foreign ports, having stated her intention of doing so, and being permitted by the collector.^ And if registered, she may engage in the coasting trade or fishery, and if licensed and en- rolled, she may become a registered ship, subject to the regula- tions provided for such cases.* A ship that is neither registered nor licensed and enrolled, can sail on no voyage with the privilege or protection of a national character or national papers. If she engages in foreign trade, or the coasting trade, or fisheries, she is liable to forfeiture ; and if she have foreign goods on board, must at all events pay the ton- nage duties leviable on foreign ships. In these days, no ship engaged in honest business, and belonging to a civilized people, is met with on the ocean, without having the regular papers which attest her nationality, unless she has lost them by some accident. SECTION II. OF THE TEANSrER OF PROPERTY IN A SHIP. The Statute of Registration provides, that " in every case of sale or transfer, there shall be some instrument in writing, in the nature of a bill of sale, which shall recite at length the said cer- tificate ; otherwise the said ship or vessel shall be incapable of being registered anew."" It follows, therefore, that a merely 1 Act of 1817, o. 204, 3 U. S. Stats, at Large, 351. 2 Act of 1793, u. 52, 1 XT. S. Stats, at Large, 306. 3 Act of 1793, c. 52, § 27, 1 U. S. Stats, at Large, 306. * Act of 1793, c. 53, f) 3, supm. 6 Act of 1792, c. 45, § 14, supra. [359] 329* ELEMENTS OF MERCANTILE LAW. [CH. XVII. oral transfer, although for valuable consideration, and followed by possession, gives the transferree no right to claim a new regis- ter setting forth his ownership. But this is all. There is nothing in this statute to prevent the property from vesting in such transferree. It is, however, unquestionably a principle of the maritime law generally, that property in a ship should pass by a written instrument. And as this principle seems to be adopted by the statute, the courts have sometimes almost denied the validity of a merely parol transfer. The weight of authority and of reason is, however, undoubtedly, in favor of the conclu- sion that " the registry acts have not, in any degree, changed the common law ' as to the manner of transferring this species of property." ^ It would follow, therefore, that such transfer would be valid, and would pass the property .^ The English Registry Act provides that, " when the property in any ship, or in any part thereof, shall, after registry, be sold, the same shall be transferred by bill of sale, or other instrument in writing, containing a recital of the certificate of registry, or the principal contents thereof; otherwise such transfer shall not be valid or effectual for any purpose whatever, either in law or in equity." ^ Our Registry Act contained no such provision. Per- haps this important omission arose from a doubt whether legis- lating concerning the transfer of ships at home, as property, could be considered as a regulation of commerce ; for if not, it was not within their constitutional power. 1 Weston V. Penniman, 1 Mason, 317. - In Olil V. E;i;4le Ins. Co. 4 Mason, 172, Mr. Justice Son/ expressed an opinion that the title to a sliip could not pass by parol. The learned judge cited the authority of Lord Stowell in The Sisters, 5 Rob. Adm. 155, wlio said : " According to the ideas which I have always entertained on this question, a bill of sale is the proper title to which the maritime courts of all countries would look. It is the universal instrument of transfer of ships, in the usage of all maritime countries ; and in no degree a peculiar title deed or conveyance known only to the laiv of England. It is what the maritime law expects, what the court of admiralty would, in its ordinary practice, always require, and what the legislature of this country has now made absolutely necessarv." See also, Weston D. Penniman, 1 Mason, 316, 317 ; 3 Kent, Com. 130| 131. But it seems to be well settled in the United States, that, at common law, the title to a vessel may pass by de- livery, under a parol contract. Bixby v. Franklin Ins. Co. 8 Pick. 86 ; United States V. Willings, 4 Crancli, 55 ; Badger v. Bank of Cumberland, 26 Maine, 428 ; Wendover V. Hogeboom, 7 Johns. 308; Vinal v. Burrill, 16 Pick.,401 ; Leonard o. Himtington, 15 Johns. 298 ; Thorn v. Hicks, 7 Cowen, 698, 699 ; Fontaine v. Beers, 19 Ala. 722. s 3 & 4 Wra. 4, c. 55, § 31 ; 26 Geo. 3, c. 60, § 17 ; 8 & 9 Vict. c. 89, § 34. Under these acts it is held that no action can be maintained upon an executory contract to sell a ship, unless it contain a recital of the ceititicate of registry. Duncan v. Tindal, 13 C. B. 258, 20 Eng. L. & Eq. 224. See also, MeCalmont v. Eankin, 2 DeG., M. & G. 403, 19Eng. L. &Eq. 176. [360] CH. XVII.] THE LAW OF SHIPPING. *330 In 1850, Congress, however, passed an act, " to provide for re- cording the conveyances of vessels, and for other purposes." By this statute it was provided " that no bill of sale, mortgage, hy- pothecation, or conveyance, of any vessel or part of any vessel of the United States, shall be valid against any person other than the grantor or mortgagor, his heirs and devisees, and persons having actual notice thereof; unless such bill of sale, mortgage, hypothecation, or conveyance be recorded in the office of the collector of the customs where such vessel is registered or en- rolled." Then follows an exception in favor of liens by bottomry, and in subsequent sections are provisions for recording by the collector, and giving certificates, &c.i * This statute has no effect, that we perceive, upon oral trans- fers, excepting that as they cannot be recorded, their operation is limited to the gi-antors and those who have actual notice.^ Where the transfer is by bill of sale, the record of this, under the late statute is, perhaps, notice to all the world. But in most of our States there are already provisions for the record of mortgages of personal property, and it may be a difficult question how these are affected by this statute of the United States. For example, if there be such a record as is required by the State law, is this sufficient, without a custom-house record, either because it is a public notice, which is the equivalent of actual notice to every- body, or because the State has the right to regulate this matter ; or, if there be a record in the custom-house and none which conforms to the State requirements, is this sufficient against aU the world ? If we suppose this statute to be constitutional, of which we do not, however, feel certain, we should say that it con- trolled and superseded the State statute, so as to make that unnecessary and ineffectual ; and therefore a record in the custom- house only would be sufficient, and a record under the State law would affect only those who had actual knowledge of it.^ But it has been held in New York that the act does not abol- 1 Act of 1850, c. 27, 9 XJ. S. Stats, at Large, 440. ^ Actual notice of an unrecorded transfer is binding on a party having such notice. Cape Fear Steamboat Co. v. Conner, 3 Rich. 335. 3 In Fontaine v. Beers, 19 Ala. 722, it was hdd that a statute of Alabama, requiring the registration of mortgages, deeds of trust, &c., on personal property, did not apply to vessels for the navigation of the ocean — and that the evidence of their title was gov- erned by the acts of Congress. We are not sure that this statute, which regulates the transfer of ships at home, is a proper exercise of the power to " regulate commerce." 31 [361] 331* ELEMENTS OE MEKCANTILE LAW. [CH. XVII. ish the State statutes, and, therefore, that a mortgage, which is recorded according to the act of Congress, and also according to the State statutes, takes precedence of a prior mortgage which is registered only according to the act of Congress. ^ "We con- sider it, however, as unquestionable law that an act of Congress which, in accordance with the constitution, is the supreme law of the land, and that a State law which comes in conflict with it, must cease to operate, so far as it is repugnant to the law of the United States.^ Mortgages must be recorded at the custom-house where the vessel was last registered.^ And it has been held that the act of 1850 does not apply to charter-parties.* As a ship is a chattel, a transfer of it should be accompanied by a delivery of possession. Actual delivery is sometimes im- possible where a ship is at sea ; and perhaps the statute of 1850 makes the record of the transfer equivalent to change of posses- sion. If there be no record, possession should be taken as soon as possible ; and prudence would still require the same course, we think, in case of transfer by writing and record.^ There have been cases which have been supposed to intimate * that, as between two innocent purchasers, he that gets actual possession first completes his title as against the other. We doubt the correctness of this in some cases.'^ We say rather 1 Thompson v. Van Veclitcn, Superior Court, Xuw York City, Nov. 1857. - License Cases, 5 How. 504, 574 ; Passenger Cases, 7 How. 283. " Potter V. Ii-ish, 10 Gray. * Hill V. The Golden Gate, 1 Newb. Adm. .308. ^ In Kirklcy v. Hodgson, 1 B. & C. 588, a part of a ship was tr.ansfeiTed, and all the forms prescribed by the registry acts complied with. I?ut the possession was not changed. Bai/ley, J., said : " It has been decided, in the cases of Monkhouse r. Hay, 2 Brod. & B. 114 ; Hay v. Pairbau-n, 2 B. & Aid. 193 ; Robinson v. Macdonnell, 5 M. & y . 228, that the alteration of tlie register is not to be considered as notice to the world. The register acts were made entirely alio intuitu ; their object was not to give notice to the world, but to give notice to government. The fact of altering the register is to be considered as much a secret act as the execution of a secret conveyance ; so that, though the true ownership would appear on the face of the register, that does not vary the case." It is obvious, however, that these remarks will not apply to the Act of 1850, c. 27. " It is now well settled that, as between the parties, the property in goods sold will pass to the purchaser, although the possession may remain in the vendor. 1 Parsons on Contracts, 440, 441. But under the statute of 13 Eliz., to render the transfer valid as to third parties without notice, there must be a change of possession. 1 id. 441 ; Twyne's case, 1 Smith's Lead. Cas. 1. But in some cases this change may be con- structive; and the delivery, as is often said, may be symbolical. But there -is no case in which delivery cither actual or symbolical may be dispensed with. Much inaccm-acy in the use of language seems to have arisen in some cases from mistaking the nature of symbolical delivery, and in others, from overlooking it entirely. The cases of Lamb [362] CH. xvilJ the law of shipping. -331 that if A becomes the bond fide purchaser of a vessel, and has taken constructive possession, he has no right to delay unneces- sarily the taking actual possession, for this may deceive and injure other persons. And if B, a second purchaser, in ignorance of the first purchase, during such delay or laches, gets actual possession, he would hold the vessel ; unless, indeed, prevented by the record. But if B gets actual possession before A, but while A was so prevented that his want of actual possession can- not be imputed to him as laches, he will get a better title than B, if he (A) takes actual possession as soon as he can.^ u. Durant, 12 Mass. 54, and Lanfear v. Snmner, 17 Mass. 110, have been supposed to support the doctrine that, as between two innocent purchasers, he who acquires actual possession first completes his title as against the other, and the tatter case has been questioned on that ground. Ingraham v. Wheeler, 6 Conn. 284; Eicker v. Cross, 5 N. H. 573. But they do not seem to us to go further than to decide that, of two inno- cent purchasers, he who gets actual possession first, has a better title than the one who has no possession at all, either actual or constructive, and so far they seem to be sound law. In Lanfear v. Sumner, the goods were supposed by the owners in Philadelphia, to be at sea. They were actually landed in Boston. A written assignment was made in Pliiladelphia and delivered, but no money was paid, no bill of lading transferred, and there was no pretence whatever of any symbolical delivery. The court (per Jack- son, J.,) did not deny that, if there had been a legal, as distinguished from an actual delivery, to the first purchaser, his title would have been protected. See also, Gardner V. Howland, 2 Pick. 599, per Parker, C. J. In Lamb v. Dm'ant, 12 Mass. 54, the ves- sel was owned by a firm. One partner was abroad and in actual possession of the ves- sel. It was held, that, under the circumstances of the case, a transfer by the home partner, must be subject to all incumbrances, made by the partner in possession, before notice of transfer, and that accordingly a sale with delivery of possession by the latter would intercept the title attempted to be passed by a sale by the former. This seems to be reasonable, for it might well be held that in such a case there could be no con- structive delivery by the home partner. 1 In England, a constructive delivery of a vessel at sea is effected by a transfer of the Grand Bill of Sale. Atkinson v. Maling, 2 T. E. 462 ; Ex parte Matthews, 2 Ves. 272 ; Kirkley v. Hodgson, 1 B. & C. 588. In this country, the delivery of an ordinary bill of sale has the same effect. Portland Bank v. Stacey, 4 Mass. 661 ; Putnam v. Dutch, 8 Mass. 287 ; Badlam v. Tucker, 1 Pick. 396 ; Wheeler v. Sumner, 4 Mason, 183. In Joy v. Sears, 9 Pick. 4, 5, Parker, C. J., said : " By the principles of maritime law, well known and adopted by the common law, the' property passed by the execution and delivery of the bill of sale, subject however to be defeated, if, after the arrival of the vessel at her home port, there should be such a delay in taking possession by the vendor as should indicate a fraudulent intention in the transfer, and when the delay and negligence are gross, they will of themselves defeat the conveyance against any subse- quent purchaser or attaching creditor. This delay and negligence must be judged of by the jm-y ; for, whether they exist or not, depends upon the situation and circum- stances of the vessel and of the vendee." Notice to the captain may, in some cases, be equivalent to taking actual possession. Brinley v. Spring, 7 Greenl. 241 ; Mair v. Glennie, 4 M. & S. 240. In Turner v. Coolidge, 2 Met. 350, the court was " inclined to the opinion that the possession of one part-owner, who acts for himself, and at the request of the other part-owner, acts for him, supersedes the necessity of a formal taking of possession, and vests the property in the vendee." See also, Winsor v. McLellan, 2 Story, 497 ; Addis v. Baker, 1 Anst. 222 ; GiUispy v. Coutts, Ambl. 652. It has been held tliat, when the sale is conditional, and there is an agreement that the mortgagor shall retain possession until condition broken, then the mortgagee need not take actual possession, Badlam v. Tucker, 1 Pick. 389 ; D'Wolf v. Harris, 4 Mason, 51 5 ; Conard V. Atlantic Ins. Co. 1 Pet. 449. But see, as to this point, 1 Smith, Lead. Cas. 1 ; Twyno's [363] 332-333* ELEMENTS OF MERCANTILE LAW. [CH. XVII. It is easy to suppose many other questions arising under this statute of 1850, to which it will be impossible to give certain answers, until the construction of the statute is settled by adju- dication. By the word " ship," and still more by the phrase " ship and her appurtenances — or apparel — or furniture," every thing would pass which was distinctly connected with the ship, and is on board of her, and fastened to her if that be usual, and needed for her navigation or for her safety.^ * Sometimes when a ship is built, she is paid for by instalments. If these are regulated by the progress in building, so that when so much is done, a sum deemed equivalent to the labor and materials used shall be paid, and when more is done, another sum in due proportion, and so on, it is held that eacH payment case, note by Mr. Wallace. See also, Portland Bank v. Stubbs, 6 Mass. 422 ; Tucker u. Buffington, 15 Mass. 480. i The construction of these words must depend upon the instrument in which they are used, and in some degree upon the circumstances of each case. Hoskins v. Pick- ersgill, 3 Doug. 222, 2 Marsh. Ins. 727; The Dundee, 1 Hagg. Adm. 109 ; b. c. Gale V. Laurie, 5 B. & C. 156 ; Richardson v. Clark, 15 Maine, 421 ; Lano v. Neale, 2 Stark. 105 ; Kynter's case, 28 & 29 Eliz. Leon. 46 ; Starr v. Goodwin, 2 Eoot, 71 ; Briggs v. Strange, 17 Mass. 405 ; Eoccus, n. 20 ; MoUov de Jure Marit. book 2, c. 1, § 8. In the case of Tire Dundee, 1 Hagg. Adm. 127, Lord Stowell said : " The word ' appurtenances ' must not be construed with reference to the abstract naked idea of a ship ; for that which would be an incumbrance to a ship one way employed, would be an indispensable equip- ment in another, and it would be a preposterous abuse to consider them alike in such different positions. You must look to the relation they bear to the actual sen-ice of the vessel. In Richardson v. Clark, it was held that a chronometer, on board a vessel, did not pass imder a bill of sale, of a vessel, with all and singular her tackle, apparel, and furniture. But see Langton v. Horton, 6 Jur. 910. In Lano v. Neale, "kentledge," a valuable kind of permanent ballast was claimed under a conveyance of a ship with aU stores, tackle, apparel, &c. Lord EUenborough, said : "It could not be considered as part of the ship or necessary stores, since common ballast might have been used." See also, Kynter's case, 1 Leon. 46 ; Burchard ;.'. Tapscott, 3 Duer, 363. In Woods v. Rus- sell, 5 B. & Aid. 942, the rudder and cordage, which were designed for a vessel, wluch was not quite finished, were held to pass with it, although they were not actually attached to the vessel at the time of its delivery. See Goss v. Quinton, 3 Man. & G. 825 ; Wood V. Bell, 6 Ellis & B. 355, 36 Eng. L. & Eq. 148, oveiTuling in part the same case in the Queen's Bench, 5 Ellis & B. 772, 34 Eng. L, & Eq. 178. See Baker v. Gray, 17 C. B. 462, 34 Eng. L. & Eq. 387. Whether a boat would pass with the ship, would seem to depend upon circumstances. In Starr v. Goodwin, supra, it was held that it would not. See also, Roccus, n. 20; Straccha de Navibus, pars, 2, No. 12; MoUoy de Jure Mari- timo, book 2, c. 1, §8. In Briggs v. Strange, 17 Mass. 405, Parker, C. J., said: " Whether the boat, cables, and anchors of a vessel, could be attached, and so separated from a vessel, may depend upon the .situation of those articles in relation to the vessel. To take a boat or cable and anchor from a ves.sel when they are in use, and necessary to the safety of the vessel, would expose the party to damages. But if the vessel were at a wharf, and her cable and anchor and boat not in use, there seems to be no reason why they may not as well be taken as the harness of a carriage, or the sails and rigging of a vessel when separated from the hull, and laid up on shore." In a policy of insurance, the word ship usually includes the boat. Emcrigon, c. 4, § 7 ; Hall v. Ocean Ins. Co. 21 Pick. 472. See also. Shannon v. Owen, 1 Man. & R. 392. [364] CII. XVII.] THE LAW OF SHIPPING. -333 purchases the ship as she lies ; and if she be lost after any such payments, the loss is the purchaser's. But late authorities have thrown some doubt upon this question, and the law now seems to be, that the time when the property in a ship passes, on a contract for building her, is a question of intent to be gathered from all the circumstances of each particular case.^ A sale by the decree of any regular court of admiralty, with due notice to all parties, and with proper precautions to protect the interests of all, and guard against fraud or precipitancy, would undoubtedly be acknowledged by courts of admiralty of every other nation as transferring the property effectually .^ 1 This doctrine, that pajnnent by instalments will pass the property in a vessel, was first sanctioned in England, in Woods v. Russell, 5 I?. & Aid. 946 ; but the case was not decided upon this point. It was recognized in Atkinson v. Bell, 8 B. & C. 282, and in Battersby v. Gale, 4 A. & E. 458, note. But the question was thoroughly discussed in Clarke v. Spence, 4 A. & E. 448, and after some hesitation the court decided, "that where the contract provides, that a vessel shall be built under the superintendence of a person appointed by the purchaser, and also fixes the payment by instalments, regulated by particular stages in the progress of the work, the general property in all the planks and other things used in the progress of the work, vests in the purchaser at the time when they are put to the fabric under the approval of the superintendent, or, at all events, as soon as the first instalment is paid." This rule prevails in Scotland. Smith v. Dun- canson, Bell on Sales (1844), p. 17. But if the time of payment is not regulated by the progress of the work, then the property does not pass till the vessel is completed. Laidler v. Burlinson, 2 M. & W. 602. See also, Mucklow v. Mangles, 1 Taunt. 318. But it seems now to be held that the fact of payment by instalments proportioned to the work is not conclusive evidence of the intent to pass the property. See Wood v. Bell, 5 Ellis & B. 772, 34 Eng. L. & Eq. 178, affirmed in the Exchequer Chamber, 6 Ellis 6 B. 355, 36 Eng. L. & Eq. 148 ; Eeid v. Fairbanks, 13 C. B. 692, 24 Eng. L. & Eq. 220 ; Baker v. Gray, 17 C. B. 462, 34 Eng. L. & Eq. 387. In this country it has been hdd that the property will not pass until the vessel is completed and delivered. Merritt V. Johnson, 7 Johns. 473 ; Andrews v. Durant, 1 Kern. 35. See also, Johnson v. Hunt, 11 Wend. 135. There is a dictum to the contrary in Moody v. Brown, 34 Maine, 107. And in Glover v. Austin, 6 Pick. 209, it was held that a conveyance and symbolical delivery of the keel, after it had been laid, vested the property of that in the vendee, and drew after it all subsequent additions, according to the maxim of the civil law : proprie- tas navis carince causam sequitur. See also, Bonsey v. Amee, 8 Pick. 236 ; Sumner v, Hamlet, 12 Pick. 76. 2 When a vessel is sold, to discharge any lien, known to the Maritime Law, or under a sentence of forfeitm-e for the violation of revenue or other laws, the title, conferred by the court, is valid against the whole world, and is recognized by the courts of all coun- tries. The Tremont, 1 W. Rob. 163; Attorney-General v. Norstedt, 3 Price, 97; 3 Kent, Com. 132 ; The Helena, 4 Rob. Adm. 3 ; Grant v. McLachlin, 4 Johns. 34. But the question arose, in Reid v. Darby, 10 East, 143, whether courts of admiralty have jurisdiction to decree, " upon the mere petition of the captain, the sale of a ship reported upon survey to be unseaworthy, and not repairable, so as to carry the cargo to the place of destination, but at an expense exceeding the value of the ship when repaired." The English Courts of Common Law have hdd that there is no such jurisdiction in their courts, although they admit that it has obtained abroad. Hunter v. Prinsep, 10 East, 378 ; Morris v. Robinson, 3 B. & C. 203. But Lord Stowett expressed regret at the want of such jurisdiction. The Fanny & Blmira, Edw. Adm. 119; The Warrior, 2 Dods. 293 ; The Pitt, 1 Hagg. Adm. 240. And in this country the jurisdiction seems to be admitted. In the case of The Schooner Tilton, 5 Mason, 465, 474, Story, J., said • " To what is suggested in that case (Reid v. Darbv), as to the want of jurisdiction .31* " [365] 334 ELEMENTS OF MERCANTILE LAW. [CH. XVII. SECTION III. OF PAET-OWNERS. Two or more persons may become part-owners of a ship, in either of three ways. They may build it together, or join in pur- chasing it, or each may purchase his share independently of the others. In either case, their rights and obligations are the same. If the register, or the instrument of transfer, or other equiva- lent evidence, do not designate specific and unequal proportions, they will be presumed to own the ship in equal shares.^ Part-owners are not necessarily partners. But a ship, or any part of a ship, may constitute a part of the stock or capital of a copartnership ; and then it will be governed, in all respects, by the law of partnership.^ A part-owner may at any time sell his share to whom he will. But he cannot sell the share of any other part-owner, without his authority.^ K he dies, his share goes to his representatives, and not to the surviving part-owners.^ in the admiralty courts to decree the sale of a ship in a case of necessity upon an appli- cation of the master, I, for one, cannot assent. I agree that, in such a case, the decree of sale is not conclusive upon the owner, or upon third persons, because it is made upon the application of the master, and not in an adverse proceeding. But I cannot but con- sider it as strictly within the admiralty jurisdiction. It is prima fade evidence of a rightful exercise of authority, but no more. The proceeding being ex parte, cannot be deemed conclusive in favor of the party promoting it." See also, Janney v. Columbian Ins. Co. 10 Wheat. 411, 418; Dorr v. Pacific Ins. Co. 7 Wheat. 612; Armroyd w. Union Ins. Co. 2 Binn. 394 ; Steinmetz v. United States Ins. Co. 2 S. & R. 293. 1 Glover V. Austin, 6 Pick. 209, 221, per Parka-, C. J. ; Ohl v. Eagle Ins. Co. 4 Mason, 172 ; Alexander v. Dowie, I H. &N. 152, 37 Eng. L. & Eq. 549, 551, per Pol- lock, C. B. But the act of 1850, c. 27, § 5, provides that "the part or proportion of the vessel, belonging to each owner, shall be inserted in the register of enrolment." ^ Harding v. Foxcroft, 6 Greenl. 76 ; Lamb v. Durant, 12 Mass. 54 ; NicoU v. Mum- ford, 4 Johns. Ch. 525, 20 Johns. 611 ; Phillips v. Purington, 15 Maine, 425 ; French V. Price, 24 Pick. 13 ; Seabrook v. Rose, 2 Hill, Ch. S. Car. 555 ; Patterson v. Chalmera, 7 B. Mon. 595. In Harding v. Foxcroft, Mellen, C. J., said: "There may be a part- nership, as well as a co-tenancy, in a vessel. When a person is to be considered as a part-owner, and when as a partner, in a ship, depends on circumstances. The former is the general relation between ship-owners, and the latter the exception, and it is re- quired to be shown specially." 3 In Lamb v. Durant, 12 Mass. 54, 56, E. L., a partner in the firm owning the vessel, had sold it. Parker, C. J., said : " With respect to the authority of R. L. to sell his partner's interest, it cannot result merely from his being a part-o-wncr of the vessel ; for part-owners are only tenants in common, and one of them cannot, by his sole act, trans- fer the property of another, unless imder circumstances which furnish a presumption of an assent by him who does not join in the conveyance." * In a note in Abbott on Shipping, p. 97, first introduced by the author into the [366] CH. XVII.J THE LAW OF SHIPPING. 335 A majority of the part-owners may, generally, manage and direct the employment of the property at their discretion.^ But a court of admiralty will interfere and do justice between them, and prevent either of the part-owners from inflicting injury upon the others.^ One part-owner may, in the absence of the rest, and without prohibition from them, manage the ship, as for himself and for them. And the contracts he enters into, in relation to the em- fourth edition, it is supposed that, if a ship were granted to a number of persons gen- erally, without distinguishing in any way the shares of each, they would become joint tenants at law, and that the rule jus accrescendi inter mercatores locum non Iiabet, could be enforced only in equity. But this is certainly not the American law ; and we doubt if it be English law. See cases cited in the two preceding notes, and, also, Merrill v. Bartlett, 6 Pick. 46; Jackson v. Robinson, 3 Mason, 138; Buddington v. Stewart, 14 Conn. 404; Macy v. De Wolf, 3 W. & M. 193, 204; Milbum v. Guyther, 8 Gill, 92; Buckley v. Barber, 6 Exch. 164, 1 Eng. L. & Eq. 506. 1 Willings V. Blight, 2 Pet. Adm. 288 ; Steamboat Orleans v. Phosbus, 11 Pet. 175 ; Davis V. The Seneca, Gilpin, 24 ; Loring v. lUsley, 1 Calif 24. The same rule pre- vails in some foreign codes. Cours de Droit Commercial, Art. 621 ; 2 Magens, 108, Art. 171. ^ "Eor this purpose, it has been the practice of the Court of Admiralty, from very remote times, to take a stipulation from those who desire to send the ship on a voyage, in a sum equal to the value of the shares of those who disapprove of the adventure, either to bring back and restore to them the ship, or to pay thein the value of their shares. When this is done, the dissentient part-owners bear no portion of the expenses of the outfit, and are not entitled to a share in the profits of the undertaking ; but the ship sails wholly at the charge and risk, and for the profit of the others." Abbott on Shipping, 100; The Apollo, 1 Hagg. Adm. 311; The Petrel, 3 Hagg. Adm. 299; Willings V. Bhght, 1 Pet. Adm. 288; Steamboat Orleans v. Phoebus, 11 Pet. 183; Davis V. The Seneca, Gilpin, 24 ; Rodick v. Hinckley, 8 Greenl. 274 ; The Lodermia, Crabbe, 271 ; Buddington v. Stewart, 14 Conn. 404. And, at law, an agreement of a majority of the part-owners of a vessel, to intrust the command of a vessel to a par- ticular person was held void, as conflicting with the exercise of that free and impartial judgment which they were bound to exercise. Card v. Hope, 2 B. & C. 661. If the part-owners are equally divided, one half in favor of employing the vessel, the other half opposed, the former can employ her, upon giving bonds. 3 Kent, Com. 153. In Steamboat Orleans v. Phoebus, 11 Pet. 175, 183, Story, J., said : " The minority of the owners may employ the ship in like manner, if the majority dechne to employ her at all ; " and the minority will, in that case, " be entitled to all the profits of the voyage or adventure, and are to bear all the expenses and outfits and risks thereof" See also, 3 Kent, Com. 156; MoUoy, b. II. c. 1, § 2, p. 308. But where part-owners, having equal interests, are both willing to employ the vessel, but differ as to the voyage, or when, in such a case, each part-owner is wilUng to take the vessel on a voyage to be planned by himself, but will not cooperate with the other, it does not seem to be well settled what a court of admiralty will do. The English admiralty courts have no authority to sell in such a case. Ouston v. Hebden, 1 Wilson, 101 ; The Apollo, 1 Hagg. Adm. 306. This authority was followed in Davis v. The Seneca, Gilpin, 10 ; but in the Circuit Court the decision was ovemiled by Washington, J., who, on the authority of the French Ordonnance de la Marine, sections 5, 6, held that a sale could be decreed in such cases. 18 American Jurist, 486. See also, Skrine v. The Hope, Bee, Adm. 2; The Vincennes, XJ. S. D. C. Maine, 1851. Unless a bond is taken by the dissentient part-owners, in the cases above mentioned, it seems that they will have no remedy in case the ship is lost. Graves v. Sawcer, T. Raym. 15, 1 Lev. 29. See also, Gould V. Stanton, 16 Conn. 12; Moody v. Buck, 1 Sandf. 304. [367] 336* ELEMENTS OP MERCANTILE LAW. [CH. XVII. ployment or preservation of the ship, bind all the part-owners in favor of an innocent third party.^ In general, all the part-owners are liable, each one for the * whole amount, for all the repairs of a ship, or for necessaries actually supplied to her, in good faith.^ If one pays his part, or more than his share, and it is agreed that he shall not be held further, still, if the others do not pay, he must, unless there is a better consideration for the promise not to call on him, than his merely paying a part, of what he was legally bound to pay. If he had a discharge under seal, it might protect him at law, but would not, of itself, in admiralty.^ If it can be clearly shown, however, that especial credit was given, and intended to be given, to one part-owner personally, to the exclusion of the others, then the others cannot be holden.* If the goods were charged to " ship " so and so, or to " ship and owners," this would tend strongly to show that it was intended to supply them on the credit of all the owners. If charged to some one owner alone, this would not absolutely prove that credit was intentionally given to him exclusively. It would raise a presumption which might be rebutted by showing that no other owner was known ; or by any other evidence which disproved the intention of discharging the other part-owners.^ 1 Chapman v. Durant, 10 Mass. 47 ; Schermcrliorn v. Loines, 7 Johns. 311 ; Mul- don V. Whitlock, 1 Cowen, 290 ; Hardy v. Sproule, 29 Maine, 258 ; Davis v. Johns- ton, 4 Sim. 539 ; Darby v. Baines, 12 Eng. L. & Eq. 238. But one part-owner of a vessel is not liable to another for repairs made at a home port, without his consent. Hardy v. Sproule, 31 Maine, 71. Sec also, Benson v. Thompson, 27 Maine, 471. 2 Wright V. Hunter, 1 East, 20; Thompson v. Finden, 4 Car. & P. 158; Patterson V. Chalmers, 7 B. Mon. 595 ; James v. Bixby, 11 Mass. 440 ; Stewart v. Hall, 2 Dow, P. C. 29 ; Macy v. De Wolf, 3 Woodb. & M. 193, 204 ; Carlisle v. The Eudora, 5 La. Ann. 15 ; Scottin v. Stanley, 1 Dall. 129. " Teed v. Baring, Abbott on Shipping, 116, note; Pitch v. Sutton, 5 East, 230; 2 Parsons on Cont. 129, and cases there cited. * Stewart v. Hall, 2 Dow, 29 ; James v. Bixby, 11 Mass. 37 ; Muldon v. Whitlock, 1 Cowen, 290; Cox v. Eeid, 1 Car. & P. 602; Reed .,•. White, 5 Esp. 122. In Thompson v. Pinden, 4 Car. & P. 158, Tindal, C. J., said : " I should think an exclu- sive credit would be a giving up of the owners generally, and the making an exclusive bargain with the person who orders the goods, and an agreement to furnish them on his credit only." But there must lie a voluntary giving up of the others ; for, when .all the part-owners ai-e not known to the person giving credit to one, the others will not be discharged. Thomson v. Davenport, 9 B. & C. 78. <> In Thompson v. Pinden, 4 Car. & P. 158, one part-owner defended against a claim for work and labor done to a vessel, on the ground that, in the plaintiff's books, the charge was against another part-owner alone. Tindal, C. J., said : " That would make no difference." But this remark must be taken with reference to that case, as the books woidd undoubtedly be evidence to show to whom the charge was made. [368] CH. XVII.] THE LAW OF SHIPPINa. *337 So, if the note, negotiable or otherwise, of one part-owner were taken in payment, if the promisor refused to pay, the oth- ers would be liable, unless they could show a distinct bargain by which they were exonerated.^ ' Commonly, the ship's husband, as the agent of all the owners for the management of the ship has long been called, is one of the part-owners. But he is not so necessarily. He may be ap- pointed in writing or otherwise. His duties are, in general, to provide for the complete equipment and repair of the ship, and take care of her while in port ; and see that she is furnished with all regular and proper papers ; and make proper contracts for freight or passage, and collect the receipts, and make the dis- bursements proper on these accounts.^ For these things he has all the necessary powers. But he cannot, without special power, insure for the rest,^ nor buy a cargo for them,* nor borrow money. 1 The Bark Chusan, 2 Story, 455, 467. In Higgins v. Packard, 2 Hall, 547, it was held that taking a note from one part-owner, does not discharge the others, unless ex- pressly received for that purpose. And it seems that the giving of a receipt in full, is not alone sufficient evidence that it was so received. Schermerhorn v. Loincs, 7 Johns. 311 ; Muldon v. Whitlock, 1 Cowen, 290 ; Wyatt v. Marquis of Hertford, 3 East, 147. But in Massachusetts and Maine, the taking of a promissory note from one part-owner, would prima facie discharge the others. Chapman v. Durant, 10 Mass. 49 ; French v. Price, 24 Pick. 13, 20 ; Descadillas v. Harris, 8 Greenl. 298 ; Wilkins v. Reed, 6 Greenl. 220 ; Newall v. Hussey, 18 Maine, 249. See also, 2 Parsons on Cont. 136. ^ Mr. Bell, in his work upon the Principles of the Law of Scotland, says : " The duties of the ship's husband are : 1 . To see to the proper outfit of the vessel in the re- pairs adequate to the voyage, and in the tackle and furniture necessary for a seaworthy ship. 2. To have a proper master, mate, and crew for the ship, so that in this respect it shall be seaworthy. 3. To see to the due furnishing of provisions and stores, ac- cording to the necessities of the voyage. 4. To see to the regularity of all the clearances from the custom-house, and the regularity of the registry. 5. To settle the contracts, and provide for the payment of the furnishings, which are requisite in the performance of those duties. 6. To enter into proper charter-parties, or engage the vessel for gen- eral freight, under the usual conditions ; and to settle for freight and adjust averages with the merchant ; and, 7. To preserve the proper certificates, surveys and documents, in case of future disputes with insurers or freighters, and to keep regular books of the ship." 1 Bell, Comm. 410, § 428 (4th ed.) ; id. p. 504 (5th ed.). ^French v. Backhouse, 5 Bun-. 2727 ; Bell v. Humphries, 2 Stark. 345 ; Patterson V. Chalmers, 7 B. Mon. 595 ; Foster v. United States Ins. Co. 11 Pick. 85 ; Turner v. Barrows, 5 Wend. 541, 8 Wend. 144; Robinson v. Gleadow, 2 Bing. N. C. 156. In Bell V. Humphries, a case where the managing owners had insured the whole vessel. Lord £WenAoro«(7A said : "As managing owners, they had a right to order every thing to be done which was necessary for the ship ; but a share in the ship was the distinct property of each individual part-owner, whose business it was to protect it by insurance, and the insurance of another could not be binding upon such proprietors, without some evidence importing an authority by them." See next page, u. 1. But one partner of a firm which owns a vessel, may effect insurance for all. Hooper o. Lusby, 4 Camp. 66. * Hewett V. Buck, 17 Maine, 147. See next page, n. 1. [369] 338* ELEMENTS OF MERCANTILE LAW. [CH. XVH. nor give up their lien on the cargo for the freight, nor delegate his authority.! * Where he acts within his powers, a ship's husband binds all his principals, that is, all the part-owners. But a third party may deal with him on his personal credit alone ; and if the part- owners, believing this on good reason, settle their accounts with him accordingly, this third party cannot now establish a claim against them to their detriment.^ If a ship's husband be not a part-owner, all the part-owners are liable to him in solido, or each for the whole amount.^ If he is a part-owner, each is liable for his share of the expense incurred.^ Whether a part-owner has a lien on the shares of other part- owners, or on the whole vessel, for advances or balances due on account of the vessel, is not certain on authority. Perhaps the current of adjudication may be adverse to this lien, permitting it only where the principles of the law of agency would give it. But there is not wanting authority, nor, as we think, strong rea- son for saying that this lien should belong to the part-ownership of a ship, as such.^ And it seems to be settled that this lien 1 Mr. Bell, ia treating of the limitations of the powers of a ship's husband, says : " 1 . That, without special powers, he cannot borrow money generally for the use of the ship ; though he may settle the accounts of the creditors for furnishings, or grant bills for them, which will form debts against the concern, whether he has funds in his hands or not, with which he might have paid them. 2. That, although he may, in the general case, levy the freight, which is, by the bills of lading, payable on the delivery of the goods, it would seem that he will not have power to take bills for the freight, and give up the possession and lien over the cargo, unless it has been so settled by charter-party, or unless he has special authority to give such indulgence. 3. That, under general authority as ship's husband, he has no power to insure, or to bind the owners for premiums ; this requiring a special authority. 4. That, as the power of the master to enter into contracts of affreightment, is superseded in the port of the owners, so is it by the presence of the ship's husband, or the knowledge of the contracting parties, that a ship's husband has been appointed." 1 Bell, Comm. 411, § 429 (4th cd.) ; id. 504, 505 (5th ed.). See also, Campbell v. Stein, 6 Dow, 135 ; Williams v. Thomas, 6 Esp. 18. 2 Reed v. White, 5 Esp. 122 ; Chcever v. Smith, 15 Johns. 276 ; Wyatt v. Marquis of Hertford, 3 East, 147. ^ See ante, p. 336, n. 2, et seq. * Helme v. Smith, 7 Bing. 709 ; Brown v. Tapscott, 6 M. & W. 119. -'"' If a part-owner, or stranger, as ship's husband, makes disbiu-seraents for a voyage, and comes into possession of the proceeds of that voyage, upon the general principles of the law of agency, he would seem to have a lien thereon, for his indemnity. 1 Bell, Coram. 503, 505 ; Ex parte Young, 2 Vcs. & B. 242 ; Holderness v. Shackels, 8 B. & C. 612. There appears to be no decision which extends the lien of a ship's husband, ivlio is not a part-owner. If the part-owners own the vessel as partners, or if they be- come partners for any particular adventure, then, undoubtedly, each one has a lien for his adv.ances upon the partnership property. Mumford v. NicoU, 20 Johns. 611 ; [370] CH. XVII.] THE LAW OP SHIPPING. *339 exists on the profits of the adventure for the expenses of the outfit.1 SECTION IV. OP THE LIABILITIES OP MORTGAGEES. A mortgagee of a ship, who is in possession, is, in general, lia- * ble in the same way as an owner.^ But if he has not taken possession, he is not liable for supplies or repairs, merely on the ground that his security is strengthened by whatever preserves or increases the value of the vessel. Nor can he be made liable, except by some act or words of his own, which show that credit was properly given to him, or that he has come under a valid engagement to assume this responsibility.^ Coll. on Part. §§ 125, 1187, and note ; Holdemess v. Shackels, supra. But, upon the question whether a part-owner, naerely as such, has a lien for his advances on the share of his copartner, there is a diversity in the decisions. In England, it is now settled, that there is no such lien. Ex parte Young, 2 Ves. & B. 242 ; Ex parte Harrison, 2 Eose, 76. This rule was followed in Braden v. Gardner, 4 Pick. 456 ; Merrill v. Bart- lett, 6 Pick. 46 ; Patton v. Schooner Randolph, Gilpin, 457 ; The Larch, 2 Curtis, C. C. 227 ; and by Chancellor Kent, in Nicoll v. Mumford, 4 Johns. Ch. 522. But, in Doddington v. Hallet, 1 Ves. Sen. 407, Lord Hardmcke held that there was a lien in such cases, and this decision, although overruled in England by Lord Eldon, in the cases just cited, was followed in the Court of Errors in New York, in Nicoll v. Mum- ford, 20 Johns. 611, and in Seabrook v. Eose, 2 Hill, Ch. S. Car. 553. These latter cases seem to have proceeded mainly on the ground that the owners were considered as partners. 1 Holdemess v. Shackels, 8 B. & C. 612 ; Gould' v. Stanton, 16 Conn. 12, 23 ; Macy u. De VPolf, 3 Woodb. & M. 193, 210. 2 Miln V. Spinola, 4 Hill, 177, 6 Hill, 218 ; Champlin v. Butler, 18 Johns. 169. In Tucker v. BuiBngton, 15 Mass. 477, the defendants had taken an absolute bill of sale of a vessel, represented her as their property at the custom-house, taken out a new cer- tificate of enrolment in their own names, and caused the name of the place of residence of the former owners to be erased from the stern, and th« name of their own place of residence to be substituted. They were held liable for repairs, although there was a written defeasance, and they had received none of the earnings of the vessel, nor acted in any way as owners. Parker, C. J., said : " A tradesman, who intended to work on the credit of the owners of the vessel, would have no means of conjecturing any one to be owner, but him in whose name the vessel was enrolled ; and this fact, together with the alteration on the stem, would give a better indication of the ownership than actual possession of the vessel. For, in almost all cases, those who own, are not those who are employed about the vessel." But see Myers v. Willis, 17 C. B. 77, 33 Eng. L. & Eq. 204, affirmed 18 C. B. 886, 36 Eng. L. & Eq. 350 ; Hackwood v. Lyall, 17 C. B. 124, 33 Eng. L. & Eq. 211. 8 M'Intyre v. Scott, 8 Johns. 159 ; Champlin v. Butler, 18 Johns. 169 ; Phillips v. Ledley, 1 "Wash. C. C. 226 ; Brooks v. Bondsey, 17 Pick. 441 ; Cutler v. Thurlo, 20 Maine, 213 ; Lord v. Ferguson, 9 N. H. 380 ; Fisher v. Willing, 8 S. & R. 118 ; Hes- keth v'. Stevens, 7 Barb. 488 ; Coi'dray v. Mordecai, 2 Rich. 518 ; M'Carter v. Hunting- ton 15 Johns. 298. In Brooks w. Bondsey, SAaw, C. J., said : " We think it now too [371] 340* ELEMENTS OP MERCANTILE LAW. [CH. XVII. SECTION V. OP THE CONTRACT OF BOTTOMRY. By this contract, a ship is hypothecated as security for money borrowed. The form of this contract varies in different places, and, indeed, in the same place. Its essentials are : First, that the ship itself is bound for the payment of the money .^ Second, that *the money is to be repaid only in case that the ship per- forms a certain voyage, and arrives at its terminus in safety ; or, as it is sometimes provided in modern bottomries, in case that the ship is in safety on a certain day ; ^ therefore, if the ship is lost before the termination of the voyage or the expiration of the period, no part of the money is due, or, as is sometimes said, the whole debt is paid by the loss.^ As the lender thus con- sents that the repayment of the money shall depend upon the clear to admit of a question, that a mortgagee of a vessel, not in tlae possession or em- ployment of the vessel, not liaving ordered or authorized supplies and repairs, and not holding himself out to the world as an owner, — as in the case of Tucker v. Buffington, 15 Mass. 477, is not liable for the supplies or repairs furnished to such vessel." In StaiT !'. Knox, 2 Conn. 215, it was held, that if a person is registered as absolute owner, and credit is given for supplies on the strength of that, he will be liable, although he is in fact a mortgagee. But see Ring v. Franklin, 2 Hall, 1 ; Duff v. Bayard, 4 Watts & .S. 240. The question whether a mortgagee, not in possession, was liable for repairs, &o., seems to have been unsettled in England at one time. Westerdell v. Dale, 7 T. 1!. 306 ; Tucker a. BufSngton, supra, per Parker, C. J. But it seems now to be determined in accordance with the above doctrine. Jennings v. Griffiths, Ryan & M. 42 ; Briggs v. Wilkinson, 7 B. & C. 30. ' In Blaine v. Tlie Charles Carter, 4 Cranch, 328, Chase, J., said: "A bottomry bond maile by the master, vests no absolute indefeasible interest in the ship on which it is founded, but gives a claim upon her, which may be enforced, with all the expedi- tion and efficiency of the admiralty process." See also, Johnson v. Shippen, 2 Ld. Eavm. 984 ; Johnson v. Greaves, 2 Taunt. 344 ; United States v. Delaware Ins. Co. 4 Wash. C. C. 418. 2 The Brig Draco, 2 Sumn. 157, 191 ; Thorndike v. Stone, 11 Pick. 183. The case of the Brig Draco deserves careful attention, as containing a most elaborate discussion upon the nature of bottomry bonds, in the light of the general maritime law. a The Atlas, 2 Hagg. Adm. 48; Bray y. Bates, 9 Met. 237; The Brig Draco, 2 Sumn. 157 ; Leland v. The Mcdora, 2 Woodb. & M. 92, 107 ; Jennings v. Ins. Co. of Penn. 4 Binn. 244; Ruchor v. Conyngham, 2 Pet. Adm. 295; The Mary, 1 Paine, C. C. 671 ; Greeley v. Waterhouse, 19 Maine, 9; Stanibank v. Penning, 11 C. B. 51, 6 Eng. L. & Eq. 412. In Bray v. Bates, Hubbard, J., said : "Bottomry is a contract by which the ship, or, as it used to be said, the keel or bottom of the ship, is pledged to secure the payment of money boiTowed by the owner to fit her for sea, repair her, &c. ; and the agreement is, that if the ship is lost by any of the perils enumerated in the contract, the lender loses his money ; but if the ship arrives safely, or is in safety at the termination of the time stipulated for the repayment of the loan, he is to receive back his principal sura and a marine interest, at the" rate agreed upon, although it ex- ceeds the legal interest; and in this event, the ship and the bon-ower himself are equally liable to the lender." [372] CH. XVII.J THE LAW OF SHIPPING. *341 safety of the ship, he has a legal right to charge " marine inter- est," or as much more than legal interest as will serve to cover his risk.i The lender may require, and the borrower pay more than lawful interest on a bottomry bond, without usury. Arid it has been said that maritime interest, or more than legal interest, must be charged by the contract, or it is not a loan on bottomry .2 But this, we think, is not accurate. We should hold that mari- time interest may always be waived by the lender ; for such in- terest, however usual, or nearly universal, is not of the essence of the contract.'^ * If the interest be not expressed in the contract, it will gener- ally be presumed to be included in the principal* If, by the contract, the lender takes more than legal interest, and yet the money is to be paid to him, although the ship be lost, it is not a contract of bottomry, and is subject to all the consequences of usury .^ But the lender. may take security for his debt and marine interest, additional to the ship itself, pro- vided the security is given, like the ship itself, to make the pay- ment certain when it becomes due by the safety of the ship, but is wholly avoided if the ship be lost.^ 1 In The Atlas, 2 Hagg. Adm. 57, Lord Stowdl said : " If the ship arrived safe, the title to repayment hecame vested; but if the ship perished in itinere, the loss fell en- tirely upon the lender. Upon that account, the lender was entitled to demand =. much higher interest than the current interest of money in ordinary transactions. It partook of the nature of a wager, and therefore was not limited to the ordinary interest ; the danger lay not upon the borrower, as in ordinary cases, but upon the lender, who was therefore entitled to charge his pretium periculi, his valuation of the danger to which he was exposed. A contract similar to this upon the cargo is called respondentia, but is of rarer occurrence." 2 Leland v. The Medora, 2 W. & M. 92, 107 ; The Mary, 1 Paine, C. C. 671. " In The Emancipation, 1 W. Rob. 124, 130, Dr. Lushinglon said : " I am aware that it is not absolutely necessaiy that a bottomry bond should carry maritime interest, and that a party may be content with ordinary interest ; but when the character of an in- strument is to be collected from its contents, and when the argument in support of the bond is, that the advance of the money was attended with risk, it is a material circum- stance, that only an ordinary rate of interest should be demanded. It is impossible to conceive that any merchant, carrying on his business with ordinary care and caution, would be content to divest himself of all security for the loan of his money but a bot- tomry bond, and ask no greater emolument than the ordinary rate of dl. per cent., if the repayment of sucli a loan was to depend upon the safe arrival of the vessel at the port of her destination, after performing such a voyage." See also, Stainbank v. Fenning, 11 C. B. 51, 6 Eng. L. & Eq. 412 ; Jennings v. Ins. Co. of Penn. 4 Binn. 244 ; Selden V. Hendrickson, 1 Brock. C. C. 396 ; The Brig Atlantic, 1 Newb. Adm. 514 ; The Hunter, Ware, 249 ; The Brig Ann C. Pratt, 1 Curtis, C. C. 340. * The Mary, 1 Paine, C. C. 671. 5 The Atlas, 2 Hagg, Adm. 58, 73, and cases cited ante, p. 340, n. 2. ^ Thorndike v. Stone, 11 Pick. 183. In the late case of Stainbank v. Shepard, 13 C. 32 [ 373 ] 342* ELEMENTS OP MERCANTILE LAW. [CH. XVII. The most common contracts of bottomry are those entered into by the master in a foreign port, where money is needed and cannot otherwise be obtained.^ Therefore the security goes with the ship, and the debt may be enforced, as soon as it is payable, against the ship, wherever the ship may be.^ In Eu- rope, contracts of bottomry are seldom made otherwise now.^ But in this " country, these are frequently made by the owner himself, in the home port. And sometimes they are nothing else than contrivances to get more than legal interest. Thus, if A borrows '§20,000 on his ship for one year, at fifteen per cent, interest, conditioned that if the ship be lost the money shall not be paid, and the lender insures the ship for three per cent., he gets twelve per cent, interest, which is twice the legal interest, and yet incurs no risk.* If such a contract were obviously and B. 418, 20 Eng. L. &Eq. 547, Parke, B., said : " Wo mtist not be supposed to intimate a tlouht that a liottomrj bond may not be given at the same time with, or as a collateral security for, bills of exchange drawn on tlie owner. This was clearly laid down by Dr. Lushington, in the case of Tiie Emancipation, 1 W. Rob. 124, on the authority of many cases. If necessaries can be provided on tlie personal credit of the owners, or upon a bill of exchange drawn by the master upon them, a bottomry bond cannot after- wards be given to secure the same debt, because the necessity of hypothecating the ship is the condition of tlic master's authority to do so. The Augusta, 1 Dods. 283. But bills of exchange may be drawn on account of the supply, and a bottomry bond given, at the same time, as a collateral security, — in this sense, that, if the bills of exchange are honored,- — The Nelson, 1 Hagg. Adm. 174, — that is, accepted and paid, if they require acceptance, or paid if they do not, as the case may be — the bottomry is dis- charged ; and, though the sliip arrive, the maritime interest is not payable ; if dishon- ored, the amount is payable on arrival, by means of the remedy against the ship, and in that case, with maritime interest. The St. Catherine, 3 Hagg. Adm. 2,'i3 ; The Eman- cipation, 1 W. Roh. 129; The Atlas, 2 AV. Rob. 502. So" that, in that event, if the bills are accepted, the creditor would have a double remedy — one against the person of the debtor, and one against the ship. But the law forbids the creditor to have a direct remedy on the bond itself against tlie owner as well as the sliip, and it makes it essential to the remedy against the ship, that it should be contingent on its safe arrival ; and this, whether maritime interest is required or not." See also, The Hunter, Ware, 253 ; Bray v. Bates, 9 Met. 237 ; The Jane, 1 Dods. 466. 1 As to the authority of the master to enter into this contract, see iufra. ^ See ante, p. 340. 2 In England, the admiralty jurisdiction extends to bottomiy bonds when made abroad for the ncicssities of the voyage, whether made by the master or the owner. The Duke of Bedford, 2 Hagg. Adm. 294. But it seems' tliat it does not extend to those made by the owner in tlie home port. Abbott on Shipping, p. 153 ; Johnson r. Shippen, 2 Ld. Rayin. 983, per Holt, C. J. ; Busk v. Fearon, 4 East, 319, per Law- rriicc, J. ; The Barbara, 4 liob. Adm. 1. But see The Brig Draco, 2 Sumner, 157, 176, per Slonj, J. I The question has been raised, whether the admiralty jurisdiction of tlie United St^ates courts extends to cases of this nature. In the case of The Draco, 2 Snmner, 157, Mr. Justice Stori/, after much consideration, decided the question in the affirmative. Sec also, Wilmer v. The Smilax, 2 Pet. Adm. 295 ; The Hull of a New Ship, Daveis, 199 ; Cornish v. Murphy, 2 Bro. Civ. & Adm. Law, App. p. 530; The Sloop Mary, 1 Paine, C. C. 671. But see Hurry w. The John & Alice, 1 W.ash. C. C. 293, aiid Blaine v. The Charles Carter, 4 Cranch, 328, per Chase, J. [374] CH. XVII.] THE LAW OE SHIPPING. *343 certainly merely colorable, and a pretence for getting usurious interest, the courts would probably set it aside ; but it might be difficult to show this.i K the money is payable at the end of a certain voyage, and the owner or his servant, the master, terminate the voyage sooner, — either honestly, from a change in their plan, or dis- honestly, by intentional loss or wreck, — the money becomes at once due.^ In admiralty, and, it may be supposed, in common-law courts, a bottomry bond, made abroad, would override all other liens or engagements except the claim for seamen's wages,'^ and the lien of material men for repairs and supplies indispensable to the safety of the vessel.* The reason is, that a bottomry bond is supposed to be made from necessity, and to have provided the only means by which the ship could be brought home.^ For the same reason, a later bond is sustained as against an earlier, and the last against all before it.^ It is possible, however, that a distinction might be taken between liens ' created by contract and those arising from tort, and that a lien by bottomry would be preferred over all the former, but not the latter.' The lien of bottomry depends in no degree on possession ; but an unreasonable delay in enforcing it will destroy the lien.^ 1 Thomdike v. Stone, 11 Pick. 183, per Putnam, J. 2 The Brig Draco, 2 Sumner, 157 ; 2 Emerig. Traite' 'a, la Grosse, cli. 8, § 4. » The Aline, 1 W. Rob. Ill ; The Madonna D'Idra, 1 Dods. 37, 40; The Sydney- Cove, 2 Dods. 1,13; The Virgin, 8 Pet. 538. In the case of The Madonna D'Idra, Sir W. Scott said : " It must be taken as the universal law of this court, that mariners' wages take precedence of bottomry bonds. These are sacred liens, and, as long as a plank remains, the sailor is entitled, against all other persons, to the proceeds, as a security for his wages." See also, The Kammerhevie Rosenkrants, 1 Hagg. Adm. 62. But in The Mary Ann, 9 Jurist, 94, Dr. Lushington expressed an opinion that wages, earned subsequently to a bottomry bond, would be entitled to priority, but that wages, earned antecedently, would not. In The Selina, 2 Kotes of Cases, 18, such was held to be the rule, as to the lien for salvage. But see The Louisa Bertha, 1 Eng. L. & Eq. 665. * The Jerusalem, 2 Gallis. 345. See also. Ex parte Lewis, id. 483. 5 Hence the privilege of priority is confined to bonds given under the pressure of necessity in a foreign'port. The Rhadamanthe, 1 Dods. 201. 6 The Sydney Cove, 2 Dods. 1 ; The Betsey, 1 Dods. 289 ; The Eliza, 3 Hagg. Adm. 87. " , , , , ■? In th^case of The Aline, 1 W. Rob.'lU, a collision occurred, and the vessel, to the negligence of whose crew the collision was omng, put into Cowes for repairs. D., without knowledge of the claim against her for the collision, advanced money for re- pairs, under an agreement of the master to execute a bottomry bond. Held, that D. was entitled to priority only to the extent of the Increased value of the vessel, arising from the repairs. See Law Reporter of May, 1853, p. 5, " On the Peculiarities of Mar. itime Liens." 8 The Rebecca, 5 Bob. Adm. 102; Blaine v. The Charles Carter, 4 Cranch, 328. [375] 344* ELEMENTS OF MEECANTILE LAW. [CH. XVII. And any connivance, by the lender, at any fraud on the part of the master, avoids the bond in toto.^ There may be a mortgage of a ship, as of any chattel, as we have already said ; but this is a very different thing from a loan on bottomry. We have seen that the statute of 18-50 requires mortgages of ships to be recorded, but does not require that bottomry bonds should be. There is excellent reason for this distinction in reference to bottomry bonds made abroad, but none as to those made at home.'^ SECTION VI. OF THE EMPLOYMENT OF A SHIP BY THE OWNER. An owner of a ship may employ it in carrying his own goods, or those of another. He may carry the goods of others, while he himself retains the possession and direction of the ship ; or he may lease his ship to others, to carry their goods. In the first case, he carries the goods of others on freight ; in the second, he lets his ship by charter-party. We shall consider first the carriage of goods on freight. He may load his ship as far as he can with his own goods, and then take the goods of others to fill the vacant space ; or he may put up his ship as " a general ship," to go from one stated port to another, and to carry the goods of all who offer. It may be remarked that the word " freight " is used in differ- ent ways ; sometimes, to designate the goods or cargo that is * carried, and there is some reason for believing that this was its earliest sense ; ^ sometimes, to denote the money which the ship- 1 The Nelson, 1 Hagg. Adm. 169, 176; The Tartar, id. 1, 14; The Brig Ann C. Pratt, 1 Curtis, C. C. 340, afifirmed on appeal, Carrington v. Pratt, 18 How. 63. 2 In The Brig Draco, 2 Sumner, 157, 180, it was held, that the nature of a bottomry bond did not require that the money loaned should be for the necessities or the use of the ship. There certainly seems to be no reason why a loan made for general purposes in a home port, secured by a. bottomry bond, should have any privileges over a loan secured by mortgage. '' Bright V. Cowper, 1 Brownl. 21 (a. d. 1620). The report of that case commences as follows : " Action of covenant brought upon a covenant made by the merchant with the master of a, ship, that if he would bring his freight to such a port, he would pay him such a sum." [376] CH. XVII.] THE LAW OF SHIPPING. -344 per of the goods pays to the owner of the ship, for their trans- portation. And not unfrequently, when the word is used in this latter sense, the word money is added, as the phrase " freight money " leaves no question as to what is meant.' Sometimes a ship-owner who lets the whole burden of his ship to another, is said to carry the shipper's goods on freight. But the most com- mon meaning of the word, especially in law proceedings, is the money earned by a ship not chartered, for the transportation of the goods ; and in this sense we shall use it.^ Nearly the whole law of freight grows out of the ancient and universal principle that the ship and the cargo have reciprocal duties or obligations towards each other, and are reciprocally pledged to each other for the performance of these duties. In other words, not only is the owner of the ship bound to the owner of the cargo, as soon as he receives it, to lade it properly on board, take care of it while on board, carry it in safety, so far as the seaworthiness of the ship is concerned, to its destined port, and there deliver it, all in a proper way, but the ship itself is bound to the discharge of these duties. That is to say, if, by reason of a failure in any of these particulars, the shipper of the goods is damnified, he may look to the ship-owner for in- demnity ; but he is not obliged to do so, because he may pro- ceed by proper process against the ship itself.^ This lien, like that of bottomry, is not dependent upon possession, but will be lost by delay, especially if the vessel passes into the hands of a purchaser for value without notice.^ On the other hand, if the 1 See Pothier, Traite de Charte-parties, n. 1 ; Valin, vol. i. p. 36. In policies of insurance, the word freight frequently designates the increased value accruing to a ship- owner fi-om the transportation of his own goods. Mint v. Tlemyng, 1 B. & Ad. 45 ; Wolcott V. Eagle Ins. Co. 4 Pick. 429. See also, Clark v. Ocean Ins. Co. 16 Pick. 289. In Lewis v. Marshall, 7 Man. & G. 729, it was held that where a broker engaged with a ship-owner to provide a full cargo for the ship, the rates of freight of which should average forty shillings per ton, and the broker put goods on board the average freight of which amounted to only thurty-two shillings, the contract was broken, though the broker shipped passengers on board whose passage-money, added to the freight of the cargo, averaged more than forty shillings. 2 Cleirac, Les Us et Coustumes de la Mer, p. 72 ; Pothier, Charte-partie, n. 48. It seems that in England the admiralty courts have no jurisdiction to enforce the lien upon the ship in such cases. Abbott on Shipping, 127; The Volunteer, 1 Sumner, 551. But in this country a suit to enforce this lien, both on the ship and cargo, is hdd to come within the maritime jurisdiction. The Volunteer, supra ; The Rebecca, Ware, 188 ; The Phoebe, id. 263 ; The Waldo, Daveis, 161 ; The Brig Casco, id. 184 ; The Eobert Morris v. Williamson, 6 Ala. 50 ; Clark v. Barnwell, 12 How. 272 ; Rich v. Lambert, id. 347. ' The maritime lien on the ship does not include or require possession. The word is used in maritime law not in the strict legal sense in which we understand it in courts 32* [377] 345* ELEMENTS OF MERCANTILE LAW. [CH. XVII. ship discharges all its * duties, the owner may look to the ship- per for the payment of his freight ; but is not obliged to do so, because he may keep his hold upon the goods, and refuse to de- liver them until the freight is paid.i It has generally been laid down, that the master of a vessel may retain part of the cargo for the freight due for -the whole, if it belongs to one person.^ But this has been doubted.^ The party who sends the goods may or may not be the owner of them. And he may send them either to one who is the owner, for whom the sender bought them, or to one who is only the agent of the owner. In either of these cases, the sender is called the consignor of the goods, and the party to whom they are sent is called the consignee. The sending them is called the consign- ing or the consignment of them ; but it is quite common to hear the goods themselves called the consignment. The rights and obligations of the ship-owner and the shipper are stated generally in an instrument of which the origin is lost in its antiquity, and which is now in universal use among com- of common law, in which there could be no lieu where there waa no possession, actual or constructive ; but to express, by analogy, the nature of claims which neither pre- suppose nor originate in possession. Harmer r. Bell, 7 Moore, P. C. 267, 22 Eng. L. & Eq. 72. But it will nevertheless be lost if not enforced without unreasonable delay, especially if the vessel has come into the hands of a bond Jide purchaser without notice of the lien. The Barli Chusan, 2 Story, 455, 468 ; Packard v. The Louisa, 2 Woodb. & M. 48. 1 The Schooner Volunteer, 1 Sumner, 551, 569 ; Drinkwater v. The Brig Spartan, Ware, 149 ; Van Bokkelin v. IngersoU, 5 Wend. 315 ; Certain Logs of Mahogany, 2 Sumner, 589 ; Molloy, Lib. 2, ch. 4, § 12 ; Beawes, Lex Merc. tit. Freight ; Anony- mous, 12 Mod. 447, 511. This lien is undoubtedly derived from the maritime law, and was in its origin like the " privilegium " of the civil law, a claim which follows the goods wherever they go. It is now usually construed as a right to retain possession of the goods until the freight is paid; and if the possession is parted with, the lien is lost, or considered as waived. The Schooner Volunteer ; Certain Logs of Mahogany ; Van Bokkelin v. IngersoU ; Packard v. The Louisa, 2 Woodb. & M. 48, 58 ; Perkins v. Hill, 2 Woodb. & M. 158, 166 ; Pliillips v. Eodie, 15 East, 547, 554. In the last case. Lord Ellenborough said : " What is a lien for freight, but a right to detain the goods on board until the freight which has been actually earned upon them, which is capable of being calculated and ascertained, has been paid, and where the owner of the goods knoM'S what he is to tender t " We should, however, be inclined to hold that the lien of the ship on the goods for freight is reciprocal with that of the goods on the ship for dam- age, and does not depend on possession, but that a surrender of possession should gen- erally be construed as a waiver of possession, unless the circumstances attending such surrender showed that the intention was that the lien should remain. See Sears v. Certain Bags of Linseed, cited 1 Parsons, Maritime Law, 145, n. 1 ; 2 id. 564, n. 1. 2 See Sodergreen v. Flight, cited 6 East, 622 ; Bernal v. Pim, 1 Gale, 17 ; Boggs v. Martin, 13 B. Mon. 239 ; Fuller v. Bradley, 25 Penn. State, 120; Barnard v. Wheeler, 24 Maine, 412. 8 MoUer v. Young, 5 Ellis & B. 755, 34 Eng. L. & Eq. 92, reversing s. c. 5 Elhs & B. 7, 30 Eng, L. & Eq. 345. And see comments on case of Sodergreen v. Flight, in 1 Parsons, Maritime Law, 257, u. 1 . [378] CH. XVII.] THE LAW OP SHIPPING. *346 mercial nations, with little variety of form. It is called the Bill of Lading.i It should contain the names of the consignor, of the consignee, of the vessel, of the master, of the place of de- parture, and of the place of destination ; also the price of the freight, with primage and other charges, if any there be, and, either in the body of the bill or in the margin, the marks and numbers of the things shipped, with sufficient precision to desig- nate and identify them. * And it should be signed by the master of the ship, who, by the strict maritime law, has no authority to sign a bill of lading until the goods are act- ually on board.2 There is some relaxation of this rule in prac- tice ; but it should be avoided. Usually one copy is retained by the master, and three copies are given to the shipper ; one of them he retains, another he sends to the consignee with the goods, and the other he sends to the consignee by some other conveyance. The delivery promised in the bill is to the consignee, or his assigns ; and the consignee may designate his assigns by an in- dorsement signed by him on the bill, and order the delivery to them, or the consignee may indorse the bill in blank, and any one who acquires an honest title to it may write over the signa- ture an order of delivery to himself.^ It is held that the con- signee has this power, if such be the usage, even if the word " assigns " be omitted.* Such indorsement not only gives the indorsee a right to demand the goods, but passes to him the property in the goods.^ It is said, however, that if the goods are 1 For forms of Bills of Lading, see Grant v. Norway, 10 C. B. 665, 2 Eng. L. & Bq. 337 ; Renteria v. Ruding, 1 Moody & M. 511/ See, as to stipulations in bills of lading, Brittan v. Barnaby, 21 How. 527. 2 Grant v. Norway, 10 C. B. 665, 2 Eng. L. & Eq. 337 ; Hubbersty v. Ward, 8 Exch. 330, 18 Eng. L. & Eq. 551. See also, Coleman v. Riches, 16 C. B. 104, 29 Eng. L. & Eq. 323; Schooner Ereeman v. Buckingham, 18 How. 182; Rowley v. Bigelow, 12 Pick. 307. ' In Chandler v. Sprague, 5 Met. 306, Shaw, C. J., said ; " Ordinarily the name of a consignee is inserted ; and then such consignee, or his indorsee, may receive the goods and acquire a special property in them. Sometimes the shipper, or consignor, is him- self named as consignee, and then the engagement of the ship-owner or master is, to deliver them to him or his assigns. Sometimes no person is named, the name of the consignee being left blank, which is understood to import an engagement on the part of the master to deliver the goods to the person to whom the shipper or consignor shall order the delivery, or to the assignee of such person." See Lickbarrow v. Mason, 2 T. R. 63, 6 East, 21 ; 1 Smith, Lead. Cases, 388. * Renteria v. Ruding, 1 Moody & M. 511 ; 1 Parsons on Cont. 239. ^ Lickbarrow v. Mason, 2 T. R. 63 ; 1 Smith, Lead. Cases, 388 ; Chandler v. Belden, 18 Johns. 157 ; Chandler v. Sprague, 5 Met. 306; 1 Parsons on Cont. 239. [379] 347* ELEMENTS OF MERCANTILE LAW. [CH. XVII. refused, an action on the bill must be brought in the name of the original consignee. ^ As the bill of lading is evidence against the ship-owner, as to the reception of the goods, and their quantity and quality, it is common to say " contents unknown," or " said to contain," &c.^ * But without any words of this kind, the bill of lading is not conclusive upon the ship-owner, in favor of the shipper, who may show that its statements were erroneous through fraud or mistake.^ But the ship-owner, or master, is bound much more strongly, and perhaps conclusively, by the words of the bill of lading, in favor of a third party, who has bought the goods for value and in good faith, on the credit of the bill of lading.* The law merchant gives to the ship, as we have seen, a lien on the goods for the freight.^ The master cannot demand the freight without a tender of the goods at the proper time, in the proper way, to the proper person, and in a proper condition ; ^ 1 la Thompson u. Downing, 14 JI. & W. 403, an action was brought on a bill of lading, in tlie name of the consignee. It was held, that the action would not lie. Al- dersoii, B., said : "Because in LickbaiTow v. Mason, a bill of lading was held to be ne- gotiable, it has been contended that that instrument possesses all the properties of a bill of exchange ; but it would lead to absurdity to cany the doctrine to tliat length. The word ' negotiable ' was not used in the sense in which it is used as applicable to a bill of exchange, but as passing the property in tlie goods only." See also, Dows i'. Cobb, 12 Barb. 310 ; Howard v. Shepherd, 9 C. B. 297 ; Tindal v. Taylor, 4 Ellis & B. 219, 28 Eng. L. &Eq. 210. In Admiralty, however, the suit should be in the name of the party in interest. See 2 Parsons, Mar. Law, 670. - In Clark v. Barnwell, 12 How. 272, 284, in the bill of lading, after the usual clause that the goods were shipped in good order, tliere was added " contents unknown." It was lield, " that the acknowledgment of the master as to the condition of the goods when received on board, e.xtended only to the external condition of the cases, excluding any implication as to the quantity or quality of the article, condition of it at the time received on board, or whether properly packed or not in the boxes." And without these words, it may be shown that the goods were damaged at the time they were re- ceived. Bissel V. Price, 16 III. 408 ; The Colombo, tJ. S. C. C. New York, 19 Law Reporter, 376 ; Ellis v. Willard, 5 Seld. 529. * Barrett v. Rogers, 7 Mass. 297 ; Benjamin v. Sinclair, 1 Bailey, 174 ; Hastings v. Pepper, 11 Pick. 41 ; O'Brien v. Gilchrist, 34 Maine, 554 ; Babcock v. May, 4 Ohio, 334 ; Bates v, Todd, 1 Moody & R. 106 ; Knox v. The Ninetta, Crabbe, 534'. * " As between the shipper of the goods and the owner of the vessel, a bill of lading may be explained as far as it is a receipt ; that is, as to the quantity of the goods ship- ped, and the like ; but as between the owner of the vessel and an assignee, for a valuable consideration, paid on tlie strength of tlie bill of lading, it may not be explained." Per Edmonds, .J., in Dickerson v. Seelye, 12 Barb. 102 ; Howard v. Tucker, 1 B. & Ad. 712. See also, Berkley v. "Watling, 7 A. & E. 29. But as far as a bill of lading con- tains a contract, and not an acknowledgment, it is governed by the ordinary rules of consti-uction, and cannot be varied by parol evidence. 2 Parsons on Cout. 67 ; Bab- cock V. May, 4 Ohio, 334 ; Wolfe v. Myers, 3 Sandf. 7 ; Ward i,. Whitney, 3 Sandf. 399, 4 Seld. 442. 5 See ante, p. 345, n. 1. » Brittau ;;. Barnaby, 21 How. 527; Lane v. Penniraan, 4 Mass. 91 ; Certain Logs of Mahogany, 2 Sumner, 589 ; Phelps v. Williamson, 5 Sandf. 578. In Bradstreet v, [380] CH. XVII.] THE LAW OF SHIPPING. *348 but then the consignee is not entitled to the goods without pay- ing freight. The law gives this lien, whether it be expressed or not.i But it may be expressly waived. The bill of lading, or other evidence, may show the agreement of the parties, that the goods should be delivered first, and the freight not be payable until a certain time afterwards ; and such an agreement is in general a waiver of the lien.^ * At common law this agreement to deliver the goods before payment of freight, is destructive of the lien. But in admiralty this lien would, we think, be considered rather as the privilegium of the civil law, than the lien of the common law ; and therefore not to be so entirely dependent on the mere possession. Unless the ship-owner intended to give up his security on the goods, a court of admiralty would be disposed so to construe such an agreement as to give the consignee possession of the goods, for a temporary purpose, as to ascertain their condition, or, possibly, that he might offer them in the market, and by an agreement to Baldwin, 11 Mass. 229, the cargo was seized by the government for the default of the shipper. The court hdd, that, " if there was evidence of a readiness, on the part of the plaintiiTs, to deliver the cargo to the defendant, and the actual delivery and discharge of it had been prevented by the neglect of the defendant to receive it, or, if the delivery was intercepted by an attachment, or seizure for a default of the defendant, the plaintifts would be entitled upon this evidence, as they would be upon proving an actual discharge and delivery of the cargo." See also, Palmer v. Lorillard, 16 Johns. 348. 1 See ante, p. 345, n. 1. 2 In The Schooner Volunteer, 1 Sumner, 551, 569, Story, J., said : " In general, it is well known, that, by the common law, there is. a lien on the goods shipped, for the freight due thereon, whether it amve under a common bill of lading, or under a charter- party. But then this lien may be waived by consent ; and, in cases of charter-parties, it often becomes a question, whether the stipulations are, or are not, inconsistent with the existence of the lien. For instance, if the delivery of the goods is by the charter- party to precede the payment, or security of payment of freight; such a. stipulation fur- nishes a clear dispensation with the lien for freight, for it is repugnant to it, and incom- patible with it." But it was hdd in that case, that a clause providing for the payment of freight, "within ten days after her" (the schooner's) "return to Boston, or, in case of loss, to the time she was last heard of," was not a waiver, because the law allows fifteen days after arrival, for entry and discharge of cargo. So, in the case of Certain Logs of Mahogany, 2 Sumner, 589, a clause making the freight " payable in five days after her return to, and discharge in Boston," was no waiver of the lien, on the ground, among others, that "discharge" did not necessarily mean delivery. And Story, J., remarked, that the lien was " favored in law, and ought not to be displaced without a clear and determined abandonment of it." In Crawshay v. Homfray, 4 B. & Aid. 50, Best, J., said : " The, principle has been truly stated, that unless the special agreement be inconsistent with the right of lien, it will not destroy it." See also, Pinney v. Wells, 10 Conn. 104 ; Alsager v. St. Katherine's Dock Co. 14 M. & W. 794 ; Raymond v. Tyson, 17 How. 53; Howard v. Macondray, 7 Gray, 516. The general doctrine that a special contract, inconsistent with the right to a lien, is a waiver of it, is supported, also, in Chandler v. Belden, 18 Johns. 157 ; Pickman v. Woods, 6 Pick. 248 ; Chase v. Westmore, 5 M. & S. 180; Tate v. Meek, 8 Taunt. 280; Homcastle v. Parran, 3 B. & Aid. 497. [381] 349* ELEMENTS OF MERCANTILE LAW. [CH. XVII. sell, raise the means of paying the freight ; and yet would pre- serve for the master his security upon .the goods for a reasonable time, unless, in the meantime, they should actually become, by sale, the property of a bond fide purchaser.^ The contract of affreightment is entire ; therefore no freight is earned unless the whole is earned, by carrying the goods quite to the port of destination.^ If by wreck, or other cause, the trans- portation is incomplete, no absolute right of freight grows out of it. We say no absolute right, because a conditional right of freight does exist. To understand this, we must remember that as soon as the ship receives the goods, it, on the one hand, * comes under the obligation of carrying them to their destination, and, on the other, at the same time (or, perhaps, only on breaking ground and beginning the voyage), •' acquires the right of so car- rying them. Therefore, if a wreck or other interruption inter- venes, the ship-owner has the right of transshipping them, and sending them forward to the place of their original destination. When they arrive there, he may claim the whole freight origi- nally agreed on ; but if forwarded in the original ship, he can claim no more ; for the extra cost of forwarding the goods is his loss.* He not only may, but must send forward the goods, at 1 See the preceding note. 2 Vlierboom v. Chapman, 13 M. & W. 238 ; Halwerson v. Cole, 1 Speers, 321 ; Hur- tin V. Union Ins. Co. 1 Wash. C. C. 530 ; Tlie N.athaniel Hooper, 3 Sumner, .^42. Bnt if, on account of the perils of the sea, only a part of the goods have been brought to the port of destination, it seems that the owner is entitled to a proportional part of the freight, if those goods are accepted. Luke i\ Lyde, 2 Bnrr. 882 ; Post v. Robertson, 1 Johns. 24; The Nathaniel Hooper, 3 Sumner, 542. But see the dissenting opinion of Livingston, J., in Post r. Eobevtson. But, in such a case, nothing can bo recovered under the special agreement to carry all the goods, but the action must be on the im- plied assumpsit. Post v. Pvobertson ; Bright v. Cowper, 1 Brownl. 21. And if an entire freight is payalile for an entire cargo, and a part only of the cargo is delivered, the con- signee may refuse to receive this part, and then neither he nor the consignor is boitnd to pay a j)io ruUi freight. Sayward v. Stevens, 3 Gray, 97. ^ Kight to freight is niailc to depend on the ship's breaking ground, in Curling t). Long, i B. & P. 634 ; Clemson v. Davidson, 5 Binn. 392, 401 ; Burgess v. Gun, 3 Har- ris & .J. 225 ; Bailev v. Damon, 3 Grav, 92. And on the taking the goods on hoard, in Tindal v. Taylor, 4 Ellis & B. 219,' 28 Eng. L. & Eq. 210 ; Thompson v. Small, 1 C. B. 328, 354 ; Thompson !•. Trail, 2 Car. & P. 334 ; Keyscr v. Harbcck, 3 Duer, 373 ; Bartlett v. Carnlcv, 19 Law Reporter, 579., * In Rosetto v. Gnrney, 11 C. B. 176, 188, 7 Eng. L. & Eq. 461, Jerois, C. J., refer- ring to a case where the cargo was detained by perils of the sea at an intermediate port, eaid : " If the voyage is completed in the original ship, it is completed upon tlie original contract, and no additional freight is incurred. If the master transships, because the original sliip is irreparaljly damaged, mthout considering whether he is bound to trans- .ship, or merely at liberty to do so, it is clear tliat he transships to earn his full freight ; (and so tlie delivery takes place upon the original contract. It may happen that a new bottom can only be obtained at a freight, higher than the original rate of freight. It [ 382 ] CH. XVII.] THE LAW OF SHIPPING. -349 his own cost, if this can be done by means reasonably within his reach.i He is not, however, answerable for any delay thus occurring, or for any damage from this delay. The shipper him- self, by his agent, may always reclaim all his goods, at any inter- mediate port or place, on tendering all his freight ; because the master's right of sending them forward is merely to earn his full freight. If, therefore, the goods are damaged and need care, and the master can send them forward at some time within reason- able limits, and insists upon his right to do so, the shipper can obtain possession of his goods only by paying full freight.^ If, does not seem to have been settled, whether, in that case, the ship-owner may charge the cargo with the additional freight. By the French law, he may do so, and as a con- sequence of that rule, the increased freiglit would be an average loss, to be added to the other items. See Shipton v. Thornton, 9 A. & E. 314." It was there held, that the increased freight sliould be an item in the average loss, thus holding the shipper respon- sible for it. The same rule has been adopted in the American courts. Mumford v. Commercial Ins. Co. 5 Johns. 262 ; Searle v. Scovell, i Johns. Ch. 218; Hugg v. Au- gusta Ins. & Banking Co. 7 How. 595, 609 ; 3 Kent, Com. 212. But see Shnltz v. Ohio Ins. Co. 1 B. Mon. 339. ■i In England it does not appear to be settled whether the master is bound to carry on the goods in such a case, or whetlier he is merely at liberty to do so. Eosetto v. Gurncy, 11 C. B. 176, 188, 7 Eng. L. & Eq. 461 ; Shipton v. Thornton, 9 A- & E. 314. But in this countiy it is held to be the duty of the master to transship, " if upon the whole it should seem reasonable, taking into view the nature of the voyage, and the time, expense, and risk of the transportation to the port of destination." Bryant v. Commonwealth Ins. Co. 6 Pick. 131 ; Shieffelin v. New York Ins. Co. 9 Johns. 21 ; Saltus V. Ocean Ins. Co. 12 Johns. 107 ; Treadvvell v. Union Ins. Co. 6 Cowen, 270. See also, Hugg v. Augusta Ins. and Banking Co. 7 How. 595, 609, per Nelson, J. ; 3 Kent, Com. 213. 2 The rule is thus stated by Lord Mansfield, in Luke v. Lyde, 2 Burr. 882, 887 : " If a freighted ship becomes accidentally disabled on its voyage (without the fault of the master), the master has his option of two things; either to refit it (if that can be done within convenient time), or to hire another ship to carry the goods to the port of deliveiy. If the merchant disagrees to this, and will not let him do so, the master will be entitled to the whole freight of the full voyage. And so it was determined in the House of Lords, in the case of Lutwidge v. Gray." See report of Lutwidge v. Gray, in Liike v. Lyde, and Clark v. Mass. F. & M. Ins. Co. 2 Pick. 104 ; Jordan v. Warren Ins. Co. 1 Story, 342 ; M'Gaw v. Ocean Ins. Co. 23 Pick. 405 ; Griswold v. New York Ins. Co. 3 Johns. 321 ; Bradhm-st v. Columbian Ins. Co. 9 Johns. 17. What will be a reasonable time to allow the master for repairs must depend upon the circumstances of each case. In Clark V. Mass. Ins. Co., two months were allowed, where the vessel, on a voyage from Richmond to Nice, with a cargo of tobacco, was driven into Kennebimk, in Maine. See remarks of Putnam, J., on this question in that case. In the case of The Nathaniel Hooper, 3 Sumner, 542, 555, Siort/, J., said : " And I tliink the whole of the cases, in which the full freight is, upon tlie ordinary principles of the commercial law, due, not- witlistanding the non-arrival of the goods at the port of destination, may be reduced to the single statement that the non-arrival has been occasioned by no default or inability of the carrier-ship, but has been occasioned by the default or waiver of the merchant shipper." The cases of The Racehorse, 3 Rob. Adm, 101 ; The Martha. 3 Rob. 106, note- Tlie HofFnung, 6 Rob. 231, were held to be of doubtful authority, unless sup- ported upon the ground that they were prize cases, and for that reason came under " a very peculiar and extensive jurisdiction, sui generis, and a sort of international discre- tion " which do not belong to courts of admiralty as instance courts. See also, Bork V. Norton, 2 McLean, 422. See also, a very instructive case on this subject, Jordan v. Warren Ins. Co. 1 Story, 342. [383] 350*-351'' ELEMENTS OF MERCANTILE LAW. [CH. XVII. however, the * master tender the goods there, to the shipper, and the shipper there receives them, this is held to sever the contract by agreement, and now what is called a freight ^jro rata itineris is due. This is quite a common transaction. DifEcult questions sometimes arise as to what is a reception of the goods. The rights of the master and of the shipper are antagonistic, and neither must be pressed too far. The master must not pretend to hold them for forwarding, to the detriment of the goods or their value, when he cannot forward them, but merely uses his right to coerce a payment of full freight. And the shipper must not refuse to receive the goods, when the master can do no more with them, and offers their delivery in good faith. The questions of this kind, so far as they are difficult, are generally questions of fact. Courts tend to this result ; where the goods cannot be forwarded by the master without unreasonable effort or cost, or where they need measures for their preservation which he cannot take, and they come into the possession of the shipper, and their original value has been increased by the transportation to that place — the ship-owner is held to be entitled to a proportionate share of the freight. Still, as matter of law, it seems to be set- tled, that if the master certainly will not, or certainly cannot, carry or send the goods forward, the shipper is entitled to them without any payment of freight. So, the shipper may always refuse to receive them, and then, under no circumstances is height pro rata payable, on the general ground that the original contract is at an end, and no new one * has been substituted, either expressly or tacitly, or by implication of law.^ 1 In the earlier cases, it seems to hme been supposed tiiat the master ivas entitled to pro rata freight, if the goods were not abandoned by the owner, although the master should find it impossible to carry the goods to tlie port of destination, or decline to do so. In Luke v. Lyde, 2 Burr. 882, 88.5, Lord Mansfield said that, in the case of Lut- wiilge V. Gray, the House of Lords held, tliat the master was entitled to only pro rata freight on goods which he declined to carry to the port of destination. And Lord Miiiixfield declared that the decision was all agreeable to the maritime law. In United Itis. Co. i'. Lenox, 1 Johns. Cas. .377, 383, Benson, J., after alluding to Luke v. Lyde, said : " From this doctrine, considered as premises, I deduce these consequences, that, although the ship cannot carry tlie goods, and although the master cannot find another to carry them, yet that he may, nevertheless, retain them until he is paid the freight." Sec al>o, Williams v. Smith, 2 Caines, 13 ; Robinson r. Mar. Ins. Co. 2 Johns. 323, where the same doctrine seems to have been supported. But the doctrine stated in the text, that an involuntary acceptance will not be sufficient to sustain a promise to pay pro rata freight; and hence, that the master cannot, by holding goods wjiich he cannot carry forward, compel the owner of them to incur liability to pay freight or lose his goods, seems to be now well settled. Marine Ins. Co. u. United Ins. Co. 9 Johns. 186 ; [384] CH. XVII.] THE LAW OF SHIPPING. *352 If freight ^ro rata is payable, the question arises, by what rule of proportion shall it be measured. One is purely geographical, and was formerly much used ; that is, the whole freight would pay for so many miles, and the freight pro rata must pay so * many less. Another is purely commercial. The whole freight being a certain sum for the whole distance, what will it cost to bring the goods to the place where they were received, and how much to take them thence to their original destination. Let the original freight be divided into two parts proportional to these, and the first part is the freight ^jro rata. Neither of these, nor indeed any other fixed and precise rule is generally adopted in this country. But both courts and merchants seek, by combining the two, to ascertain what proportion of the increase of value by the intended transportation, has been actually conferred upon the goods by actual partial transportation, and this is to be taken Welch V. Hicks, 6 Cowen, 504 ; Armroycl v. Union Ins. Co. 3 Binn. 437 ; Portland Bank v. Stnbbs, 6 Mass. 422, 427 ; Caze v. Baltimore Ins. Co. 7 Cranch, 358 ; The Ship Xathaniel Hooper, 3 Sumner, 542 ; Escopiniche v. Stewart, 2 Conn. 262 ; Par- sons V. Hardy, 14 Wend. 215 ; Hurtin v. Union Ins. Co. 1 Wash. C. C. 530 ; Hanis II. Kaud, 4 N. H. 261 ; Griggs v. Austin, 3 Pick. 20 ; Hunt v. Haskell, 24 Maine, 339 ; Bowman v. Teall, 23 Wend. 306 ; Kossiter v. Chester, 1 Doug. Mich. 154. In the case of The Ship Nathaniel Hooper, 3 Sumner, 542, Mr. Justice Story considered, very elaborately, the various C|ucstions which arise as to the freight, when a vessel is driven by perils of the sea into an intermediate port. In that case, a cargo of sugar was on its way from Havana to St. Petersburg, to stop at Boston. The vessel struck on the South Shoal, and 1,000 boxes of sugar wore thrown overboard, and then she was de- serted. She afterwards floated, went adrift to sea, and was taken into Boston by the crew of another vessel. Both ship and cargo were libelled for salvage. A part of the sugars were found to be in a perishable condition, and were sold under an order of court. One third of the cargo was abandoned to the underwriters and accepted by them. In twenty days after the arrival in Boston, the vessel was repaired, and offered to proceed with the cargo. But it was then in the hands of the court, and there was no one to release it, and the ship was sold before it was actually released. It was held, that in the adjustment of general average, the ownei-s of the ship were to be allowed full freight on the goods jettisoned, and that no freight was due on those sold as in a perishing condition, on the ground that as to them the entire voyage neither was nor could Iiave been perfonned, but it was defeated by an ovenvhelming calamity. A part was sold to pay the duties and salvage ; it wa.s held, that those were to be treated as if they had been lost on the voyage, and that no freight was due on them. As to the remainder, it was held that, under all the circumstances, the owners of the cargo had waived the express contract, and hence were bound to pay pro rata freight. No gen- eral rule can be laid down as to what acts would be sufScient to show a waiver of the contract to complete the voyage, and thus to raise a promise to pay pro rata freight. Mr. Justice Stori/, in his edition of Abbott on Shipping (5th ed.), p. 549, said : "If the owner, or his agent, should refuse to pay any freight at the time of receiving them, or should receive them with a protest against freight, or with a denial of any right to claim it, or if his agents shoidd merelj' act in the absence of the owner, for the benefit of all concerned, there could arise no implication of any contract to pay freight, result- ing from the mere acceptance of the goods or their proceeds." The acceptance of the proceeds of goods sold by necessity in an intermediate port, is not sufficient to raise a promise to pay pro rata freight. Escopiniche v. Stewart, 2 Conn. 391. 33 [385] 352- ELEMENTS OF MERCANTILE LAW. [CH. XVII. as the freight that is due p-o rata itinerisy It has been inti- mated that where a cargo cannot be delivered in one day, the consignee has the right to take it away in parcels on paying a ■pro rata freight, and that as the ship-owner has the control of the unloading, he should do it in such a manner that the pro rata freight may be ascertained.^ If the bill of lading requires delivery to the consignee or his assigns, " he or they paying freight," which is usual, — and the master delivers the goods without receiving freight which the consignee fails to pay, the master or owner cannot in the absence of express contract fall back on the consignor and make him liable, unless he can show that the consignor actually owned the goods ; in which case the bill of lading, in this respect, is nothing more than an order by a principal upon an agent to pay money due from the principal.^ 1 In Luke V. Lydo, 2 Burr. 882-888, the vessel had been at sea seventeen days when she was Ciiptiircd, and was within four days of her port of destination. Hdd, that tlie owner was entitled to ^i of the whole freight — although the freight from the place where the goods were received, Biddeford, on tlic coast of England, to Lisbon, was higher than for tlie whole original voyage from Newfoundland to Lisbon. The same rule was adopted in Robinson v. Marine Ins. Co. 2 Johns. 323, but Kml, J., said ; " In the case of the Marine Ins. Co. v. Lenox, decided in the Court for the Correction of En'ors, in 1801, tlie rule adopted was to ascertain how much of the voyage had been performed, not when the ship first encountered the peril, and was interrupted in her course, but when the goods had arri^ cd at the intermediate port, because that is the extent of the voyage performed, as it respects the interest of the shipper. . . The rule appears to be more just tlian that in Lulce v. Lyilc, lint wo cannot adopt it in the present case, because we have no. data given by whicli we might ascertain the difference of the voyage, as it respected the port of destination, between Kingston (where the goods were re- ceived), and the place where the vessel wa.s forced out of her course." In Coffin v. Storcr, 5 Mass. 252, the vessel was chartered by the month, the ship-owner was-allowed what would have been due for the entire voyage, at the average time, deducting the expense of transporting the goods from the place where they were wrecked to the port of destination. The court remarked, that the rule in Luke c. Lyde was manifestly unjust. ^ Brittan v. Barnaby, 21 How. 527, 532. 3 In Barker v. Havens, 17 Johns. 234, Spencer, C. J., said: "The effect of this clause has been repeatedly considered in tlie English courts, and the decisions have been uniform in botli the King's Bench and Common Pleas. In Shepard v. De Ber- nales, 13 East, 565, Lord EUenborouqh examined all the cases, and he considered the clause introduced for the benefit of the carrier of the goods only, and merely to give him the option, if he thought fit, to insist upon his receiving freight abroad, before he should malvo delivery of the goods ; and that he had a right to waive the benefit of that provision in his favor, and to deliver, without first receiving payment, and was not preclnded, by such deliveiy, from afterwards maintaining an action againstthe consignor. He observes, that the ca^cs he cited, proved that such a clause did not, in general, cast the duty on the captain, at his peril, of obtaining freight from the consignee ; but that if lie could not get it from him, he may insist on having it from the consignor. He ad- mits that the rule might be otherwise in a case differently circumstanced ; and he lays stress on the fact, that the deUvery was to be to the correspondents, factors, and agents of the defendant. I should clearly be of opinion, that if it appeared that the goods [386] CH. XVII.] THE LAW OP SHIPPING. 353-*354 Generally, the one who receives the goods under the com- mon bill of lading is liable for the freight ; ^ but not if he be merely an indorsee or assignee of the consignee, and obtain them by his order, and not under the bill of lading, unless such indorsee, by express or implied promise, agi-ees to pay the freight.^ If the master delivers goods to any one, saying that he should look to him for the freight, he may demand the freight of him, unless that person had the absolute right to the goods without payrnent of freight ; which must be very seldom the case 3 If freight be paid in advance, and not subsequently earned, it must be repaid, unless it can be shown that the owner took a less sum than he would otherwise have had, and, for this or some * other equivalent reason, the money paid was in final set- tlement, and was to be retained by the owner at all events.* were not owned by the consignor, and were not shipped on his account, and for his benefit, that the carrier would not be entitled to call on the consignor for freiglit ; and I should incline to the opinion that, in all cases, the captain ought to endeavor to get the freight of the consignee." See also. Domett v. Beckford, 5 B. & Ad. 521 ; Taplcy v. Martens, 8 T. R. 451 ; Christy v. Row, 1 Taunt. 300; Marsh v. Predder, 4 Camp. 257 ; Collins v. Union Transp. Co. 10 Watts, 384 ; Spencer v. Wliite, 1 Ired. 236 ; Hayward v. Middleton, 3 McCord, 121 ; Layng v. Stewart, 1 Watts & S. 222 ; Grant I'. Wood, 1 N. J. 292. But if the consignor, although not the owner of the goods, ha.s expressly agreed by charter-party to pay the freight, it would seem, from the principles laid down in Shepard v. De Bernales, and in Domett v. Beckford, that he would be liable for it, if the master had delivered the goods, without receii'ing the freight. In the latter case, Parker, J., said the clause gave the master " the option of insisting on re- ceiving the freight before he should make delivery of the goods." 1 Under the usual bill of lading, the goods are to be delivered to the consignee or his assigns, on the payment of freight. If goods are accepted under this bill of lading, the party receiving them, whether the consignee or his assignee, becomes liable for the freight. Cock v. Taylor, 13 East, 399 ; Dougal v. Kemble, 3 Bing. 383 ; Roberts v. Holt, 2 Show. 443 ; Moorsom v. Kymer, 2 M. & S. 303 ; Merian v. Funck, 4 Denio, 110; Trask v. Duvall, 4 Wash. C. C. 184. In Sanders v. Vanzeller, 4 Q. B. 260, it was Ud, in the Exchequer Chambei', that the law would not imply a contract to pay freight, from the acceptance of goods, under a bill of lading, witli tiie usual clause, but that a jury might infer from such acceptance, a promise to pay it. If the bill of lading does not make the delivery conditional upon the payment of freight, then the consignor, unless he is the owner, does not incur any liability for the freight ; but a contract may be inferred from usage. Coleman v. Lambert, 5 M. & W. 502 ; Wilson v. Kymer, 1 M. & S. 157. The indorsement of the bill of lading by the consignee, does not make him liable for freight. Merian v. Funck, 4 Denio, 110; Tobin v. Crawford, 5 M. & W. 235. If goods are received by one as agent of the consignor, he does not thereby become personally liable to pay the freight. Amos v. Temperley, 8 M. & W. 798 ; Ward V Felton, 1 East, 507. As to liability of consignee to pay demurrage, see Smith V Sieveking, 4 Ellis & B. 945, 30 Eng. L. & Eq. 382, affirmed 5 BUis & B. 589, 34 Eng. L. & Eq. 97 ; Wegener v. Smitli, 15 C. B. 285, 28 Eng. L. & Eq. 356. 2 Wilson V. Kymer, 1 M. & S. 157. See preceding note. 3 Scaife V. Tobin, 3 B. & Ad. 523. * Griggs V. Austin, 3 Pick. 20 ; Watson v. Duykinck, 3 Johns. 335 ; Phelps o. Wil- liamson 5 Sandf. 578 ; Pitman o. Hooper, 3 Sumner, 50, 66 ; Gillan u. Simpkin, 4 [387] 354- ELEMENTS OF MERCANTILE LAW. [CH. XVII. If a consignee pay more than he should, he may recover it back, if paid through ignorance or mistake of fact ; but not if, with fuU knowledge of all the facts, he was ignorant or mistaken as to the law.^ If one sells his ship after a voyage is commenced, he can only claim the freight of the shipper, although the contract of sale may require him to pay it over to the purchaser.^ A mortgagee of a ship who has not taken possession, has not, in general, any right to the freight, unless this is specially agreed. Neither has a lender on a bottomry bond.^ But it seems that a mortgagee is entitled to the freight accruing after he takes possession, al- though the outfits for the voyage were furnished by the mort- gagor.* No freight, of course, can be earned by an illegal voyage ; as the law will not enforce any illegal contract, or sanction any illegal conduct.^ The goods are to be delivered, by the bill of lading, in good condition, excepting " the dangers of the seas," and such other risks or perils as may be expressed. If the goods are damaged, to any extent, by any of these perils, and yet can be, and are delivered in specie, the freight is payable. The shipper or consignee cannot abandon the goods for the freight, although they may be worthless ; for damage caur^ed by an excepted risk is his loss, and not the loss of the owner.^ But Camp. 241. In Watson v. Duykinck, /•Cent, C. J., after a carefnl examination of the question, said : " The general principle undoubtedly is, that freight is a compensation for the carriage of goods, and if paid in advance, and the goods be not carried, by reason of any event not imputable to the shipper, it then forms the ordinary case of money paid upon a consideration which liappens to fail." But the a;;rcemciit in that case was to suffer the plaintiff to proceed and go in the defendant's vessel, as a passen- ger, from New York to St. Thomas, and to loiid on board, for transportation, goods to the value of $G0(), and it was Jield to be rather an agreement "for tlio loading of the article on board," than for freight in the strict sense of the word, and that the money paid in advance could not be recovered back, although the vessel was lost. 1 Geraldes.y. Donison, Holt, N. P. 346 ; Brown v. North, 8 Exch. 1, 16 Eng. L. & Eq. 486. ^ Pelayo v. Fox, 9 Barr, 489. Sec Morrison o. Parsons, 2 Taunt. 407 ; Lindsay v. Gibbs, 22 Beav. 522. 3 See ante, p. 340. * Korswill V. Bishop, 2 Cromp. & J. 529. ■' MuUer v. Gernon, 3 Taunt. 394. 1 Griswold v. N. Y. Ins. Co. 3 Johns. 321 ; s. r. 1 Johns. 205 ; M'Gaw v. Ocean Ins. Co. 23 Pick. 205, 210 ; Wl''t"^y ''• ^'- Y. Firemen Ins. Co. 18 Johns. 208. In Griswold V. N. Y. Ins. Co. Kent, C. J., said : " The contract of affreightment, like other contracts of letting to hire, binds the shipper personally, and the lien which the ship-owner has on the goods conveyed, is only an additional security for the freight. [388] CH. XVII.J THE LAW OP SHIPPING. 355 if they are lost, in substance, though not in form ; as if sugar is washed out of boxes or hogsheads, or wine leaks out of casks, by reason of injury sustained from a peril of the sea, though the master may deliver the hogsheads or boxes or casks, this is not a delivery of the sugar or of the wine, and no freight is due.i If the goods are injured, or if they actually perish and disappear, from internal defect or decay or change, that is, from causes inherent in the goods themselves, freight is due.^ If they The lien is not incompatible with the personal responsibility of the shipper, and does not extinguish it. The consideration of the freight is the carriage of the article shipped on board, and the state or condition of tlie article, at the end of the voyage, has nothing to do with the obligation of the contract. It requu'cs a special agreement to limit the remedy of the carrier for his hire to the goods conveyed. It cannot be deduced from the nature of the undertaking. The ship-owner performs his engagement when he carries and delivers the goods. The condition which was to precede payment, is then fulfilled. The right to payment then becomes absolute, and whether we consider the spirit of this particular contract, or compare it with the common-law doctrine of carry- ing for hire, we cannot discover any principle which makes tlie carrier an insurer of the goods as to tlieir soundness, any more than he is of the price in the market to which they are carried. If he has conducted himself with fidelity and vigilance in the course of the voyage, he has no concern witli the diminution of their value. It may impair- the remedy which his lien afforded, but it cannot affect his personal demand against the shipper." 1 In Frith v. Barker, 2 Johns. 327, one hundred and ninety hogsheads of sugar were shipped from Surinam to New York. Owing to the perils of the sea, the ship leaked, and fifty hogsheads of the sugar were washed out so that the casks were empty on arrival. The owner of the cargo refused to pay freight on tlie empty hogsheads. It was held, that he was not liable. Kmt, C. J., said : " The sugar was, in this case, as effectually destroyed, as if it had been at once swept into the sea and had gone to the bottom. Bringing into port the empty hogsheads, was not bringing the hogsheads of sugar which the defendant had undertaken to do. A hogshead of merchandise is con- sidered by Pothier (Charte-Partie, No. 60), as having perished, if the cask arrives empty, because the goods no longer exist ; and, consequently, the master cannot be said to have canied them to their place of destination. And however the authorities may differ, on the assumed right to abandon damaged goods in discharge of freight, yet they all agree that you may abandon casks, leaked out by the perils of the sea, as the subject-matter of the contract no longer exists. (Le Guidon, c. 7, § 11 ; Ord. du Pret. Art. 26, Valin, 672, and Pothier, Charte-Partie, 60.) I wish to be understood, as con- fining this opinion strictly to the facts in the case, which establish that the sugar was entirely gone, by the perils of the sea, before the arrival of the vessel in port. It wUl not, therefore, apply to the case of an article that is lost by other causes than the perils of the sea, such as internal decay, leakage, evaporation, and the like." "' Nelson v. Stephenson, 5 Duer, 538. In Clark v.. Barnwell, 12 How. 272, a libel was brought against a vessel fey the owners of twenty-four boxes of cotton thread, for damage done to it on board the vessel on a voyage from Liverpool to Charleston. Ndson, J., in delivering the opinion of the court, said : " Now the evidence shows very satisfactorily that the damage to the goods was occasioned by the effect of the humidity and dampness, which, in the absence of any defect in the ship, or navigation of the same, or in the storage, is one of the dangers and accidents of the seas, for which the carrier is not liable. The burden lay upon the libellants to show that it might, not- withstanding, have been prevented by reasonable skill and diligence of those employed in the conveyance of the goods. For, it has been held, if the damage has proceeded from an intrinsic principle of decay, naturally inherent in the commodity itself, whether active in every situation, or only in the confinement and closeness of the ship, the mer- chant must bear the loss as well as pay the freight ; as the master and owners are in no 33 * [ 389 ] 356* ELEMENTS OF MERCANTILE LAW. [CH. XVII. are lost from the * fault of the owner, the master, or crew, the owner must make the loss good, but in this case may have, by way of offset or deduction, his freight, because the shipper is entitled to full indemnification, but not to make a profit out of this loss.^ If goods are delivered, although damaged and dete- riorated from faults for which the owner is responsible, as bad stowage, deviation, negligent navigation, or the like, freight is due ; the amount of the damage being first deducted.^ The rules in respect to passage-money are quite analogous to those which regulate the payment of freight.^ Usually, how- fault, nor does their contract contain any insurance or warranty against such an event. 12 East, 381 ; 4 Camp. 119; 6 Taunt. 65; Abbott on Ship. 428 (Sliee's ed.). But if it can be shown that it might have been avoided by the use of proper precautionary measures, and that the usual and customary methods for this purpose have been neg- lected, they may still be held liable." See also, Rich v. Lambert, 12 How. 347. 1 Watkinson ;;. Laughton, 8 Johns. 213; Amory b. M'Gregor, 15 Johns. 24. In Watkinson v. Laughton, the goods were embezzled, but without fraud on the part of the master, against whom the action was brought. Held, that the measure of damages was the net value of the goods at the port of delivery, deducting freight and other charges. 2 Davidson v. Gwynne, 12 East, 381 ; Sheels v. Davies, 4 Camp. 119 ; Edwards i\ Todd, 1 Scam. 462 ; Leech v. Baldwin, 5 Watts, 446 ; Glover v. Dufom-, 6 La. Ann. 490 ; The Ninetta, Crabbe, 534. In Davidson v. Gwynne, the action was for freight under a charter-party, which entitled the ship-owner to freight " on a right and true delivery of the whole of the goods, agreeably to bills of lading.'' The bills of lading required them to be delivered in good order and well conditioned. The cargo, consist- ing of chests of fruit, was much injured by the negligence of the master and crew in not ventUating sufiBciently. The freight was recovered. Lord E/Zen^orouf/A ruled : "That the allegation of having made a right and true deli\'ery of the cargo, was satisfied by the delivery made of the number of chests of fruit shipped on board ; and that if the contents of any of them turned out to be damaged by the negligent stowing, or subse- quent want of care and proper ventilation bj' the master and crew, the defendant had a cross-action to recover damages ; but that it was no answer to an action for the freight. . That the issue on the fact of a right and true delivery of the goods according to the bills of lading, was to be taken in a narroiv and restricted sense, such as in his own experience it had always received, as meaning a right and true delivefy of the enthe number of chests or packages shipped on board, as specified in the bills of lading." In England, in an action at law for the freight, the amount of damage from bad stowing, or the like, cannot be set off. Sheels r. Da-\ics, 4 Camp. 119. But in tliis country such a set-off' is generally allowed under the statutes of set-off' of the several States. Leech V. Baldwin, 5 Watts, 446 ; Edwards v. Todd, 1 Scam. 462 ; Hinsdell v. Weed, 5 Denio, 172; Bartram v. McKee, 1 Watts, 39 ; Ship Rappahannock v. Woodruff, 11 La. Ann. 698. In Admiralty, Snow v. Carruth, U. S. D. C. jMass. 19 Law Reporter, 198 ; Bradstrcet v. Heron, Abbott, Adm. 209 ; Thatcher v. CuUoh, Olcott, Adm. 365 ; Bearse v. Ropes, 19 Law Reporter, 548 ; Zerega v. Poppe, Abbott, Adm. 397 ; Glover V. Dufour, 6 La. Ann. 490 ; Humphreys v. Reed, 6 Whart. 435 ; Dickinson v. Haslet, 3 Harris & J. 345. How far this circuity of action %vill be sustained in this country, is not settled. See notes to Cutter v. Powell, 2 Smith, Lead. Cas. 1. '^ Watson V. Duykinck, 3 Johns. 335 ; MuUoy v. Backer, 5 East, 316 ; Howland v. La^■inia, 1 Pet. Adm. 126 ; Griggs v. Austin, 3 Pick. 20 ; The Pacific, 1 Blatehf. C. C. 569 ; The Aberfoyle, id. 360 ; i;he Zcnobia, Abbott, Adm. 48. The ship-owner has a lien on the baggage of a passenger for the passage-money. In Wolf v. Summers, 2 Camp. 631, an action of trover was brought for a trunk filled with wearing apparel and a writing-desk. The defendant retained them for the non-payment of passago- [390] CH. XVir.J THE LAW OF SHIPPING. *357 ever, the passage-money is paid in advance. But it is not earned except by carrying the passenger, or, pro rata, by carry- ing him a part of the way with his consent. And if paid in advance and not earned by the fault of the ship or owner, it can be recovered back.^ ♦SECTION VII. OP CHARTER-PARTIES. The owner may let his ship to others ; and the written in- strument by which this is done, is called by an ancient name, the origin of which is not quite certain, a Charter-Party. The form of this instrument varies considerably, because it must express the bargain between the parties, and this of course va- ries with circumstances and the pleasure of the parties.^ An agreement to make and receive a charter, though not itself equivalent to a charter, will, if the purposes of the proposed charter are carried into effect, be considered as evidence that such a charter was made and was completed.^ Generally, only the burden of the ship is let ; the owner hold- ing possession of her, finding and paying her master and crew, and supplies and repairs, and navigating her as is agreed upon.* Sometimes, however, the owner lets his ship as he might let a house ; and the hirer takes possession, mans, navigates, supplies, and even repairs her. In the latter case, bills of lading are not commonly given to the hirer, unless the hirer takes the goods of other shippers, but in that case bills of lading are given by him to them ; but in the former, which we have said is much more common, bills of lad- ing are usually given as in the case of a general ship. They money. Lawrence, J., said : " The master of a ship has certainly no lien on the pas- senger himself, or the clothes which he is actually wearing when he is about to leave the vessel ; but I think the lien does extend to any other property he may have on board." 1 See ante, p. 354, n. and Moffat v. East India Co. 10 East, 468. 2 Tao-gard v. Loring, 16 Mass. 336; Thompson u. Hamilton, 12 Pick. 428 ; Mug- gridge v. Eveleth, 9 Met. 233 ; The Phebe, "Ware, 263 ; 3 Kent, Com. 203, 204 ; Lidgett V. Williams, 4 Hare, 456. 3 The Schooner Tribune, 3 Sumner, 144. * See Almgren v. Dutilh, 1 Seld. 28. [391] 358* ELEMENTS OF MERCANTILE LAW. [CH. XVII. are then, however, little more than evidence of the delivery and receipt of the goods, for the charter-party is the controlling con- tract, as to all the terms or provisions which it expresses.^ The master is not authorized to sign bills promising to carry and de- liver the goods for less freight than has been stipulated for. And if he signs such bills, and goods are shipped by the charterer, neither the charterer nor any person shipping the goods with a knowledge of the charter-party could defend, on account of the bills of lading, against the owner's claims under the charter- party.^ There is no particular form for a charter-party, but in all our commercial cities blank forms are sold by mercantile stationers. They should designate particularly the ship, and master, and the parties ; should describe the ship generally, and particularly as to her tonnage or capacity ; ^ should designate especially what parts *of the ship are let, and what parts, if any, are re- served to the owner, or to the master, to carry goods, or for the purpose of navigation ; should describe the voyage, or the period of time for which the ship is hired, with proper particularity ; should set forth the lay days, demurrage, the obligation upon either party to man, navigate, supply, and repair the ship, and all other particulars of the bargain, for this is a written instru- ment of an important character, and cannot be varied by any external evidence.* Finally, it should state, distinctly and pre- cisely, how much is to be paid for the ship, — whether by ton, and if so, whether by ton of measurement or ton of capacity of carriage, or in one gross sum for the whole burden, — and when 1 Perkins v. Hill, 2 "Woodb. & M. 158; Lamb v. Parlanan, XJ. S. D. C. Mass. 20 Law Rep. 186, per Spragiie, J. 2 Knight V. Cargo of Bark Salem, U. S. D. C. IMa.^s. 20 Law Eep. 669 ; Faith v. Ei)st India Co. 4 B. & Aid. 630 ; Grade v. Palmer, 8 Wheat. 605. See Gledstanes v. Allen, 12 C. B. 202, 22 Eng. L. & Eq. 382 ; Gilkison v. Middleton, 2 C. B., n. s., 134, 40 Eng. L. & Eq. 295. ^ MoUoy, Lib. 2, c. 4, § 8; Abbott on Ship. p. iv. c. 1, 4 2 ; Thomas v. Clarke, 2 Stark, 450, but where a merchant covenanted to load a full and complete cargo on board a ship described in the charter-party as of the burden of 261 tons or thereabouts; the burden thus expressed was considered by the court, in the absence of fraud, not to be conclusive on the parties, and the freighter was held answerable on the covenant for not furnishing a full cargo, although it was found that 400 tons of goods of the kind actually loaded, were requisite to constitute such a cargo. Hunter v. Fry, 2 B. & Aid. 421. Sec also, Duffie v. Hayes, 15 Johns. 327; Ashburner v. Balchen, 3 Seld. 262. As to the case of fraud in the misrepresentations, see Johnson v. Miln, 14 Wend. 195. * As to the general principles respecting the admission of parol evidence to affect written contracts, see 2 Parsons on Cont. 59-79. [ .392 ] CH. XVII.] THE LAW OF SHIPPING. *359 the money is payable, and how, that is, in what currency or |t what exchange, especially if it be payable abroad. The charter- party usually binds the ship and freight to the performance of the duties of the owner, and the cargo to the duties of the ship- per. But the law merchant would, generally at least, create this mutuality of obligation if it were not expressed.^ If the hirer takes the whole vessel, he may put the goods of other shippers on board (unless prevented by express stipula- tion),2 but whether he fills the whole ship or not, he pays for the whole ;^ and what he pays for so much of the ship as is empty, is said to be paid for dead freight.* This is calculated on the actual capacity of the ship, unless she is agreed to be of a speci- fied tonnage." If either party is deceived or defrauded by any * statement in the charter-party, he has, of course, his remedy against the other party.^ The question has arisen under charter-parties, analogous to that under biUs of lading, whether the lien of the ship-owner on the cargo, for freight, is lost by want of possession. Here, how- ever, the owner seems to let his ship out of his hands, and not, 1 See ante, p. 345, n. 1. ■•^ Hunter v. Pry, 2 B. & Aid. 421 ; Michenson v. Begbie, 6 Bing. 190; Abbott on Ship. 246 ; 3 Kent, Com. 202. * Thompson v. Inglis, 3 Camp. 428 ; Heckscher v. McCrea, 24 Wend. 304. In this last case, it was held to be the duty of the master, where the charterer failed to furnish a full cargo, according to the agreement, and goods were offered ffy third parties to make up the deficiency at current, although reduced rates, to take them and credit the char- terer with the amount thus earned. See also, as to this point, Ashburner v. Balchen, 3 Seld. 262; Shannon v. Comstock, 21 Wend. 457; Wilson v. Hicks, Exch. 1857, 40 Eng. L. & Eq. 511 ; Hyde v. Willis, 3 Camp. 202; Crabtree v. Clark, U. S. D. C. Mass. 16 Law Rep. 584; Clarke v, Crabtree, 2 Curtis, C. C. 87 ; Bailey v. Damon, 3 Gray, 92; Avery v. Bowden, 5 Ellis & B. 714, 33 Eng. L. & Eq. 133, affirmed e.ElHs & B. 953, 38 Eng. L. & Eq. 130 ; Barrick v. Buba, 2 C. B., n. s., 563 ; Matthews v. Lowther, 5 Exch. 574 ; Lidgett v. Williams, 4 Hara, 456. * 3 Kent, Com. 219. Chancellor Kent considers it to be the doctrine of Bell v. Pul- ler, 2 Taunt. 286, that the equity of this claim for dead freight would extend to the case of the master's bringing back the outward cargo where it could not be disposed of, although the charter-party contained no provision as to a return cargo. ^ Supra, p. 357, n. 3. But if the agreement be only to pay so much per ton for all goods laden on board, and the charter-party contains no stipulation on the part of the shipper to furnish a full cargo, payment can only be claimed by the ship-owner for the amount actually shipped. 3 Kent, Com. 219. Where payment was to be made "per cask or bale," the shipper was held to pay for the goods brought, although the master refused to remain long enough to take in a full cargo, which he had agreed to take. Ritchie v. Atkinson, 10 East, 295. In such case, he is not liable to pay dead freight, and the ship-owner may be liable to him in damages for the act of the captain. Dun- bar V. Buck, 6 Munf. 34. ^ In an action upon a charter-party to recover the price agreed upon for the use of the vessel, the defendant may give evidence of fraudulent representations by the plain- tiff as to the burden of the vessel, in mitigation or satisfaction of the plaintiff's claim. Johnson v. Miln, 14 Wend. 195. [393] 359- ELEMENTS OF MERCANTILE LAW. [CH. XVII. to be the carrier of the charterer. Hence, in England, there have been great doubts whether the technical defect of posses- sion did not destroy this lien. Less weight is now given to this reason, or objection, than formerly, even there.i j^ this country it seems to be settled that the owner, under any common char- ter-party, and especially if bills of lading are signed by his mas- ter, has this lien on the cargo for his freight. If, however, he lets his whole ship, giving up the possession entirely, and hav- ing nothing to do with the officers or men or navigation, and of course not being a party through his master to the bills of lad- ing, it would seem that there can be no sufficient ground for a lien. His contract with the hirer is purely personal, and to him alone he looks for the payment of the money due.^ 1 The rule now is, that the whole contract must be construed together, and due effect given to every clause. Marqnand v. Banner, 6 Ellis & B. 232, 36 Eng. L. & Eq. 136 ; Belcher v. Capper,.4 Man. & G. 502, 541. 2 The question of the ship-owner's lien on the goods caiTied for his freight, irrespec- tive of the charter-party, has been already discussed. See ante, p. 345, and notes. The existence of this instrument renders it necessary to decide the preliminary question of jjossession under it. For the party having possession of the vessel, we have already seen, is usually the one entitled to the benefit of the lien. Prima facie this is the general owner, and it will be so accounted in doubtful cases. Story, J., in theicase of Certain Logs of Mahogany, 2 Sumner, 589. But there is no doubt that he may make such an agreement with the charterer that the possession of the ship, and with it the lien, will thereby pass to the latter. " The defendant, the owner of the ship," said Chief Justice Dallas, in Christie <•. Lewis, 2 Brod. & B. 410, "contends that he had a lien on the goods on board, for the freight due, or on the money received for such freight. To have a lien, he must have had at the time of the asserted exercise of it, the possession of the ship. He had the possession when he executed the charter-party, — and the question is, whether, by the charter-party, he has parted ivith the possession for the particular voyage." In the absence of express provisions on this point in the charter-party, this question of possession depends upon another, namely, who is the owner pro tempore under the instrument ; for upon such special ownership the constructive possession depends. " The owner of a ship, so long as he continues in possession of the ship, is in possession also of the goods carried by her, and his right to a lien on them for the freight due in respect of them, whether by charter-party or under a bill of lading, has never b'een questioned. He may, if ho think proper, part with that possession, he may demise her for a term, surrender all control over the ship itself, the appointment of her master and mariners, and even i-clicve himself from responsibility for wages and re- pairs. If he do so, the person to whom he lets the ship, who is called the charterer, becomes owner pro tempore, the rights of the absolute owner are suspended, and among them liis right of lien for the freight of goods carried by his ship. AI)bott on Ship, p. 288, 289. Whether the contract is to be considered as a hiring of the vessel itself, or merely of its tonnage or carrying capacity a locatio rei, or locatio operls vehendarum mercium, as writers on commercial law sometimes style it, is one of construction on the contract. Clarksou v. Edes, 4 Cowen, 47i). In determining this point, the court pay more attention to the intent of the parties as manifested by the substantial provisions of the agreement th.an to special clauses and the employment of technical terms. See Palmer v. Gracie, 4 Wash. C. C. 110, and 8 "Wheat. 605 ; The Schooner Volunteer, 1 Sumn. 568. Certain Logs of Mahogany, supra. In the first of these cases, it was held by the court, upon a view of the wdiole contract, that the special ownership did not pass to the charterer, although the words employed were " let and hired " and the freight was a gross sum to be paid before the discharge of the cargo. So in the case of The [394] CH. XVII.J THE LAW OF SHIPPING. *360 If one party appoints the master and the other pays him, he is generally considered as holding possession of the vessel for the party appointing him.i * If a charterer takes the goods of other shippers, payment by one of them to the master or owner, is a good defence against the claim of the charterer against him, for so much as the char- terer was bound to pay the owner, but no more.^ Schooner Volunteer, supra, the court came to a similar decision, although the general owner declared in the charter-party that he had " letten to freight " the wliole vessel. This of course does not extend, in cases arising on the question of lien, to the introduc- tion into the charter-party of any express provision upon the subject of possession of the goods for the purpose of carriage and earning the freight thereby, which must from the nature of the case be decisive as to the claim of lien. The party having the pos- session and control of the ship under the charter-party, is the one entitled to tlie hen, and will be considered the owner pro tern, for this purpose. See, besides the cases before cited, Euggles u. Bucknor, 1 Paine, C. C. 358 ; Drinlcwater v. The Brig Spartan, Ware, 149 ; The Phebe, Ware, 265 ; Marcardier v. Cliesapeako Ins. Co. 8 Cranch, 49 ; Lander v. Clark, 1 Hall, 375 ; Pickman v. Woods, 6 Pick. 248 ; Brown v. Howard, 1 Cal. 423 ; Hutton v. Bragg, 7 Taunt. 640; Faith v. East India Co. 4 B. & Aid. 640. This question of ownership pro tern, under the charter-party is one of very frequent oc- currence, arising as it does, wherever the claim sought to be enforced against one of the parties to such agreement depends on the existence of such special ownership in the defendant. It has accordingly been elaborately discussed by the courts of England and America, in a variety of cases both of tort and contract. See Rich v. Coe, Cowp, 636 ; Eletcher v. Braddick, 5 B. & P. 182 ; Parish v. Crawford, Abbott on Ship. 42; Fra- zer V. Marsh, 13 East, 238 ; Saville v. Campion, 2 B. & Aid. 503 ; Laugher v. Pointer, 5 B. & C. 578 ; Lucas v. Nockells, 4 Bing. 729 ; Colvin v. Newberry, 6 Bliah, 189 ; Newberry v. Colvin, 7 Bing. 190 ; Reeve v. Davis, 1 A. & E. 312 ; Trinity House v. Clarke, 4 M. & S, 288 ; Dean v. Hogg, 6 Car. & P. 54 ; Belcher v. Capper, 4 Man. & G. 502; Martin v. Teraperly, 7 Jurist, 150; Hooe v. Groverman, 1 Cranch, 214; Ship Nathaniel Hooper, 3 Sumner, 575 ; Arthur t'. Schooner Cassius, 2 Storr, 92 ; Skolfield V. Potter, Daveis, 392.; MTntyre v. Bowne, 1 Johns. 229 ; Hallet v. Col. Ins. Co. 8 Johns. 272; Holmes v. Pavenstedt, 5 Sandf 97 ; Eeynolds v. Toppan, 15 Mass. 370; Taggard v. Loring, 16 Mass. 336; Perry v. Osborne, 5 Pick. 422; Cutler v. Windsor, 6 Pick. 335 ; Thompson v. Hamilton, i2 Pick. 425; Manter v. Holmes, 10 Met. 402 ; Thompson v. Snow, 4 Greenl. 264 ; Emery v. Hersey, id. 407 ; Winsor v. Cutts, 7 id. 261 ; Houston v. Darling, 16 Maine, 413 ; Cutler v. Thurlo, 20 id. 213 ; Williams v. Williams, 23 id. 17; Sproat ;;. Donnell, 26 id. 185; Swanton v. Eeed, 35 id. 176; Webb V. Peirce, 1 Curtis, C. C. 104 ; Pitkin v. Brainerd, 5 Conn. 451. In the greater part of the above cases the courts appear to liave recognized the existence of the princi- ples before stated, although in their application of them to particular circumstances there exists considerable discrepancy. It was indeed doubted by Lord Munsfiekl, in the early case of Eich v. Coe, whether any agreement between the general owner of the ship and the charterer could bo allowed to vary their respective liability towards third parties having no notice of such agreement. See also, Fletcher v. Braddick, supra. And in the case of Skolfield v. Potter, supra, Mr. Justice Ware seemed inclined to favor the doctrine of Lord Ulansfield, although admitting that it appeared to be overniled to a certain extent by subsequent decisions. But see the language of Mr. Justice Curtis in Webb v. Pierce, and that of Abbott before cited. 1 McGilvery v. Capen, 7 Gray, 523 ; Lander v. Clark, 1 Hall, 355 ; Fenton v. Dublin Steam Packet Co. 1 Per. & D. 103, 8 A. & E. 835. 2 Paul V. Birch, 2 Atk. 621 ; Mitchell v. Scaife, 4 Camp. 298 ; Cln-istie v. Lewis, 2 Brod. & B. 410 ; Faith v. East India Co. 4 B. & Aid. 630 ; Small u. Moates, 9 Bing. 574 ; Holmes v. Pavenstedt, 5 Sandf 97. In the first of tiiese cases, the char- terers appear to have hired the ship itself at a monthly freiglit, but by a clause in the charter-party, a lien on the goods which they might carry was expressly reserved to [395] 361 ELEMENTS OP MERCANTILE LAW. [CH. XVII. The voyage may be a double one ; a voyage out, and then a voyage home ; or a voyage to one port and thence to another. The question sometimes arises, whether any freight is payable if the ship arrives in safety out, and delivers her cargo there, and is lost on her return vi^ith the cargo that represents the cargo out. Of course, the parties may make what bargain they please, and the law respects it ; but in the absence of an agreement on this point, the tendency of the courts, to say the least, is to con- sider each voyage, at the termination of which goods are deliv- ered, as a voyage by itself, earning its own freight.^ the general owner. The charterers having become bankrupt, the o\¥ner sued the shippers of goods for the whole amount due to him upon the charter-party. But Lord Manhrlcl-i:, admitting that, by the general law, the cargo was liiible to pay the freight, and that, to the extent of their own contract with the charterers, the defendants were liable, decided that they were not so for the amount due upon the original agreement, to which they were not parties. Mitchell v. Scaife, supra, differed from Paul v. Birch in the facts, that there appears not to have been any hiring of the ship itself, the gen- eral owner remaining the owner p-o tempore, and no express lien was therefore neces- sary, or, as it seems, reserved in the charter-party. The captain signed bills of lading for the cargo, the property of third parties, at a lower rate than that specified in the charter-party ; but on the arrival of the vessel in port, the ship-owner refused to deliver the goods till the fall amount due to him was paid, and trover was accordingly brought to recover them. Lord Elienhorough said: " Ijpon the facts proved, I am of opinion that the ship-owner had no right to detain the cargo for more than the freight mentioned in tlie bill of lading. The plaintiff is the bond fide indorsee of the bill of lading, and, having paid the bills of exchange, must be taken to be the purchaser and owner of the cargo. He is in no degree connected with any fraud upon the charter-party. He knew that this is an instrument whicli the master has, in general, authority to sign, and he seems to have had no reason to suspect that this authority was not properly exercised upon this occasion. Under such circumstances, I am of opinion that the owner of the ship cannot be hoard to aver against the conti-act created by Ins own agent." The doe- trine of Paul V. Birch was fiu'ther ratified in Christie ;>. Lewis, and Paith v. East India Co. In the former. Chief Justice Richardson said : " It is true that, according to the decision in Paul !>. Bircli, tho owner has not a lien on the goods mentioned in the bills of ladin;;', for .all his freight due on the charter-party, but he is entitled to the freight on the bills of lading, in preference to tlie freighter." But, sembk " that, if the lading of the sliip belong to the charterer, and such lading is subject to the ship-owner's lien for the freight reserved by the charter-party, such lading, if it be sold by the charterer after it is put on board, would pass to the pureliaser, subject to the lien Avhich the ship-owner had before tlie sale." Per Tindall, C. J., in Small v. Moatos, supra. 1 Abbott on Shipping, 46.3. In the following cases, the voyages were held to be severable. Mackrell v. Simond, 2 Chitty, 666; Brown v. Hunt, H Jlass. 45; Locke V. Swan, 13 Mass. 76. And in the following, entii'e. B3-rne v. Pattinson, Abbott on Shipping, 4C.6 ; Smith v. Wilson, id. 469, 8 East, 4.37 ; Gibbon v. Mendez, 2 B. & Aid. 17; Crozier v. Smith, 1 Scott, N. R. 338; Barker v. Cheriot, 2 Johns. 352; Scott r. Libbv, 2 Johns. 336 ; Pennoycr v. Hallct, 15 Johns. 332 ; Burrill v. Clecman, 17 Johns. 72 ; Coffin v. Storur, 5 Mass. 252 ; Towle c. KettcU, 5 Cush. 18 ; Blanchard v. Buck- nam, 3 (Jreenl. 1 ; Hamilton v. Warfield, 2 Gill & J. 482. In Brown v. Hunt, supra, Chief Justice Sewall said : " It is not disputed that, where an outward voyage and a homeward voyage are spoken of in a contract as distinct, there the freight becomes due upon the performance of each voyage. It would, liowevor, be unreasonable to suppose this construction to be restricted to the jiarticular expressions and case of an outward and homeward voyage. Any other expressions descriptive of a voyage or adventure consisting of several distinct and separate passages or voyages, are within the same reason, and seem to be governed by the same rule." [396] CH. XVII.] THE LAW OF SHIPPING. •362 If the master hires the vessel on shares, and this mode of compensation is intended as merely in lieu of wages, he is con- sidered as holding the vessel as agent for the owners.^ But generally there is no distinction between the rights and liabili- ties of the parties, whether the vessel is let to the captain or to a stranger.^ And one owner may hire the vessel from the others in the same way and with the same responsibilities.^ The more frequent practice at the present day when the master hires a vessel, is for him to take it on shares, in which case he is con- sidered as having the entire control and possession of the vessel.* And there is no difference between a fishing voyage and any other in this respect.^ If a vessel is chartered by government, and the master and crew are appointed by the owners, she is considered for most purposes as in the possession of her own- ers.*" The vessel may be hired on time only, and freight is then to be paid at the times specified, and each stipulated period of payment is considered as a separate voyage.'^ And where, in such a case, freight is to be paid at a certain rate per month, it is considered as earned till the time of the loss of the vessel.^ * As time has become of the utmost importance in commer- cial transactions, both parties to this contract should be punc- tual, and cause no unnecessary delay,^ and for such delay the party injured would have his remedy against the party in fault.^'' The charter-party usually provides for so many " lay-days," and 1 The Nathaniel Hooper, 3 Sumner, 542, 575 ; Arthur v. Sch. Cassias, 2 Story, 81 ; Lyman v. Redman, 23 Me. 289; Latham v. Lawrence, 13 Conn. 299. 2 Hallet V. Col. Ins. Co. 8 Johns. 272 ; Reeve v. Davis, 1 A. & E. 312. s McLellan v. Reed, 35 Me. 172. * Webb V. Peirce, 1 Curtis, C. C. 104; Thomas v. Osborn, 19 How. 22; Perry v. Osborne, 5 Pick. 422; Thompson v. Hamilton, 12 Pick. 425. 5 Mayo V. Snow, 2 Curtis, C. C. 102. See Harding v. Souther, 12 Cush. 307. " Fletcher v. Braddick, 5 B. & P. 182 ; Hodkinson v. Fernie, 2 C. B., n. s. 415, 40 Eng. L. & Eq. 306 ; Trinity House v. Clark, 4 M. & S. 288. ^ Havelock v. Geddes, 10 East, 555. 8 McGilvery v. Capon, 7 Gray, 525. 5> See Weisser v. Maitland, 3 Sandf. 318 ; Pope v. Bavidge, 10 Exch. 73, 28 Eng. L. &Eq. 569. 1" " There can be no doubt, I think, that, when there has been no express agreement for demuiTage, if the vessel is detained an unreasonable time by the freighter or con- signee, the owner of the vessel may recover damages in the nature of demurrage for such detention. To sustain such action, it must appear that the vessel was improperly detained." Per Harris, J., in Clendauiel v. Tuckerman, 17 Barb. 184. See also, KeU V. Anderson, 10 M. & W. 498 ; Horn v. Bensusan, 9 Car, & P. 709 ; Sweeting v. Dar- thez, 14 C. B. 538, 25 Eng. L. & Eq. 326; Harris v. Dreesman, Exch. 1854, 25 Eng. L. & Eq. 526. 34 [397] 362- ELEMENTS OF MERCANTILE LAW. [CH. XVII. for SO much " demurrage." Lay-days, or working days, are so many days which the charterer is allowed for loading, or for un- loading the vessel. These lay-days are counted from the arrival of the ship at her dock, wharf, or other place of discharge, and not from her arrival at her port of destination, unless otherwise agreed by the parties ; ^ and the usage of the port often is re- sorted to to determine the place and manner of the loading.^ In the absence of any custom or bargain to the contrary, Sun- days are computed in the calculation of lay-days at the port of discharge ; but if the contract specifies " working lay-days," Sundays and holidays are excluded.^ If more time than the agreed lay-days is occupied, it must be paid for ; and " demur- rage " means what is thus paid. Usually, the charterer agrees to pay so much demurrage a day. If he agrees only to pay de- murrage, without specifying the sum, or if so many working days are agreed on, and nothing more is said,* it would, gener- 1 Brown v. Johnson, 10 JI. & W. 331 ; KcU v. Anderson, id. 498 ; Brereton i\ Chap- man, 7 Bing. 559 ; Gibbens v. Biiisson, 1 Bing. N. C. 283, 1 Scott, 133; BaUey v. Be AiTOyarc, 7 A. & E. 919. 2 See Leideman v. Schultz, U C. B. 38, 24 Eng. L. & Eq. 305 ; Taylor v. Clay, 9 Q. B. 713; Hudson v. Clementson, 18 C. B. 213, 36 Eng. L. & Eq. 332 ; Kichol's v. Jewett, U. S. D. C. ilass., 1857 ; Nichols v. Trcmlett, same Court, 20 Law Reporter, 324. ^ Brooks V. Jlintum, 1 Calif. 481. In England, it has simply been held that the lay- days may be "mnning days," where such appears on the charter-party to haye been the intention of tlie parties. JBrown r. Jolmson, 10 M. & W. 331 ; Cochran v. Retbcrg, 3 Esp. 121 ; Gilibens v. Buisson, 1 Bing. X. C. 283 ; Field v. Chase, Hill & Den. 50. It is not necessary, before they liegin to run, that the consignees should be notified of the arrival of tlie vessel. Harman v. Clarke, 4 Camp. 159 ; The Same r. Mant, id. 161. ■* "Demurrage," so called, can be recovered, properly speaking, only where it is reserved liy the charter-party or bill of lading. The remedy, where no such express reservation exists, appears to be by an action on the case for damages, in the nature of demurrage, for the detention. Sec Kell v. Anderson, 10 JI. & W. 498, %yhere Ahinger, C. B., said : " I thought tliat, as no time was limited by the charter-party, from wliich the demurrage Avas to be reckoned, it must be reckoned from the time of the ship's arrival at the ordinary pbice of discharge, and that, if she was prevented from discharg- ing sooner by tlie fault of tlie defendant, tliat sliould have been the subject of an action on the case, and not of an action for demurrage." So, Harris, J., in the recent Amer- ican case of Clendaniel v. Tuckerman, 17 Barb. 184 : "It is true that demurrage, prop- erly so called, is only payable when it is stipulated for in the contract of affreightment ; but it is also true, that, wlien a vessel has been improperly detained by the freighter or consignee of the cargo, the owner may have a special action for the damage resulting to him from the detention." See also, on this point, Brouncker v. Scott, 4 Taunt. 1 ; Horn V. Bensusan, 9 Car. & P. 709 ; Atty v. Parish, 4 Bos. & P. 104 ; Robertson v. Betliune, 3 Johns. 342; Evans v. Eorster, 1 B. & Ad. 118. In Brouncker v. Scott, supra, the master of a ship brought an action to recover a compensation in damages for the detention of his ship beyond a reasonable time for the delivery of her cargo in the port of London, and declared also generally for demurrable. It was lield tliat such an action could not be maintained by the master, whatever right the owners might have to sue in their own names. See also, Evans v. Foretcr, supra. But where the master [398] CH. XVII.] THE LAW OF SHIPPING. *363-*364 ally at * least, be considered that the number of lay-days deter- mined what was a reasonable and proper delay, and that for whatsoever was more than this, the party in fault must pay a reasonable indemnity.^ If, after the lay-days allowed for unlad- ing have commenced, and, of course, after a safe arrival, but before the cargo is unladen (the delay being for the convenience of the consignee), ship and cargo, or cargo alone, is lost, with- out the fault of the ship, of the owner, or of the master, the freight or charter-money is due, because that was earned by the safe arrival and offer to deliver.^ If time be occupied in the repairs of the ship, which are made necessary, without the fault of the owner or master, or of the ship itself, that is, if they do not arise from her original unsea- worthiness, the charterer pays during this time.^ Many cases have arisen where the ship was delayed by differ- ent causes, and the question occurred, which party should pay for the time thus lost. On the whole, we should say that no delay arising from the elements, as from ice, or tide, or tempest, or from any act of government, or from any real disability of the consignee, which could not be imputed to his own act, or to *his own wrongful neglect, should give rise to a claim on the charterer for demurrage.* is owner pro tempore, he may bring the action. Thus, where he sailed the vessel under a contract with the owner, by which he was to find the crew and provisions, pay half the labor, port charges, &c., and receive half the net freight earned by the vessel, it was held that he thereby acquired a special property in the ship sufficient to enable him to maintain an action for damages in the nature of demurrage. Clendaniel v. Tuckerman, supra. 1 Rogers v. Forresters, 2 Camp. 483 ; Burmester t'. Hodgson, id. 488. Even where the rate of demurrage is fixed by the agreement, it has been held not conclusive on either party. See Moorsom v. Bell, 2 Camp. 616, where Lord Ellenborough said : " If a ship is detained beyond her days of demurrage, prima facie, the sum allowed as demurrage shall be taken as the measure of compensation. But it is open to the ship-owner to show that more damage has been sustained, and to the freighter to show there has been less than would thus be compensated. We think, however, that it would require strong evidence to overcome the specific agreement of the parties, even if such evidence were admitted." 2 Brown v. Ralston, 9 Leigh, 532; Clendaniel v. Tuckennan, 17 Barb. 184. In this last case, whilst waiting to unload her cargo, the vessel was capsized by a freshet, and the greater part of her cargo lost. But freight was claimed and allowed for the whole, on the ground stated in the text. 8 See Kimball v. Tucker, 10 Mass. 192. "The hirer must not abandon the vessel while he can keep her afloat, and suitably provided for the employment and destination for which she was hired ; and the owner must be ready to pay all expenses and dam- an-es necessarily incurred for the purpose." But the freight will not be bound by the charter-party, unless the vessel can be repaired within a reasonable time. Purvis v. Tunno, 1 Brev. 260. * Rogers v. Hunter, Moody & M. 63 ; Dobson v. Droop, id. 441 ; Douglas v. Moody, [399] 365* ELEMENTS OF MERCANTILE LAW. [CH. XVII. Demurrage seems essentially due only for the fault or volun- tary act of the charterer;^ but if he hires at so much on time, that is, by the day, week, or month, then, if the vessel be de- layed * by seizure, embargo, or capture, and the impediment is removed, and the ship completes her voyage, the charterer pays 9 Mass. 555. In England, however, it was held, in the earlier cases, that, where the charter-party contains a stipulation to [laj- demurrage, and the ship is detained beyond the lay-days allowed by the agreement, the merchant must pay the demurrage, although the delay was owing to circumstances entirely beyond his control. As, where the de- tention was owing to the crowded state of the London docks. Randall v. Lynch, 2 Camp. 356, 12 East, 179. As to the fact that the goods of the defendant were stowed underneath those of other parties, see Leer v. Yates, 3 Taunt. 387 ; Harman v. Gan- dolph. Holt, N. P. 35. But see Lord Tenterden, in Dobson v. Droop, Moody & M. 441. By a prohibition of intercourse between the ship and the shore, on account of infectious disease, see Barker v. Hodgson, 3 M. &, S. 267. So, where the dehiy was owing to frost. Barret c. Dutton, 4 Camp. 333. Or to the act of a foreign goveru- ment, in prohiliiting the exportation of the goods stipulated. Bright v. Page, 3 Bos. & P. 295, n. a. To the regulations of the custom-house. Hill v. Idle, 4 Camp. 327. Or the unlawful act of the custom-house agents. Bessey v. Evans, 4 Camp. 131. On the other hand, in Rogers v. Hunter, 1 Moody & M. 63, Lord I'unterden remarked, in refer- ence to the foregoing decisions : " I have great difficulty in saying that, when the con- signee has had no opportunity of taking his goods within the time stipulated, he is bound by the contract to ]->ay for not doing so ; ho cannot, I think, in that case lie said to detain the vessel. On the other hand, I do not agree to the proposition tliat he has necessarily the stipulated time, to be computed from the period when the discharge of his own goods can be commenced ; I think, after that period he must use reasonable despatch. The true principle seems to be this : If the goods of the particular con- signee are not ready for discharge at the time of the ship's arrival, he must have a rea- sonable time for removing them after they are so ; if in such a case, using reasonable despatch, he cannot clear them within the stipulated period from the ship's being ready to discharge her cargo generally, he will not be liable for demurrage till the expiration of such reasonable time ; but when it is expired, he will be liable, though the stipulated period, if computed from the time when the discharge of his own goods could have commenced, is not at an end." In this country, the equitable doctrine of Lord Tenter- den seems to have met with approval. Thus, in Douglas v. Moody, 9 Mass. 555, the court say : " As to the demurrage, a detention by capture is not demurrage. A cove- nant to pay for demurrage applies to a detention voluntary in the partv contracting for the freight." If the delay be owing to the act of the ship-owner or his agent, no de- murrage, of course, is payable. Barker v. Hodgson, supra ; Benson v. Blunt, 1 Q. B. 870. Wliere it is agreed that demurrage shall be paid for the time during which a ship is detained to take on board her cargo, the claim ceases so soon as she is loaded and cleared, althongli, owing to adverse weather, she cannot put to sea, or is driven back into port. And it was so lutd in a case i\herc tlie delay caused by the freighters ap- pears to have been the ultimate cause of the subsequent detention, by keeping the ves- sel in port until the season for navigation was almost closed. Jamieson i\ Laurie, 6 Bro. P. C. 474, anil ^Vbbott, p. 315, wliere a British vessel was detained in St. Peters- burg, to take on board her cargo, nearly two months beyond the stipulated time, and then setting sail, was driven back and frozen in for the winter, which began somewhat earlier than usual. Demurrage in this case was awarded only to tlie sailing of the vessel. And so, where, by the delay, tlie vessel lost the opportunity of sailing with convoy, and was obliged to wait nearly two months for another, the owner having cov- enanted that she should sail with convoy. Connor v. Smythe, 5 Taunt. 654. A simi- lar rule wa.s adopted where demurrage was stipulated to be paid whilst the ship was waiting for convoy. See Lannoy v. Wcrry, 4 Bro. P. C. 630. These eases appear to illustrate the principle that the freighter is not responsible, at least in this form of ac- tion, for any consequential injury to the ship-owner arising from the delay. See Cleii- daniel v. Tuckerman, 17 Barb. 184. 1 Douglas V. Moody, 9 Mass. 555. See preceding note. [400] CH. XVII.] THE LAW OF SHIPPING. *366 for the whole time.^ If she be condemned,^ or otherwise lost, this terminates the voyage and the contract. The contract may be dissolved by the parties, by mutual con- * sent, or against their consent by any circumstance which makes ^ So held in the following cases, as to capture ; Odlin v. Ins. Co. of Penn. 2 Wash. C. C. 312 ; The Ship Nathaniel Hooper, 3 Sumner, 542 ; Patron w, Silva, 1 La. 277 ; SpafFord u. Dodge, 14 Mass. 66. See post, n. 2, infra. But see The Hiram, 3 Rob. Adm. 180. For the application of the doctrine to embargo, see Bork v. Norton, 2 McLean, 422; M'Bride v. Marine Ins. Co. 5 Johns. 308; Palmer w. Lorillard, 16 id. 357 ; Baylies v. Fettyplace, 7 Mass. 325 ; Hadley v. Clarke, 8 T. R. 259. A distinc- tion appears, however, to have been taken in some of the English cases, between the effect of an embargo upon British vessels, upon contracts of affi'eightment between British subjects, and one imposed upon the ships of a foreign nation, " by way of hos- tility and reprisal." Thus, in Touteng v. Hubbard, 3 Bos. & P. 291, Lord Alvanley held that the contract of affi-eightment between the British merchants and the owner of a Swedish vessel, was dissolved by a hostile embargo on all Swedish ships; admitting, however, that had the embargo been laid on by a third State, it might, perhaps, have only produced u, suspension of the contract. And in the tliree cases of Conway v. Gray, Conway v. Forbes, and Mowry v. Shedden, 10 East, 536, 539, 540, cited in Park on Ins. (6th ed;), p. 610, Lord Elknborough held that an American citizen could not recover from a British underwriter, under an abandonment founded upon the embargo imposed by the American government. These cases, it was remarked by Chief Justice Kent, in M'Bride v. Mar. Ins. Co. supra, seem to have been decided rather upon politi- cal considerations than upon any principle of law. The case of The Isabella Jacobina, 4 Rob. Adm. 77, also came up under the Swedish embargo ; but the decision in this case appears to have turned, partly at least, upon the fact that the cai-go, one of " pilch- ards " could not wait till the embargo might be taken off. A blockade of the port of departure suspends, but does not dissolve the contract. So held in this country, in Palmer w. Lorillard, supra, overruling 15 Johns. 14. See also, Ogden v. Barker, 18 Johns. 87. And Richardson v. Maine Ins. Co. 6 Mass. 102, 118. In Stoughton v. Rappalo, 3 S. & E. 559, the court held, in direct opposition to Ogden v. Barker, supra, that the right of the master to retain the goods was destroyed by the blockade, his rem- edy, if any, being by action on the case, without, however, expressly deciding that the contract of affi'eightment was dissolved. 2 See Spafford v. Dodge, 14 Mass. 66. The effects of the hostile seizure of a vessel on the contract of charter-party are thus stated by Mr. Justice Jackson, in this case, where the charterers were owners pro tempore: "Here was a hostile seizure of the ship. This might have been followed by a condemnation as prize, which would undoubtedly have dissolved the contract of affreightment ; but in the events which have happened, it produced only a prolongation of the voyage. The ship was restored by the sovereign under whose authority she was seized. The captors, therefore, admit that they had no right to condemn the property, or to deal with it as captured. It makes no difference that the ship was carried into a port of the captors, for examination, before she was re- stored. If this seizure produced a dissolution of the charter-party, the same consequence would follow, however short might be the period of the detention, and whether she was restored by the captors upon examination of her papers at sea, or upon a like Examina- tion in port, or in a coiurt of admiralty. We must not confound this contract with that contained in a policy of insurance. The assured may, during such a detention, aban- don the ship to the insurers, and recover as for a total loss ; because the insurers have agreed that, in case of such an interruption of his voyage, whilst it is uncertain how soon it can be resumed, or whether it can ever be further prosecuted, he may disembar- rass himself of the adventure, and that they will pay him for the ship, and take the future risk upon themselves. But the owner of the ship makes no such contract with the hirer, in a common charter-party of affreightment. He is to be paid for the whole time the ship is out of his possession, in virtue of the contract, whether her voyage be long or short, and by whatever accident she may be delayed ; provided the delay do not arise from his own default, and provided also, that the voyage be finally completed." 34* [401] 366- ELEMENTS OF MERCANTILE LAW. [CH. XVII. the fulfilment of the contract illegal ; ^ as, for example, by a dec- laration of war on the part of the country to which the ship belongs, against that to which she was to go.^ So, either an embargo,^ or an act of non-intercourse,* or a blockade of the port to which the ship was going,^ may either annul or suspend the contract of charter-party. And we should say they wotild be held to svispend only, if they were temporary in their terms, and did not require a delay which would be destructive of the purposes of the voyage. In reference to all these points, it is to be understood that if the parties know the circumstance when they make their bar- 1 See Odlin v. Ins. Co. of Penn. 2 Wash. C. C. 312; Palmer v. Lorillard, 15 Johns. 14, and 16 id. 348; Bayhcs v. Fettyplace, 7 Mass. 338, per Sedgwick, J.; Browne v. Delano, 12 Mass. 370 ; Barker v. Hodgson, 3 M. & S. 267 ; Liddard v. Lopes, 10 East, 526 ; Evans v. Hutton, 4 Man. & G. 954. But it has been held that the prohibi- tion of a foreign government to export the articles of which the cargo was to be com- posed, did not dissolve the contract or excuse its non-performance. Blight v. Page, 3 Bos. & P. 295, n. (a), and Abbott, p. 597. See also, Sjoerds v. Luscombe, 16 liast, 201, and Kichardson v. Maine Ins. Co. 6 Mass. 112. "Because the municipal laws of any State have not the force of laws without its jurisdiction, voyages prohibited in one State are not in any other State deemed for that reason to be illegal." Per Par- sons, C. J. 2 Abbott on Ship. 596 ; Palmer v. Lorillard, 16 Johns. 356, 357. But the breaking out of hostilities between the nation to which either the ship or cargo belongs, and any other nation to which they are not destined, does not dissolve the contract. Abbott on Ship. p. 596. ' " An embargo," said Chief Justice Kent, in iM'Bride v. Marine Ins. Co. 5 Johns. 299, 308, " is not required to be, upon the face of the act, definite as to time. It is fre- quently otherwise ; and the case of the British embargo on vessels bound to Leghorn, as stated in Hadley v. Clarke, 8 T. E. 259, is a pertinent and strong instance of the kind. But it is, from the very nature and policy of the measure, a temporai-y restraint. It suspends, but does not dissolve the contract of insurance, any more than the con- tract to caiTy goods. The error of the counsel for the defendants consists in consider- ing the embargo imposed by congress as a pcniianent prohibition, working a dissolu- tion of the contract. Wo must judge of the act from what it purports to bo, and from the terms which it uses. An embargo ' ex vi termini ' means only a temporary suspen- sion of trade. A general and permanent prohibition of trade would not be an em- bargo." See ante, p. 365, ii. 1. * "When the sovereign of the country to which the ship belongs shall prohibit his subjects from trading with a foreign country or port, whether the prohibition be a con- sequence of his dechiring war against the foreign country, or be made by an express ordinance for any cause at the will of the sovereign, a voyage to that country for the purpose of trade is illicit." Per Parsons, C. J., in Richardson v. Maine Ins. Co. 6 Mass. 111. See also, Palmer v. Lorillard, 16 Johns. 356. " ^here is no difference in principle," says Chancellor Kent (3 Com. 249), "between a complete interdiction of commerce, which prevents the entry of the vessel, or a partial one in relation to the merchandise on board, which prevents it from being landed." Patron v. Silva, 1 La. 277. So where the cargo is prohibited from exportation. Barker v. Hodgson, 3 M. & S. 267. ^ A blockade of the port of destination, by rendering the voyage to such port in u, certain sense illegal, would appear on principle to ha\ e the effect of dissolving the char- ter-party (see n. 1, supra), and accordingly this has been held to be its effect in several cases. See Scott v. Libby, 2 Johns. 336 ; The Tutela, 6 Kob. 177. As to the effect of a blockade of the port of departure, see ante, p. 365, u. 1. [402] CH. XVII.J THE LAW OF SHIPPING. 367 gain, and provide for it, any bargain they choose to make in relation to it would be enforced, unless it required one or* other of the parties to do something prohibited by the law of nations, or of the country in which the parties resided, and to whose tri- bunals they must resort.^ SECTION VIII. OF GENERAL AVERAGE. Whichever of the three great mercantile interests — ship, freight, or cargo — is voluntarily lost or damaged for the benefit of the others, if the others receive benefit therefrom, they must contribute ratably to the loss. That is to say, such' a loss is averaged upon all the interests and property which derive ad- vantage from it. This rule is ancient and universal.^ 1 " Every engagement to perform a future aet is in one sense conditional. If it be- comes impossible by any act not imputable to the party who is bound to perform it, unless he assumes the risk of all contingencies, he is excused." Per Ware, J., in The Eliza, Daveis, 316. Where the master of a ship covenanted in a charter-party to go to a certain port of America and receive a loading from the freighter, with the exception of the restraints of rulers, &c., but the freighter covenanted absolutely to provide the loading, without any such exception, Lord EUenborough was of opinion that an embargo in the American port, which prevented the freighter from loading the ship, did not dis- charge him from his covenant. Sjoerds v. Luscombe, 16 East, 201. "Supposing," said his lordship, "all the facts stated appeared upon the records, the restraint of the government would not operate as an excuse for the freighter, who was to load the goods on board at all events, even if, by the law of the country, it could not be done, but only for the ship-owner, who covenanted with that exception. I assume the fact that nothing but the embargo prevented the loading of the cargo ; but the result of Bright V. Page (3 Bos. & P. 295, in note) is, that if the freighter undertakes what he cannot perform, he shall answer for it to the person with whom he undertakes." 2 The doctrine of average is supposed to be derived from the ancient Khodian law. In the Digest, it is recognized as the Lex Rhodia. Dig. 14, 2, 1. The rule, as there laid down, is this : " If goods are thrown overboard in order to lighten a ship, the loss incurred for the sake of all shall be made good by the contribution of all." The doc- trine has been much discussed by foreign writers, and various rules respecting it have been adopted in foreign ordinances. Laws of Oleron, art. 8, 9 ; Ord. of Wisbuy, art. 20, 21, 38; French Ord. liv. 3, tit. 8; Cod. de Com., art. 410; Emerigon, ch. 12, § 39 ; Consolato del Mare, cap. 47, 48, 49 ; Le Guidon, ch. 5, art. 28 ; 2 Valin, 167 ; Beawes, 165. But the numerous decisions upon questions of average, in the English and American courts, are now the sources from which the law of average must be chiefly derived. The history of the law of average is most thoroughly considered by Mr. Justice Story, in Columbian Ins. Co. v. Ashby, 13 Pet. 343. The question has been raised, whether the principles of general average apply to a case of jettison on in- land waters. Eossiter v. Chester, 1 Doug. Mich. 154. On principle, we have no doubt that they should be so applied. See also, Welles v. Boston Ins. Co. 6 Pick. 182, for an unsuccessful attempt to apply the principles of general average to fire insurance. [403] 368* ELEMENTS OP MERCANTILE LAW. [CH. XVII. There are three essentials in general average, without the concirrrence of all of which there can be no claim for loss. First, the sacrifice must be voluntary ; second, it must be necessary ; third, it must be successful. Or, as it is sometimes said, there must be a common danger, a voluntary loss, and a saving of the imperilled property by that loss.^ The loss must be voluntary. Therefore, if the cargo be actu- ally thrown over, and the ship saved thereby, or if the ship be * actually cast ashore, and the goods saved thereby, yet if, in the first case, the cargo could not possibly have been saved, and if, in the second case, the ship could not possibly have been saved, there is no average. We distinguish this from the cases where all cannot possibly be saved, but something may be if something else is sacrificed. Here there is no doubt that the thing lost by voluntary choice is to be paid for. But, while we admit that the question is one of much difficulty, as well as of uncertainty on the authorities, we incline to say that the loss must be voluntary ; and if the peril of any one whole thing is such that its safety is impossible, the destruction of it in a way to insure the safety of the rest, is not such a voluntary loss or sacrifice as would give a claim for indemnity. There have been many cases, and some conflict, respecting the voluntary stranding of the ship. But there ought to be no doubt whatever about the principle, whatever may be the diffi- culty of applying it in different cases. If the ship must be lost in that tempest, and only a place is selected favorable to the safety of life and cargo, there can be no average. But if the ship, although in imminent danger, may be saved, and a sub- stantial chance of safety is voluntarily given up for the sake of the cargo, the cargo must contribute to this loss.^ If a ship is 1 Barnard v. Adams, 10 How. 270, 303 ; Nimick y. Holmes, 25 Penn. State, 366 ; Starless v. Cary, 2 Cm-tis, C. C. 59, 66. 2 Two questions have given rise to much discussion in cases where a claim for aver- age has been made for the benefit of a sliip which has been voluntarily stranded. 1 . Can there be a voluntary stranding so as to give a claim for average, if the vessel would have perished at any rate 1 2. Do the ship-OAvners have a claim for average, if a vessel is voluntarily stranded, and cannot be got off, so that she is totally lost ? In Sims V. Gurney, 4 Binn. 513, the vessel would have gone ashore at any rate, and probably on a certain part of the coast. The master directed her course to another place, which was in no degree better calculated cither for the safety of the ship, or of the cargo. Yet this was held to be a case for a general average contribution. We feel compelled to doubt the correctness of this decision, and no case has been decided which fully sustains it. The doctrine of the text is supported in Barnard v. Adams, 10 [404] CH. XVII.] THE LAW OF SHIPPING. *369 accidentally * stranded, and got off, and the voyage resumed, and ship, cargo, and freight saved, all must contribute to the expense of getting her off.^ So, if she be stranded near her port of destination, and the cargo be transported thither in lighters, this expense is a matter of average.^ So would be any sea damage sustained by the goods in the lighters.^ A somewhat difficult question has arisen, where the property sacrificed was in such imminent danger that it could not proba- bly have been saved in any event. And it has been held in some cases, that if there was a common danger, and that was caused peculiarly by the thing sacrificed, or if the thing sacrificed was in such peculiar danger that it could not be said to have had any value, no contribution should be made.* But the gen- eral rule must be, that where all interests are involved in a com- mon peril, and one is sacrificed for the benefit of the rest, this should be contributed for. And if the cargo is on fire, and the vessel scuttled, or water is poured down, goods injured thereby which the fire has not reached, are to be contributed for," as are perhaps those which are already partially burned.^ So the loss must not only be voluntary, but, what is indeed implied in its being voluntary, it must be for the purpose and with the intention of saving something else. And this intention must be carried into effect: for only the interest or property How. 270, which case overrules Meech v. Robinson, 4 Wliart. 360, and in Sturgess v. Gary, 2 Curtis, C. C. 59. In Col. Ins. Co. v. Ashby, 13 Pet. 331, the jury found that the stranding was voluntary, and the point in question was not discussed by the court. In Walker v. U. S. Ins. Co. 11 S. & R. 61, the court held, as a matter of fact, that when the master slipped his cables, it did not appear that it was his intention to run his vessel ashore, but rather to get her out to sea, and failing in this, he was driven ashore against his will. See Cutler v. Rae, Sup. Jud. Ct. Mass., not yet reflorted. As to the question whether there can be a general average if the vessel is totally lost, there is some conflict of authority, but the reason and weight of authority is in favor of the affirmative. Col. Ins. Co. v. Ashby, 13 Pet. 331 ; Caze v. Reilly, 3 Wash. C. C. 298 ; s. c. nom. Caze v. Richards, 2 S. & R. 237, n. ; Gray v. Waln,'2 S. & R. 229; Mut. Safety Ins. Co. v. Cargo of Brig George, Olcott, Adm. 89 ; Barnard v. Adams, 10 How. 270. See contra, Eppes v. Tucker, 4 Call, 346 ; Bradhurst v. Col. Ins. Co. 9 Johns. 9, supported to some extent by Marshall v. Garner, 6 Barb. 394. 1 Bedford Com. Ins. Co. v. Parker, 2 Pick. 1. If the stranding were voluntary, and the ship recovered, it seems to be well settled tliat the expense would be a subject of general average. Bradhurst v. Columbian Ins. Co. 9 Johns. 14 ; Reynolds v. Ocean Ins. Co. 22 Pick. 191. 2 Heyliger v. N. Y. Firemen Ins. Co. 11 Johns. 85. " Lewis «. Williams, 1 Hall, 430. * See Crockett v. Dodge, 3 Tairf. 190; Marshall v. Garner, 6 Barb. 394; Lee w. Grinnell, 5 Dner, 400. 6 Nelson v. Belmont, 5 Duer, 310, 323 ; Lee v. Grinnell, 5 Duer, 400. 6 Nimick v. Holmes, 25 Penn. State, 366. [405] 370* ELEMENTS OP MERCANTILE LAW. [CH. XVII. which is actually saved can be called to contribute for that which was lost.' Any loss which comes within this reason, is an average loss ; as ransom paid to a captor or pirate ; not so, however, if he take what he will, and leave the ship and the rest, for here is no con- tribution.^ So, cutting away bulwarks or the deck, to get at goods for jettison, is an average loss.^ As is also the cutting away of the masts and rigging,* or throwing overboard a boat to relieve the ship,^ or the loss of a cable and anchor, or either, by cutting the cable to avoid an impending peril.^ So is a dam- age which, though not intended, is the direct effect and conse- quence of an act which was intended ; as, where a ma^t is cut away, and by * reason of it, water gets into the hold and damages a cargo of corn, this damage is as much a general average as the loss of the mast.''' But if a ship makes all sail in a violent gale to escape a lee shore, and so saves ship and cargo, but carries away her spars, &c. ; or if an armed ship fights a pirate or enemy, or beats him off at great loss ; the first is a common sea risk,^ the second a 1 Scudcler v. Bradford, U Pick. 13 ; Williams u. Suffolk Ins. Co. 3 Sumner, 510. In the latter case. Story, J., said : " The expenses and charges of going to a port of ne- cessitj' to refit, can properly be a general average only where the voyage has been, or might be resumed." In Butler ;■. Wildman, 3 B. & Aid. 398, dollars were thrown over- board from a vessel which was on the point of being captured, to save them from the enem}'. This was admitted by the counsel not to be a case of general average. ^ Dig. 14, 2, 2, 3. 8(1 the necessary expenses incurred in procuring the restoration of a ship and cargo, after capture, arc allowed as general average. Spafford v. Dodge, 14 Mass, 66 ; Douglas v. Moody, 9 Mass. 548. See .also, Sansoni v. Ball, 4 Dall. 459. In Price v. Noble, 4 Taunt. 122, it was held that a jettison, made while the vessel and cargo were in the hands of the enemy, would support a claim for general average. 3" Dig. 14, 2, 2, 1 ; Molloy, b. 2, c. 6, ^ 15 ; Laws of Wisbuy, art. 55 ; Abbott on Ship, 580 ; Nelson v. Belmont, 5 Duer, 310. * Walker v. U. S. Ins. Co. 11 S. & R. 61 ; Sims v. Gurney, 4 Binn. 513, 525 ; Pot- ter V. Providence Washington Ins. Co. 4 Mason, 298 ; Greely v. Tremont Ins. Co. 9 Cush. 415 ; Scudder v. Bradford, 14 Pick. 13 ; Lee v. Grinuel'l, 5 Duer, 400, 411. "i Lenox v. United Ins. Co. 3 Johns. Cas. 178 ; Hall v. Ocean Ins. Co. 21 Pick. 472. •^ Walker v. U. S. Ins. Co. 11 S. & R. 61. Sec Birkley v. Presgr.ave, 1 East, 220. ' In Maggr.ath v. Church, 1 Caines, 196, the vessel, loaded with corn, encoimtcred severe weather, and a mast was cut away for the general preservation. In consequence of the cutting away the mast, the corn was injured by the water. Kent, J., said : " The corn being damaged by the cutting away of the mast, is to be considered, equally with the n^ast, a sacrifice for the common benefit — a price of safety to the rest ; and it is founded on the clearest eciuity, that all the property and interest saved, ought to con- tribute their due proportion to this sacrifice." » Power V. Whitmore, 4 M. & S. 141 ; Covington v. Roberts, 5 Bos. & P. 378. In the latter case, a vessel was captured by a French privateer, but, on account of a heavy gale, the privateer could not take possession of her. To escape from the priva- teer, she carried an unusual press of sail. She succeeded in escaping, but was much strained, most of her seams were opened, and the head of her mainmast was caiTied [406] CH. XVII.] THE LAW OF SHIPPING. -370 common war risk,i and neither of them is a ground for average contribution. If goods are put on board a lighter to relieve the ship, and, the boat being in peril, some of the goods are jettisoned, the whole^ ship and cargo should contribute.'^ But if they are put on board the boat for their own benefit only, and a part are jettisoned, it has been held that no contribution is to be made.^ Though we think the boat and the rest of the gqods should contribute in such a case, and it would then be a good example of what is, properly speaking, particular average. If masts are overboard, and, hanging by the ship, embarrass or endanger her, and are cut away, this might be a general aver- age loss, but only for the value of the masts and rigging as they then were, for only that is voluntarily sacrificed ; and this value would generally be nothing.* If some part of a cargo is landed in safety, and by a subse- quent peril the rest is damaged, the part saved does not contrib- ute. But if the cargo is landed in successive portions, and there is a loss or injury to that which comes on shore last, all should contribute.^ It is not considered prudent to lade goods on deck, because away. Held, that the damage to the vessel was not a subject for general average. Sir James Mansfield, C. J., said : " This is only a common sea risk. If the weather had been rather better, or the ship stronger, nothing might have happened." 1 In Taylor v. Curtis, 6 Taunt. 608, a vessel resisted a privateer, and finally beat her off. The losses suffered were claimed as general average. The claim was not allowed. Gibhs, C. J., said : " The losses for which the plaintiffs seek to recover this contribution, are of three descriptions. 1. The damage sustained by the hull and rigging of the ves- sel, and the cost of her repairs. 2. The expense of the cure of the wounds received by the crew in defending the vessel. 3. The expenditure of powder and shot in the en- gagement. The measure of resisting the privateer was for the general benefit, but it was a part of the adventure. No particular part of the property was voluntarily sacri- ficed for the protection of the rest. The losses fell where the fortune of war cast them, and there, it seems to me, they ought to rest." Mr. Flanders, in his able work an Mar- itime Law, is inclined to doubt whether this decision should be adopted by the Ameri- can courts. ■^ Benecke & Stevens, by Phillips, p. 133, et seq. ; Lewis u. Williams, 1 Hall, 430 ; 1 Mag. 160, cas. 9. 3 Whitteridge v. Non-is, 6 Mass. 125. " Nickerson v. Tyson, 8 Mass. 467. It is said in Benecke & Stevens on Average, Phillips, ed. p. Ill, that although it is the practice in most countries to allow for the rigging so cut, in general average, yet, in England, no such allowance is made. The reason given that the rigging is of no value, seems to be a begging of tlie question. 5 See'Bevan v. Bank of the United States, 4 Whart. 301 ; Bedford Com. Ins. Co. v. Parker, 2 Pick. 1 ; Sparks y. Kittredge, U. S. D. C. Mass., 9 Law Keporter, 318 ; Job V. Langton, 6 Ellis & B. 779, 37 Eng. L. & Eq. 178 ; Moran v. Jones, 7 Ellis & B. 523 ; Nelson v. Belmont, 5 Duer, 310; Sherwood v. Kuggles, 2 Sandf. 55; The Ann D. Kichardson, Abbott, Adm. 499. [407] 371* ELEMENTS OF MERCANTILE LAW. [CH. XVII. they are not only more liable to loss there, but hamper the ves- sel, and, perhaps, make her top-heavy, and increase the common danger for the whole ship and cargo. Therefore, by the general . rule, if goods on deck are jettisoned (or cast overboard), they are not to be contributed for.^ But there are some voyages on which there is a known and established usage to carry goods of a certain kind on deck. This justifies the carrying them there, and *then the jettison of them would seem to entitle the owner to contribution.^ The repairs of a ship are for the benefit of the ship itself, and generally are to be adjusted as a partial loss. But if the repairs are made necessary by an injury voluntarily inflicted to save the property, they come into general average.'^ And if a ship be in a damaged condition, at a port where she cannot be per- manently repaired, and receive there temporary repairs, which enable her to proceed to another port, where she may have thorough repairs, and thereby the voyage is saved, all of the 1 Myer v. Vander Dcyl, Ahbott on Ship. 481 ; Johnston v. Crane, Kerr, N. Bninsw. 356 ; Smith u. Wright, 1 Caincs, 43 ; Lenox v. United Ins. Co. 3 Jolms. Cas. 178; Dodge o. Bartol, 5 Grecnl. 280; Cram y. Aildn, 13 Maine, 229; Hampton v. Brig Thaddeus, 4 Martin, 582 ; Tannton Copper Co. v. Merchants Ins. Co. 22 Pick. 108; Doane v. Keating, 12 Leip;h, 391. The same rule prevails, generally, upon the continent. Ord. Louis 14, tit. Jettisons, a. 13; Code de Commerce, a. 232; Valin, vol. 2, p. 2U.'!. See also, Abbott on Ship. (8th. Eng. Ed.), 482, where there is an elabo- rate note on this suliject. ^ Tills doctrine does not appear to be settled in the American courts. But it was thoroughly disinsscd in England in Milward v. Hihbert, 3 Q. B. 120. In that case, pigs were shipped on deck from WatLvfnrd, in Ireland, to London, in accordance with a usage so to do. Tliey were thrown overboard for the general safety. The owners of the stoamlioat paid their proportional part of the contribution in general average, Har- ley !'. Milward, 1 Jones & C. Irisli E.xch. 224, and brought an action against their in- surers to recover it. The insurers were held liable. In Gould v. ( Hivcr, 4 Bing. N. C. 134, it had been held, that wiiere goods were carried on deck, according to the custom of that particular trade, the ship-owner was liable to contribute in case of jettison, but tlie doctrine had not been extended so as to charge the shippers of goods lielow deck. The decision in Milward v. Hibbert, did not expressly carry the doctrine so far as that, but the principles there laid down would seem to make goods shipped in the hold charge- able. It appears from the report of the case of Gould v. Oliver, at a further stage of the proceedings, that all the cargo was owned by the plaintiffs, and the question as to the liability of goods in the hold to contribute, in such a case, did not arise. 2 Man. & G. 208, 2 Scott, N. R. 241. The exception stated in the text seems in some cases to be adopted in practice in America, although not directly sanctioned bv our courts. See Phillips on Ins. vol. 2, § 1282, and Cram v. Aikin, 13 Maine, 229." Valin (vol. 2, p. 203) says that contribution is allowed for the jettison of goods on deck, in case of boats or other small vessels going from port to port, or in cases wdiere this mode of stowing is sanctioned by custom. But sec Dodge v. Bartol, 5 Grcenl. 286, and Cram ». Aikin, 13 Jlainc, 229. 3 licynolds v. Ocean Ins. Co. 22 Pick. 191 ; Bradhnrst v. Col. Ins. Co. 9 Johns. 9 ; Sturgess V. Cary, 2 Curtis, C. C. 59; Kelson v. Belmont, 5 Duer, 310, 322; Lee v. Grinnell, 5 Duer, 400. [408] CH. XVII.J THE LAAV OF SHIPPING. *372 first repair, which was of no further use than to make the per- manent repair possible, is to be contributed for by ship, freight, and cargo. 1 If a ship put into a port for necessary repair, and receive it, and the voyage is by reason thereof successfully prosecuted, the wagea and provisions of the crew, from the time of putting away for the port, the expense of loading and unloading, and every * other necessary expense arising from this need of repair, seems, by the best authority, to be an average. Nor do we, in this country, refuse an average where the repair was made nec- essary by a common sea peril, and allow one where the repair was required by a voluntary loss, as the cutting away of a mast, or the like.^ ^ In Brooks v. Oriental Ins. Co. 7 Pick. 259, the vessel received repairs at Balize, to enable her to complete her voyage. They were charged to the general average. Put- nam, J., said : " As to the third question, it is contended for the defendants that the temporary repairs should be charged to general average ; and we arc referred to Plum- mer v. Wildman, 3 Maule & Selwyn, 482, which, in several particulars, resembles the case at bar. The ship had been mn foul of, and so much damaged as to malvc it nec- essary to return to her port to repair, to enable her to perform the voyage, and she was afterwards completely repaired at the end of the voyage. The expenses uf repairs wliich were made abroad, which were strictly necessary to enable the ship to perform her voy- age, were placed to the account of general average. Bayley, J., doubted whether the repair of a particular damage could be placed to the account of general average, inas- much as it is a benefit done to the ship. The court considered these repairs only under the account of general average, which were absolutely necessary for the enabling of the ship to pursue her voyage ; and all beyond were to "be set down to tlie account of the ship. " Therefore, deducting the benetit, if there be any, which still results to the ship from the repair, the rest may be placed to the account of general average." See Padel- ford V. Boardman, 4 Mass. 548, where it was held that repairs generally do not go to the account of general average. See also, Jackson v. Charnock, 8 T. R. 509 ; Eoss V. Ship Active, 2 Wash. C. C. 226. In the case of Plummer v. Wildman, cited above, the injury on account of which the vessel was obliged to seek the port of refuge, was itself the subject of general average, and that may have influenced the decision under the principles adopted in the English cases, but in this country, no distinction appears to rest upon that fact. But see Hassam v. St. Louis Pei-pet. Ins. Co. 7 La. Ann. 11 ; Sparks v. Kittredge, U. S. D. C. Mass., 9 Law Reporter, 318. 2 The eases of Power v. Whitmore, 4 M. & S. 141, and of Plummer v. Wildman, 3 M. & S. 482, seem to have left this question in some doubt in England. The most satisfactory rule which can be deduced from them, appears to be this : —If the in- jury which led the vessel to seek a port of refuge, was itself a subject for general aver- age, then the wages and provisions of the crew, and other expenses during the deten- tion, will give a claim for contribution ; but if the injury did not give a claim for contribution, the expenses and wages, and provisions of the crew will not. Sec Hallett V. Wigram, 9 C. B. 580 ; De Vaux v. Salvador, 4 A. & E. 420. But see 3 Kent, Com. 235, where a different rule is deduced from these cases. But if the crew are discharged and tlien hired as common laborers, their wages are the subject of a general average contribution. Da Costa v. Newnham, 2 T. R. 407. In America, it seems to be well settled, that the wages and provisions of the crew, and other expenses, from the time a vessel leaves its course to seek a port of refuge, are to be contributed for. Padelford v. Boardman, 4 Mass. 548 ; Walden v. Le Roy, 2 Caines, 263 ; Barker v. Phcenix Ins. Co. 8 Johns. 307; Dunham i-. Cora. Ins. Co. 11 Johns. 315 ; Jones v. Ins. Co. of N. 35 [409] 372- ELEMENTS OF MERCANTILE LAW. [CH. XVII. As to the expenses, wages, &c., during a capture, or a deten- tion by embargo, it is not quite certain what the rule is. We should prefer to limit the claim for contribution to those ex- penses which Avere necessarily and successfully incurred in sav- ing or liberating the property.' The loss or sacrifice must be necessary, or justified by a rea- sonable probability of its necessity and utility.^ In former times the law merchant guarded with much care against wanton and unnecessary loss, by requiring that the master should formally consult his officers and crew, and obtain their consent before making a jettison.^ But this rule has passed away, and the practice is almost unknown.* And it has been held that where A. 4 Dall. 246 ; Brooks v. f )iient;il Ins. Co. 7 Pick. 259 ; Thornton v. U. S. Ins. Co. 3 Fairf. 150; Potter v. Ocean Ins. Co. 3 Sumn. 27 ; Giles v. Eagle Ins. Co. 2 Met. 140; Greely v. Tremont Ins. Co. 9 Cush. 415, 421. But see Wiglitman v. Macadam, 2 Brcv. 230 ; Union Bank of South Carolina v. Union Ins. Co. Dudley, S. Car. 171 ; Perry v. Ohio Ins. Co. 5 Ohio, 306. 1 M'Bride o. Mar. Ins. Co. 7 Johns. 431 ; Penny v. N. Y. Ins. Co. 3 Caines, 155. The doctrine of the text was also sustained, after much discussion, in Spafford v. Dodge, 14 Mass. 66. The vessel ^■^•as detained as a prize several months. A contribmion was claimed for the wages and provisions of the crew during the detention. Jackson, J., in delivering the opinion of the court, said : "As to the wages and provisions of the crew during the detention, we are unable, notwithstanding tlie very respectable authorities cited in support of this claim, to see any ground upon which wo can allow it, consist- ently witli the established principles on this subject, and tlie course of decisions in this State. The only case in which the cliarge has been allowed, in an account of general average, in our courts, was wlien it was necessary to go into port to repair damages sustained during the \'uyage, from the perils of the sea ; and the master, for that reason, voluntarily sought a port to refit. Here, it is to be observed, the delay was voluntarily incmTed by the master ; the mind and agency of man were employed in producing it ; and this circumstance is deemed essential in every case of general average, in contradis- tinction to sueli unavoidable detentions and losses, as arise from accident beyond the control of the master. We see no ground of distinction, in this respect, between a temporary detention occasioned by a hostile seizure, and one which is occasioned by an embargo, or by a tempest, or other common peril of the sea. . . . The ship-owner might as well claim a contrilnttion for the wear and tear of his ship during the deten- tion, or the owner of the cargo for the interest of his money, for the deterioration of his merchandise, or for the loss of a market by the delay, as the owner of the fi-eight for the extraordinary wages and pro\isions expended on such an occasion." It seems difficult to resist the force of this reasoning. But there are earlier cases in which con- trary decisions have been made. Jones v. Ins. Co. of N. A. 4 Dall. 246, s. c. Ins. Co. of N. A. V. Jones, 2 Binn. 547 ; Leavenworth v. Delafield, 1 Caines, 573. See Walden V. Le Roy, 2 Am. Lead. Cas. 404, where this question is considered ■with care. 2 The Gratitudine, 3 Bob. Adm. 240, 258. The authority of the master to judge of this necessity is very great, and if he exercises it with reasonable care and discretion, the law considers the act done for tlie good of all, and contribution is allowed. Law- rence V. Mintm-n, 17 How. 100, 110. But see Myers v. Baymore, 10 Barr, 114, 118. But if there is a want of proper care or skill, Bentley v. Bustard, 16 B. Mon. 643, or if the vessel is unseaworthy, the vessel is liable for the loss. Dupont de Nemom-s v. Vance, 19 How. 162, 166; Chamberlain v. Reed, 13 Maine, 357. '^ See authorities cited in Emerigon, ch. xii. § xl., Meredith's Ed. p. 469, 470, and in The Nimrod, Ware, 9. * Birkley v. Presgrave, 1 East, 220, 228 ; Sims o. Gurnev, 4 Binn. 513 ; Col. Ins. [410] CH. XVII.J THE LAW OF SHIPPING. *373 a consultation is had, this merely proves that the jettison was deliberately made, but it does not prove the necessity of it.^ In regard to the rules or principles for estimating the contrib- utory interests, how — that is to say, the value of the ship, or of * the freight, or of the cargo, is to be ascertained, — it is to be regretted that we have nothing like uniformity in the usages of different parts of this country. Perhaps this cannot be deter- mined in any better way than by an arbitrary rule, or estimate ; but there are many such rules in the law of insurance and ship- ping ; and we believe it would be well if the rules applied by the courts in Nca^ York (which are stated in our notes), should be generally received. If any one place should have the right and authority of a commercial metropolis, it would seem to be that, where the greater extent of commerce brings up such ques- tions most frequently, and where the practical bearing of any rule is likely to be best illustrated.^ Co. V. Ashby, 13 Pet. 331, 343 ; Nimick v. Holmes, 25 Penn. State, 266, 372. The erew, however, have generally no authority to make a jettison without the master's or- ders. The Nimrod, Ware, 9, 15. 1 Bentley v. Bustard, 16 B. Mon. 643, 695. ^ The contributory value of the ship was held in some eases to be her value at the commencement of the voyage, deducting one fifth for supposed deterioration. Leaven- worth V. Delaficld, 1 Caines, 573 ; Gray v. Wain, 2 S. & R. 229. But this rule never has been adopted in Massachusetts. SpafFord v. Dodge, 14 Mass. 66 ; Douglas v. Moody, 9 Mass. 548. And it seems not to have been applied in a late case in Now York. In Mutual Safety Ins. Co. v. Cargo of Ship George, Olcott, Adm. 157, the value at the port of departure, deducting the actual wear and tear, was held her contributory value. See also, Bell v. Smith, 2 Johns. 98. But in cases of jettison of goods, where the vessel amves in safety, the rule adopted, both in England and generally in this country, seems to be to take the value at the end of the voyage. 3 Kent, 243 ; Abbott on Ship. (8th Eng. ed.), 503. Where masts, sails, or cables, or other parts of the equipment of a ship are lost, one third is deducted from the cost of the new articles, and the remain- der is contributed for. Strong v. Firemen Ins. Co. 11 Johns. 323; 3 Kent, 243. The freight pending contributes, after deducting the expenses of earning it. Williams V. London Ass. Co. 1 M. & S. 318. But if only pro rata freight is earned, that only contributes. Maggrath v. Church, 1 Caines, 196 ; The Nathaniel Hooper, 3 Sumner, 542. If no freight is eventually earned, there is no contribution on account of it. Potter V. Washington Ins. Co. 4 Mason, 298 ; Tudor v. Macomber, 14 Pick. 34. In Massachusetts, and generally in the United States, one third is deducted from the gross freight for seamens' wages and other expenses. Humphreys v. Union Ins. Co. 3 Mason, 439, per Slory, J. But in New York, the rule seems to be to deduct one half. Leaven- worth V. Delafield, 1 Caines, 873 ; Heyliger v. N. Y. Piremen Ins. Co. 11 Johns. 85. If a vessel is wrecked and the cargo transshipped, the contributory value of the freight is the excess of its amount over the amount paid the other vessel. Searle v. Scovell, 4 Johns. Ch. 218 ; Dodge v. Union Ins. Co. 17 Mass. 471. The cargo, if the vessel ar- rives at the port of destination, contributes its net value at that place. Barnard v. Adams, 10 How. 270. But, if a jettison takes place, and the vessel returns to the port of departure, or some neighboring port, then the invoice price is to be taken, or the market value at that place. Tudor v. Macomber, 14 Pick. 84 ; Mutual Safety Ins. Co. V. Cargo of Ship George, Olcott, Adm. 157. In Tudor v. Macomber, a cargo of ice was shipped from Boston to Charleston, S. C. The vessel ran ashore on Cape Cod, [411] 374 ELEMENTS OF MERCANTILE LAW. [CH. XVII. It is the master's duty to have an average adjustment made at the first port of delivery at which he arrives. And an adjust- ment made there, and especially if this be a foreign port, is gen- erally held to be conclusive upon all parties.^ For the purpose of this rule, our States it would seem are foreign to each other ; as they are indeed for most purposes under the Law of Admi- ralty, or the Law of Shipping.^ And we should prefer to state the rule to be that an adjustment, when properly made accord- ing to the law of the port where it is made, is binding every- where. But a foreign adjustment might doubtless be set aside or corrected, for fraud or gross error ; and our courts differ somewhat in the degree in which they regard it as conclusive.-' It is universally admitted that the master has the right of re- fusing delivery of the goods, until the contribution due from them on general average, is paid to him. That is, he cannot hold the whole cargo, if it belong to different consignees, until the Avhole average is paid ; but he may hold all that belongs to each con- signee, until all that is due from that consignee is paid.* And in the ice was thrown overboard to save her from destruction, and the voyage was broken up. As no freight was earned, no contribution was made on account of it. The value of the ice was taken as stated in the bill of lading, there being no invoice. Putnam, J., said : " If the goods had arrived at the port of destination in safety, the owner would have realized the price there. He suffers just so much loss as was caused by the jettison, whicli could be there accurately estimated. And the freight would then be brought into the contribution. But when, as in the case at bar, the voyage is broken up near the port of departure, and the vessel has not adopted an intei-mediate port as and for the port of destination, but lias returned home, and the freight has not been saved by the jetti.'.on, the contribution to the general average loss should be between the ship and the cargo, upon the assumed value of the cargo at the port of departure. This, we think, furnishes an e.Kact rule ; whereas tiie adopting the value at the port of destin- ation ivould, in such a case, be uncertain, — depending upon matters of opinion instead of matters of certainty." ' Strong V. Firemen Ins. Co. 11 Johns. 323; Simonds v. White, 2 B. & C. 806; Peters i\ Warren Ins. Co. 1 Story, 463 ; Dcpau v. Ocean Ins. Co. 5 Cowen, 63 ; Loring V. Neptune Ins. Co. 20 Pick. 411 ; Thornton v. U. S. Ins. Co. 3 Faiif. 153. In deliv- ering the opinion in Simonds v. Wiiite, Abbott, C. J., said : " The shipper of goods, tacitly, if not expressly assents to genenil average, as a known maritime usage, which may, according to the events of the voyage, be either beneficial or disadvantageous to him. And by assenting to general average, he must be understood also to assent to its adjustment, and to its adjustment at the usual and proper place ; and to all tliis it seems to lis, to be only an obvious consequence to add, tliat he must be understood to consent also to its adj^.^tnK■nt according to the usage and law of the place at which the adjust- ment is to be made." 2 Lewis V. Williams, 1 Hall, 430. 3 The extract above from the opinion of Abbott, C. J., in Simonds v. White, places the binding force of a foreign adjustment upon the implied contract to agree to it. This ground seems to bo unobjectionable, as it leaves the adjustment open to attacks on ac- count either of fraud or mistake. * United States v. Wilder, 3 Sumner, 308 ; Chamberlain v. Reed, 13 Maine, 357 ; [412] CH. XVII.] THE LAW OF SHIPPING. •375 this country the doctrine has been carried so far, that the master may retain property belonging to the United States, until the average contribution due upon it has been paid.i As the purpose of average and contribution is to divide the loss proportionably over all the property saved by it, the whole amount which any one loses is not made up to him, but only so much as will make his loss the same per centage as every other party suffers. Thus, if there be four shippers, and each has on board $5,000, and the ship is worth (for the purpose of the adjustment) $15,000, and the freight ^5,000, and all the goods of one shipper are thrown over ; now the whole contributing interest * is $40,000, and the loss is one eighth of this. The ship- per whose goods are jettisoned therefore loses one eighth of his goods, and the remaining seven eighths are made up to him, by each owner of property saved giving up one eighth. There are usually in every commercial place, persons whose business it is to make up adjustments. As the losses usually consist of many items, some of which are general average and some rest on the different interests on which they fall, and as the contributory interests must all be enumerated, and the value of each ascertained according to the general principles of law, qualified, perhaps, by the local law or usage of the port, and then the average struck on all these items, it is obvious that this must be a calculation requiring great care and skiU. And as the ad- justment affects materially persons who may not be present, but specially represented, — for all these reasons only those who are known to be competent to the work should be employed to make this adjustment. The name given to such persons in France is depacheur, and this name is frequently used in other countries. Eckford V. Wood, 5 Ala. 136 ; Simonds v. White, 2 B. & C. 805 ; Scaife v. Tobin, 3 B. & Ad. 523 ; The HofFnung, 6 Rob. Adm, 383. I United States v. Wilder, supra. 35 * [ 413 ] 376* ELEMENTS OF MERCANTILE LAW. [CH. XVII. SECTION IX. OF THE NAVIGATIOX OF THE SHIP. 1. Of the poivers and duties of the master. — The master has the whole care and the supreme command of his vessel, and his duties are coequal with his authority .^ He must see to every thing that respects her condition ; including her repair, supply, loading, navigation, and unloading. He is principally the agent of the owner ; but is, to a certain extent, the agent of the ship- per, and of the insurer, and of all who are interested in the property under his charge. Much of his authority as agent of the owner, springs from necessity. He may even sell the ship, in a case of extreme necessity ; so he may make a bottomry bond which shall pledge her for a debt ; so he may charter her for a voyage or a term of time ; so he may raise money for repairs, or incur a debt there- for, and make his owners liable. All these, however, he can do only from necessity.^ If the owner be present, in person or by his * agent, or is within easy access, the master has no power to do any of these things. If he does them in the home port, the owner is liable only where by some act or words he ratifies or 1 See Propeller Niagara v. Cordes, 21 How. 7. 2 " The authority of the master of a ship is very large, and extends to all acts that are usual and necessary for the use and enjoyment of the ship ; but is subject to several well-linown limitations. He may make contracts for the hire of the ship, but cannot vary that which the owner has made. He may take up money in foreign ports, and, under certain circumstances, at liome for necessarj- disbursements, and for repairs, and bind the owner for repayment ; but his authority is limited by the necessity of the case, and he cannot make them responsible for money not actually necessary for those pur- poses, altliough he may pretend that it is. He may make contracts to carry goods on freight, but cannot bind his owners by a contract to carry freight free. So, with regard to goods put on board, he may sign a bill of lading, and acknowledge the nature and quality and condition of the goods. Constant usage shows that masters have that gen- eral authority ; and if a more limited one is given, a party not informed of it is not af- fected by such limitation. The master is a general agent to perform all things relating to the usual employment of his ship ; and the authority of such an agent to peiform all tilings usual in the line of business in which he tvas employed, cannot be limited by any pri- vate order or direction not known to the party dealing with him." Smith's Merc. Law, 59. Per Jervis, C. J., in Grant v. Norway, 10 C. B. 665, 687 ; 2 Eng. L. & Eq. 337. In that case it was hdd that a master has no authority to sign a bill of lading for goods which had never been shipped. See also. Gen. Int. Ins. Co. v. Euggles, 12 Wheat. 408. [4U] CH. XVII.] THE LAW OF SHIPPING. -376 adopts the act of his master.^ If in a foreign port, even if the owner were there, he may be liable on his master's contracts of this kind, to those who neither knew, nor had the means of knowing, that the master's power was superseded or qualified by the presence of the owner.^ Beyond the ordinary extent of his power, which is limited to the care and navigation of the ship, he can go, as we have said, only from necessity. But this necessity must be greater for some purposes than for others. Thus he can sell the ship only in a case of extreme and urgent necessity ; that is, only when it seems in all reason impossible to save her, and a sale is the only way of preserving for the owners or insurers any part of her value.3 We say " seems ; " for if such is the appearance at the 1 In The Schooner Tribune, 3 Sumner, 144, the master of a vessel made a charter- party at the home port. It was hdd, under the circumstances, to be binding on the owners. Story, J., said : " As to the right to make such a contract in the home port of the owners, I agree that it cannot be ordinarily presumed from his character as master. It is not incident to his general authority ; nor can it be presumed, under such circum- stances, as an ordinary superadded agency. But there are peculiar circumstances, how- ever, in the present case, which do create some presumption of superadded agency. In the first place, such has been his authority in the former voyages of the vessel ; and such seems also to have been his authority under her subsequent employment. And I think it might fairly be presumed, that in the home port he would scarcely have had the rashness to make so important and definitive a contract without some authority." 2 In Ward v. Green, 6 Covven, 173, it was held, that the mere fact that an owner was on board as supercargo, did not free him from liability on contracts respecting freightj made by the master in a foreign port. Tlie owner must show that he alone attended to the shipment of the cargo. ^ Many cases have been decided upon the question what circumstances will justify a sale of a ship by the master. All the cases admit that it is not sufficient that the sale was bond fide and intended for the benefit of all concerned ; it must have been neces- sary. "We can find no better account of the circumstances, which will create such a necessity than the following by Tindal, C. J., in Somes v. Sugrue, 4 Car. & F. 276. " A great deal has been said about the word necessity. Undoubtedly, it is not to be confined to, or so strictly taken as it is in its ordinary acceptation. There can, in such a case, be neither a legal necessity nor a physical necessity, and therefore it must mean a moral necessity ; and the question will be, whether the circumstances were such that a person of prudent and sound mind could have no doubt as to the course he ought to pursue. The point principally for consideration will bo, the expenditure necessary to put the ship into a, condition to bring home her cargo ; the means of performing the repairs, and the comparison between those two things and the subject-matter which was at stake ; and it must not be a mere measuring cast, not a matter of doubt in the mind, whether the expense would or would not have exceeded the value ; but it must be so preponderating an excess of expense, that no reasonable man could doubt as to the propriety of selling under the circumstances instead of repairing A captain has no power to sell, except from necessity, considered as an impulse, acting morally, to excuse his departure from the original duty cast upon him of navigating and bringing back the vessel. If he has no means of getting the repairs done in the place where the injury occurs ; or if, being in a place where they might be done, he has no money in his possession, and is not able to raise any, then he is justified in selling, as the best thing that can be done." The leading English cases in which this question has been discussed, are Idle v. Royal Exch. Ass. Co. 8 Taunt. 755 ; Hayman v. Molton, 5 Esp. 65 ; Reid v. Darby, 10 East, 144 ; Robertson v. Clarke, 1 Bing. 445 ; Read v. Bonham, [416] 377-378* ELEMENTS OF MERCANTILE LAW. [CH. XVII. time, when all existing circumstances are carefully considered and weighed, the sale is not void for want of authority, if some accident, or cause which could not be anticipated, as a sudden change in the wind or sea, enables the purchaser to save her easily.^ So to pledge her by bottomry ; there must be a stringent and sufficient necessity, but it may be far less than is required to au- thorize a sale. It is enough if the money is really needed for * the safety of the ship, and cannot otherwise be raised, or not without great waste.^ 3 Bi-od. & B. 147 ; Hunter v. Parker, 7 M. & W. 322 ; Ireland y. Thompson, 4 C. B. 149 ; The Catherine, 1 Eng. L. & Eq. 681. The principal American cases are, Gor- don V. Mass. E. & M. Ins. Co. 2 Pick. 249 ; Tlie Schooner Tilton, 5 Mason, 465, 475 ; American Ins. Co. o. Center, 4 Wend. 45, 7 Cowen, 564; Tlie Ship Eortitude, 3 Sumner, 254; Patapsco Ins. Co. v. Southgate, 5 Pet. 604; American Ins. Co. e. Og- den, 15 Wend. 532; Winn v. Columbian Ins. Co. 12 Pick. 285; Robinson v. Com- monwealth Ins. Co. 3 Sumner, 220; New England Ins. Co. v. The Sarah Ann, 13 Put. 387. If the circumstances are such as will admit of delay to consult the owners, the muster cannot sell. New England Ins. Co. c. The Brig Sarah Ann, 13 Pet. 387 ; The Brig Sarah Ann, 2 Sumner, 215; Scull v. Briddle, 2 Wash. C. C. 150; Hall v. Franklin Ins. Co. 9 Pick, 466 ; Peirce v. Ocean Ins. Co. 18 Pick. 83 ; Post v. Jones, 19 How. 150 ; Pike v. Balch, 38 Maine, 302. 1 The Brig Sarah Ann, 2 Sumner, 215 ; s. c. 13 Pet. 387 ; Fontaine v. Phcenix Ins. Co. 11 Johns. 293. In the case of The Brig Sarah Ann, the vessel had run upon the shore at Nantucket. She was stripped of her rigging, and then sold for S127. The sale by the master was held to be valid, although the vessel was gotten off by the pur- chasers, and repaired at a cost considerably less than her value when repaired. Story, J., said : " The fact that the brig was actually gotten off by the purchasers after the sale, is certainly a strong circumstance against the necessity of the sale. But it is by no means decisive ; for we are not, in cases of this sort, to judge by the event, — for a vessel may be apparently in a desperate situation, and yet by some lucky accident, or unexpected concurrence of fortunate circumstances, she may be delivered from her peril. We must look to the state of things as it was at the time of the sale ; and weigh all the circumstances, — the position and exposure of the brig; season of the year; the dangers from storms ; the expense of any attempts to get her off; the probable chances of success ; and the necessity of immediate action on the part of the master, one way or the other." •■' The Ship Fortitude, 3 Sumner, 228 ; The Ship Virgin, 8 Pet. 538 ; The Nelson, 1 Hagg. Adm. 169. In The Ship Fortitude, Story, J., said; "In relation to what are necessary repairs in tlie sense of tire law, for whicli the master may lawfully bind the owner of the ship, I have not been able, after a pretty thorough search into the authori- ties and text writers, ancient and modem, to find it anywhere laid down in direct or peremptory terms, that they are such repairs, and such repairs only, as arc absolutely indispensable for the safety of the ship or the voyage, — or that there must be an ex- treme necessity, an invincible distress, or a positive urgent incapacity, to justify the master in making the repairs. . . . But a thorough examination of the common text writers, ancient as well as modern, will, as I think, satisfactorily show, that they have all understood the language in a very mitigated sense ; and that necessary repairs mean such as are reasonably fit and proper for the ship under the circumstances and not merely such as are absolutely indispensable for the safety of the ship, or the accom- pUshment of the voyage." To authorize the master to give a bottomry bond, not onJy must the repairs be necessary in the sense of the word taken in the above extract, but it must appear that the funds for making tliem could not have been obtained on the credit of the owner alone. The Aurora, 1 Wheat. 96 ; The Randolph, Gilpin, 459. [416] CH. XVir.] THE LAW OF SHIPPING. -378 So, to charter the ship, there must be a sufficient necessity, unless the master has express power to do this. But the neces- sity for this act may be only a mercantile necessity ; or in other words, a certain and considerable mercantile expediency.^ So, to bind the owners to expense for repairs or supplies, there must also be a necessity for them. But here it is suffi- cient if the repairs or supplies are such as the condition of the vessel, and the safe and comfortable prosecution of the voyage, render proper.^ Where the master borrows money, and the lender sues the owner, great stress is sometimes laid upon the question whether the captain was obliged to pay the money down. But we do not see in principle any great difference be- tween incurring a debt for service or materials which the owner must pay, or incurring the same debt for money borrowed and applied to pay for the service or materials.^ See ante, p. 341, n. 6, and Reade v. Com. Ins. Co. -3 Johns. 352 ; Fontaine v. Col. Ins. Co. 9 Johns. 29 ; Walden ;;. Chamberlain, 3 Wash. C. C. 290 ; The Brig Hunter, Ware, 249 ; The Packet, 3 Mason, 255 ; The Gratitudine, 3 Eob. Adm. 240 ; The Hannah, Bee, 348. 1 HuiTy V. Hurry, 2 Wash. C. C. 145 ; The Schooner Tribune, 3 Sumner, 144 ; Ward V. Green, 6 Cowen, 173. In Hurry v. Hurry, it was held, that the master has a general authority to charter a vessel in a foreign port, if the owner has no agent there. But this must be taken with the limitation that chartering the vessel would be consis- tent with her usual course of employment. 2 The Aurora, 1 Wheat. 102 ; The Ship Fortitude, 3 Sumner, 228, 236 ; Milward v. Hallett, 2 Caines, 77 ; Eocher v. Busher, 1 Stark. 27 ; James v. Bixby, 11 Mass. 37. ^ See ante, note 1, as to how necessary the supplies must be. If necessary, the mas- ter may borrow money for supplies, repairs, or for aiiy other purpose connected with the navigation of the ship. In Beldon v. Campbell, 6 Exch. 886, 6 Eng. L. & Eq. 473, Parke, B., said : " In this case the point reserved for the consideration of the court was, whether the owner of a vessel who resided at Newport, was liable to the plaintiff, a merchant at Newcastle (which is within one day's post of Newport), for a sum of money which had been bon'owed by the master of the defendant's ship at Newcastle, for the purpose of paying a debt contracted for towing a vessel by steam-tug into port, and also for a sum paid on Saturday to a master carpenter, who had been employed to repair the vessel. We are of opinion that a nonsuit must be entered. There is no doubt of the power of the master by law (but some as to what extent it goes) to bind the owner. The master is appointed for the purpose of conducting the navigation of the ship to a favorable termination, and he has, as incident to that employment, a right to bind the owner for all that is necessary, — that is upon the legal maxim — quando aliquid mandatur, mandatur et omne per quod pervenitur ad illud. Consequently the mas- ter has perfect authority to bind his principal, the owner, as to all repairs, necessary for the purpose of bringing the ship to her port of destination ; and he has also power, as incidental to his appointment, to borrow money, but only in cases where ready money is necessary, — that is to say, when certain payments must be made in the course of the voyage, and for which ready money is required. An instance of this is the payment of port dues, which are required to be paid in cash, or lights, or any dues which require immediate cash payments. So also, in the case referred to in the course of the argument, where, a ship being at the termination of one voyage, and about to proceed on another, money borrowed to pay the wages of seamen, who would not go on the second voyage without being paid, was considered necessary. Eobinson v. LyaU, [417] 379-380* ELEMENTS OP MERCANTILE LAW. [CH. XVn. So the master, — unlike other agents, who have generally no power of delegation, — may substitute another for himself, to discharge all his duties, and possess all his authority, if he is unable to discharge his own duties, and therefore the safety of the ship and property calls for this substitution.^ Generally, the master has nothing to do with the cargo be- tween the lading and the delivery. But, if the necessity arises, he may sell the cargo, or a part of it, at an intermediate port, if * he cannot carry it on or transmit it, and it must perish before he can receive specific orders.^ So, he may sell it, or a part, or 7 Price, 592. But these instances do not apply when the owner of the vessel is so near the spot as to be conveniently communicated with. In that case, before the master has any right to make the owner a debtor to a third person, he must consult him, and see whether he is willing to be made a debtor, or whether he will refuse to pay the money. It appears to us that there are two objections to the plaintiff's recovering cither the one sum or the other. With respect to the money borrowed for the purpose of paying the steam-tug, it appears that the vessel was off' the port of Newcastle, which was its ulti- mate port of destination, at the time when the assistance of the steam-tug was neces- sary in order to tow the vessel into the river Tyne, and the owner of the steam-tug did not object to tow the vessel witliout previous payment. If the owner of the steam-tug had said, ' I will not tow you in unless you will actually pay the money down,' then it would have been necessary for the master to have borrowed the money for that pur- pose. It conld not be expected that he would wait at the mouth of the harbor, where it would have been impossible for him to have communicated with the owner at New- port, a great distance off, in order to ascertain whether he should bon-ow the money or not. In this case, however, the owner of the steam-tug did not make any such stipu- lation ; but the vessel w^is towed into Newcastle, and the money was not paid until after several days had elapsed, during whicli it was perfectly competent for the master to have written to Newport (which was only a day's post, as' it happened), and got an answer from the owner of the vessel. Instead of that, he goes, four or five days after- wards, and borrows money from the plaintiff, for the purpose of paying this debt to the owner of the steam-tug, — a debt for which the owner of the vessel was liable, because it was within the province of the master to employ the steam-vessel. AVe think that under these circumstances, that the master had no power to borrow money in order to pay a debt for which the owner of the vessel was already responsible by the original contract, and still less to borrow that money without consulting the owner." It was held in Arthur v. Barton, 6 M. & W. 138, and in Johns ;;. Simons, 2 Q. B. 425, that, if a master cannot communicate with the owner without great delay, he may borrow, al- though in a home port. See also, Selden i\ Hendrickson, 1 Brock. 396. 1 1 Bell's Com. 413. See also, The Alexander, 1 Dods. Adm. 278, where a new master was appointed by tlie consignees. 2 Bryant v. Commonwealth Ins. Co. 13 Pick. 543 ; Prceman v. East India Co. 5 B. & Aid. 619; Morris v. Robinson, 3 B. & C. 196; Cannan v. Meaburn, 1 Bing. 243; Smith V. Martin, 6 Binn. 262 ; Pope u. Nickerson, 3 Story, 465 ; Jordan v. AVarren Ins. Co. 1 Story, 342; Saltus v. Ocean Ins. Co. 12 Johns. 107; The Ship Packet, 3 Mason, 255 ; Dodge v. Union Mar. Ins. Co. 17 Mass. 471. In Bryant v. CJommon- wcalth Ins. Co. 13 Pick. 543, 553, Putnam, J., said : "In American Ins. Co. u. Center, 4 Wend. 52 (Cases in Error), 'the master is not authorized to sell the ship or cargo, except in a case of absolute necessity, when he is not in a situation to consult with the owner, and when the preservation of the ])roperty makes it necessary for him to act as agent for whom it may concern.' " Per the Chancellor. Abbott on Ship. (4th Amer. cd.), 241 : "Tiro disposal of the cargo by the master, is a matter that requires the utmost caution on his part. He should always bear in mind that it is his duty to con- vey it to the place of destination, by every reasonable and practicable method." Id. 243 : " Transsliipment for the place of destination, if it be practicable, is the first object, [418] CH. XVII.] THE LAW OF SHIPPING. *3R1 pledge (or hypothecate) it, by means of a respondentia bond, in order to raise money for the common beneiif^ A bond of respondentia is much the same thing as to the cargo, that a bot- tomry bond is as to the ship. Money is borrowed by it, at mar- itime interest, on maritime risk, the debt to be discharged by a loss of the goods.2 But it can be made by the master only on even a stronger necessity than that required for bottomry ; only when he can raise no money by bills on the owner, nor by a bot- tomry of the ship, nor by any other use of the property, or credit of the owner.^ ' The general remark may be made, that a master has no ordi- nary power, and can hardly derive any extraordinary power even from any necessity, except for those things which are fairly within the scope of his business as master, and during his em- ployment as master. Beyond this, he has no agency or authority that is not expressly given him.* because that is in furtlierance of the original purpose." ..." The merchant should be consulted, if possible. A sale is the last thing that the master should think of, because it can only be justified by that necessity which supersedes all human laws. If he sell without necessity, the persons who buy, under such circumstances, will not acquire a title as against the merchant, but must answer to him for the value of the goods." The learned editor remarks, in note 1 : " When a ship is driven out of her course by stress of weatlier, the charge of the cargo devolves on the master, whose duty it is to take care of it. In such case, he has power to sell goods which are perishable or damaged. But he has no right to sell goods, which are in good condition and not perishable, with- out the orders of the owners, to whom he is bound to give immediate infoi-mation." See ante, p. 376, n. 3, on sale of ship by the master. 1 The Gratitudine, 3 Rob. Adm. 240; Pope v. Nickerson, 3 Story, 465 ; The Packet, 3 Mason, 255 ; United Ins. Co. v. Scott, 1 Johns. 106 ; Fontaine v. Col. Ins. Co. 9 Johns. 29 ; Searle v. Scovell, 4 Johns. Ch. 222 ; Amer. Ins. Co. v. Coster, 3 Paige, 323 ; Ross v. Ship Active, 2 Wash. C. C. 226. It seems that, when goods are sold by the master, to repair the vessel, it is to be considered as in the nature of a forced loan, for which the owner of the vessel is liable to the shipper, whether the vessel arrive or not. Pope V. Nickerson, 3 Story, 465. '^ See ante, cases on bottomry bonds. But in Franklin Ins. Co. n. Lord, 4 Mason, 248, the respondentia bond was for $10,000, and it contained a clause that the vessel was to have goods to that amount on board. The vessel was lost, with only $9,000 worth of goods on board. Held, that the lenders could recover the difference between the amount lent and the amount on board. 8 The Gratitudine, 3 Rob. Adm. 240; Ross v. The Ship Active, 2 Wash. C. C. 226; The Packet, 3 Mason, 255 ; Hussey v. Christie, 13 Ves. 599 ; U. S. Ins. Co. v. Scott, 1 Johns. 106. In the case of The Gratitudine, this right of the master, in a case of necessity, to give a respondentia bond, was thoroughly considered, in the light both of principle and authority, and the right was firmly established. * The master cannot settle claims against a vessel, which do not accrue while he is master. Kelley v. Merrill, 14 Maine, 228. Or purchase a cargo, unless he has received some authority beyond that implied by his appointment as master. Hewett v. Buck, 17 Maine, 153 ; Lyman v. Redman, 23 Maine, 289. But, if so appointed, he may be the agent of the owners, both to buy and sell cargoes. Peters v. BalUstier, 3 Pick. 495. See also, Merwin v. Shailer, 16 Conn. 489. [419] 382* ELEMENTS OF MERCANTILE LAW. [CH. XVII. The master of a vessel in this couMtry has no lien on the ship for wages/ or for his disbursements.^ But for both of these he has a lien on the freight, according to the best authorities.^ Bat he has no lien for a general account."' If the cargo belongs to the owner of the ship, it has been held that the master has a lien on it for his disbursements.^ The owner is liable also for the wrong doings of the master.^ But, we think, with the limitation which belongs generally to the liability of a principal for the torts of his agent, or of a mas- ter for the torts of his servant. That is, he is liable for any injury done by the master, while acting as master. But not for the wrongful acts which he may do personally, when he is not acting in his capacity of master, although he holds the office at the time. Thus, if, through want of skill or care, while navigat- ing the ship, he runs another down, the owner is liable for the collision.^ * But it has been questioned whether the owners are liable for a wilful collision by the master.^ Nor is the owner 1 The Ship Grand Turk, 1 Paine, C. C. 73 ; Revens v. Lewis, 2 id. 202 ; Fisher v. WUlin^', 8 S. & R. 118; Gardner i\ The New .Jer.-ev, 1 I'ct. Adm. 223; Phillips v. Tlie Thoijiiis ScatterKOod, 11 Pet. 175; WiUanl v. l)orr, 3 Mason, 91; Dudleys. t^te;ullll.lal Superior, U. S. P. C. (Jliio, 3 Am. L. Reg. 622 ; Hopkins v. For^vth, 14 Puiin. State, 34; Richardson v. Whitinu', 18 Pick. ."iSO ; Case v. Wooley, 6 Dana, 17, 22. But if a person is merely called a master, hut is not one in fact, he can proceed ao-aiiist the ship in rem for Iii.s wages. L'Arina v. Brin' Exchange, Bee, Adm. 198. - The Larch, 2 Curtis, C. C. 227; Hopkins u. Forsyth, 14 Penn. State, 34. See also, Gardner v. The Xew .leisey, 1 Pet. Adm. 223, 226 ; Bulgin o. Sloop Rainbow, Bee, Adm. 116 ; The Ship Packet, 3 Ma.son, 233, 263; Steamboat Orleans v. Phojbus, U Pet. 17;'). •' As to the lien for disbursements, see Lane v. Penniman, 4 Mass. 91 ; Lewis v. Han- cock, 11 Jlass. 72 ; Int;ers(.ll r. A'aii Bokkelin, 7 Cinven, 670, 3 Wend. 315; The Ship Packet, 3 Mason, 235; Driiikwater c. Brig Spartan, Ware, 149; Richardson r. Whit- ing, 18 Pick. 5.30. As to tlie lien for freight, see Drinkw.ater v. Brig Spartan, Ware, 149; Rielinnlsun v. Whiting, 18 Pick. 530, 532. In Inger.-oll r. ^'an Bokkelin, the Supreme Court held, 7 Coweii, 670, that the master had a lieu on the freight for wages, but this decision was rcierscd liy the Court of Errors, 5 Wend. 315. * Shaw V. Gookin, 7 N. H. lii. See also, Hodgson v. Butts, 3 Cranch, 140. 'i Newhall ;■. Dunla]!, 14 Maine, 180. li Du.,ai- u. Mui-atroyd, 1 Wash. C. C. 13; Stone v. Ketland, 1 Wash. C. C. 142; Bussy (;. Donaldson, 4 i)all. 206 ; Manro v. Almeida, 10 Wheat. 473 ; Dean v. Angus, Bei'.'Adm. 369; Tiie Karasan, 5 Rob. Adm. 291 ; Nostra Signora de los Dolores, 1 D..ds. 290 ; The Mary, 1 Ma,son, 363. ' The Thames, 5 Roll. Adm. 345 ; The Woodrop Sims, 2 Dodson, 83. 8 The Druid, 1 W. Roh. 391, 6 .lurist, 144; Richmond Turnpike Co. u. Vanderbilt, 1 Hill, 480, 2 Comst. 479. In the case of The Druid, a Danish vessel was passing out of the port of Liverpool, when she «as wilfully injured by the master of a steam-tug, will.) towed her about in a violent nianner, and carried her out of her course, in conse- quence of which she received considerable damage. It was held that the owners of the steam-tug were not liable. But Dr. Liishinglon, in so deciding, commented forcibly upon the hard.ship of the rule which exonerates the owners in such cases, saying : " The general principle of law, that the master is liable for the acts done by his servants in the [420] CH. XVII.] THE LAW OF SHIPPING. -382 liable if the master embezzles goods which he takes on board to fill his own privilege, he to have all the freight and profit.^ Nor for injm-y to, or embezzlement of, goods put clandestinely on board, when the owner is on board and attending to the lading of the ship, and the shipper of the goods knows this, or has no- tice enough to put him on his guard.^ A distinction may be taken between the act of the master towards one to whom the owner owes no more duty than one citizen owes to another, and his act when this duty is increased by reason of a special contract, or an obligation imposed upon him by virtue of his office as carrier. And it would seem that scope of their employment, is not denied, but it is contended, on behalf of the owners of The Druid, that the principle does not apply to this case, and that no such liability exists where the servant, tliough occupied in the affairs of his master generally, has occasioned an injury by his violent, wilful, and malicious conduct. The justness of the reasoning upon which this distinction is founded, is, I must confess, not altogether apparent to my mind ; and if I had been called upon to decide this question upon my own judgment alone, in the absence of any decided cases, I might, perhaps, have felt some difflciilty in arriving at the conclusion to which I am about to come in the present instance. It is consistent with reason and natural justice, that a master should be responsible for the skill and honesty of the agent whom he employs in the management of his business. He selects him, and holds him out to the world as a fit person to be trusted ; and in so doing, to a certain extent, he may be said to contract with the person with whom he deals for the existence of these qualities in his agent. Unless, therefore, the principal was responsible, mankind would have no security or protection in the ordi- nary transaction of their affairs." But, notwithstanding his objections to the nile, he felt bound, by the decided cases, to abide by it. This point was decided the other way in Ralston v. The State Rights, Crabbe, 22, on the authority of a distinction pointed out by Mr. Justice Washington in the case of Dias v. Privateer Revenge, 3 Wash. C. C. 262. See also, Duggins v. Watson, 15 Ark. 118. 1 King II. Lenox, 19 Johns. 235; Boucher v. Lawson, Cas. temp. Hardw. 85, 194. But see Phile v. The Anna, 1 Ball. 197. 2 Walter v. Brewer, 11 Mass. 99; Reynolds v. Toppan, 15 Mass. 370; Ward v. Green, 6 Coweu, 173. The cases cited in this note and the preceding, were decided on the ground that the master was not authorized to contract to carry the goods which were lost, and hence, that the owner was not liable for the breach of the contract. In Wal- ter V. Brewer, the owner was with his vessel at Monte Video, for tlie purpose of taking a cargo for himself, and not intending to take freight for others. The master, without the knowledge of the owner, took on board a few bales of Nutria skins, to carry to Boston. It was in evidence that the bales would not more than fill the ' privilege,' which the masters of vessels, in a case like that, were accustomed to have. The judge, at Nisi Prius, instructed the jury, " That, although the owners of ships were generally liable for the contracts of their masters abroad, touching the ship on the voyage ; yet, as the owner, in this instance, had himself gone in the ship, for the purpose of procuring a cargo, and as the ship was not put up for freight, and as the defendant was not con- sulted respecting this shipment, nor the persons who attended to his business in his absence, but they were taken on board without his knowledge, he was not accountable originally for the safe transportation and delivery of the goods ; but if the jury believed that the defendant knew, before his ship sailed from Monte Video, that these bales had been taken on board by the master, he must be considered as having adopted the act of the master, and as having consented thereto, and so would be accountable." These instructions were hdd to be correct, with the exception that it was not sufficient to charge the owner that he knew that the goods were taken on board, but that he must have " knowledge that the goods were received on board upon freight." 36 [421] 382- ELEMENTS OF MERCANTILE LAW. [CH. XVII. the owner is liable for the wilful tort of his servant, if it was committed while in his employ, and in the management of the conveyance under his control, although the wrong was done in direct opposition to the express commands of the owner.^ For any misdeed of the master, for which the owner is liable, his liability is limited in this country, as well as in many others, and also in one or two of our own States, to the value of the ship and freight.^ SECTION X. OF COLLISIOX. The general rules in this country in respect to collision should be stated here. The party in fault suffers his own loss, and compensates the other party for what loss he may sustain.^ If neither be in fault, that is, where the loss is caused by inevitable accident, the loss rests where it falls.* If both are in fault, the loss rests where it falls by the rules of the common law,^ but is equally divided in Admiralty.^ It has been held that this rule does not apply where the faults of the parties are egregiously unequal,' or where both parties are wilfully in fault.^ We think 1 Weed V. Panama Railroad Co. 5 Duer, 193, 17 N. Y. 362 ; Philadelphia and Read- ing Railroad Co. v. Derby, 14 How. 468. 2 RcY. Stats. Mas.s. c, 32 ; Rev. Stats. Maine, c. 47 ; Rev. Stats. Maine, 1857, c. 36, 4 35. See Pope v. Nickcrson, 3 Story, 405 ; The Rebecca, AVarc, 188 ; Stinson v. Wy- man, Davcis, 172. In 1851, an act was pas.scd by Congress (c. 43, 9 U. S. Stats, at Large, 635), to limit the liability of ship-owner.s. This act has been much considered by the courts, but the true construction of it is not vet entirely settled. Sec Wattson v. Marks, U. S. D. C. Penn., 2 Am. Law Re<;-. 157 ;' In re Sinclair, U. S. D. C. South Carolina, 8 Am. Law Reg. 208; Allen v. iNIackay, U. S. D. C. Mass., 16 Law Rep. 686 ; Moore c. American Transp. Co. 5 Mich. 368, affirmed on appeal to XJ. S. Su- preme Court, Dec. T. 1860 ; Walker v. Boston Ins. Co., Sup. Jud. Ct. Mass., Jan. T. 1860, 23 Law Reporter, 603 ; Spring v. Haskell, Same Court, 23 Law Reporter, 661. 8 The Scioto, Davcis, 359 ; The Woodrop Sims, 2 Dods. 83 ; and cases infra, generally. * The Woodrop Sims, 2 Dods. 83 ; Jameson v. Drinkald, 12 Moore, 148 ; The Ebenezer, 2 W. Rob. 206 ; Stainback v. Rae, 14 How. 532 ; The Lochlibo, 3 W. Rob. 310, 318, 1 Eng. L. & Etp 651 ; Stevens u. Steamboat S. W. Downs, 1 Newb. Adm. 458. 5 Luxford V. Large, 5 Car. & P. 421 ; Dowell v. Gen. Steam Nav. Co. 5 Ellis & B. 195, 32 Eng. L. & Eq. 158 ; Simpson v. Hand, 6 Whart. 311 ; Barnes r. Cole, 21 Wend. 188. e Vaux V. Sheffer, 8 Moore, P. C. 75 ; The Victoria, 3 W. Rob. 49 ; The Scioto, Daveis, 359; Sch. Catherine v. Dickinson, 17 How. 170, 177; Rogers !■. Steamer St. Charles, 19 How. 108. ' Ralston v. The State Rights, Crabbe, 22. 8 Stiirnes V. Murphy, U. S. C. C. New York, 1857. See Sturgis ;•. Clough, 21 How. 451. [422] CH. XVII.] THE LAW OF SHIPPING. 383 the rule of equal apportionment should be applied where the fault is inscrutable, and it is impossible to determine which party is to blame.^ If a vessel has been guilty of negligence, the burden is on her to prove that this negligence was not the cause of the collision.^ And a plaintiff in a cause of collision must prove both care on his own part and want of it in the defendant.^ Whether a ves- sel is required by law to carry a light in the night time, is doubt- ful, and the circumstances of each case must be looked to, to determine the necessity of one in that particular instance.* Lights are required by United States statutes in the case of certain steamboats," and in New York boats in the canal are obliged to have them,® and in Vermont, on Lake Cham- plain." Sailing vessels when under way^ as well as when at 1 Lucas V. Steamboat Swan, 6 McLean, C. C. 282 ; The J^autilus, Ware (2d Ed.), 529 ; The Scioto, Daveis, 359 ; The Catherine, of Dover, 2 Hagg. Adm. 145 ; Story on Bailments, § 609 ; 1 Bell's Coram. 579. '^ Clapp V. Young, U. S. T). C. Mass., 6 Law Reporter, 111; Waring v. Clarke, 5 How. 441. See Gushing v. The John Fraser, 21 How. 184. ^ Carsley v. White, 21 Pick. 254 ; Davies v. Mann, 10 M. & W. 546 ; Fashion v. Wards, 6 McLean, C. C. 152 ; The Steam Tug Wm. Young, Olcott, Adm. 38. ■• See The Rose, 2 W. Rob. 4; The Iron Duke, 2 W. Rob. 377 ; The Victoria, 3 W. Rob. 49 ; Tbe Scioto, Dareis, 359 ; Lenox i\ The Winesimmet Co., U. S. D. C. Mass., 11 Law Rep. 80 ; Kelly v. Cunningham, 1 Calif. 365 ; Innis v. Steamer Sena- tor, id. 459 ; The Indiana, Abbott, Adm. 330 ; Hain v. Steamboat North America, 2 N. Y. Legal Obs. 67 ; Rogers v. Steamer St. Charles, 19 How. 108 ; Cushing v. The John Fraser, 21 How. 184, 189 ; Steamer Louisiana v. Fisher, 21 How. 1 ; Cars- ley V. White, 21 Pick. 254 ; New Haven Steamboat Co. v. Vanderbilt, 16 Conn. 420 ; The Santa Claus, 1 Blatchf C. C. 370 ; The Barque Delaware v. Steamer Osprey, 2 Wallace, C. C. 268, 275 ; Simpson v. Hand, 6 Whart. 311 ; The Columbine, 2 W. Rob. 27 ; Steamboat Blue Wing v. Buckner, 12 B. Mon. 246 ; Ward v. Armstrong, 14 111. 283; Culbertson v. Shaw, 18 How. 584; Ure v. Coffman, 19 How. 56; The Thomas Martin, XJ. S. C. C. New York, 1 9 Law Reporter, 379 ; New York & Virginia Steamship Co. v. Calderwood, 19 How. 241 ; Valentine i;. Cleugh, 8 Moore, P. C. 167, 29 Eng. L. & Eq. 49 ; Whittel v. Crawford, Exch., 37 Eng. L. & Eq. 466 ; Mackay V. Roberts, 9 Moore, P. C. 357 ; Dowell v. Gen. Steam Nav. Co. 5 Ellis & B. 195, 32 Eng. L. & Eq. 158 ; The Aliwal, 25 Eng. L. & Eq. 602. 5 Stat. 1838, eh. 191, 4 10, 5 U. S. Stats, at Large, 306. This applies to steamboats generally. That of 1849, ch. 105, § 5, 9 U. S. Stats, at Large, 382, relates to steam- boats and sailing vessels on the northern and western lakes. See Chamberlain v. Ward, 21 How. 548, 565; Bulloch v. Steamboat Lamar, U. S. C. C. Georgia, 1844, 8 Law Reporter, 275 ; Foster v. Sch. Miranda, 1 Newb. Adm. 227, 6 McLean, C. C. 221 ; Hall V. The Buffalo, 1 Newb. Adm. 115. If an accident takes place, which is not owing in any degree to the absence of the light, the vessel will not be considered in fault. New Haven Steamboat Co. v. Vanderbilt, 16 Conn. 420 ; Griswold v. Sharpe, 2 Calif. 17 ; The Santa Claus, Olcott, Adm. 428; The Panther, 24 Eng. L. & Eq. 585 ; Mor- rison V. Gen. Steam Nav. Co. 8 Exch. 733, 20 Eng. L. & Eq. 455 ; Mackay v. Roberts, 9 Moore, P. C. 357. <> Rathbun ;;. Payne, 19 Wend, 399 ; Fitch v. Livingston, 4 Sandf. 492 ; The Santa Claus, Olcott, Adm. 428, 1 Blatchf. C. C. 370. ' Rev. Stats. Vermont, tit. xxii. ch. 92, p. 422. 8 Whitridge v. Dill, 23 How. 448 ; The Brig Emilv, Olcott, Adm. 132 ; The Pilot Boat Blossom, id. 188; The Rebecca, 1 Blatchf. & H. Adm. 347 ; The Clement, 2 Cmtis, C. C. 363, 369; The Chester, 3 Hagg. Adm. 316. [423] 384 ELEMENTS OF MERCANTILE LAW. [CH. XVII. anchor,^ should have a sufHcient watch or lookout on deck. And this rule applies with still greater force in the case of steamboats.^ K sailing vessels are approaching each other, the one going free must get out of the way of the one that is close hauled.^ If both are close hauled, each should go to the right ; or the vessel on the starboard tack keeps on, while the one on the lar- board tack changes her course.* If both are going the same way, it is said that the ship to windward should keep away ; but this is manifestly incorrect.^ If two sailing vessels are ap- proaching each other with the wind free, each goes to the right.^ The rule is the same when two steamboats are approaching each other.'' When a steamer meets a sailing vessel close- hauled, the sailing vessel must keep on her course, and the steamer must avoid her.^ And, according to the American rule, the steamer may go either to the right or left of a sailing vessel with the wind free,® but we think the English rule requiring her to go to the right is to be preferred. i** 1 Tlio Indiana, Abbott, Adm. 330. See Mellen v. Smith, 2 E. I)- Smith, 462. 2 St. John V. Paine, 10 How. 557 ; Newton v. Stebbins, id. 586 ; The Genesee Chief V. Fitzhu^h, 12 How. 443 ; Steamboat New York v. Eea, 18 How. 223 ; Netherlands Steamboat Co. v. Styles, 40 Eng. L. & Eq. 19 ; The Europa, 2 id. 557 ; The Wirrall, 3 W. Rob. 56. s Sills V. Brown, 9 Car. & P. 601 ; The Gazelle, 2 W. Rob. 515 ; The Rebecca, 1 BhUihf. & H. Adm. 347 ; The Clement, U. S. D. C. Mass., 17 Law Reporter, 444, af- firmed in Circuit Court, 2 Curtis, C. C. 363. * Tlie Jupiter, 3 Hagg. Adm. 320 ; The Lady Anne, 1 Eng. L. & Eq. 670 ; The Commerce, 3 W. Rob. 287 ; The Traveller, 2 W. Rob. 197 ; The Brig Cynosiu-e, TJ. S. D. C. Mass., 7 Law Reporter, 222. The vessel on the larboard tack should give way at once, without considering whether the other vessel be one or two points to lee- waid. The Traveller, 2 W. Rob. 197. ^ 3 Kent, Com. 230 ; Abbott on Sliipping, p. 234, by one of the American editors ; Planders on Mar. Law, 307, citing Marsh v. Blythe, 1 McCord, 360. The head note in the case is to this effect, but no such point was decided. See also. The Clement, 17 Law Reporter, 444, 2 Curtis, C. C. 363. On appeal, the Supreme Court were, in this case, equally divided. See Whitridge v. Bill, 23 How. 448. If two steamboats are going in the same direction, the one ahead is entitled to keep its course, and the one astern, if it attempts to pass, must avoid a collision. The Rhode Island, Olcott, Adm. 505, 1 Blatchf. C. C. 363 ; The Governor, Abbott, Adm. 108 ; Ward v. Sch. Dousraan, 6 McLean, C. C. 231. So, where the one ahead is a sailing vessel, and the one astern towed Ijy a steamer. The Carolus, 2 Curtis, C. C. 69. e St. John V. Paine, 10 How. 557 ; The City of London, 4 Notes of Cases, 40. ' New York & Baltimore Trans. Co. r. Philadelphia & Savannah Steam Nav. Co. 22 How. 461 ; Wheeler v. The Eastern State, 2 Curtis, C. C. 141 ; Lockwood v. La- shell, 19 Penn. State, 344 ; Ward v. The Ogdensburgh, 1 Newb. Adm. 139. 8 The Gazelle, 2 W. Rob. 515; St. John v. Paine, 10 How. 557. See Propeller Monticello v. MoUison, 17 How. 152; New York & Liverpool U. S. Mail S. Co. v. Rumball, 21 How. 372. See N. Y. & Baltimore T. Co. v. P. & S. Steam Nav. Co. 22 How. 461. ' The Osprey, U. S. D. C. Mass., 17 Law Reporter, 384 ; Steamer Oregon !•. Eocca, 18 How. 570. w The Cit^- of London, 4 Notes of Cases, 40. This is now by statute the settled law [424 J CH. XVII.J THE LAW OF SHIPPING. 385 If a ship at anchor and one in motion come into collision, the presumption is, that it is the fault of the ship in motion,^ unless the anchored vessel was where she should not have been.^ And if a vessel is at anchor, or at a wharf, another vessel should not anchor so near that damage may in any way result.^ Steamboats being vessels of great power and speed, are al- ways obliged to observe a great degree of caution, particularly at night. It is a question of fact in each particular case whether the speed was excessive or not, and in determining this the lor cality and hour, the state of the weather, and all circumstances of a similar nature, are to be fully considered.* And it is no excuse for an excessive speed that the steamer could not otherr wise fulfil a contract for the carriage of the mail.^ In general established rules and known usages should be carefully followed ; for every vessel has a right to expect that every other vessel will regard them ; but not where they would from peculiar circumstances, certainly cause danger, and no vessel is justified by a pertinacious adherence to a rule, for get- ting into collision with a ship which she might have avoided.^ in England, 17 & 18 Vict. ch. 104, § 296 ; The Mangerton, 2 Jur., N. s. 620, 27 Law T. 207. 1 The Lochlibo, 3 "W. Rob. 310, 1 Eng. L. & Eq. 651 ; Culbertson «. Shaw, 18 How. 584 ; Steamboat New York v. Rea, 18 How. 223. ^ Strout V. Foster, 1 How. 89. But although she is in an improper place, the other vessel must ayoid her if possible. TheBatavier, 10 Jur. 19 ; Knowlton v. Sanford, 32 Maine, 138. 8 Griswolde v. Sharpe, 2 Calif. 17 ; The Volcano, 2 W. Rob. 337 ; Vantine v. The Lake, 2 Wallace, C. C. 52 ; Beane v. The Maym-ka, 2 Curtis, C. C. 72. * The Europa, 2 Eng. L. & Eq. 557, 564 ; The Northern Indiana, 16 Law Reporter, 433; The Gazelle, 2 W. Rob. 615; The Iron Duke, 2 W. Rob. 377; McCready v. Goldsmith, 18 How. 89 ; Rogers v. Steamer St. Charles, 19 How. 108 ; Netherlands Steamboat Co. v. Styles, 40 Eng. L. & Eq. 19 ; Chamberlain v. "Ward, 21 How. 548 ; Haney v. Baltimore S. P. Co. 23 How. 287 ; Steamer Louisiana v. Fisher, 21 How. 1 ; Nelson v. Leland, 22 How. 48. ^ The Rose, 2 W. Rob. 1 ; The Northern Indiana, 16 Law Reporter, 433 ; Rogers V. Steamboat St. Charles, 19 How. 108, 112. » Allen V. Mackay, U. S. D. C. Mass., 16 Law Reporter, 686 ; The Vanderbilt, Abbott, Adm. 361 ; The Friends, 1 W. Rob. 478 ; The Commerce, 3 "W. Rob. 287 ; The Lady Anne, 1 Eng. L. & Eq. 670 ; St. John v. Paine, 10 How. 557. But see Steamer Oregon v. Rocca, 18 How. 570, 572; Crockett v. Newton, id. 581, 583; Wheeler v. The Eastern State, 2 Curtis, C. C. 141 ; The Test, 5 Notes of Cases, 276. 36* [425] 385-386* ELEMENTS OP MERCANTILE LAW. [CH. XVII. SECTION XI. OF THE SEAMEN. The law makes no important distinction between the officers, or mates, as they are usually called, and the common sailors.^ Our statutes contain many provisions in behalf of the seamen, and in regulation of their rights and duties, although the con- tract between them and the ship-owner is in general one of hir- ing and service.- Our statutory provisions relate principally to the "following points: 1st, the shipping articles; 2d, wages; •id, provisions and subsistence ; 4th, the sea-worthiness of the ship ; 5th, the care of seamen in sickness ; 6th, the bringing them home from abroad ; 7th, regulation of punishment. First. Every master of a vessel bound from a port in the United States to any foreign port, or of any ship or vessel of the burden of fifty tons or upwards, bound from a port in one State to a port in any other than an adjoining State, is required i See Grant v. Eaily, 12 Mod. 440 ; s. c. Viner's Ab. tit. Mariners, B. 2, wlicre it is said of the mate : " The court inclined to consider liim as a mariner, because he is hired by the master, as otlier mariners ; but the master is put in by the owners." See, also, the case of The Exeter, 2 Rob. Adm. 261, where Lord Siowdl laid it down that ofRcers come before the courts of admiralty with as strong a title to indulgence and favorable attention as common mariners. It was said, likemse, by Rider, C. J., in Mills V. Long, Sayer, 136, and repeated by Sir J. NichoU, in The Prince George, 3 Hagg. Adm. 379, tliat the privilege of suing for wages in admiralty, extends " to cveiy person employed on board ship except the master." Thus it has been held that tlie purser has that privilege : The Prince George, supra. And so with the surgeon : Mills V. Long, supra ; The New Jersey, 1 Pet. Adm. 230, 233 ; Trainer v. The Superior, Gilp. 514 ; Packard v. Tlie Louisa, 2 Woodb. & M. 53. The carpenter : The Lord Ho- bart, 2 Dods. 104. The boatswain: Ragg v. King, 2 Stra. 858. The pilot, engineer, and fireman on board a steamboat : Wilson v. Tlie Ohio, 1 Gilp. 505 ; Packard v. The Louisa, supra. And a woman who acted as cook and steward, and as a mariner : The Jane & Matilda, 1 Hagg. 187. But not musicians on board a vessel, who are hired and employed merely as such : Trainer v. The Superior, supra. 2 Wilkinson v. Frazier, 4 Esp. 182; Pitman v. Hooper, 3 Sumner, 59; Earral u. McClea, 1 Dall. 393 ; Bishop v. Shepherd, 23 Pick. 495 ; Smith v. Leavd, Hopkins, 199. The personal liability of the master to the seamen for wages being founded on contract, if he did not make the original contract, but merely succeeded to the place of master in the course of the voyage, by reason of the death or removal of the former master, he is not liable for the wages antecedentally earned, but only for those earned while he is master. Wysham v. Eossen, 11 Johns. 72; Mayo o. "Harding, 6 Mass. 300. The contract is still considered a contract of hu-e, and not a contract of partner- ship in the fisheries, where, by a usage of the trade, the crew generally ship for a spe- cific share of the oil or fish, in lieu of wages. Baxter v. Eodman, 3 Pick. 435 ; Gro- zier V. Atwood, 4 id. 234 ; Bishop v. Shepherd, supra ; Wilkinson v. Prazier, supra ; Dry V. Boswell, 1 Camp. 329 ; Pott v. Byton, 3 C. B. 32. [426] CH. XVII.] THE LAW OF SHIPPING. *387 to have shipping articles, under a penalty of twenty dollars for every person who does not sign,^ which articles every seaman on board must sign, and they must describe accurately the voy- age, and the terms on which each seaman ships.^ Courts will protect seamen against indefinite or * catching language, and against unusual and oppressive stipulations.''' And wherever there is a doubt as to their meaning or obligation, the seaman has the benefit of the doubt.* Thus, a voyage from one place 1 One suit should be brought for each penalty, and one count is sufficient. Wolver- ton V. Lacey, U. S. D. C. Ohio, 18 Law Eep. 672. ■•i Act of 1790, c. 29, 1 U. S. Stats, at Large, 131. See The Crusader, Ware, 437 ; Wolverton v. Lacey, XJ. S. D. C. Ohio, 18 Law Rep. 672. The 6th section of the above act provides that the master shall produce the contract and log book when re- quired, otherwise parol evidence of their contents may be given. The 1st section of the Act of 1840, 5 U. S. Stats, at Lai-ge, 394, has been considered to imply that the owner must deposit the original articles with the collector of the port where the con- tract is made, and it has been suggested that this so far modifies the former act that the master or owner, if not relieved from producing them at the call of the seaman, be- cause, being in the custom-house, they are as much at the command of the seaman as of the owner, yet at least the seaman should give distinct and reasonable notice that he desires them. The Brig Osceola, Olcott, Adm. 450, 459. See also, this case for other points, and Piehl v. Balchen, Olcott, Adm. 24 ; Willard v. Dorr, 3 Mason, 161. * The leading cases on this subject are The Juliana, 2 Dods. 504 ; Harden v. Gordon, 2 Mason, 541 ; Brown v. Lull, 2 Sumner, 443. In Harden v. Gordon, Story, J., said : " Every court should watch with jealousy an encroachment upon the rights of seamen, because they are unprotected, and need counsel ; because they are thoughtless, and require indulgence ; because they are credulous and complying, and are easily over- reached. But courts of maritime law have been in the constant habit of extending towards them a peculiar protecting favor and guardianship. They are emphatically the wards of the admiralty. If there is any undue equality in the terms, any dispro- portion in the bargain, any sacrifice of rights on one side, which are not compensated by extraordinary benefits on the other, the judicial interpretation of the ti-ansaction is, that the bargain is unjust and unreasonable; that advantage has been taken of the sit- uation of the weaker party, and that, pro tanto, the bargain ought to be set aside as inequitable. Hence, every deviation from the terms of the common shipping paper, which stands upon the general doctrines of maritime law, is rigidly inspected; and if additional bm'dens or sacrifices are imposed upon the seamen without adequate remu- neration, the court feels itself authorized to interfere, and moderate or annul the stipu- lation." Accordingly, in this case, a stipulation that the seaman should pay for medi- cal aid and medicines further than the ship afforded, no extraordinary compensation being allowed therefor, was set aside as grossly inequitable. As to clauses affecting the rights of the seamen to their wages, see Johnson v. The Lady WalterstofF, 1 Pet. Adm. 215 ; id. 186, n. ; Swift v. Clark, 15 Mass. 173 ; Brown v. Lull, supra; The Ju- liana, supra; The Hoghton, 3 Hagg. Adm. 100; Rice v. Haylett, 3 Car. & P. 534. Where a crew were shipped on a voyage " to a port or ports easterly of the Cape of Good Hope, or any other port or ports to which the master should see fit to go, in order to procure a cargo," but the owners really intended that the vessel should proceed to Ichaboe, there to ship guano, which destination was concealed from the crew, the court held that the seamen were not bound to load the guano for the wages fixed in the ship- ping articles. The Brookline, 8 Law Rep. 70. Where any doubt arises upon the con- struction of the shipping articles, the court will give the benefit of it to the seamen. The Minerva, 1 Hagg. Adm. 355; The Hoghton, 3 Hagg. Adm. 112; Jansen v. The Heinrich, Grabbe, 226. * See The Minerva, 1 Hagg. Adm. 347, 355 ; The Hoghton, 3 Hagg. Adm. 100, 112; Jansen v. The Heinrich, Crabbe, 226 ; Wape v. Hemenway, 18 Law Rep. 390. [427] :388* ELEMENTS OF MERCANTILE LAW. [CH. XVII. to another being stated, and the words "and elsewhere" being added, these mean nothing, or only such further procedure by the vessel as fairly belongs to the voyage described.^ But a definite usage may give a precise meaning to these words.^ And the shipping articles ought to declare explicitly the ports of the beginning and of the termination of the voyage.-^ If a number of ports are mentioned, they are to be visited only in their geographical and commercial order, and not revisited * un- less the articles give the master a discretion.^ Admiralty courts enforce or disregard the stipulations, as they are fair and legal, or otherwise, and exercise a liberal equity on this subject ;'' *but courts of common law are more strictly bound by the letter of 1 Brown v. Jones, 2 Gallis. 477 ; Anonymous, 1 Hall, Am. Law J. 209 ; Ely v. Pock, 7 Conn. 39 ; Gilford v. Kollock, U. S. D. C. Mass., 19 Law Rep. 21 ; The Countess of Harcourt, 1 Hagg. Adm. 248; The Eliza, id. 182, 185; The Minerva, id. 347, 354 ; The George Home, id. 370, 374 ; The AVestmorland, 1 W. Rob. 216, 225 ; Piehl V. Balchen, Olcott, Adm. 24 ; Douglass v. EjTe, Gilpin, 147 ; Magee v. The Moss, Gilpin, 219 ; The Crusader, Ware, 437. It is now provided by the Act of July 20, 1840, ch. 48, § 10, 5 TJ. S. Stats, at Large, 395, that all shipments of seamen con- trary to the provisions of acts of Congress, are void. See Snow v. Wope, 2 Curtis, C. C. 301, 18 Law Rep. 390. See, as to the meaning of the word "cruise" in the shipping articles, The Brutus, 2 Gallis. 526. A trading voyage does not include a freighting voyage. Brown v. Jones, 2 Gallis. 477. And see, for the meaning of other peculiar words of description, GifFord v. Kollock, 19 Law Rep. 21 ; U. S.' v. Staly, 1 Woodb. & M. 338; Stratton v. Babbage, U. S. T>. C. Mass., 18 Law Rep. 94; The Varuna, 18 Law Rep. 437; Peterson v. Gibson, 20 Law Rep. 380; Thompson V. Ship Oakland, 4 Law Rep. 349 ; TJ. S. v. Barker, 5 Mason, 404. 2 Gifford V. Kollock, 19 Law Rep. 21. See also. Brown v. Jones, 2 Gallis. 477. 8 Anonymous, 1 Hall, Am. Law J. 209 ; The Crusader, Ware, 437 ; Magee r. The Moss, Gilpin, 219, 226; Gifford v. Kollock, 19 Law Rep. 21. * Douglass V. Eyre, 1 Gilp. 147. In this case it was held that shipping articles for a voyage " from Philadelphia to Gibraltar, other ports in Europe, or South America, and back to Philadelphia, authorize a voyage directly from Gibraltar to South America, without proceeding to any intermediate European port, but not a return afterwards from South America to a European port. Sec also. Brown v. Jones, 2 Gallis. 477. 6 Wood V. The Nimrod, Gilpin, 83. But see The Brookline, 8 Law Rep. 70. >> The Minerva, 1 Hagg. Adm. 347 ; The Prince Frederick, 2 Hagg. Adm. 394 ; Sims V. Jaclcson, 1 Wash. C. C. 414; Natterstrom v. The Ship Hazard, Bee, Adm. 441 ; Harden v. Gordon, 2 Mason, 541 ; Brown v. Lull, 2 Sumner, 443. " Courts of admiralty," said Mr. Justice Stoiy, in this last case, p. 449, "are accustomed to con- _sider seamen as peculiarly entitled to their protection; so tliat tliey have been, by a somewhat bold figure, often said to be favorites of courts of admiralty. In a just sense they are so ; so far as the maintenance of their rights, and the protection of their in- terests against the effects of the superior skill and shrewdness of masters and owners of ships are concerned. Courts of admiralty are not, by their constitution and jurisdic- tion, confined to the mere dry and positive niles of the common law. But they act upon the enlarged and liberal principles of courts of equity ; and in short so far as their powers extend, they act as courts of equity. Wherever, therefore, any stipulation is found in the shipping articles, which derogates from the general rights and privileges of seamen, courts of admiralty hold it void, as founded upon imposition, or an undue advantage taken of then: necessities, and ignorance, and improvidence, unless two things concur, — first, that the nature of the clause is fairly and fully explained to the seamen, and secondly, that an additional compensation is allowed, entirely adequate to the new restrictions and risk imposed upon them thereby." [428] OH. XVII.J THE LAW OP SHIPPING. -388 the contract.^ The articles are generally conclusive as to wages ; but accidental errors or omissions may be supplied or corrected by either party, by parol.^ Second. Wages are regulated as above stated, and also by limiting the right to demand payment in a foreign port, to one third the amount then due, unless it be otherwise stipulated.® Seamen have a lien on the ship and on the freight for their wages, which is enforceable in admiralty.^ By the ancient rule, 1 Cutter V. Powell, 6 T. R. 320 ; Appleby v. Dods, 8 East, 300 ; Jesse v. Roy, 4 Tyrw. 626, 1 Cromp., M. & R. 316, 340. See also. Rice u.Haylet, 3 Car. & P. 534; Webb V. Duckingfield, 13 Johns. 390; Dunn v. Comstock, 2 E. D. Smith, 142. 2 Veacoek v. M'Call, Gilpin, 329 ; Wickhara v. Bliffht, id. 452 ; Bartlett v. Wvman, 14 Johns. 260; The Isabella, 2 Rob. Adm. 241 ; The Providence, 1 Hagg. Adra'. 391 ; The Harvey, 2 Hagg. Adm. 82 ; The Prince George, 3 Hagg. Adm. 376 ; Dafter v. Cresswell, 7 Dowl. & R. 650. Where the rate of wages is not specified in the shipping articles, the statute of 1790, c. 56 (29), ^ 1, provides that the seaman shall be entitled to the highest rate of wages paid at the port where he ships, for a similar voyage, within the three months preceding, and parol evidence will not be admitted to show an agree- ment for a lower rate. The Crusader, Ware, 437. 3 Act 1790, ch. 56 (29), § 6 ; 1 Pet. Adm. 186, n. ; Johnston v. The Walterstorff, 1 Pet. Adm. 215. * Sheppard v. Taylor, 5 Pet. 675; The Mary, 1 Paine, C. C. 180; Drinkwater v. The Brig Spartan, Ware, 134 ; Lewis v. The ISlizabeth & Jane, id. 44 ; Skolfield u. Potter, Daveis, 392 ; Smith v. The Stewart, Crabbe, 218 ; Taylor v. The Royal Saxon, 1 Wallace, Jr. 311 ; The Sidney Cove, 2 Dods. 13 ; The Neptune, 1 Hagg. Adm. 227, 239 ; The Juliana, 2 Dods. 504 ; The Golubchick, 1 W. Rob. 143. And every part of the freight is liable for the whole of the wages. Skolfield v. Potter, supra. The lien attaches on money paid by a foreign government as indemnity for a wrongful seizure of the vessel, and consequent loss of freight, and may be enforced by a libel against such proceeds in the hands of assignees having notice of the claim. Sheppard v. Tay- lor, supra. See also. Brown v. Lull, 2 Sumner, 443 ; Pitman v. Hooper, 3 Sumner, 50. In Sheppard v. Taylor, the lien was said not to extend to the cargo, which was the property of the insolvent owners of the vessel, but it is to be remarked, that freight had been awarded to the assignees as a distinct item, and to this the lien was allowed to attach. Understood with reference to these circumstances, the doctrine of the court in this case does not appear inconsistent with the case of " The Spartan," supra, where Ware, J., held, that where a ship carries the goods of her owners, the seamen have a lien on the cargo for their wages, for a charge in the nature of freight. See also, Skol- field V. Potter, supra, p. 402 ; and the case of The Lady Durham, 3 Hagg. Adm. 198, where the court say : " A mariner has no lien on the cargo as cargo. His lien is upon the ship, and upon the freight as appurtenant to the ship ; and so far as the cargo is subject to freight, he may attach it as a security for the freight that may be due." See also. The Riby Grove, 2 W. Rob. 59. Where a voyage is illegal, the seamen's wages are no lien on the vessel. Brig Langdon Cheves, 4 Wheat. 103, 2 Mason, 58 ; The Vanguard, 6 Rob. Adm. 207 ; The Malta, 2 Hagg. Adm. 163. It is different where the infraction is of the laws of a foreign power, and is consummated without the assent of the crew. Sheppard v. Taylor, supra. The wages are due at the end of the voyage, but arc not payable till the expiration of the period allowed by law for discharging the vessel and collecting the freight. Hastings v. The Happy Return, 1 Pet. Adm. 253. And in the absence of a custom to the contrary, the seamen are not bound to assist in unloading the .vessel. — Same case. Accordingly, where due diligence had been used, ■ but the ship could not be unloaded within the ten days allowed by the statute, more than fifteen days were allowed by the court for that purpose. Thompson v. The Phila- delphia, 1 Pet. Adm. 210. See also, Edwards v. The Ship Susan, 1 Pet. Adm. 165. But the mariners may file their hbel for wages within the statutory interval, although no process can issue against the vessel. The Mary, Ware, 454. The lien for wages [429] 389 ELEMENTS OF MERCANTILE LAW. [CH. XVII. that freight is the mother of wages, any accident or misfortune which makes it impossible for the ship to earn its freight, de- stroys the claim of the sailors for wages.^ The maxim that has precedence over bottomry bonds. The Madonna d'Idra, 1 Dods. 37 ; and over all others ; Brown !'. Lull, supra ; Pitman v. Hooper, supra. 1 'Anon. 1 Ld. Eavm. 639; Id. 1 Sid. 179; Hernaman v. Bawden, 3 Burr. 1844; The Neptune, 1 Hagg. Adra. 232 ; The Malta, 2 Hagg. Adm. 162 ; Opinion of Judge Winclicster, 1 Pet. Adra. 186, n. ; Giles v. The Cynthia, 1 Pet. Adm. 203 ; Weeks v. The Catharina Maria, 2 Pet. Adm. 424 ; Thompson v. Faussat, Pet. C. C. 182 ; The Saratoga, 2 Gallis. 164, 175 ; Tlie Two Catherines, 2 Mason, 319 ; Brown v. Lull, 2 Sumner, 443; Pitman v. Hooper, 3 Sumner, 50; Adams v. The Sophia, Gilpin, 77 ; Brooks V. Dorr, 2 Miiss. 45; per Sedgwick, J.; Moore ;;. Jones, 15 Mass. 424; Blan- chard v. Bucknam, 3 Grccnl. 1 ; Hoyt v. Wildfire, 3 Johns. 518 ; Mun-ay v. Kellogg, 9 Johns, 227 ; Porter v. Andrews, id. 350. It is not sufficient to destroy the mariner's claim to wages, that no freiglit actually has been earned, if it miglit have been. Pit- man V. Hooper, supra. Hence, where tlie non-earning of freight is owing to the act or default of the owner or master of tlio vessel, the seamen are entitled to their wages. I Pet. Adm. 192, in note. Therefore "if the voyage or freight be lost by the negli- gence, fraud, or misconduct of tlie owner or master, or voluntarily abandoned by them ; if tile owner have contracted for freiglit upon terms or contingencies differing from the general rules of maritime law ; or if he have chartered his ship to take a freight at a foreign port, and none is to be earned on the outward voyage, in all these cases the mariners are ejititled to wages, notwithstanding no freight has been earned." Per Slory, J., in the case of The Saratoga, supra ; and see Hindman v. Shaw, 2 Pet. Adm. 264 ; Giles r. The Cynthia, sii/)ra ;' M'Quiik i. The Penelope, 2 Pet. Adm. 276; The Two Catherines, supra : Brown r. Lull, supra ; Emerson v. Rowland, 1 Mason, 45 ; Hoyt 0. Wildfire, 3 Johns. 518 ; Van Beuren v. Wilson, 9 Cowcn, 158 ; Blanchard >:. Buck- nam, supra; O.Kuard v. Dean, 10 Mass. 143 ; The Juliana, 2 Dods. 504 ; The Malta, supra; The Neptune, 1 Hagg. Adm. 232; The Lady Durham, 3 Hagg. Adm. 202, per Sir J. NichoU. " If freight is eanied in the voyage, and for the voyage, whether it is greater or less, and whether it is actually secured by the owner or not, makes no differ- ence in the rights of the seamen." Per Stori/, J., in Pitman v. Hooper, 3 Sumner, p. 60. From this intimate connection between the freight and wages, it results that where the voyage is divisible for the earning of freight, it is so for the earning of wages. 1 Pet. Adm. 185, n. ; Anon. 1 Ld. Rayni. 639. Hence, where a voyage is divided by various ports of delivery, so that the freight is earned, or would have been under the general maritime law, in portions, a proportionate claim for wages attaches at each of those ports. Edwards v. Childs, 2 Vern. 727 ; The Juliana, supra; Anon. 1 Pet. Adm. 186, tk. ; and for this purpose, a port of destination, to which the vessel proceeds in ballast, is a port of delivery. Giles v. The Cynthia, supra. "And there can be no difference in principle whether the vessel go emjjty to a destined port for a cargo, or retui-n under disappointment without one." Same case. See also. Millet v. Stephens, 2 Dane, Abr. ch. 57, p. 461 ; The Two Catherines, supra ; Blanchard i\ Bucknam, supra. But see Thompson v. Faussat, supra. In computing what is due in such eases, it is the estab- lished rule to consider half the time spent by the vessel in such a port as included in the voyage to it. Pitman r. Hooper, supra. Therefore, where the ship, after touching at several such poits, meets with a disaster, the seamen are entitled to their wages up to her arrival at the last of these ports, and for half the time she remained there. Giles V. The Cynthia, supra; Johnson r. The Walterstorff, 1 Pet. Adm. 215 ; Cranmer v. Gernon, 2 Pet. Adm. 390; The Two Catherines, supra; Bordman v. The Elizabeth, 1 Pet. Adm. 130 ; Galloway v. Morris, 3 Yeates, 445 ; Murray v. Kellogg, 9 Johns. 227 ; Blanchard v. Bucknam, supra; Thompson v. Faussat, Pet. C. C. 182; Hooper v. Per- ley, 11 Mass. 545; Smithy. The Stewart, Crabbe, 218; Locke v. Swan, 13 Mass. 76; Swift i'. Clarke, 15 Mass. 173 ; Moore v. Jones, 15 Mass. 424; Brown v. Lull, supra; Pitman c. Hooper, supra. But sec Bronde v. Haven, Gilpin, 592. In the case of Brown v. Lull, 2 Sumner, 443, it was held, that " the capture of a merchant ship does not itself operate as a dissolution of the contract for mariner's wages, but at most only as a suspension of the contract. If the ship is restored, and performs her voyage, the contract is revived, and the mariner becomes entitled to his wages ; that is, to his full [430] CH. XVII.] THE LAW OF SHIPPING. -389 freight is the mother of wages, does not apply to the case of the master ; and, although he cannot sue the vessel in rem, yet wages for the whole voyage, if he hafs remained on board and done his duty, or if, being talceu out, lie has been unable, without any fault of his own, to rejoin the ship. If the ship is condemned by a sentence of condemnation, then the contract is dissolved, and the seamen are discharged from any further duty on board ; and they lose their wages, unless there is a subsequent restitution of the property, or of its equivalent value, upon an appeal, or by treaty, with an allowance of freight, in which event tlicir claim for wages revives. In the case of a restitution in value, the proceeds represent the ship and freight, and arc a substitute therefor. If freight is decreed or allowed for the whole voyage, then the mariners are entitled to the full wages for the whole voyage ; for the decree for freight in such a case includes an allowance of the full wages, and conse- quently creates a trust or lieu to that extent thereon, for the benefit of the mariners. If the freight decreed or allowed is for a part of the voyage only, the seamen are ordi- narily entitled to wages up to the time for which the freight is given, unless under spe- cial circumstances ; as, where they have remained by the ship, at the special request of the master, to preserve and protect the property for the beneiit of all concerned." See also. Pitman v. Hooper, supra; The Saratoga, supra; Watson ;;. The Rose, 1 Pet. Adm. 132; Hart v. The Little John, I Pet. Adm. 115; Howland u. The Lavinia, 1 Pet. Adm. 123; Girard v. Ware, Pet. C. C. 142; Sheppard o. Taylor, 5 Pet. 675; Vandever v. Tilghman, Crabbe, 66 ; Brooks v. Doit, 2 Mass. 39 ; Lemon v. Walker, 9 Mass. 403 ; Hooper ". Perley, 11 Mass. 545; Spafford v. Dodge, 14 Mass. 66. In such cases a deduction will, however, be made, of any wages earned by the seamen whilst separated from the vessel. Singstrom v. The Hazard, 2 Pet. Adm. 384 ; Brooks V. Dorr, 2 Mass. 39 ; Wetmore v. Henshaw, 12 Johns. 324. The same principles apply to the case of an embargo. Marshall v. Montgomery, 2 Dall. 170. The doctrine of the English courts appears to be, that the mariner's contract is dissolved by a capture, but that on recapture, the right to wages revests. Beale v. Thompson, 4 East, 546 ; Johnson v. Broderick, id. 566 ; Pratt v. Cuff, cited in Thompson v. Rowcroft, id. 43 ; Bergstrom v. Mills, 3 Esp. 36; Delamainer v. Winteringham, 4 Camp. 186; and see the case of The Friends, 4 Rob. Adm. 143, where Sir W. Scott refused wages to a seaman who had been removed from a ves.sel at the time she Was captured, so that he could not rejoin her upon a subsequent recapture, and that her owner was obliged to hire another man in his stead, — even for the short interval preceding the capture. In case of The Dawn, Daveis, 121, Ware, J., after an elaborate examination of the sub- ject, held that in cases of shipwreck, " the crew are bound to remain by the vessel and contribute their utmost exertions to save as mucli as possible from the wreck ; that if this is done, they are always entitled to their full wages, if enough is saved for that pur- pose ; but if they abandon the wreck, and refuse to aid in saving it, their wages are forfeited. But that they may not rest satisfied with saving what is merely sufficient to pay their wages, and may he induced to persevere in their exertions so long as the chance of saving any thing remains, tlie law, from motives of policy, allows them, ac- cording to the circumstances and merits of their services, a further reward in the nature of salvage. The wages are to be paid exclusively from the materials of the ship, but the salvage is a general charge upon the whole mass of property saved. It is not, how- ever, intended to bo said, that they can claim as general salvors, that is, as persons who, being under no obligation to the ship, engage in this service as volunteers, or that they are entitled to be rewarded at the same liberal rate. But they are to be allowed a rea- sonable compensation, pro opere et labore, as the rule is laid down in many of the old ordinances, honi viri arhitrio. If the disaster happens in a foreign country, it ought to be at least a sum sufficient to pay the expenses of their return home." See also, the' language of the court in Giles v. The Cynthia, supra. In general, it may be said that if the ct-ew of a shipwrecked vessel do their duty by her, and by their exertions con- tribute to the saving of any remnants of the wreck, they should be regarded as entitled to a reward ; but whether in the nature of wages or of salvage, or both, as lield by Ware, J., and to what extent, has been matter of much conflict in the cases, and can- not be considered as decided. See The Niphon, 13 Law Rep. 266; The Cato, 1 Pet. Adm. 48, 58 ; Clayton v. The Harmony, id. 70, 79 ; id. 186, n. ; Giles v. The Cynthia, supra ■ Adams v. the Sophia, Gilpin, 77 ; Brackett v. The Hercules, Gilpin, 184; The [431] 390* ELEMENTS OF MERCANTILE LAW. [CH. XVII. the owners of the vessel are liable to him for wages in case of capture ^ or shipwreck,^ to the time of the dissolution of the contract, A seaman cannot insure his wages,^ nor derive any benefit from the insurance effected by the owners on the ship or freight,* nor by a recovery of damages for a loss of the ship by collision.^ * Third. Provisions of due quality and quantity must be fur- nished by the owner, and double wages are given to the seamen, when on short allowance,^ unless the necessity be caused by some peril of the sea, or other accident of the voyage.' The I Siiiatoya, 2 Gallis. 164, 183; The Two Catherines, 2 Mason, 319; Hobart v. Drogan, 10 Pet. 122 ; Pitman i>. Hooper, 3 Sumner, 07 ; Jones v. The Wreck of The Massa- soit, 7 Law Kep. 522 ; Frothingham r. Prince, 3 Mass. 563 ; Same case, 2 Dane, Abr. II. 462 ; Dtnmett v. Tomhagen, 3 Jolins. 154 ; Brid;;c v. Niagara Ins. Co. 1 Hall, 423; Lang r. Holbrook, Crabljc, 179 ; The Sidney Cove, 2 Dods. 13 ; The Neptune, 1 Hagg. Adm. 227; The Lady Durham, 3 id. 196; The Reliance, 2 W. Eob. 119. Seamen may, liowc\'cr, become salvors, pro]ierly speaking, of their own vessel, in some cases. Tlic Two Catherines, supra; The Blaireau, 2 Cranch, 240, 269; Hobart v. Drogan, supra: Williamson r. The Brig Alphonso, I Curtis, C. C. 376 ; The Neptune, sw/)ra ; The ticivcrnor Raffles, 2 Dods. 14 ; The Two Friends, 1 Rob. Adm. 278 ; The Beaver, 3 id. 292 ; The Florence, 20 Eng. L. & Eq. 607. But see The Cato, 1 Pet. Adm. 61 . Where freight is paid in advance, it lias been /leld that tlie seamen are entitled to wages in pro- portion to the amount of the advance, although the ship perish before any freight be earned. .Vnon. 2 Shower, 291 ; and see Brown l\ Lull, supra. The Englisli statute, 17 & 18 Vict. e. 104, § 175, 183, gives to seamen, when the master certifies tliat they have faithfully performed their (liuy, a right to wages, although no freight be earned. 1 Moore V. Jones, 15 Mass. 424. " Hawkins v. Twizell, 5 EUis & B. 883, 34 Eng. L. & Eq. 195. ^•Stie post, p. 415, n. ■* The Lady Durham, 3 Hagg. Adm. 196 ; M'Quirk u. Ship Penelope, 2 Pet. Adm. 276 ; Icard v. Goold, 11 Johns. 279. <> Pcrcival v. Hickcy, 18 Johns. 257, 290. " Act, 1790, ch. 29, ^ 9 ; 1 U. S. Stats, at Large, 131, 135 ; The Ship Washington, 1 Pet. Adm. 220 ; Gardner v. Ship New .lersey, id. 223 ; The Mary, Ware, 454. "But courts lia\c thought that when a ves.^el h:ip)ie)is to be in a port where it is not in tlie power of the master to obtain provisions of the amount and description directed by the law, other articles may be substituted which arc of equivalent value," The Mary, supra ; The Washington, supra. But see the case of Coleman r. Brig Harriet, Bee, Adm. 80, where a master liad put to sea with less than the prescribed quantity of Ijread, owing to his not being able to obtain a larger supply at the ])ort of departure, but with a large excess of beef and water. The voyage was unusually long, the vessel having Ijecn dismasted in a gale of wind, without which it was admitted there would have been no failure of bread, supplies of which wore obtained from other vessels at sea. Under these circumstances, tiic court were of opinion that tlie crew were entitled to extra wages under the statute, but inasmuch as they bad been placed .on short allowance with refer- ence to the single article of bread, ananlcd but one third of the amount of the wages contriutcil for, over and above the common wages. Under the statute, the burden of proof is upon the libellant to show, not merely that he was placed on short allowance, but that the vessel sailed without the stores prescribed by the act. Ferrara v. The Talent, Crabbe, 216. Where their rations arc stopped, the crew are justified in leaving the vessel, and do not thcrel)y forfeit their wages. The CastiUa, 1 Hagg. Adm. 59. ' Though this point does not appear to have been expressly decided,' yet it follows as a necessary deduction from the fact that to enable a seaman to recover tiie entire wages, not only must he be put on short allowance, but it must also be shown that the vessel [432] CH. XVII.] THE LAW OP SHIPPING. 391-'392 master may at any time put them on a fair and proper allow- ance to prevent waste.^ If extra wages are claimed, it has been held that the answer must set forth precisely whether the vessel shipped thS quantity and quality of provisions, required by the statute.^ Fourth. As to the seaworthiness of the vessel, the owner is bound to provide a seaworthy vessel,^ and our statutes provide the means of lawfully ascertaining her condition, at home or abroad by a regular survey, on complaint of the mate and a majority of the seamen.* *But this very seldom occurs in prac- tice. If seamen, after being shipped, refuse to proceed upon sailed, without having on board the stores prescribed in the act. The Ship Elizabeth v. Kickers, 2 Paine, C. C. 291; Ferrara v. Barque Talent, Crabbe, 216; Bark Childe Harold, Olcutt, Adm. 24, 31. See also, Piehl v. Balchen, Olcutt, Adm. 24, 31. 1 The Mary, supra. Where this occurs, the navy ration, fixed by Act of 1805, c. 91, ^ 3, has been assumed as the standard by which the allowance in the merchant service ought to be regulated. The Washington, supra; Gardner v. Ship New Jersey, supra; Ship Elizabeth v. Bickers, 2 Paine, C. C. 291, 298. 2 The Elizabeth Frith, Blatchf. & H. Adm. 195. 8 Dixon V. Ship Cyrus, 2 Pet. Adm. 407, 411 ; Rice v. The Polly & Kitty, id. 420 ; The Ship Moslem, Olcott, Adm. 289 ; Hoyt v. Wildfire, 3 Johns. 518. But see Couch V. Steele, 3 Ellis & B. 402, 24 Eng. L. & Eq. 77 ; Eaken v. Thorn, 5 Esp. 6. * Act of July 20, 1790, ch. 29 ; 1 U. S. Stats, at Large, 131 ; Act of July 20, 1840, ch. 48, § 12, 13, 14, 5 U. S. Stats, at Large, 396. The former of these acts provides, that if the m.ate or first oflicer under the captain and a majority of the crew of any vessel bound on a voyage to a foreign port, shall, before the vessel has left the land, require the seaworthiness of the vessel to be inquired into, the master shall stop at the nearest port for the purpose of having such inquiry made. On the construction of this act. Ware, J., remarked in the case of The William Harris, Ware, 367, 373, that the reason of the law applies as strongly -to the case of a vessel departing from a foreign port on her return, as leaving her home port on a foreign voyage. The act contemplates also the case of a vessel which has commenced her voyage. By the Act of 1840, a mode of proceeding is provided in a foreign port by which to ascertain the condition of the vessel at the time she left home, and certain penalties imposed if it appear she was not then seaworthy. By this act the consul, or commercial agent at the foreign port, is directed on complaint being made in writing by any officer and a majority of the crew, to appoint two persons to inspect the vessel, &e. By the Act of 1850, ch. 27, § 6, 9 U. S. Stats, at Large, 441, the Act of 1840 is so far amended, as to require the complaint to be signed by the first, or the second and third officers, and a majority of the crew. If, however, the crew, instead of availing themselves of their right under the statute, suffer the owner to repair the vessel of his own accord, and he employs an agent who pronounces her seaworthy, they cannot refuse to proceed on the ground that the repairs are insufficient, it not appearing that they were so. Porter v. Andrews, 9 Johns. 350. Independently of this statate, it has been decided that the law implies in the seaman's contract that the ship shall be seaworthy at the outset of the voyage. Dixon V. The Cyrus, 2 Pet. Adm. 411. If no complaint is made, and the ship pro- ceeds to sea, " nothing but inability can excuse the mariner for a refusal of duty, what- ever deficiencies may then occur or be discovered." Same case. But see the William Harris, supra ; and the case of the United States v. Ashton, 2 Sumner, 13, where Story, J., held that it was a sufficient defence to an endeavor to commit a revolt, that the combination charged was to compel the master to return into port for the unseaworthi- ness of the vessel, provided the act was bona fide, and the vessel actually unseaworthy, and so where it was upon reasonable grounds and apparent unseaworthiness, and it was doubtful whether the vessel was unseaworthy or not. 37 [433] 392- ELEMENTS OP MERCANTILE LAW. [CH. XVII. their voyage, and are complained of and arrested, the court will inquire into the condition of the vessel ; and as the complaint of the seamen is justified, in a greater or less degree, will dis- charge them, or mitigate or reduce their punishment.''- If there is reasonable cause for the survey, the expense thereof cannot be charged to the seamen.^ Fifth. As to sickness, our statutes require that every ship of the burden of one hundred and -fifty tons, navigated by ten persons or more in the whole, and bound on a voyage without the limits of the United States, shall have a proper medicine- chest on board.^ This act has been extended to vessels of seventy-five tons, navigated by six or more persons in the whole, bound from the United States to any port in the West Indies.* 1 TJ. S. V. Nye, 2 Curtis, C. C. 225 ; U. S. v. Staly, 1 Woodb. & M. 338 ; Dixon V. The Sliip Cyrns, 2 Pet. Adm. 4U7 ; TJ. S. r. Asliton, 2 Sumner, 13 ; The Wni. Har- ris, Ware, 367. 2 The Wm. Harris, Ware, 367. See Act of 1704, (> 3; and act of 1840. 3 Act of 1790, e. 29, § 8 ; 1 U. 8. Stats, at Large, 134. « Act of 1805, e. 28, 2 U. S. Stats, at Lari;-e/330. Ho-\v far these acts affect the general right of the seamen under the maritime law to be cured at the tliip's expense — for which see infra — has been a cjuestion of some difficulty. In the case of an ordi- nary sickness, not infectious, so as to render the removal of the patient from the ship prudent or necessary, and where no such removal took place, and the ship was properly provided with medicines and directions under the statute, it has been held that the charge of a physician's attendance on board must be borne by the seaman. Holmes i\ Hutchinson, Gilpin, 447. And it has Vjeen held that the rule is the same whatever may be the nature of tlie disease ; even if it be of a violent and dangerous kind. Pray r. Stinson, 21 Maine, 402. Where the danger is such as to require it, the attendance of a physician may be procured on board without the a.^scnt of the seaman, and at his ex- pense. Same eases. But if, from tlie nature of the disease or other circumstances, there is no person on board by whom the medicines can be safely administered under the printed medical directions accompanying the chest, such attendance will be a charge upon the owners. The Forest, Ware, 420. So if it becomes advisable for the con- venience or safety of the rest of the crew, as in cases of contagious disease, that the sick man shoirld be removed on shore Avhether with or without his consent, so that he has not the benefit of the medicine chest, his exllcn^es for medicine and advice remain a charge upon the ship. Harden v. Gordon. 2 Mason, 541 ; Walton r. The Neptune, 1 Pet. Adm. 152 ; Hastings v. The Happy Return, id. 256, n. ; The Forest, supra; The Brig George, 1 Sumner, 151. But, seiiihli\ not wliere the seaman is removed at his own request from a vessel properly provided in all respects. Pierce i. Patton, Gilpin, 436. And see tlie case of Pray v. Stinson, supra. But see Johnson r. Doubty, 1 Ashm. 165; The Atlantic, Abbott, Adm. 451, 477. Cases requiring extraordinar-jr assistance, such as surgical aid, which the ship cannot afford, are not within the spirit of tlie statute which it seems " is limited to tlie ordinary cases of illness on board the ship ; a sickness of such a character that the patient may be and is kept on board, and receives, or may receive the benefit of the medicine chest'and directions, and the advice and assistance of the master of the ship or some other competent person attached to the ship, in the application of the medical directions accompanying the chest, and sncli nursing and attendance as the situation of the ship may admit." Per Duris, J., in Lanison v. Westcott, 1 Sumner, 591, Appen. And see the remarks of Pclcrs. J,, in Plastings v. The Happy Return, 1 Pet. Adm. 256, n. See also, the case of Eccil v. Canlield, 1 Sumner, 195, where a seaman whose feet had been frozen in the service of [434] CH. XVII.] THE LAW OF SHIPPING. *393 Moreover, twenty cents * a month are deducted from the wages of every seaman to make up a fund for the maintenance of ma- rine hospitals, to which every sick seaman may repair without charge.! j^ addition to this the general law merchant requires every ship-owner or master to provide suitable medicine, medi- cal .treatment, and care, for every seaman who becomes sick, wounded, or maimed, in the service of the ship at home or abroad, at sea or on shore ; unless this is caused by the miscon- duct of the seaman himself.^ This right of cure extends to the officers of the ship, and probably to the master.^ Sixth. The right of the seaman to be brought back to his own home, is very jealously guarded by our lawS. The master should always present his shipping articles to the consul or cora- the ship so that partial amputation became necessary, was allowed to recover the ex- penses of his care from the owners under the general maritime law. The charge for nursing and attendance are not affected by the act. Story, J., in Harden v. Gordon, supra. Where a seaman contracts a disease by his own vices or faults, and in defiance of the counsel and command of his superior oificers, the vessel is not chargeable for the expense of his cure. Pierce v. Patton, supra. A claim by a seaman for expenses of cure is in the nature of a claim for additional wages, and enforceable as such in ad- miralty. Harden v. Gordon, supra. The burden of proof as to the sufficiency of the medicine chest, is always upon Ihe owner. The Forest, supra ; The Nimrod, Ware, 9. 1 Act of 1798, eh. 77 ; Act of 1799, ch. 36 ; Act of 1802, ch. 51 ; Act of 1811, cli. 26, The Act of 1802, § .3, extends a similar provision to the case of boats, rafts, and flats, descending the Mississippi to New Orleans. See the remarks of Mr. Justice Story on these acts in Reed v. Canfleld, 1 Sumner, 200. It is there stated that they had been con- straed in practice not to impose upon ships and vessels in the whale and other fisheries the payment of hospital money, although their object is " the relief and maintenance of sicls and disabled seamen," without the slightest reference to the time, the place, or the manner of their sickness or disability, whether in port or on the ocean, whether in the service of the ship or otherwise ; whether from their own fault, or from inevitable casu- alty. They are auxiliary to, and do not supersede the maritime law ; hence, they do not affect the claim of a seaman injured in the ship's service in port, to be cured at the expense of the vessel under that law. By the Act of March 1, 1843, ch. 49, 5 U. S. Stats, at Large, 602, the provisions and penalties of the Act of 1798, are extended to registered vessels in the coasting-trade. 2 Harden v. Gordon, 2 Mason, 541 ; The Ship Neptune, 1 Pet. Adm. 142 ; Hastings V. The Happy Return, id. 256, n. ; Pierce v. Patten, Gilpin, 436 ; The Porest, Ware, 420 ; The Brig George, 1 Sumner, 151 ; Reed v. Canfield, id.- 197 ; Lamson v. West- cott, id. 591, Apperi. ; Johnson v. Hucldns, 6 Law Reporter, 311 ; Freeman v. Baker, Blatchf. & H. Adm. 372, 382 ; Nevitt v. Clarke, Olcott, Adm. 316 ; The Atlantic, Ab- bott, Adm. 451 ; Ringold i'. Crocker, Abbott, Adm. 344 ; Laws of Oleron, Art. 7 ; Laws of Wisbuy, Art. 19 ; Of the Hanse Towns, Art. 39 ; MoUoy, 243 ; Viner's Ab. tit. " Mariners," E. 3 ; L'Ord. de la Marine, liv. 3, tit. 4, art. 11 ; Valin, Com. tome 1, p. 721 ; Pothier, Contrats Mar. n. 190; Cleirac, Us et Coustumes de la Mer, p. 31. " The Maritime Law," said Mr. Justice Story, in the case of Reed v. Canfield, supra, " embraces all sickness sustained in the service of the ship and while the party consti- tutes one of the crew, without in the slightest manner alluding to any difference be- tween their occurring in a home or in a foreign port, upon the ocean or upon tide- waters." But neither under that law nor the United States Statutes, is the seaman to receive any compensation or allowance for the efffects of the injury. The owners are not in any just sense liable for consequential damages. Same case. ^ The Brig George, 1 Sumner, 151. See Winthrop v. Carleton, 12 Mass. 4. [435] 394* ELEMENTS OF MERCANTILE LAW. [CH. XVII. mercial agent of the United States, at every foreign port which he visits, but does not seem to be required by law to do this, unless the consul desires it.^ He must, however, present them to the first boarding officer on liis arrival at a home port. And if upon an arrival at a home port from a foreign voyage, it appears that any of the seamen are missing, the master must account ' for their absence.^ If he discharge a seaman abroad with his consent, he must pay to the American consul of the port, or the commercial agent, over and above the wages then due, three months' wages, of which the consul gives two to the seaman, and remits one to the treasury of the United States to form a fund for bringing home seamen from abroad.^ This obligation 1 Act of 1840, cli. 48, § 3, 5 TJ. S. Stats, at Large, 395. = Act of Feb. 28, 1803, ch. 9, 2 U. S. Stats, at Large, 203. The first section of this act is as follows : " Be it eaacted, &c., That, before a clearance be granted to any ves- sel bound on a foreign voyage, the master thereof shall deliver to tlie collector of the customs a list, containing the names, places of birth and I'csidence, and a description of the persons who compose his ship's company, to which list the oath or affirmation of the captain shall be annexed, tliat the said list contains the names of the crew, together with the places of their birtlr and residence, as far as he can ascertain them ; and the said collector shall deliver him a certified copy thereof, for which the collector shall be entitled to receive the sum of twenty-five cents ; and the said master shall moreover enter into bond with sufficient security, in the sum of four hundred dollars, that he shall exhibit the aforesaid certified copy of the list to the first boarding officer, at the first port in the United States at which he shall arrive on his return thereto, and then and there also produce the persons named therein to the said boarding officer, whose duty it shall be to examine the men with sucli list, and to report the same to the collector ; and it shall be the duty of the collector at the said port of arrival (where the name is different from tlie port from whicli the vessel originally sailed), to transmit a copy of the list so reported to him, to the collector of the port from whicli said vessel originally sailed." But the bond was not to be forfeited if it appeared that any seaman was not produced, because discharged in a foreign country with the consent of the consul, or because of the death of such seaman, or his having absconded, or been impressed into other ser- vice. See United States ;;. Hatch, 1 Paine, C. C. 336. ''' Act of Feb. 28, 1803, eh. 9, § 3. If a seaman is left in a foreign port, and the ves- sel is subsequently sold, it is doubtful if he can recover the extra wages allowed by this act in the case of sale. Nevitt v. Clarke, Olcott, Adm. 316. The Act of July 20, 1840, ch. 48, § .5, 5 U. S. Stats, at Large, 395, allows a consul, upon the application both of the master of a vessel and of a mariner under him, to discharge such mariner, if he thinks it expedient, without requiring the payment of three months' wages. See as to certificate of consul. Lamb v. Briard, Abbott, Adm. 367 ; The Atlantic, Abbott, Adm. 451 ; Miner v. Harbeck, id. 546. In Emerson v. Howland, 1 Mason, 45, it was held, that where seamen were discharged abroad, without the payment of the three months' wages required by the above act, on a libel for wages against the owners of the vessel, the court would enforce the payment of the three months' wages. See also, Orne v. Townsend, 4 JIason, 541. But in Ogdcn i\ On-, 12 Johns. 143, the court refused to sustain an action at law brought by a seaman discharged by his own consent, in a for- eign port, against the owners of a vessel, to recover two thirds of the three months' wages. The ground taken by the court was that the statute does not require the mas- ter to pay the money to the seaman, but to the consul, and that the payment was in the nature of a penalty for the discharge of American seamen in foreign coimtries. See also. Van Bcuren i\ Wilson, 9 Cowen, 158. When a vessel is sold, a seaman is entitled to his wages, up to the actual sale of the vessel, and not merely to the time of [436] CH. XVII.] THE LAW OP SHIPPINS. *395 does not apply, where the -voyage is necessarily broken up by a wreck, or similar misfortune.^ But proper measures must be taken to repair * the ship if possible,^ or to obtain her restora- tion, if captured. And the seamen may hold on for a reasona- ble time for this purpose, and if discharged before, may claim the extra wages.^ Our consuls and commercial agents may au- thorize the discharge of a seaman abroad for gross misconduct, and he then has no claim for the extra wages.* On the other hand, if he be treated cruelly, or if the ship be unseaworthy by her own fault, or if the master violate the shipping articles, the consul or commercial agent may direct the discharge of the seaman ; and he then has a right to these extra wages, and this even if the seaman had deserted the ship by reason of such cru- the advertisement of such sale. Lang v. Holbrook, Crabbe, 179. See Act of 1856, ch. 127, § 26, 11 IT. S. Stats, at Large, 62. 1 The Dawn, Ware, 485, Daveis, 121 ; Henop v. Tucker, 2 Paine, C. C. 151 ; The Saratoga, 2 Gallis. 164, 181. Tliis is now so provided by statute in the case of wrecked or stranded vessels, or where they are condemned as unfit for service. Act of 1856, ch. 127, § 26, U tl. S. Stats, at Large, 62. See also. Brown v. The Indepen- dence, Crabbe, 54. ^ The Dawn, Ware, 485 ; Pool v. Welsh, Gilpin, 193; The Saratoga, 2 Gallis. 164. See Wells v. Meldrun, 1 Blatchf. & H. Adm. 342. ' In the Saratoga, 2 Gallis. 164, Story, J., said : " Jt has been further argued, that by the capture, the relation between the owners and mariners ceases ; so that the latter are not bound to remain by the ship, but are at liberty, without the imputation of desertion, to abandon the voyage. Without deciding whether the rule assumed in some of our own courts be not more reasonable, that the marinei-s are bound to remain by the ship until a iirst adjudication (Brig Elizabetli, Pet. 128) ; it is clear that the mariner is not bound to leave the ship. He has a right to remain by her and wait the event. If re- stored, he is entitled to his wages, if the ship proceed and earn a freight ; if condemned, he may lose his wages, though perhaps, under circumstances, with a recompense for his actual services, pending the prize proceedings. But see Lemon u. Walker, 9 Mass. 403 ; Alfridson v. Ladd, 12 Mass. 173. * Under the Act of Peb. 28, 1803, ch. 9, "a discharge of a seaman in a foreign port, in order to justify a master for not producing him on the return of the vessel, must have been with the consent of the consul, vice-consul, commercial agent, or vice-commercial agent, there residing, signified in writing under his hand and official seal." Any great misconduct only will justify a master in putting an end to the contract with seamen. In Hutchinson v. Coombs, Ware, 65, 70, Ware, 3., after admitting that by the marine law a master could, in certain cases, turn a mariner out of the vessel, said : " But this he cannot do for slight or venial offences, and certainly not for a single offence, unless of a very aggravated character. The cases stated in which a master is permitted to discharge a seaman are, when he is incorrigibly disobedient, and will not submit to do his duty ; Thorne v. White, 1 Pet. Adm. 175 ; or if he is mutinous and rebellious, and persists in such conduct ; Relf v. The Maria, 1 Pet. Adm. 186 ; or guilty of gross dis- honesty, as embezzlement or theft ; Black v. The Louisiana, 2 Pet. Adm. 268 ; or if he is an habitual drunkard, and a stiiTcr up of quarrels and broils, to the destruction of the discipline of the crew ; or by his own fault renders himself incapable of performing his duty." See also, Orne v. Townsend, 4 Mason, 541 ; Smith v. Treat, Daveis, 266 ; Whitton V. The Ship Commerce, 1 Pet. Adm. 164; Atkyns «. Burrows, 1 Pet. Adm. 244 ; The Nimrod, Ware, 9. Only gross misconduct or disobedience will justify a mas- ter in discharging a mate or other officer. Atkyns v. Burrows, supra ; The Exeter, 2 Rob. Adm. 261 ; Thompson v. Busch, 4 Wash. 'C. C. 338. 37 * [ 437 ] 396* ELEMENTS OF MERCANTILE LAW. [CH. XVII. elty.i Our seamen may also be sent home in American ships, which are bound to bring them for a compensation not to exceed ten dollars each, and the seaman so sent must work and obey as if originally ' shipped.^ Besides this, if a master discharges a seaman against his consent and without good cause in a foreign port, he is liable to a fine of five hundred dollars, or six months' imprisonment.^ And a seaman may recover full indemnity or compensation for his loss of time, or expenses incurred by reason of such discharge.* Seventh. As to the regulation of punishment, flogging has 1 Act of July 20, 1840. As to what acts of cruelty will justify a seaman in desert- ing, see Steele v. Thacher, Ware, 91 ; Sherwood v. Mcintosh, Ware, 109. In Ward V. Ames, 9 Johns. 138, it was held that, if a seaman is compelled to leave the ship, on account of ill usage and eiuel treatment by the master, it is not a case of voluntary desertion, and the seaman is entitled to recover at common law his full wages for the whole voyage. ^ Act of Feb. 28, 1803, eh. 9, ^ 4. The act provides a penalty of one hundred dol- lars, in case any master refuses to bring home destitute seamen. In Matthews v. Of- fley, 3 Sumner, 115, it was held that an action for this penalty must be brought in the name of the United States. 8 Act of 1825, ch. 65, ^ 10. In United States v. Netcher, 1 Story, 307, Stcrry, J., after citing the tenth section of the above act, said : " In my judgment, this section enumerates three distinct and independent offences. 1. The maliciously and without justifiable cause, forcing any olBcer or mariner on shore in any foreign port. 2. The maliciously and without justifiable cause, leaving such officer or mariner on shore in any foreign port. 3. The maliciously and without justifiable cause, refusing to bring home again all the officers and mariners of the ship in a condition to return, and willing to return on the homeward voyage." See also. United States i'. Ruggles, 5 Mason, 192 ; United States v. Coffin, 1 Sumner, 394 ; United States o. Lunt, 18 Law Rep. 683. * In Emerson v. Howland, 1 Mason, 45, 53, Stoi-y, J., said : "In some of the adjudged cases, indeed, wages up to the successful termination of the voyage, have been allowed ; in others, wages up to the return of the seaman to the country where he was originally shipped, without reference to the termination of the voyage. The Beaver, 3 Rob. Adm. 92 ; Robinctt v. The Ship Exeter, 2 Eob. Adm. 261 ;"Hoyt v. Wildfire, 3 Johns. 518 ; Brooks V. Dorr, 2 Mass. 39 ; Ward v. Ames, 9 Johns. 138 ; Sullivan v. Morgan, 11 Johns. 66 ; The Polly & Kittv, 2 Pet. Adm. 420, 423, note ; Mahoon v. The Glocester, 2 Pet. Adm. 403, 406, note ; The Little John, 1 Pet. Adm. 1 15, 119, 120. But these ap- parent contrarieties are easily reconcilable, when the circumstances of each case are carefully examined. In all the cases, a compensation is intended to be allowed, which shall be a complete indemnity for the illegal discharge, and this is ordinarily measured by the loss of time, and the expenses incuiTcd by the party. It is presumed that after his return home, or after the lapse of a reasonable time for that purpose, the seaman may, without loss, engage in the service of other persons, and where this happens to he the case, wages are allowed only untU his return, although the voyage may not then have terminated. On the other hand, if the voyage have tei-minated before his return, or before a reasonable time for that purpose has elapsed, wages are allowed up to the time of his return, for otherwise he would be without any adequate indemnity. Cases, however, may occur, of such gross and harsh misbehavior, or wanton injustice, as might require a more ample compensation than could arise from either rule." The ex- penses of the seaman's return are allowed in addition to his wages ; but from these expenses his intermediate earnings may be deducted. Hutchinson v. Coombs, Ware, 65. Where seamen were turned off from a privateer without lawful cause, they were held to be entitled to their proportion of the prizes taken during their absence. Mahoon V. The Glocester, 2 Pet. Adm. 403. [438] CH. SVII.] THE LAW OF SHIPPING. *'S97 been abolished and prohibited by law. This includes the use of the cat, or a similar instrument, but not necessarily blows of the hand, or a stick, or a rope.^ Desertion, in maritime law, is * distinguished from absence without leave, by the intention not to return. This intention is inferred from a refusal to return.^ If he returns and is received, this is a condonation of the offence, and is a waiver of the for- feiture.* If he desert before the voyage begins, he forfeits the 1 The Act of March 3, 1835, prohibited the beating, wounding, or imprisoning of seamen, from malice, hatred, or revenge, and without justifiable cause. In United States V. Cutler, 1 Curtis, 502, where the master was indicted under that act for beating a seaman, Cuttis, J., said: "The government must prove: 1. The beating; 2. The want of justifiable cause ; 3. Malice." But the Act of September, 1850, c. 80, contains this clause : " Provided, that flogging in the navy, and on board vessels of commerce, be, and the same hereby is abolished, from and after the passage of this act." Mr. Jus- tice Curtis, in a charge to the grand jury, delivered at Providence, R. I., November 15, 1853, instructed them that the words " vessels of commerce," in the above statute, in- cluded vessels engaged in the whale and other fisheries ; that the word " flogging " referred only to "punishment by stripes inflicted with a cat-o'-nine-tails, or other instru- ment capable of inflicting the same kind of punishment." 1 Curtis, C. C. 509. So hdd, also, in TJ. S. u. Cutler, 1 Curtis, C. C. 501. The Act of 1850 is not a penal law, and no indictment can be framed upon it. But it has an important bearing upon the Act of 1835 in regard to the question of justifiable cause a:nd malice. Same case. 2 In Cloutman v. Tunison, 1 Sumner, 373, 375, Story, J., said : " By the general maritime law, desertion from the ship in the course of the voyage, is held to be a for- feiture of the antecedent wages earned by the party ; and this rule is equally as appli- cable to the officers as it is to the seamen of the ship. It is believed that this rule con- stitutes a part of the maritime code of every commercial nation, and is founded upon a universal principle of public policy. But still, a very important question remains, upon which much loose and unsatisfactory opinion seems to pervade the community. It is, what, in the sense of the maritime law, constitutes desertion ? It is commonly enough supposed, that an absence from the ship, without leave of the proper officer, or in diso- bedience of his orders, constitutes desertion. But this is certainly a mistake. Deser- tion, in the sense of the maritime law, is a quitting of the ship and her service, not only without leave, and against the duty of the party, but with an intent not again to return to the ship's duty. There must be the act of quitting the ship, animo derelin- quendi, or animo non revertendi. If a seaman quits the ship without leave, or in disobe- dience of orders, but with an intent to return to duty, however blamable his conduct may be, and it is certainly punishable by the maritime law, not only by personal chas- tisement, but by damages by way of diminished compensation — [see 1 Valin, Com. Lib. 2, tit. 7, art. 3, p. 534 ; The Ship Mentor, 4 Mason, 84 ; 3 Kent, Com. ^ 46, pp. 198, 199 (2d edition)], — it is not the offence of desertion to which the maritime law attaches the extraordinary penalty of forfeiture of all antecedent wages." It was also Iield, that the desertion must be during the voyage, and hence that leaving the vessel, after she had arrived at her last port of destination, and is moored in good safety in the proper and accustomed place, is not desertion, although it is a violation of the obliga- tion to attend to the unUvery of the cargo. See also. The Brig Cadmus v. Matthews, 2 Paine, C. C. 229 ; Borden v. Hiem, Blatchf & H. Adm. 293 ; The Union, id. 545 ; Ship Union v. Jansen, 2 Paine, C. C. 277; Coffin v. Jenkins, 3 Story, 108; The Eo- vena, Ware, 309 ; The Bulmer, 1 Hagg. Adm. 163 ; The Mentor, 4 Mason, 84 ; The Two Sisters, 2 W. Eob. 125; The Pearl, 5 Rob. Adm. 224. 3 Miller v. Brant, 2 Camp. 590 ; Beale v, Thompson, 4 East, 546 ; Train v. Bennett, 3 Car. &P. 3. In Cloutman v. Tunison, 1 Sumner, 373, 376, Story, J., said: "And even in a case of clear desertion, if the party repents of his oifence, and seeks to return to duty, and is ready to make suitable apologies, and to repair the injuries sustained by his misconduct, he is entitled to be received on board again, if he tenders his services [439] 398* ELEMENTS OF MERCANTILE LAW. [CH. XVII. advanced wages, and as much more ; ^ but he may be appre- hended by a warrant of a justice, and forcibly compelled to go on board, and this is a waiver of the forfeiture.^ By desertion on the voyage, he forfeits all his wages and all his property on board the ship, and is liable to the owner for all damages sus- tained in hiring another seaman in his place.^ Desertion, under the statute of the United States on this sub- *ject, seems to be a continued absence from the ship for more than forty-eight hours, without leave ; and there must be an entry in the log-book of the time and circumstances.* But any desertion or absence without leave, at a time when the owner has a right to the seaman's service, is an offence by the law mer- chant, giving the owner a right to full indemnity.^ SECTION XI. OF PILOTS. An act of Congress authorizes the several States to make in a reasonable time, and before another person has been engaged in his stead, and his prior conduct has not been so flagrantly MTong, that it would justify his discharge." 1 Act of July 20, 1790, ch, 29, § 2 ; Cotel v. HiUiard, i Mass, 664. But absence, with the leave of the master, will not work such forfeiture. 2 Act of July 20, 1790, ch. 29, § 7 ; Bray v. Ship Atalanta, Bee, 48; Turner's case, Ware, 83. The Act of March 2, 1829, provides for the apprehension and delivery of deserters from vessels belonging to foreign governments, which hare a treaty with the United States, stipulating for the restoration of seamen deserting, on application of the consul or vice consul of the foreign government. See In re Bruni, 1 Barb. 187. ^ Cloutman v. Tunison, 1 Sumner, 373 ; CoflSn v. Jenkins, 3 Story, 108 ; The Eo- vena, Ware, 309 ; Spencer v. Eustis, 21 Maine, 519. The 5th section of the Act of 1790, ch. 29, has been materially changed by the Act of 1856, ch. 127, 11 TJ. S. 'Stata. at Large, 62. * Act of July 20, 1790, § 5. In Cloutman v. Tunison, 1 Sumner, 381, Story, J., said : " To work the statute forfeiture, it is made an indispensable condition, that the mate, or other ofiicor having charge of the log-book, should make an entry therein of the name of such seaman, on the day on which he shall so absent himself; and the entry must not merely state his absence, but that he is absent without leave. The entry on the very day is, therefore, a sine qua non." See also, Cofiin v. Jenkins, 3 Story, 108"; Snell t). Brig Independence, Gilpin, 140; Spencer v. Eustis, 21 Maine, 519 ; Whitton V. Brig Commerce, 1 Pet. Adm. 160 ; Malone v. Brig Maiy, 1 Pet. Adm. 139 ; The Phoebe v. Dignum, 1 Wash. C. C. 48. But the entry on the log-book, although necessary, is not conclusive evidence of desertion. Jones v. Brig Phoenix, 1 Pet. Adm. 201. A seaman is subject to the penalty for desertion, if he does not return within forty-eight hours, although he majf have been prevented by the sailing of the ship. Cofiin V. Jenkins, 3 Story, 108 ; Ship Union v. Jansen, 2 Paine, C. C. 277. 5 In Cloutman v. Tunison, 1 Sumner, 373, a desertion was not shown, but the sec- ond mate was absent without leave during the unlivery of the ship, and a forfeiture of two months' wages was decreed. See also. The Baltic Merchant, Edw. Adm. 86. [ 440 ] CH. XVII.] THE LAW OF SHIPPINa. *399 their own pilotage laws ; ^ and questions under these laws are cognizable in the State courts.^ No one can act as pilot, and. claim the compensation allowed by law for the service, unless duly appointed. And he should always have with him his com- mission, which usually designates the largest vessel he may pUot, ' or that which draws the most water.^ If a pilot offers himself to a ship that has no pilot, and is entering or leaving a harbor, and has not reached certain geographical limits, the ship must pay him pilotage fees, whether his services are accepted or not.* As soon as the pilot stands on deck, he has control of the 1 Act of Aug. 7, 1789, c. 9, § 4 ; 1 tJ. S. Stats, at Large, 54. Section 4 of tliis Act is as follows : " And be it further enacted, that all pilots in the bays, inlets, rivers, har- bors, and ports of the United States, shall continue to be regulated in conformity with the existing laws of the States respectively wherein such pilots may be, or with such laws as the States may respectively hereafter euact for the purpose, until further legis- lative provision shall be made by Congress." See also, the case of Gibbons v. Ogden, 9 Wheat. 207. By the Act of March 2, 1837, c. 22, 5 TJ. S. Stats, at Large, 153, pilots on the waters which are the boundaries of two States, may be licensed by either State, and may be employed by any vessel going into or out of any port situated on such waters. ^ In The Wave, Blatchf. & H. Adm. 235, it was hdd that the United States courts had concurrent jurisdiction with the State courts to entertain suits for pilotage. On ap- peal, the decision was reversed. Schooner Wave v. Heyer, 2 Paine, C. C. 131 ; Low V. Commissioners of Pilotage, R. M. Charlt. 314. But in the case of Hobart v. Dro- gan, 10 Pet. 108, Mr. Justice Story held that the United States courts had a con- current jurisdiction with the State courts, to entertain suits for pilotage, even in the case where the pilot's compensation was established by a law of the State in which the action is brought. See also. The Anne, 1 Mason, 508 ; Dexter v. Bark Richmond, 4 Law Rep. 20. The State laws respecting pilotage are not in derogation of the common law, with which they have no connection. They are rather to be classed under tlie liead of the Maritime Law, and are entitled to a liberal construction. Per Hubbard, J., in Smith V. Swift, 8 Met. 332. It is now held that the States have concun'cnt jurisdiction over the subject of pilotage with Congress. Cooley v. The Board of Wardens of the Port of POiiladelphia, 12 How. 299. ^ Hammond v. Blake, 10 B. & C. 424; Commonwealth v. Ricketson, 5 Met. 417, 426. * Commonwealth v. Ricketson, 5 Met. 412, 424; Martin v. Hilton, 9 Met. 371; Nickcrson v. Mason, 13 Wend. 64; Smith ii. Swift, 8 Met. 329 ; Hunt v. Mickey, 12 id. 346; Hunt v. Carlisle, 1 Gray, 257 ; Gemsh v. Johnson, 1 N. C. Law, 335 ; Beck- with f. Baldwin, 12 Ala. 720. But if he offers himself and is refused, he cannot main- tain an action for work and labor done. Donaldson v. Fuller, 3 S. & R. 505. And see the remarks of Shaw, C. J., in Winslow v. Prince, 6 Cush. 370. The master is bound' to approach the pilot-ground carefully, and if in the night, ho must hold out a light, and wait a reasonable time for a pilot, and approach one if he can do so with safety. Bolton V. Am. Ins. Co. 3 Kent, Com. 476, n. (a). If he neglects to take a pilot when it is in his power to do so, and a loss happens in consequence, the insurers are dis- chai-ged. M'Millan v. U. S. Ins. Co. 1 Rice, 248. But see the case of Flanigen v. Washington Ins. Co. 7 Barr, 306. If, however, the master at a foreign port, attempts to got a pilot and fails, he may then, in the exercise of his best discretion, endeavor to navigate the vessel himself into port. And for a loss incun-ed whilst he is so doing, the insurers remain liable. Phillips v. Headlam, 2 B. & Ad. 380; Vansyckle v. The Sch. Thomas Ewing, U. S. D. C. Penn., 3 Law Reporter, 449. It is not necessary, to constitute a valid "offer of his services," that the pilot should go on board and tender them to the master. If he hail the vessel when the pilot-boat is so near and in such a position that the hail was heard on board the ship, or might have been, if the ofBcers [441] 400* ELEMENTS OF MEECANTILE LAW. [CH. XVII. ship.i But it remains the master's duty and power, in case of obvious and certain disability, or dangerous ignorance or error, to disobey the pilot, and dispossess him of his authority.^ If a ship neglect to take a pilot, when it should and can do so, the owners will be answerable in damages to shippers or others for any loss which may be caused by such neglect or refusal."^ Pilots are themselves answerable for any damage resulting from their own negligence * or default, and have been held strictly to this liability.* The owner is also liable, on. general principles, for the default of the pilot, who is his servant.^ and crew had been on duty, this is a suflBcient offer and tender of services. Common- wealth V. Ricketson, supra. But see Peake v. Carrington, 12 Brod. & B. 399. 1 Snell V. Rich, 1 Johns. 305 ; Yates v. Brown, 8 Pick. 23. But see Denison v. Sey- mour, 9 Wend. 9 ; United States v. Forbes, Crabbe, 558 ; TJ. S. v. Lynch, 2 N. Y. Leg. Obs. 51. 2 The Duke of Manchester, 2 W. Rob. 480. In this case. Dr. Lushington said : "It is, I conceive, the duty of the master to observe the conduct of the pilot, and in the case of palpaljle incompetency, whether arising from intoxication or ignorance, or any other cause, to interpose his authority for the preservation of the property of his em- ployers. In such a case, the vessel and lives of the crew are not to be risked, because there is a law which, under ordinary circnmstances, imposes the responsibility upon the pilot. And in anotlier case (The Diana, 1 W. Rob. 131), where the master and mate of the vessel had given up the entire management of the vessel to the pilot, and were diverting themselves in the cabin below, when, through the negligence of the pilot, a collision occurred, the learned judge decided that the accident was occasioned by the joint misconduct of the master, mate, and pilot, and that the owners were responsible therefor. But it is only in extreme cases, that the master is warranted in interfering with the pilot in his proper vocation. Per Dr. Lushington, in the case of The Maria, 1 W. Roh. 1 10. See further on this subject the dicta in the cases of The Joseph Har- vey, 1 Rob. Adm. 311 ; The Girolamo, 3 Hagg. Adm. 169, 176 ; Tlie Christina, 3 W. Rob. 27, afBrraed, Petley v. Catto, 6 Moore, P. C. 371 ; The Lochlibo, 3 W. Rob. 310, affirmed, PoUok v. McAlpin, 7 Moore, P. C. 427 ; Netherlands Steamboat Co, v. Styles, Privy Council, 40 Eng. L. & Eq. 19. " iveeler v. Fireman's Ins. Co. 3 Hill, 250; M'Millan v. TJ. S. Ins. Co. 1 Rice, '248. And in an English case, where a vessel, seized on justifiable grounds, as appeared by the condemnation of a part of her cargo, was lost by the neglect of the captors to take a pilot on board, the Court of Admiralty decreed restitution in value against them. See the case of The William, 6 Rob. Adm. 316. * Yates V. Brown, 8 Pick. 24 ; Heridia v. Ayres, 12 id. 334 ; Lawson v. Dumlin, 9 C. B. 54. See Stort v. Clements, Peake, 107. But he will be exonerated from lia- bility, if it appear that the accident was owing neither to carelessness nor want of skill on his part, but to a simple miscalculation, where the most prudent man might have erred. The Constitution, Gilpin, 579. ^ The Xcptune, 1 Dods. 467 ; The Transit, cited in the case of The Protector, 1 W. Rob. 45; Yates v. Brown, 8 Pick. 23; Williamson o. Price, 16 Mart. La. 339; Bussy V. Donaldson, 4 Dall. 206 ; Pilot-boat Washington v. The Saluda, U. S. D. C. S. Car., April, 1831. But see The Protector, 1 W. Rob. 45; The Maria, id. 95; The Agricola, 2 W. Rob. 10 ; The Lochlibo, 3 W. Rob. 310. [442] CH. XVII.] THE LAW OF SHIPPING. -400 SECTION XII. • OF MATERIAL MEN. Maritime law so calls persons employed to repair a ship or furnish her supplies.^ Such persons, and indeed all who work upon or about her, have a lien on the ship for their charges.^ Stevedores, however, cannot sue in rem or in personam in the admiralty .3 There is, however, this important distinction. Ma- terial men, by admiralty law, have a lien oij^y on foreign ships, and not on domestic ships.* But many of our States have by 1 We should hare no doubt that in principle a contract for building a ahip is a mari- time contract which might be enforced in admiralty, but this is doubted by the Supreme Court of the United States. People's Ferry Co. v. Beers, 20 How. 393 ; Eoach v. Chapman, 22 How. 129. But see the Richard Busteed, U. S. D. C. Mass., Oct. 1858, 21 Law Reporter, 601. ^ The Neptune, 3 Hagg. Adm. 142; Harper v. The New Brig, Gilpin, 536; The Calisto, Daveis, 31. "By the general maritime law," said Judge Ware in the latter case, "material men, under which term, in the language of admiralty, are included all persons who supply materials or labor in building or repairing vessels, or fm'nish supplies which are necessary for their employment, as provisions for the crew, have, in addition to the personal liability of the debtor, a lien on the vessel for their security. It is com- monly said, that this principle was borrowed by the maritime, from the civil law ; but it seems more probable that it originated in the maritime usages of the middle .ages." See also, Rich v. Coe, Cowp. 636 ; and Farmer v. Davies, 1 T. R. 109, where Lord Mans- field expressed an opinion, that a person who supplies a ship with necessaries, generally has such a lien. 3 The Amstel, Blatchf. & H. Adra. 215; The Bark Joseph Cunard, Olcott, Adm. 120 ; M'Dermott v. The S. G. Owens, 1 Wallace, Jr. 370 ; Cox v. Murray, Abbott, Adm. 340. See also, Emerson v. Proceeds of the Pandora, 1 Newb. Adm. 438; Gurney v. Crockett, Abbott, Adm. 490 ; Bradley v. BoUes, id. 569 ; The Gustavia, Blatchf. & H. Adm. 189 ; Minturn v. Maynard, 17 How. 477. * In the case of the Zodiac, 1 Hagg. Adm. 325, Lord Kennebec Co. v. Augusta Ins. & Banking Co. 6 Gray, 204. ' Graves v. Boston Mar. Ins. Co. 2 Cranch, 441 ; Andrews v. Essex F. & M. Ins. Co. 3 Mason, 6 ; Phoenix Fire Ins. Co. v. Gurnee, 1 Paige, 278 ; Oliver v. Com- mercial Mut. Mar. Ins. Co. 2 Curtis, C. C. 277. The evidence of the mistake must in all cases be clear and satisfactory. Franklin Fire Ins. Co. v. Hewitt, 3 B. Mon. 231. " Now I take the rule to be, that if by mistake, a deed be drawn, plainly different from the agreement of the parties, a court of equity will grant relief, by considering the deed as if it had conformed to the agreement. If the deed be ambiguously expressed, so that it is difficult to give it a construction, the agreement may be referred to in order to ex- plain such ambiguity." Per Washington, J. Hogan v. Delaware Ins. Co. 1 Wash. C. C. 419. See also, Dow v. Whetten, 8 Wend. 160. 8 Jessel V. Williamsbui-gh Ins. Co. 3 Hill, 88. Per Curiam: "We know of no prin- ciple upon which the assignee of a policy of insurance can be allowed to sue upon it in his own name. The general rule applicable to personal contracts is, that, if assigned, [451] 408* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. loss is made by the policy payable " to order " or to " bearer," it will then be negotiable by indorsement or delivery, but it is not certain that the transferree can even then sue in his own narae.^ But if the insured transfers the property, unaccompanied by a transfer of the policy with consent of the insurer, this discharges the policy, unless it was expressly made for the benefit of who- ever should be owner at the time of the loss, as before stated.^ ■* There is usually a clause to the effect that the policy is void if assigned without the consent of the insurers. But this does not apply to an assignment by force of law, as in a case of insolvency ; ® or in a case of death.* And after a loss has oc- tlie action fof a breach must be brought in the name of the assignor, except where the defendant has expressly promised the assignee to respond to him." The policy in this case contained the usual clause that the interest of the insured should not be assigned withoirt the consent of the corporation. The insured assigned his interest with their consent, and the assignee sued in his own name. The court held that the action should have been brought in the name of the assignor, and the plaintiff, therefore, was non- suited. See also, Howard «. Albany Ins. Co. 3 Denio, 305. The later cases in New York, where assignees have sued in their own names, have been brought under the new Code, c. 4, tit. 3, which provides that all actions are to be brought by the real paj-ties in interest. 2 N. Y. Rev. Stat. p. 499. The transfer of the entire interest of the insured, together with the assent of the undenvriter to the assignment of the policy, will be con- sidered a promise on his part to make payment to the assignee, and he may then sue in his own name. Carroll w. Boston Mar. Ins. Co. 8 Mass. 515; Howard v. Albany Ins. Co. 3 Denio, 301 ; Tillou v. Kingston Mutual Ins. Co. 7 Barb. 570. 1 By the law of France, policies of insurance may be made negotiable by making the loss payable to order, or to bearer. Emerigon, c. 18, § 2 ; 2 Valin, 45 ; Alauzet, 360 ; 2 id. 135 ; see 2 Duer on Ins. 51, 52. It may perhaps be doubted whether in England, and in this country, an assignee of such a policy could maintain an action upon it in his own name. See Eogg v. Middlesex Mut. E. Ins. Co. 10 Cush. 337, 345 ; Eolsom V. Belknap Co. Mut. F. Ins. Co. 10 Foster, 231 ; Hobbs v. Memphis Ins. Co. 1 Sneed, 444 ; Pollard v. Somerset Mut. F. Ins. Co. 42 Me. 221 ; Flanagan v. Camden Mut. Ins. Co. 1 Duti-h. 506. It has been hdd in Enghand, that si bill of lading was not such a negotiable instr\iment that an indorsee could maintain an action upon it in his own name. Thompson v. Dominy, 14 M. & W. 403. The same point is decided in a late case in 9 C. B. 297, Howard v. Shepherd. Maiile, J., says ; "Now it is per- fectly clear that a contract cannot be transferred so as to enable the transfen-ee to sue upon it in his own name." In Skinner v. Somes, 14 Mass. 107, the plaintiff declared upon a bond made by the defendant to the assignor of the plaintiff and by him assigned to the plaintiff. The court hdd that though the word " assigns " was in the bond, this would not entitle the assignee to sue in his own name. 2 The party mth whom the contract was made, cannot sue, for "the insured must have an interest at the time of the loss as well as when the contract is made." Per Branson, C. J., in Howard v. Albany Ins. Co. 3 Denio, 301 ; and the assignee cannot site, for the contract was not made with him originally, and he has not become a party to it with the consent of the underwriter. Lynch v. Dalzell, 4 Brown, P. C. 431 ; The Sadler's Co. v. Badcock, 2 Atk. 554 ; Wilson v. Hill, 3 Met. 66 ; Murdock v. Che- nango Mut. Ins. Co. 2 Comst. 210; MeCarty v. Com. Ins. Co. 17 La. 365 ; Tate o. Citizens Mut. F. Ins. Co. 13 Gray, 79. 3 But see contra Adams v. Eockingham Mut. F. Ins. Co. 29 Me. 292. In respect to voluntary assignments the general rule is, that they do not work an alienation. Gour- ' The term " alienate " is said, by the Supreme Court of New York, to mean a con- veyance of the title to the estate, and nothing short of this will amount to an aliena- [462] CH. XVIII.] MARINE INSURANCE. -408 curred, the claim against the insurers is assignable.^ And whether the parties may agree that such an assignment shall invalidate the policy is a matter of doubt.^ And a seller who remains in possession of the property as trustee for the pur- chaser,3 or a mortgagor retaining possession, may retain the policy and preserve his rights.* SECTION II. OP THE INTEREST OF THE INSURED. The contract of Insurance is a contract of indemnity for loss. The insured must therefore be interested in the property at the don V. -Ins. Co. of N. A. 3 Yeates, 327, 1 Binn. 430, n. ; Gordon v. Mass. F. & M. Ins. Co. 2 Pick. 249. But if the assignment is made on the condition that the debts should be released and discharged, and this is done, it amounts to an alienation. Lazarus v. Commonwealth Ins. Co. 5 Pick. 76. See also, Dadmun Manuf. Co. v. Worcester Mut. F. Ins. Co. H Met. 429. ^ Spavkes v. Marshall, 2 Bing. N. C. 761 ; Dadmun Manuf. Co. v. Worcester Mut. F. Ins. Co. n Met. 429, 435 ; Mellen v. Hamilton F. Ins. Co. 5 Duer, 101 ; Brichta v. N. Y. La Fayette Ins. Co. 2 Hall, 372. ^ See the opposing cases of Goit v. National Protection Ins. Co. 25 Barb. 189 ; Dey V. Poughkeepsie Mut. Ins. Co. 23 Barb. 623. s Powles V. Innes, 11 M, & W. 10; Eeed v. Cole, 3 Burr. 1512; Morrison v. Ten- nessee M. & F. Ins. Co. 18 Misso. 262. * Gordon v. Mass. Fire & Mar. Ins. Co. 2 Pick. 249 ; Lazarus v. Commonwealth Ins. Co. 5 Pick. 76 ; Stetson v. Mass. Mut. F. Ins. Co. 4 Mass. 330 ; Hibbert v. Car- ter, 1 T. R. 745 ; Irving v. Richardson, 2 B. & Ad. 193 ; Bell v. Western M. & F. Ins. Co. 5 Rob. La. 423. ■ tion. Masters v. Madison Co. Mut. Ins. Co. 11 Barb. 624. Thus it has been Md that a mortgage on real estate is not an alienation. Conover v. Mutual Ins. Co. of Albany, 1 Comst. 290, 3 Denio, 254 ; Jackson v. Mass. Mut. F. Ins. Co. 23 Pick. 418. Nor a mortgage of personal property without a transfer of possession to the mortgagee. Rice V. Tower, 1 Gray, 426. See also, Holbrook v. Am. Ins. Co. 1 Curtis, C. C. 193. Nor a levy on execution, Clark v. N. Eng. Mut. F. Ins. Co. 6 Gush. 342 ; Rice v. Tower, 1 Gray, 426 ; nor a sale of the equity of redemption so long as the party has the right to redeem. Strong v. Manufacturers Ins. Co. 10 Pick. 40. If the insured die intestate, his death works no alienation, because his heirs take by descent, and not by any act of his. Bm-bank o. Rockingham M. F. Ins. Co. 4 Foster, 550. See also, Haxall V. Shippen, 10 Leigh, 536 ; Parry ;;. Ashley, 3 Sim. 97 ; Norris v. Harrison, 2 Madd. Ch. 268; Mildmay v. Folgham, 3 Ves. 471 ; Orrell v. Hampden Fu:e Ins. Co. 13 Gray, 431. In Dreher v. Etna Ins. Co. 18 Misso. 128, it was held that a dissolution of a partnership, before loss, and a division of the goods, was such a change of title that the underwriters would be discharged. Whetlier a sale by one joint-owner or pai'tner to the other jointowners or partners, is an alienation, see Tillou v. Kingston Mut. Ins. Co. 7 Barb. 570, 1 Sold. 405; Murdock v. Chenango Mut. Ins. Co. 2 Comst. 210; Howard v. Albany Ins. Co. 3 Denio, 301 ; Ferriss v. North America F. Ins. Co. 1 Hill, 71; McMasters v. Westchester Co. Mut. Ins. Co. 25 Wend. 379; Wilson v. Genesee Mut. Ins. Co. 16 Barb. 511; Dey u. Poughkeepsie Mut. Ins. Co. 23 Barb. 623 ; Finley v. Lycoming Co. Mut. Ins. Co. 30 Penn. State, 311. See also, Hobbs v. Memphis Ins. Co. 1 Sneed, 444. See next chapter, on Insurance against Fire. [463] 409* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. time of the loss.i The value to be paid for may be agreed upon beforehand and expressed in the policy, which is then called a valued policy ; or left to be ascertained by proper evidence, and the policy is then called an open policy.^ This valuation, if in good faith, is binding on both parties, *^ even if it be very high indeed.^ But a wager policy, that is, one without interest, is void ; * and if there be some interest, the valuation may be so excessive as to be open to the objection that the interest is a mere cover, and that the contract is only one of wager." But a mere exaggeration of the value of the property is not sufficient to avoid the policy .•^ The valuation is void if fraudulent in any respect ; as if it cover an illegal inter- est or peril.^ And in this case the fraud vitiates and avoids the whole contract and the insured recovers nothing.^ And if the valuation is gross and excessive, fraud may be presumed.^ 1 See supra, p. 407, n. - All open policy is also one where the property insiired is to be inserted bj- subse- quent indorsements. See supra, p. 406, n. 5. •' Hodgson V. Marine Ins. Co. of Alexandria, 5 Cranch, 100, 6 Cranch, 206. In this case, the ship was valued at $10,000, and insured for $8,000. The court held that it would not necessarily avoid the contract, nor restrict damages to that sum, if it were proved that the actual vidue of the vessel was no more than >S,000, because she might have fairly cost her ownei-s the whole amount of her valuation. Coolidge v. Gloucester Marine Ins. Co. 15 Mass. 341 ; Miner v. Tagert, 3 Binn. 204. * In New York, liefore they were prohibited by the Revised Statutes, wager policies were held to be valid. Juhel v. Church, 2 Johns. Cas. 333. In Amory v. Gilman, 2 Mass. 1, Dana, C. J. says : " As wager policies are injurious to the morals of the citi- zens, and tend to encourage an extravagant and peculiarly hazardous species of gam- ing, they ought not to receive the countenance of this court." See also. Stetson v. Mass. Mut. F. Ins. Co. 4 Mass. 336; Lord v. Dall, 12 Mass. 115; Alsop v. Commer- cial Ins. Co. 1 Sumner, 464. All wagers upon matters in which the parties have no interest, are void contracts. Hoit v. Hodge, 6 N. H. 104 ; Pritehet o. Ins. Co. of N. America, 3 Yeates, 458. 6 Clark V. Ocean Ins. Co. 16 Pick. 289, 296; "Wolcott v. Eagle Ins. Co. 4 Pick. 429; Catron v. Tenn. Ins. Co. 6 Hnmph. 176. In Lewis o. Rucker, 2 Burr. 1171, Lord Itlansfidd says: "There are many conveniences from allowing valued policies; but where they are used merely as a cover to a wager, they would be considered as an evasion." •i Alsop V. Com. Ins. Co. 1 Sumner, 451, 473; Robinson v. Manuf. Ins. Co. 1 Met. 143; Gardner i>. Col. lus. Co. 2 Cranch, C. C. 550; Ii-ving v. Manning, 1 H. L. Cas. 287, 304, 6 C. B. 391, 419. " " It may be laid down as a general rule, that, where a voyage is illegal, an insur- ance upon such voyage is invalid." Per Tindal, C, J., Redmond v. Smith, 7 Man. & G. 474. See Mount v. Waite, .7 Johns. 434. But if the voyage is kno\vn to the underwriter to be illegal, at the time when he makes the contract, then he cannot say the contract is not valid. Arcliibald v. Mercantile Ins. Co. 3 Pick. 70, 73 ; Pollock v. Bahcoct, 6 Mass. 234; Richardson v. Maine Ins. Co. 6 Mass. 102. See Sect. III. post. ' We should state this to be the rule if the overvaluation was fraudulently made for any purpose. Haigh v. De La Cour, 3 Camp. 319 ; Gardner v. Col. Ins. Co. 2 Cranch, ^ See cases in preceding note. [454] OH. XVIII.] MARINE INSURANCE. *410 The insured may apply his valuation to the M'hole property, or to that part of it which he wishes to insure ; thus he may cause himself to be insured for one half of a cargo, the whole of which is valued at $20,000 — or one half, which half is val- ued at 120,000; and which of these things is meant will be determined by a reasonable construction of the language used. If he owns the whole, the valuation, in general, will be held to apply to the whole ; and only to a part if he owns only a part.i He may value one thing insured and not another ; ^ or may value the same thing in one policy and not in another, and then the valuation does not affect the policy which does not contain * it.-^ If only a part of the goods included in the valuation are on board and at risk, it applies to them pro rata.^ A valuation of an outward cargo may be taken as a valuation of a return cargo, substituted for the other by purchase and covered by the same policy.* And a valuation will cover the insured's whole interest in the thing valued, including the premium, unless a different purpose is expressed or indicated.^ A valuation of freight applies to the freight of the whole C. C. 550 ; Ocean Ins. Co. v. Fields, 2 Stoiy, 59, 77 ; Hersey v. Merrimack Co. Mut. E. Ins. Co. 7 Foster, 149, 155; Protection Ins. Co. v. Hall, 15 B. Mon. 411; Catron V. Tenn. Ins. Co. 6 Humph. 176. But see 2 Phillips Ins. 4 1182. ^ Feise v. Aguilar, 3 Taunt. 506; Dumas v. Jones, 4 Mass. 647. The insurance in this case was on freight valued at $5,000, for which amount the plaintiff caused himself to be insured. It was proved that the insurance was made on the joint account of the plaintiff and another person, though this fact was not known to the insurers at the time the contract was made. The court held that as the whole interest of the plaintiff was covered by other underwriters, he could not recover any thing in this suit. See Mayo v. Maine Fire & M. Ins. Co. 12 Mass. 259; Murray v. Columbian Ins. Co. 11 Johns. 302 ; Port V. Phoenix Ins. Co. 10 Johns. 79. 2 The ship may be valued and not the cargo. Eiley v. Hartford Ins. Co. 2 Conn. 368. ^ Higginson v. Dall, 13 Mass. 96. In this case a vessel was insured in Boston on an open policy, and afterwards insured on a valued policy in Calcutta. A total loss having occurred, it was settled under the Boston policy without regard to the value expressed in the other. See also, Bousfield v. Barnes, 4 Camp. 228 ; Mintuin i/. Col. Ins. Co. 10 Johns. 75; Kane v. Com. Ins. Co. 8 Johns, 229. * Wolcott V. Eagle Ins. Co. 4 Pick. 429 ; Forbes v. Aspinall, 13 East, 323 ; Clark v. Ocean Ins. Co. 16 Pick. 289, 295; Rickman v. Carstairs, 5 B. & Ad. 651 ; Haven v. Gray, 12 Mass. 71, 76 ; Mutual Marine Ins. Co. v. Mnnro, 7 Gray, 246, 249 ; Whit- ney V. Am. Ins. Co. 3 Cowen, 210; Brooke v. La. State Ins. Co. 16 Mart. La. 640, 681. ^ This is entirely a question of construction. The intent of the parties, as it appears on the face of the policy, will in all cases govern. Haven o. Gray, 12 Mass. 74; M'Kim V. Phcenix Ins. Co. 2 Wash. C. C. 89; Whitney v. American Ins. Co. 3 Cowen, 210, 5 Cowen, 712. s Brooks V. Oriental Ins. Co. 7 Pick. 259 ; Minturn v. Col. Ins. Co. 10 Johns. 75 ; Oo-den V. Col. Ins. Co. 10 Johns. 273 ; Mayo v. Maine F. & M. Ins. Co. 12 Mass. 259. [ 455 ] 411* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. cargo ; and if a part only be at risk, it applies pro rata} And it applies either to the whole voyage, or to freight earned by voyages which form parts of the whole, as may be intended and expressed.^ If profits are insured as such they are generally valued,^ but may be insured by an open policy.* If they are valued, the loss of the goods on which the profits were to have been made, im- ports iu this country a loss of the valued profits,^ without proof that there would have been any profit whatever ; it seems to be necessary in England to show that there would have been some profit, and then the valuation attaches.^ It is very common to insure profits, in fact, by a valuation of the goods sufficiently high to include all the profits that can be made upon them.^ *In an open policy, where the value insured is to be determined by evidence, the value of the property — whether ship or goods — which is insured, is their value when the insurance took efTect, including the premium of insurance ; as the law of insurance intends indemnifying the assured, as accurately as may be, for all his loss.^ If a ship be insured, its value throughout the 1 See cases supra, p. 410, n. 4. ^ Where the premium is double it has been hold that the voyage is distinct. Davy V. Hallett, 3 Gaines, 16 ; Hugg v. Augusta Ins. & Banking Co. 7 How. 595. Patapsco Ins. Co. V. Biscoe, 7 Gill & J. 293, extends the rale much further, but we are clearly of opinion that this case was incon-ectly decided. In Wolcott v. Eagle Ins. Co. 4 Pick. 429, there was no freight earned on the outward voyage, and this question did not arise. See also, Hughes i\ Union Ins. Co. 8 Wheat. 294." 3 Mumford v. Hallett, 1 .Johns. 433 ; Alsop v. Com. Ins. Co. 1 Sumner, 451 ; Hal- head r. Young, 6 Ellis & B. 312 ; 36 Eng. L. & Eq. 109, and cases infra. * Mumford i'. Hallett, 1 Johns. 439 ; Bcnecke on Ins. 28. ^ Patapsco Ins. Co. v. Coulter, 3 Pet. 222. 8 Barclay v. Cousins, 2 East, 544; Hodgson v. Glover, 6 East, 316 : Ewe v. Glover, 16 East, 218. ' Alsop V. Commercial Ins. Co. 1 Sumner, 451, 469. In this case, the profits were valued at S20,000. The plaintiff had on board bullion of the invoice value of SI 1,821, and hides of the value of $7,765. Mr. Justice Story says, p. 473 : " There is some- thing, too, in the nature of an insurance on profits, 'which distinguishes it from any other iusurance, whether on ships, or on goods, or on freight. The latter are generally susceptible of an exact valuation. But profits are not. It is not sufficient to justify the court in setting aside tlie present verdict upon this ground, that it should' doubt whether the over valuation was innocent. It must clearly see that it was fraudulent." See also Robinson v. Manufacturers Ins. Co. 1 Met. 143. 8 Shawc V. Felton, 2 East, 109 ; Lo Eoy v. United Ins. Co. 7 Johns. 343. In Usher V. Noble, 12 East, 639, Lord Ellenhorough lays down the rule as follows : "In the case of a valued policy, the valuation in the policy is the agreed standard; in case of an open policy, the invoice price at the loading port, including premiums of insurance and commission, is, for all purposes of either total or average loss, the usual standard of calculation resorted to for the purpose of ascertaining this value." In Carson v. Marine [456] CH. XVIII.] MARINE INSURANCE. *412 insurance is the same as at the beginning, without allowance for the effect of time upon it.^ And all its appurtenances, in a mer- cantile sense of this phrase, enter into this value.^ While the value does not vary with time, the interest of the in- sured at the time of the loss, is that on which he founds his claim.^ If the insurance is on goods on successive passages, and at the close of one the goods are sold at a profit, and the whole proceeds invested in the cargo put on board, this increased value enters into the value.* Generally, the value of goods is their invoice price, with all those charges, commissions, wages, &c., * which enter into the cost to the owner, when the risk com- mences.5 The drawback is not deducted ; ^ and the expenses incurred after the risk begins, as for freight, are not included.''' And the rate of exchange at the beginning of the risk is taken.* Ins. Co. 2 Wajh. C. C. 468, there was a total loss of goods insured on an open policy. Mr. Justice Washington held that the market price at the loading port and not the invoice price, was to be taken as the measure of damages. 1 Shawe v. Felton, 2 East, 109 ; Snell v. Delaware Ins. Co. 4 Ball. 430 ; Weskett on Ins. 304, u. 9. ^ Kemble v. Bowne, 1 Caines, 80 ; Shawe v. Felton, 2 East, 109 ; 1 Emerigon, 277, Meredith's Ed. 225. ^ See cases cited, ante, p. 407, n. 2. * Columbian Ins. Co. v. Catlctt, 12 Wheat. 383, In this case, the sum of S10,000 was insured on a cargo of flour from Alexandria to St. Thomas, and two other ports in tlie West Indies, and back to the port of discharge in the United States. More than $3,000 worth of the flour was sold at St. Thomas, and the vessel was afterwards wrecked. At the time the vessel sailed, the value of the flour on board amounted to more than $16,000; at the time of the loss, over $12,000. The question arose whether at the time of the loss, the policy covered the cargo then on board, to the whole amount underwritten, or only twelve sixteenths of it, that is the portion covered at the com- mencement of the risk. It was hdd that the policy covered $10,000 during the whole voyage, out and home, so long as the insured had that amount on board. And tliat the loss must be apportioned between the parties in the proportion which the sum insured bore to the amount of the value on board at the time of the loss. See Meech V. Philadelphia F. & Inland Nav. Ins. Co. 3 Whart. 473; Crowley v. Cohen, 3 B. & Ad. 478. ^ In Coffin V. Newburyport Mar. Ins. Co. 9 Mass. 436, the invoice price, which was their real value at the time, and price of shipment, was held to be the true standard. In Le Roy i'. United Ins. Co. 7 Johns. 343, the prime cost was taken. Mi'. Justice Washington contends, on the other hand, that the tnte rule is the actual market value at the time of effecting the insurance. Carson v. Marine Ins. Co. 2 Wash. C. C. 468. See also, Gahn v. Broome, 1 Johns. Cas. 120 ; Usher v. Noble, 12 East, 639 ; Snell v. Delaware Ins. Co. 4 Dall. 430. To the price is to be added all sums paid for labor, storage, expense of transportation, and commissions paid to agents and factors. Fon- taine V. Col. Ins. Co. 9 Johns. 29. 1 Gahn v. Broome, 1 Johns. Cas. 120 ; Minturn v. Col. Ins. Co. 10 Johns. 75. ' Gibson V. Phil. Ins. Co. 1 Binney, 405. See Anonymous, 1 Johns. 312. 8 Thelluson v. Bewick, 1 Esp. 77, which holds that the rate of exchange at the time of the adjustment of the loss, should govern, cannot be sustained on principle and is generally questioned by the text writers. The question now seems to be, whether the current rate of exchange, at the time the risk commenced, or the legal par value is to be taken. See 2 Phillips Ins. § 1231 ; 1 Arnould, Ins. 330. See also, Smith v. Shaw, 2 39 [ 457 ] 4] 3* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. SECTION III. or THE INTEREST WHICH MAY BE INSURED. A mere possibility or expectation cannot be insured ; ^ but any actual interest may be. If one has contracted to buy goods, he may insure them, and will recover if the property be in him at the time of the loss.- Or if one has taken on himself certain risks, or agreed to indemnify another for them, he may insure himself against the same risks.^ The policy may express and define the interest in such a way that any change in the nature of it will discharge the insurance. If it is not so defined, a change, as from the interest of an owner to that of a mortgagor, or of a mortgagee, will not defeat the policy.* * A mere indebtedness to a party on account of property, gives the creditor no insurable interest ; as if one repaired a house or a ship ; but if the creditor has a lien on the property, this is an insurable interest.^ And, generally, every bailee or party in pos- "Wash. C. C. 167 ; Grant v. Healey, 3 Samner, 523 ; Martin v. Franklin, 4 Johns. 124.: Scofielfl V Day, 20 Johns. 102; Adams r. Cordis, 8 Pick. 260; Lodge t. Spooner, 8 Gray, 166. 1 Stockdale v. Dunlop, 6 jNI. & W. 224. In this case, the plaintiffs made a verbal contract to purchase of third parties 100 tons of palm oil, to arrive on board the Maria. " Oil to arrive " in a certain vessel gives the vendee no right in it unless the quantity mentioned arrives in the specified vessel. The plaintiff^ had insured the goods and the profits on them. In Devaux i\ Steele, 6 Bing. X. C. 358, it was shown that the French government sometimes granted a bounty to vessels, which performed a similar voyage tu the one in question. Held, that this did not constitute such a vested interest, as would entitle the owners to insure their expectation. See also. Brown v. Williams 28 Maine, 252; Adams v. Pcnn. Ins. Co. 1 Rawle, 97; Knox v. Wood, 1 Camp. 543 ; Warder v. Horton, 4 Binn. 529 ; Lucena v. Crawfurd, 5 B. & P. 269, 294. Hancox v. Fishing Ins. Co. 3 Sumner, 132, 140. ^ Rhind v. Wilkinson, 2 Taunt. 237, 243 ; McGivney v. Phcenix Fire Ins. Co. 1 Wend. 85. In tliis case it was decided that a person who was in possession of a house, and had agi-ecd to purchase the same, who had made partial payments and repaired the premises, had an insurable interest in the house. See also, Col. Ins. Co. v. Lawrence, 2 Pet. 25 ; Rider v. Ocean Ins. Co. 20 Pick, 259. 3 Oliver v. Greene, 3 JIass. 133 ; Crowley u. Cohen, 3 B. & Ad. 478 ; Merry v. Prince, 2 Mass. 176. " Reinsurance is a valid contract at the common law. It is for- bidden in England, except where the insurer shall be insolvent, become bankrupt or die, by the statute 19 Geo. 2, ch. 37, § 4." Per Branson, J., New York Bowery Ins. Co. V. New York Fire Ins. Co. 17 Wend. 359. * See ante, p. 408, n. 4. 5 Buclianan v. Ocean Ins. Co. 6 Cow. 318; Wolff v. Horncastlc, 1 B. & P. 316; Taskor c. Scott, 6 Taunt. 234; Wells v. Phil. Ins. Co. 9 S. & R. 103. See Wilson v. Martin, 1 1 Exch. 684 ; 34 Eng. L. & Eq. 496 ; Folsom i'. Merch. Mut. Mar. Ins. Co. 38 Me. 414. [458] CH. XVIII.] MARINE INSURANCE. ^13 session of goods, with a lien on them, may insure them.' And a lender on bottomry or respondentia, may insure the ship or goods.2 And any persons who have possession of property, or a right to possession, and may legally make a profit out of it, as factors on commission, consignees, or carriers, may insure their interest.^ A mortgagee has an insurable interest to the amount of his claim.* But we should doubt whether he could claim any thing of the insurers in case of loss unless his security was thereby impaired or at least not without transferring the mort- gagees If a mortgagee be insured, and recovers from the insurers, he, generally at least, transfers to them the security for his debt, or accounts with them for its value ; because, to the extent of that security, he has met with no loss, and if he did not transfer it, would recover his money twice.® 1 Crowley v. Cohen, 3 B. & Ad. 478 ; Waters v. Monarch F. & L. Ins. Co. 5 Ellis & B. 870, 34 Eng. L. & Eq. 116; Van Natta v. Mut. Security Ins. Co. 2 Sandf. 490. In this case, the plaintiff insured the cargo of a canal boat generally. Be!d, that he might recover on proving that he had a special interest in it as a common carrier. 2 Harman v. Vanhatton, 2 Vern. 717 ; Kenny v. Clarkson, 1 Johns. 385. In Wil- liams V. Smith, 2 Gaines, 13, it was held, that the purchaser of a vessel, which had been bottomried, he not knowing it at the time of the sale, had an insurable interest in it. ^ Putnam v. Mercantile Mar. Ins. Co. 5 Met. 386. In this cafe, it was hdd, that a com- mission merchant, to whom the cargo of a vessel was consigned for sale, might insure his expected commissions while the vessel was on her voyage. Mr. Justice Hubbard, in delivering the opinion of the court, says : " The law of insurance has been most reason- ably extended to embrace within its provisions cases where the parties, having no ownership of the property, have a lien upon it, or such an interest connected with its safety and its situation, as will cause them to sustain a direct loss from its destruction, or from its not reaching its proper place of destination. Such rights have received protection, and the expectation of profits, the loan upon mortgage or respondentia, the advances of a consignee, an agent or factor, are all now the well-recognized subjects of insurance." See also, French v. Hope Ins. Co. 16 Pick. 397; Crowley v. Cohen, 3 B. & Ad. 478 ; De Forest v. Fulton F. Ins. Co. 1 Hall, 84 ; Knill v. Hooper, 2 H. & N. 277. * Smith V. Lacelles, 2 T. E. 187; Dobson v. Land, 8 Hare, 216; Wliite v. Brown, 2 Cush. 412, 415; Carpenter v. Prov. Wash. Ins. Co. 16 Pet. 495, 502. I" See Smith w. Columbia Ins. Co. 17 Penn. State, 253; Kernochan u. New York Bowery F. Ins. Co. 5 Duer, 1, 17 N. Y. 428. But see note infra. * Prior to the case of King v. State Mut. F. Ins. Co. 7 Cush. 1, the commonly re- ceived opinion was, that, if the mortgagee insured his interest and recovered from the insurers, they were entitled to an assignment of an amount of the debt equal to that paid for the loss. See 2 Phillips on Ins. ^ 1712. In the case above referred to, Shaw, C. J., takes very strong grounds in favor of permitting the mortgagee to recover on both contracts. He says, on page 9 : " What, then, is there inequitable, on the part of the mortgagee, towards either party, in holding both sums 'i They are both due upon valid contracts with him, made upon adequate considerations paid by himself. There is nothing inequitable to the debtor, for he pays no more than he originally received, in money loaned ; nor to the underwriter, for he has only paid upon a risk voluntarily [459] 413- ELEMENTS OF MEECANTILE LAW. [CH. XYHI. It should, however, be added, that where a mortgagee or one having a lien insures his own interest in property, a payment of a loss to him by the insurers does not discharge the debt, for which the mortgage or the lien is the security.^ Where, how- ever, the mortgagee is trustee for the mortgagor, as where the taken, for which he was paid by the mortgajree a full and satisfactory equivalent." See also, Foster v. Equitable Mut. F. Ins. Co. 2 Gray, 216. Mr. Pliillips takes a somewhat different ground, and seems to us, to view the case in its true light. He says : "If the assured could recover the amouut of the del it under a policy on the prop- erty pledged as collateral security, and also the debt itself, from the debtor, the policy Avould be equivalent to a ticket in a lottery, for the debtor is, under such a policy, still liable for the debt, which is not discharged by payment of the loss on property mortgaged as collateral security." In Carpenter v. Providence Washington Ins. Co. 16 Pet. 495, 501, iSIr. Justice Slory said : " Where the mortgagee insures solely on his own account, it is but an insurance of his debt ; and if his debt is afterwards paid or cxtinguisjicd, the policy ceases from that time to have any operation; and even if the premises insured are subsequently destroyed by fire, he has no right to recover for the loss, for he sus- tains no damage thereby ; neither can the mortgagor take advantage of the policy, for he has no interest whatsoever therein." See also, the language of Walworth, Clian- cellor, in Etna F. Ins. Co. v. Tyler, 16 Wend. 385, 397 ; and the recent case of Ker- nochan v. New York Bowery F, Ins. Co. 5 Duer, 1, 17 X. Y. 428. Moreover, the case of King V. State Mutual Fire Ins. Co. seems hardly consistent with a prior decision of the same court. It is provided by statute, in Massachusetts, that railroad corporations shall be responsible for losses by fire caused Ijy their locomotives, " to the person or cor- poration injured." In Hart v. Western R. K. Corporation, 13 Met. 99, a house which was insured, was destroyed by a fire communicated by a locomotive engine of the de- fendants. The underwriters paid the owner the amount of the loss. It was held, that the underwriters could then bring an action against the corporation, under the statute, in the name of the owner, and that he could not release such action. Shaw, C. J., says : "Now, when the owner, who prima facie stands to the whole risk, and suffers the whole loss, has engaged another person to be at that particular risk for him, in whole or in part, the owner and the insm-er are, in respect to that ownership and the risk incident to it, in effect one person, having together the beneficial right to an indemnity provided by law for those who sustain a loss by that particular cause. If, therefore, the owner demands and receives payment of that very loss from the insurer, as he may, by virtue of his contract, there is a manifest equity in transferring the right to indemnity, which he holds for the common benefit, to the insurer. It is one and the same loss, for which he has a claim of indemnity, and he can equitably receive but one satisfaction. Where such an equity exists, the party holding the legal right, is conscientiously bound to make an assigu\iieut, in equity, to the person entitled to the benefit ; and if lie fails to do so, the cestui ipw trust may sue in the name of the trustee, and his equitable interest will be protected." See also. Mason r. Sainsbury, 2 Marsh. Ins. 794; Clark v. The Hundred of Blything, 2 B. & C. 254. But if the doctrine contended for in King v. State Mutual Fire Ins. Co., be true in fire insurance, it does not follow that it is true in marine. On the other hand, there are numerous cases in favor of the doctrine of sub- rogation. Thus, it has been /leW, that, where a master of a vessel is liable, as a com- mon caiTier, to the assured for a loss, as by thieves, for which the insurer is also liable, the insurer, upon an abandonment being made, is entitled to be subrogated to the rights of the insured against the owner, Atlantic Ins. Co. v. Sforrow, 5 Paige, 285. See also, Bell v. Western Mar. & Fire Ins. Co. 5 Rob. La. 423, 442 ; Russel v. Union Ins. Co. 4 Dall. 421 ; Gracie v. New York Ins. Co. 8 Johns. 245 ; Coolidgo v. Gloucester Ins. Co. 15 Mass. 341 ; Walker v. U. S. Ins. Co. 11 S. & R. 61 ; Col. Ins. Co. V. Ashby, 4 Pet. 139; Quebec Fire Ins. Co. v. St. Louis, 7 Moore, P. C. 286; 22 Eng. L. & Eq. 73; Mason r. Sainsburv, 3 Doug. 61. 1 iEtna Fire Ins. Co. r. Tyler, 16 Wend. 385, 397, per Wahoorth, Ch. ; Carpenter V. Providence Washington Ins. Co. 16 Pet. 495, 501 ; White v. Brown, 2 Cush. 412 ; King V. State Mut. F. Ins. Co. 7 Cush. 1, 4. [460] CH. XVIII.] MARINE INSURANCE. *414-*415 mortgagor causes insurance to be made on the premises, pay- able to the mortgagee in case of loss, or where the mortgagee effects insurance at the expense of the mortgagor, with his con- sent, payment by the insurers would go in discharge of the debt.i * A policy usually adds to the description of the property, " lost or not lost." This phrase makes the policy retrospective ; and attaches it to the property, if that existed when, by the terms of the policy, the insurance began, whether this were for a voyage or for a certain time, although it had ceased to exist when the policy was made.^ An interest which was originally valid and sufficient, cannot be defeated by that which threatens but does not complete an actual divestment of the interest in property ; therefore, not by attachment or on execution ^ for debt ; nor by liability to seizure * by government for forfeiture ; * nor a right in the seller to stop the goods in transitu;^ nor capture.^ But sale on execution, actual seizure, stoppage in transitu., or condemnation, divest the property, and discharge the insurance.'' And the insurance never attaches if the interest is illegal originally ; ^ and it is dis- charged if it becomes illegal, subsequently to the insurance, or 1 Ex parte, Andrews, 2 Kose, 410; King u. State Mut, F. Ins. Co, 7 Cush. 1,5; Fowley v. Palmer, 6 Gray, 549. 2 Paddock v. Franklin Ins. Co. II Pick. 299. See also, Hucks v. Thornton, 1 Holt, N. P. 30 ; March v. Pigot, 5 Burr. 2802. See Hammond v. Allen, 2 Sumn. 387, 396. 8 See Strong v. Manufacturers Ins. Co. 10 Pick. 40; Clark u. New Eng. Mut. F. Ins. Co. 6 Cush. 354 ; ante, p. 408, n. See also, Franklin Fire Ins. Co. v. Findlay, 6 Whart. 483. * Clark V. Protection Ins. Co. 1 Story, 109, 131. "If the illegal act is followed by a foi'feiture and seizure of the thing insured, I agree that the underwriters are not liable for the loss. But the mere fact of liability to forfeiture does not avoid the insurance, or prevent a recovery for a loss by any independent peril." Per Story, J. See also. Ocean Ins. Co. u. Polleys, 13 Pet. 157 ; The Mars, 1 Gallis. 192 ; and 2 Parsons, Mar. Law, 79. * Stoppage in transitu proceeds upon the ground of an equitable lien, not of rescind- ing the contract. Gwynne, ex parte, 12 Ves. 379; per Shaw, C. J., Rowley o. Bige- low, 12 Pick. 313 ; Stanton v. Eager, 16 Pick. 475. The vendee, or his assignees, may recover the goods, on payment of the price, and the vendor may sue for and recover the price, notwithstanding ho had actually stopped the goods in transitu, provided he be ready to deliver them upon payment. If he has been paid in part, he may stop the goods for the balance due him, and the part-payment only diminishes the lien pro tanto on the goods detained. Newhall v. Vargas, 13 Maine, 93 ; Kymer u. Suwercropp, 1 Camp. 109. See also, 1 Parsons on Cont. 479. « Per Lord Eldon, Lucena v. Craufurd, 5 B. & P. 319; East India Co. v. Sands, cited in 10 Mod. 79; The Arrogante Barcelones, 7 Wheat. 496. ' See the four preceding notes. 8 See ante, p. 409, notes 4 and 7. 39* [461 J 416* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. if an illegal use of the subject-matter of the insurance is in- tended.i And any act is illegal which is prohibited by law, or made subject to a penalty.^ The effect would be the same if the policy opposes distinctly the principles and the purposes of law, as wagering policies do.^ Mariners, or mates, cannot insure their wages, but may insure goods on board, bought with their wages ; * and one legally * interested in the wages of a mariner, may insure them ; as one to whom they are assigned by order or otherwise.^ A master may insure his wages, commissions, or any profit he may make out of his piivilege.'^ An unexecuted intention, if not distinctly agi-eed upon, will not defeat a policy ; ' nor a remote and incidental illegality ; as smuggling stores on board,^ or not having on board the provis- ' Enssell v. Do Grand, 15 Mass. 35. The insurance in this case was from Boston to the port of discharge in Europe. In the policy, it was provided that no exceptions were to be taken on account of ports interdicted by the laws of the United States. At the time the policy was made, a statute was in force prohibiting all vessels from going to any port in France or England. There was evidence tending to show that, at the time tire policy was made, it was intended that the vcs.^cl shoitld go to France, and that she afterwards sailed for, and arrived there. Held, that the contract was illegal, and therefore void. ^ Farmer v. Legg, 7 T. E. 186; Ingham v. Agnew, 15 East, 517; AVainhouse v. Cowie, 4 Taunt. 178; United States v. The Paul Shearman, Pet. C. C. 98; Bartlett V. Vinor, Carth. 252. Per Holt, C. J. : "Every contract made for, or about any mat- ter or thing, which is prohibited and made unlawful by statute, is a void contract, though the statute does not mention that it shall be so, but only inflicts a penalty on the of- ffender, because a penalty implies ii prohibition, though there are no prohihitory words in the statute." This is cited with commendation by Tindal, C. J., in De Begnis v. Armistead, 10 Bing. 107; Gallini v. Laborie, 5 T. K. 242; Clark v. Protection Ins. Co. 1 Story, 109, 122. " See ante, p. 409, n. 4. • Emerigon, Meredith's Ed., 191 ; Lucena c. Craufurd, 5 B. & P. 294. " But the mariner is not permitted to insure his wages by the policy of our law, in order that he may be stimulated to all possible exertion for the preservation of the ship, on which alone all his own interests are made to depend." Per Lord Stowelt, in the case of The Juliana, 2 Dods. 509 ; Lucena v. Craufurd, 5 B. & P. 269, 274 ; Webster v. De Tastet, 7 T. E. 157. But if they engage to go on a long voyage, and covenant to have some money paid them abroad, to lay out in goods to bring home, insurance may be made on such goods. Wcskett on Ins. 587 ; Galloway v. Mon-is, 3 Yeates, 445. See also, cases ante, p. 389, n. 4 & 5. ' Haucox V. Fishing Ins. Co. 3 Suran. 141. ^ King V. Glover, 5 B. & P. 206. In this case, the captain insured his commissions, privileges, &c. ; his wages were not insured ; but the court seemed to consider it as well settled that a captain might insure liis wages. See also, Foster v. Hoyt, 2 Johns. Cas. 327 ; Holbrook v. Brown, 2 Mass. 280. ' " A mere intention to do an illegal act, or other act, which would avoid a policy, if done, but which has never been consummated by any act, has never, as fiir as I know, been deemed, per se, to vitiate the policy." Per Storij, J., Clark v. Protection Ins. Co. 1 Storv,' 124. See also, The Abby, 5 Eob. Adm.'251 ; Waters v. Allen, 5 HiU, 421. 8 Ocean Ins. Co. v. PoUeys, 13 Pet. 157; Clark v. Protection Ins. Co. 1 Story, 109. [462] CH. XVm.J MARINE INSURANCE. -416 ions required by law ; ^ nor a change from legality to illegality, which cannot be proved or supposed to be known to the insured.^ And upon these questions, the court, if the case be balanced, will incline to the side of legality .^ A cargo may be insured which is itself lawful, but was purchased with the proceeds of an illegal voyage.* If a distinct part of a cargo or a voyage is legal, it may be insured, although other parts are illegal. But if a part of the whole property insured together is illegal, this avoids the whole policy.^ A compliance with foreign registry laws certainly is not, and with our own, probably, is not necessary to sustain the insur- ance of an actual owner in good faith.^ 1 Deshon v. Merchants Ins. Co. 11 Met. 199; Warren v. Manuf. Ins. Co. 13 Pick. 518. 2 Walden v. Phoenix Ins. Co. 5 Johns. 310. " MuUer v. Thompson, 2 Camp. 610; Wright v. Welbie, 1 Chitty, 49; Gill v. Dun- lop, 7 Taunt. 193; Haines v. Burli, 5 Taunt. 521. * Per Lord Kenyon, C. J., Bird v. Appleton, 8 T. K. 562. ^ See 2 Parsons on Contracts, 29, as to when a contract is entire. In Parkin v. Dick, 11 East, 502, Lord Elknborough said: "It lias been decided a hundred times that, if a party insures goods altogether in one policy, and some of them are of a nature to make the voyage illegal, the whole contract is illegal and void." Keir v. Andrade, 6 Taunt. 498. This was an action on a policy of insurance upon goods valued at £5,000, from London to Madeira. The plaintiff had placed on board tlie vessel 300 barrels of gunpowder, which were forbidden to be exported. They obtained a license for 150 of the barrels. The court held that they could recover for the loss of the 150, but not for therest. See also, Butler v. Allnutt, 1 Starkie, 222 ; Clark u. Protection Ins. Co. 1 Story, 128. *■ The cases of Camden v. Anderson, 5 T. R, 709, and Marsh v. Eobinson, 4 Bsp. 98, were decided under the Regisn-y Act of 26 Geo. 3, c. 60, ^ 3, which provides that all unregistered transfers of property in a ship, shall be " utterly null and void to all intents and purposes." It was consequently decided in those cases, that none but the parties on record had an insurable interest in the freight. In Ocean Ins. Co. v. Polleys, 13 Pet. 157, it was hdd that an insurance was valid upon a ship sailing under circum- stances rendering lier liable to forfeiture for a violation of the registry laws of the United States. It has been generally hdd in this country, that the insured need not state his interest at the time of making the insurance, unless it is asked for. Locke v. North American Ins. Co. 13 Mass. 61. The case of Bixby v. Pranklin Ins. Co. 8 Pick. 86, was as follows. The policy was made in the names of Bixby, Valentine & Co., and Hibbert, the master. This firm consisted of Bixljy, Valentine, and Holmes. Before this partnership was formed, the brig was owned by Holmes and Hibbert, in whose names she continued to be registered at the custom-house, until the loss occurred. The court held that. Holmes having sold out a portion of his half, and the partnership being formed, the transfer on the books of the firm was, between Holmes and his partners, a sufficient transfer, and that the fact of tlie vessel not being transferred on the custom- house register, could not affect the question, unless the sale should be contested by a creditor of Holmes. Vinal v. Barrill, 16 Pick. 401, is to the same effect. The Regis- try Act of 1850^ c. 27, provides merely, " That no bill of sale, mortgage, hypothecation, or conveyance of any vessel shall be valid against any person other than the grantor, mortgagor, his heirs and devisees, and persons having actual notice thereof; unless such bill of sale, mortgage, hypothecation, or conveyance be recorded in the office of [463] 417-*418 ELEMENTS OF MERCANTILE LAW. [CH. XVIII. By the law of nations, goods, contraband of war, are forfeited if captured by a belligerent against whom they might be used.^ Goods are contraband, which are munitions of war, or are de- signed or capable of supporting an enemy in carrying on war ,2 — as even food, if sent to a place which it is sought to * reduce by starvation ; ^ and so are any goods sent to a blockaded port.* No contraband trade is, strictly speaking, illegal, in the neu- tral country which carries it on ; that is, the courts of that coun- try will not declare it illegal, or annul contracts which have the collector of the customs where such vessel is registered or enrolled." There seems to be no reason why an owner, though the transfer to him were not registered, should not be able to insure his interest, notwithstanding the provisions of the statute. Would it be argued that a purchaser of real estate could not insure a house because his deed was not recorded ? Under the statute of 3 & 4 Will. 4, c. 55, it has been held tliat a mortgage is good between the parties, though the particulars thereof were not indorsed. Lyster v. Payn, 11 Sim. 348. 1 Richardson v. Maine Ins. Co. 6 Mass. 114. "An insurer is not answerable for a seizure and confiscation of goods for the violation of the trade laws of a foreign port, unless, with a full knowledge of the trade, or by an express undertaking, he shall insure them against such seizure." In the case of The Haabet, 2 Eob. Adm. 174, Sir Wm. Scott, says : " The right of taking possession of cargoes of this description, commeatus or provisions going to the enemy's ports, is no pecuUar claim of this country ; it belongs generally to belligerent nations." ^ The following articles are considered contraband. Ships of war destined to an enemy's port, to bo there sold. The Richmond, 5 Rob. Adm. 331. Sail cloth under all circumstances. The Neptunus, 3 Rob. Adm. 108. Pitch and tar, which are not the produce of the country exporting. The Twee Juflfi-owen, 4 Rob. Adm. 242 ; The Jonge Tobias, 1 Rob. Adm. 329. But it has been held that piteli and tar being Swedish prop- erty, and conveyed in Swedish vessels, arc not subject to confiscation, but simply to the riglits of preoccupany and preemption. The Maria, 1 Eob. Adm. 372 ; The Christina Maria, 4 Rob. Adm. 166 ; The Sarah Christina, 1 Rob. Adm. 241. See also, The Char- lotte, 1 Act. 201, and The Neptunus, 6 Rob. Adm. 403. Hemp, which is not fit for naval purposes. The Gute Gesellschaft Michael, 4 Rob. Adm. 94, or which is the pro- duce of the exporting country, and embarked in its vessels (The Apollo, 4 Rob. Adm. 158), is not considered contraband, but the onus probandi, lies with the claimant. The Evert, 4 Rob. Adm. 354. Rosin is contraband if destined for a military port of the enemy. The Nostra Signora Ue Begona, 5 Rob. Adm. 97. Brimstone, under some circumstances, will be considered contraband. The Ship Carpenter, 2 Act. 11. Tallow, if destined to a port merely of naval equipment, will be deemed contraband, but not if the port possess also an extensive trade and mercantile character. The Neptunus, 6 Rob. Adm. 403. Timber, for ship building, also masts, if going to an enemv's port of naval equipment, become contraband. The Staadt Embden, 1 Rob. Adm. 29 ; The En- draught, 1 Rob. Adm. 25 ; The Twende Brodre, 4 Rob. Adm. 33. " The Jonge Margaretha, 1 Rob. Adm. 189. In this case, the law of contraband is most ably laid down by Sir Wm. Scott. In The Edward, 4 Rob. Adm. 68, wines taken to a naval port of the enemy, at the time a large fleet were there, were adjudged contra- band. So cheeses, of the kind usually furnished as naval stores, were, under similar cir- cumstances, condemned. The Zelden Rust, 6 Rob. Adm. 93. * To justify a condemnation for a breach of blockade, three things must be proved. First, the existence of an actual blockade ; second, the knowledge of the party ; third, some act of violation, either by going in or coming out with a cargo laden after the com- mencement of the blockade. Per Sir Wm. Scott, in the case of The Betsey, 1 Rob. Adm. 93. See also, Schacht v. Otter, 9 Moore, P. C. 150, 33 Eng. L. & Eq."28; The Bark Coosa, 1 Newb. Adm. 393. See also. The Nayade, 1 Newb. Adm. 366. [464] CH. XVIII.j MARINE INSURANCE. *419 this trade in view, for illegality.^ But if the owners of a ship contemplate contraband trade, either in the place they send her to, or in the goods they put on board, this is an additional risk, which must be communicated to the insurers, or the policy is void .2 Freight is a common subject of insurance. In common con- versation, this word means sometimes the cargo carried, and sometimes the earnings of the ship by carrying the cargo. The latter is the meaning in mercantile law, and especially in the law of insurance.^ It includes the money to be paid to the owner of a ship by the shipper of goods, and the earnings of an owner by carrying his own goods, and the amount to be paid to him by the hirer of his ship, and the profits of such hirer, either by carry- ing his own goods, or by carrying, for pay, the goods of others.'' An interest in freight begins as soon as the voyage is deter- mined upon, and the ship is actually ready for sea, and goods are on board, or are ready to be put on board, or are promised to be put on board, by a contract binding on the owner of the goods.^ If a ship is insured on a voyage which is to consist of many passages, and sail without cargo, but a cargo is ready for her, or contracted for her, at the first port she is to reach and sail from, * the owner has an insurable interest in the freight from the day on which she sails from the home port.^ If one makes advances towards the freight he is to pay, and this is to be repaid to him by the ship-owner, if the freight is not earned, the advancer has no insurable interest in what he ad- 1 Gardiner v. Smith, 1 Johns. Cas. 141 ; Christie v. Secretan, 8 T. E. 197, per Law- T671CG u t 2 See ante, p. 409, n. 7. Pond v. Smith, 4 Conn. 297. 3 Eobinson v. Manufacturers Ins. Co. 1 Met. 145, per Shaw, C. J. ; Adams v. Penn. Ins. Co. 1 Rawle. 97, 106. * Clark V. Ocean Ins. Co. 16 Pick. 289. 6 Truscott )). Christie, 2 Brod. & B. 320 ; Thompson v. Taylor, 6 T. E. 478 ; Mac- kenzie V. Sheddcn, 2 Camp. 431 ; De Vaux v. J'Anson, 5 Bing. N. C. 519 ; Forbes v. Aspinall, 13 East, 323. But where the parties hare expressly stipulated that the risk is to commence when the goods are laden on board, a cargo engaged, but not laden, will not be covered. Gordon v. Am. Ins. Co. of N. Y. 4 Denio, 360. » Flint V. Flemyng, 1 B. & Ad. 45; Forbes v. Aspinall, 13 East, 323 ; Hart v. Dela- ware Ins. Co. 2 Wash. C. C. 346 ; De Longuemere v. Phoenix Ins. Co. 10 Johns. 127 ; Adams v. Penn. Ins. Co. 1 Eawle, 97, 106. [465] 420* ELEMENTS OF MERCANTILE LAW. [CH. XVIH. vances ; ^ but if he is to lose it, without repayment, if the ship be lost or the freight not earned, he has an insurable interest.^ SECTION IV. OF PRIOR INSURANCE. Our marine policies generally provide for this by a clause, to the effect, that the insurers shall be liable only for so much of the property as a prior insurance shall not cover.^ The second covers what the first leaves, the third what the second leaves. and so on ; and as soon as the whole value of the property is covered, the remainder of that policy, and the subsequent poli- cies, have no effect* This priority relates not merely to the date of the instrument, but to the actual time of insurance." Some- times the policy provides that the insured shall recover only the same proportion of the whole loss which the amount insured in that policy is of .the whole amount insured by all the policies on the whole property.'' When a prior policy is deducted, from this deduction is taken the amount of the premium paid for the insurance.'' It sometimes happens that the property is increased in value, or in the valuation, after the first insurance is effected ; but in settling with a second, only the actual amount covered by the first is deducted.^ * A subsequent policy may be suspended by the fact that prior policies cover all the property, and when any of these prior poli- cies is exhausted, the next policy begins to take effect.^ 1 Do Silvalo V. Kendall, 4 M. & S. 37; Miinficld v. Maitland, 4 B. & Aid. 585; Wilson V. Knval Exch. Ass. Co. 2 Camp. 626 ; Ellis v. Lafone, 8 Excli. 546, 18 Eng. L. & Eq. 559. ^ Maiifi"l(l i>. Miitland, 4 B. & Aid. 5S2 ; Uohbins v. N. Y. Ins. Co. 1 Hall, 325. 8 Si'c Whiting; II. Independent Mat. Ins. Co. 15 Md. 297. * Perkins v. N. E. Mai-. Ins. Co. 12 Miss. 214; Col. Ins. Co. v. Lynch, 11 Johns. 233; Peters r. Delaw.are Ins. Co. 5 S. & R. 473. 6 Leo v. M;>ss. F. & i\I. Ins. Co. 6 Mass. 208. " Lucas V. Jcffei'son Ins. Co. 6 Cowen, 635; Howard Ins. Co. of N. Y. o. Scribner, 5 Hill, 298. " 2 Phillips, Ins. ^ 1257. 8 Murray v. Ins. Co. of Penn. 2 Wash. C. C. 186 : M'Kim v. Phoenix Ins. Co. 2 Wash. C. C. 89. " Kent V. Manufacturers Ins. Co. 18 Pick. 19. f 466] CH. XVIII.J MARINE INSURANCE. *421 If all once attach, and afterwards the property is diminished, we should prefer the rule that all the policies should be dimin- ished pro rata. It has been held, however, that the rule as to prior policies operates, and the last policy is discharged or les- sened by the whole amount of the diminution.^ Where no provision is made in the policies as to priority, all are insurers alike, but altogether only of the whole value at risk. The insured, therefore, may recover of any one insurer at his election, and this insurer may compel the others to contribute to him in proportion to their respective insurances.^ Insurances may be simultaneous, and then no clause as to prior policies has any application, and all the insurances are lia- ble pro rata? They are simultaneous, if said to be so in the policies ; or, if made on the same day, and bearing the same date, and there is no evidence as to which was, in fact, first made.* SECTION V. or DOUBLE INSURANCE AND KEINSUEANCE. If there be double insurance, either simultaneously or by suc- cessive policies in which priority of insurance is not provided for, we have seen that all are insurers, and liable pro rata!' But there is no double insurance, unless all the policies insure the very same subject-matter, and, taken together, exceed its whole value,^ Nor is there double insurance as to any particu- lar * one of these policies, unless the whole amount insured by all exceed the value that is insured by that policy.^ So, if the 1 Am. Ins. Co. v. Griswold, 14 Wend. 399. See .ilso, the dissenting opinion of Mr. Senator Tracy, p. 502; 2 Phillips on Ins. \ 1261 ; 2 Piirsons, Mar. Law, 98, note. 2 Lucas y. Jefferson Ins. Co. 6 Cowen, 635; Fisk v. Masterman, 8 M. & W. 165 ; Craig V. Murgatroyd, 4 Yeates, 161 ; Millaudon v. Western Mar. & Fire Ins. Co. 9 La. 27 ; Thurston v. Koch, 4 Dall. 348 ; Cromie v. Kentucky & Louisville Mut. Ins. Co. 15 B. Mon. 432. ' Potter V. Marine Ins. Co. 2 Mason, 475; Wiggin v. Suffolk Ins. Co. 18 Pick. 145. * Though both bear date the same day, parol evidence is admissible, to show which was made first. Potter v. Marine Ins. Co. ul svp. ^ See supra, n. 3. ° Perkins v. N. Eng. Mar. Ins. Co. 12 Mass. 214 ; Columbian Ins. Co. v. Lynch, 11 Johns. 233; Warder v. Horton, 4 Binn. 529; Howard Ins. Co. v. Scribner, 5 HiU, 298. ' Kane v. Comm. Ins. Co. 8 Johns. 229; Minturn v. Columbian Ins. Co. 10 Johns. [467] 422* ELEMENTS OF MEECANTILE LAW. [CH. XVIII. whole amount insured exceeds the valuation of the subject-mat- ter as it stands in any one policy, it is said that there is over insurance as to that.^ Many insurances of the same subject-matter for the benefit of different parties, do not constitute double insurance.^ Reinsurance is lavirful ; for Avhoever insures another, has as- sumed a risk against which he may cause himself to be insured. This is often done by companies who wish to close their ac- counts, to lessen their risks, or get rid of some, special risk.^ SECTION VI. OF THE MEMOKAXDUM. This word is retained, because the English policies have at- tached to them a note or memorandum providing that the in- surers shall not be liable for any loss upon certain articles therein, enumerated (and hence called memorandum articles), unless it be total, or greater than a certain percentage. In our policies the same thing is provided for, but usually by a clause contained in the body, or in the margin of the policy. The general purpose is to guard against a liability for injuries which may very probably not arise from maritime peril, because the articles are in themselves perishable ; but which injuries it might not be easy to refer to the precise causes which produced them.* * The articles and the percentage vary very much at different 75; Pleasants v. Maryland Ins. Co. 8 Cranch, 55; Murray i'. Ins. Co. of Pcnn. 2 Wash. C. C. 186. 1 Bousfield V. Barnes, 4 Camp. 228. See, however, 1 Phillips on Ins. ^ 370. 2 Warder v. Horton, 1 Binn. 529 ; Godin v. London Ass. Co. 1 Burr. 489. ^ See ante, p. 412, n. 3. ' Many of the articles enumerated in the memorandum are called by ambiguous names. We here give some decisions which show the meaning put upon these terms by tlie judicial tribunals. Corn, Moody r. Surridge, 2 Esp. 633 ; Mason v. Skiirray, Hughes, Ins. 142, Weskett on Ins. 389, Millar, Ins. 358. Skins, Bakcwcll v. United Ins. Co. 2 Jolms. Cas. 246; Astor v. Union Ins. Co. 7 Cowcn, 202. Salt, Journu v. Bourdieu, Marsli. Ins. 224, note, Park, Ins. 149. Roots, Coit v. Commercial Ins. Co. 7 Johns. 385. Fruit, De Pan v. Jones, 1 Brev. 437 ; Humphreys v. Union Ins. Co. 3 Mason, 429. As to what articles are perishable in their nature, see Nelson v. La. Ins. Co. 17 Mart. La. 289 ; Robinson v. Commonwealth Ins. Co. 3 Sumner, 220 ; Williams V. Cole, 16 Me. 207 ; Baker i\ Ludlow, 2 Jolms. Cas. 289 ; Kettell v. Alliance Ins. Co. Sup. Jad. Ct. Mass. 1857 ; Tudor v. New Eng. M. Ins. Co. 12 Cush. 554. [468] CH. XVIII.] MARINE INSURANCE. -422 times and in different States. Perhaps as good a list of them for practical purposes as can be found anywhere, is given in 1 Phillips on Insurance (3d. ed.), note to fifty-fourth section. In some policies it is provided that the memorandum articles shall be " free from average unless general, or the ship be stranded." What is a general average we shall consider here- after, and we shall now speak of merely the latter part of this phrase. The phrase is construed as if it read " unless the ship be stranded." The stranding is regarded as a condition, and if it take place the underwriters are liable whether the loss is caused by the stranding or not.^ By stranding is meant the getting on shore or on piles ^ or any natural or artificial obstruc- tion in an extraordinary way.^ It is not sufficient that the ves- sel should merely " touch and go," but the progressive motion of the vessel must cease.* A voluntary stranding has been held to be a stranding within the policy.^ But it must be a stranding of the vessel itself, and the stranding of a lighter in which the goods were passing to the shore is not sufficient.^ The word " bilging " is sometimes used with, or ini3|ead of stranding. To constitute a bilging there must be a breach in the vessel.'' We shall consider hereafter the question how far the insurers are liable for a loss occurring to a memorandum article. 1 Bowring v. Elmslie, 7 T. E. 216, n.; Burnett v. Kensington, 1 Esp. 416, 7 T. E. 210. 2 Dobson V. Bolton, Marsh. Ins. 239, Park, Ins. 148, ii. 3 Taking tlie ground in a tide harbor in the usual wa.y is not a stranding, although the vessel is thereby injured. liingsford v. Marshall, 8 Bing. 458 ; Hearne v. Edmunds, 1 Brod. & B. 138. But if a vessel is driven into a tide harbor by a storm, tlie under- writers are liable for all damages occasioned b.y her taking the ground therein. Coco- ran V. Gurney, 1 Ellis & B. 456, 16 Eng. L. & Eq. 215, See also, Barrow v. Bell, 4 B, & C. 736. And the underwriters have been held liable where the vessel was injured in consequence of a rope breaking, and in .another case by a rope stretching, when she took ground in a harbor. Bishop v. Pentland, 7 B. & C. 219 ; Wells v. Hopwood, 3 B. & Ad. 20. See also Carnithers v. Sydebotham, 4 M. & S. 77 ; Eayner v. Godmond, 5 B. & Aid. 225. * Harman v. Vaux, 3 Camp. 429 ; M'Dougle v. Royal Exch. Ass. Co. 4 M. & S. 503, 4 Camp. 283 ; Lake v. Columbus Ins. Co. 13 Ohio, 48 ; Baker v. Towry, 1 Stark. 436. 5 Bowring v. Elmslie, 7 T. R. 216, note; Bm-nett v. Kensington, 7 T. R. 210. 6 Hoffman v. Marshall, 2 Bing. N. C. 383. ' Eliery v. Merchants Ins. Co. 3 Pick. 46. 40 [ 469 ] 423* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. SECTION VII. OF ATARKAXTIES. A stipulation or agreement in the jjolicy, that a certain thing shall be or not be, is a warranty. And every warranty must be, if not strictly, at least accurately complied with.^ Nor is it an excuse that the thing is not material ;2 or that the breach was not intended, or not known ; or that it was caused by an agent of the insured.^ A warranty is equally effectual if written upon a separate paper, but referred to in the policy itself as a war- ranty.* And the direct assertion or allegation of a fact may constitute a warranty.^ * If the breach exists at the commencement of the risk, it avoids the whole policy, although the warranty was complied with before a loss ; ^ and although all other risks were distinct from that to which the warranty related ; and even if the breach was caused by one of the risks against which there was insur- ance.' If the breach occur after the risk begins, and before a loss, and is not caused or continued by the fault of the insured, the insurers are held;^ as they are if a compliance with the war- 1 "jSIothing tantamount will do." Pawson u. Watson, Cowp. 785. See De Halm ,. Hartley, 1 T. R. 343, 2 T. R. 186 ; Sawyer v. Coasters ilut. Ins. Co. 6 Gray, 221. 2 Newcastle F. In,s. Co. u. Macmorran, 3"Dow, 262 ; Blackhui'St ;;. Cockell, 3 T. R. 360, per Duller, J. ^ The only question is, "Is the wan-anty broken? " Duncan v. Sun Fire Ins. Co. 6 Wend. 488. * Routleilge o. BurrcU, 1 H. Bl. 254 ; Worsley v. Wood, 6 T. R. 710. See also, Bean o. !Stu|iart, Doug. 11 ; Jennings v. Chenango Co. Mut. Ins. Co. 2 Denio, 75; Glendale Wauuf. Co. v. Protection Ins. Co. 21 Conn. 19 ; Williams v. N. Eng. Mut. Ins. Co. 31 Me. 219 ; Biu'ritt v. Saratoga County M. P. Ins. Co. 5 Hill, 188. s AVherc insurance was made on property described to be on board the "Swedish brig Sophia," it was held to be a warranty that the brig was Swedish. Lewis u. Thatcher, 15 Mass. 433 ; Barker v. Phcenix Ins. Co. 8 Johns. 307. If the description is merely collateral, it will not amount to a warranty. Le Mesurier v. Vauglian, 6 Past, 382; Clapham v. Cologan, 3 Camp. 382; Martin v. Pishing Ins. Co. 20 Pick. 389 ; Alackie v. Pleasants, 2 Binn. 363. « P.ich V. Parker, 7 T. R. 705, 2 Esp. 615; Goicocchea v. La. State Ins. Co. 18 Mart. La. 51.. ' Ilore V. Wliitmore, Cowp. 784. See also, 1 Phillips on Ins. 770; 1 Arnould on Ins. 584. 8 Am. Ins. Co. v. Ogden, 15 "Wend. 532. In this case it was held, that if a vessel [470] CH. XVIII.] MARINE INSURANCE. *424 ranty becomes illegal after the policy attaches, and it is there- fore broken.! The usual subjects of express warranty are : first, the owner- ship of the property, which is chiefly important as it secures the neutrality, or freedom from war risks of the property insured. The neutrality is sometimes expressly warranted; and this war- ranty is not broken, if a part of the cargo that is not insured is belligerent.2 But it is broken if a neutral has the legal title, but only in trust for a belligerent.^ The neutrality of the ship and of the cargo must be proved by the ship's having on board all the usual and regular documents.* False papers may, however, be carried for commercial purposes, either when leave is given by the insurers, or when it is permitted by a positive and estab- lished usage.5 If neutrality is warranted, it must be maintained by a strict adherence to all the rules and usages of a neutral trade or em- ployment.^ Without warranty, every neutral ship is bound to respect a blockade which legally exists by reason of the presence * of an armed force sufficient to preserve it, and of which the neutral has knowledge.' The second most common express warranty, is that of the time of the ship's sailing.^ She sails wheir she weighs anchor or casts off her fastenings, and gets under way if the intention be was seaworthy at the commencement of the voyage, the risk attached ; but if she after- wards became unseawortliy, and a loss liappened, whicli conld not be attributed to her unseaworthiness, the underwriters would be held responsible. See also, Copeland u. New England Marine Ins. Co. 2 Met. 432. 1 Brewster v. Kitchell, 1 Salk. 198. 2 Livingston v. Maryland Ins. Co. 6 Cranch, 274. 3 Goold V. United Ins. Co. 2 Caines, 73 ; Calbreath v. Gracy, 1 "Wash. C. C. 219 ; Bayard v. Mass. F. & M. Ins. Co. 4 Mason, 256. * Coolidge V. N. Y. Firem. Ins. Co. 14 Johns. 308 ; Higgins v. Livermore, 14 Mass. 106 ; Barker v. Phoenix Ins. Co. 8 Johns. 307 ; The San Jose, 2 Gallis. 285 ; The Vigilantia, 1 Eob. Adm. 11; Sleght v. Hartshorn, 2 Johns. 531; Griffith v. Ins. Co. of N. A. 5 Binney, 464 ; Carrere v. Union Ins. Co. 3 Harris & J. 324. ^ Livingston v. Maryl. Ins. Co. 7 Cranch, 506 ; Calbreath v. Gracy, 1 Wash. C. C. 219. See also, Horneyer v. Lushington, 15 East, 46 ; Bell v. Bromfleld, 15 East, 364. » The Princessa, 2 Eob. Adm. fiX ' See ante, p. 418, n. 4. See also, The Arthur, 1 Dods. 423; The Ocean, 5 Eob. Adm. 91 ; The Vrouw Judith, 1 Eob. Adm. 152; The Neptunus, 2 Eob. Adm. 110; Dalgleish v. Hodgson, 7 Bing. 495 ; The Vrow Johanna, 2 Eob. Adm. 109 ; The Dispatch, 1 Act. 163; The Alexander, 4 Eob. Adm. 93; The Eortuna, 5 Eob. Adm. 27; The Christiansberg, 6 Eob. Adm. 378; The Adonis, 5 Eob. Adm. 256; The Hoflfhung, 6 Eob. Adm. 116. 8 SeeBaines v. Holland, 10 Exch. 801, 32 Eng. L. & Eq. 503; CoUedge v. Harts, 6 Exch. 205, 3 Eng. L. & Eq. 550. [471 J 424- ELEMENTS OF MERCANTILE LAW. [CH. XVIII. to proceed at once to sea without further delay. She must have been actually under way.^ But if she moves with the intention of prosecuting her voyage, this is sufficient.^ But if not entirely ready for sea, she has not sailed by merely moving down the harbor.^ If she moves, ready and intended for sea, but is after- wards accidentally and compulsorily delayed, this is a sailing.* When the vessel is ready to sail, but is prevented by a storm, there seems to be some question whether the warranty is broken by not sailing.^ Nor is the warranty complied with by leaving a place to return to it immediately ; ^ or by going from one port of the coast or island to another.'^ Some difTerence seems to exist between a warranty to sail and one to depart.^ And the words " leave," ^ " final sailing," ^^ or " being despatched from " a place,ii mean something more than is expressed by the word " sail." If the ship is warranted " in such a harbor or port," or "where the ship now is," this means at the time of the insurance.^^ And " warranted in port " means the port of insur- ance, unless another port is expressed or distinctly indicated. ^^ Property insured is sometimes warranted to be free from all liens, and from all claims that may become liens.^* 1 Nelson i'. Salvador, Moody & M. 309 ; Danson & LI. 219. 2 Cochran v. Fisher, 4 Tyrw. 424, 2 Cromp. & M 581 ; Fisher i'. Cochran, 5 Tyi-w. 496, 1 Cromp. M. & R. 809 ; Bowen v. Hope Ins. Co. 20 Pick. 27.5 ; Union Ins. Co. V. Tysen, 3 Hill, 118; Bond v. Nutt. Cowp. 601; Earle v. Han'is, 1 Doug. 357; Wright V. Shiffner, 2 Camp. 247, 11 East, 515 ; Lang v. Anderdon, 3 B. & C. 495. 3 Pettcgrew r. Pringle, 3 B. & Ad. 514; Lang v. Anderdon, 3 B. & C. 495, 499; Graham v. Barras, 3 Nev. & M. 125, 5 B. & Ad. 1011 ; Risdale v. Nc^vnham, 4 Camp. Ill, 3 M. & S. 456; Thompson v. Gillespy, 5 Ellis & B. 209, 32 Eng. L. & Eq. 153; Hudson V. Bilton, 6 Ellis & B. 565, 36 Eng. L. & Eq. 248; Sharp v. Gibhs, 1 H. &. N. 801 , 40 Eng. L. & Eq. 383 ; Williams v. Marshall, 6 Taunt. 390, 2 Marsh. 92, 1 J. B. Moore, 168, 7 Taunt. 468. ■• Thellusson v. Fergusson, 1 Doug. 361 ; Thellusson v. Staples, 1 Doug. 366, note; Earle v. Han-is, 1 Doug. 357. '' See Ilore v. Whitraore, Cowp. 784 ; Bond v. Nutt, Cowp. 601, and cases cited in the three preceding notes. The distinction hetween the cases seems to be this : If the rislc is to commence only at the sailing, then the vessel must actually sail. But if the risk had begun previously, and the vessel was ready to sail at the time, but was pre- vented by a peril insured against, the warranty to sail is complied with. " Cockran v. Fi^lR■r, 2 Cromp. & M. 581. ' Wright V. Shilfner, 11 East. 515 ; Cruikslmnk v. Janson, 2 Taunt. 301 ; Dennis v. Ludlow, 2 Cables, 111 ; Risdale v. Newnham, 3 i\I. & S. 456. 8 Moir 1'. Royal Exchange Ass. Co. 3 M. & S. 461, 6 Taunt. 241, 1 Marsh. 576, 4 Camp. 84. I Van Baggen v. Baines, 9 Excli. 523, 25 Eng. L. & Eq. 530. 1" Roelandts v. Han-ison, 9 Exch. 444, 25 Eng. L. & Eq. 470. II Sharp V. Gibhs, 1 H. & N. 801, 40 Eng. L. & Eq. 383. 1^ Callaghan v. Atlantic Ins. Co. 1 Edw. Ch. 64. 1' Kenyon i: Berthon, 1 Doug. 12, note ; Colbv r. Hunter, 3 C. & P. 7 ; Kevser u. Scott, 4 Taunt. 660; Dalgleish v. Brooke, 15 East, 295. " Bidwell V. Northwestern Ins. Co. 19 N. Y. 179. [472] OH. XVIII.J MARINE INSURANCE. *425 SECTION VIII. OF IMPLIED -WARRANTIES. The most important of these wavmnties, — which the law makes for the parties, although they may, if they please, make them for themselves, — is that of seaworthiness. By this is meant, that every person who asks to be insured upon his ship, by the mere force and operation of law, warrants that she is, in every respect — of hull, sails, rigging, officers, crew, provisions, implements, papers, and the like — competent to enter upon and 'prosecute that voyage at the time proposed, and encounter safely the common dangers of the sea.^ If this warranty be not complied with, the policy does not attach, whether the breach be known or not,^ unless there is some peculiar clause in the policy waiving this objection.^ If the ship be seaworthy and the policy attaches, no subse- quent breach discharges the insurers from their liability for a loss previous to the breach.* Even if it does not attach at the begin- ning of the voyage, if the unseaworthiness be capable of prompt and effectual remedy, and be soon and entirely remedied, the policy may, it is said, then attach.^ If the insurance is at and from a port, there is no implied warranty in the nature of a condi- tion precedent that the vessel shall be seaworthy when she leaves port, but only that she was in a suitable state for the policy to attach when the risk commenced.^ The general rule 1 Dixon V. Sadler, 5 M. & W. 405, 414, per Parhe, B. 2 Small V. Gibson, 16 Q. B. 141, 3 Eng. L. & Eq. 305 ; Tidmavsh v. Washington F. & M. Ins. Co. 4 Mason, 441 ; Copeland v. New Eng. Mar. Ins. Co. 2 Met. 437. ' As to what will be considered a waiver, see Parfitt v. Thompson, 13 M. & M. 392 ; Phillips V. Nairne, 4 C. B. 343 ; Danson v. Cawley, Newf. Cas. 433; Myers v. Girard Ins. Co. 26 Penn. State, 192 ; Natchez Ins. Co. v. Stanton, 2 Smedes & M. 340. * After tlie risk has once commenced, the underwriters are liable for all losses which are not the consequence of a subsequent breach of the implied warranty. Am. Ins. Co. V. Ogden, 20 Wend. 287 ; Copeland j'. N. E. Mar. Ins. Co. 2 Met. 432. ° This doctrine is supported to some extent by Abbott, C. J., in Weir v. Aberdeen, 2 B. & Aid. 320, but the case was decided mainly we think on other grounds. The other cases cited by Mr. Phillips to this point do not, in our judgment, support it. See 2 Parsons, Mar. Law, 137, n. 5. ° See Taylor v. Lowell, 3 Mass. 331, confirmed in Merch. Ins. Co. v. Clapp, H Pick. 56 ; Weir v. Aberdeen, 2 B. & Aid. 320 ; Garrigues u. Coxe, 1 Binn. 592 ; M'Millan V. Union Ins. Co. Rice, 248. But see Knill v. Hooper, 2 H. & N. 277. 40 * [ 473 ] 426* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. is that if unseaworthiness prevents the policy from attaching at the proper commencement of the risk, the contract becomes a nullity.! If she becomes unseaworthy in the course of the voyage, from a peril insufficient to produce it in a sound vessel, this may be evidence of inherent weakness and original unseaworthiness.'^ But if originally seaworthy, and by any accident made other- wise, the policy continues to attach until she can be restored to a seaworthy condition by reasonable endeavors. And the gen- eral rule is that she must be so restored as soon as she can be. It is the duty of the master to repair her as soon as he can ; by the aid of another ship if that may be, but otherwise not to keep her at sea if she can readily make a port where she can be made seaworthy ; and not to leave that port until she is seaworthy,^ The ' neglect of the master would not generally discharge the in- surers,* but it is the rule that a ship must not leave a port in an unseaworthy condition, if she could there be made seaworthy ; if 1 Copeland v. N. E. M. Ins. Co. 2 Met. 437. 2 Paddock v. Franklin Ins. Co. U Pick. 227, 237. In tliis case Shaw, C. J., says : " But where tlie proof sliows in point of fact, that the vessel sprung a leak by the start- ing of a butt or other internal defect, without any accident or stress of weather, hut by the ordinary pressure of the cargo, and the action of the wind and sea, the ordinary presumption of seaworthiness is rebutted." Sec, also, Talcot v. Com. Ins. Co. 2 Johns. 124; Mills v. Roebuck, Marsliall on Ins. 161 ; Bullard c. Roger Williams Ins. Co. 1 Curtis, 148 ; Cort v. Del. Ins. Co. 2 Wash. C. C. 37.'5. 8 Paddock v. Franklin Ins. Co. 11 Pick. 227. " It would seem to be more consistent with the nature of the contract, the intent of the parties, and the purposes of justice and policy, to hold tliat after the policy has once attached, the implied warranty should be so construed, as to exempt the underwriter from all loss or damage, which did or might proceed from any cause thus warranted against ; but to hold him still responsi- ble for those losses which by no possibility could be occasioned by peril increased or affected by the breach of such implied warranty." See arise, Copeland v. New Eng. M. Ins. Co. 2 Met. 432 ; Am. Ins. Co. v. Ogden, 1.5 Wend. 532, 20 Wend. 287 ; Put- nam i,'. Wood, 3 Mass. 481 ; Hazard v. New Eng. Mar. Ins. Co. 1 Sumner, 218. * The question how far the owners are responsible for the gross negligence of the master, so as to exonei-ate the insurers, has given rise to considerable discussion. The English Court of Exchequer, in the case of Dixon v. Sadler, 5 JM. & W. 415, decided that if a master wilfully threw over baUast, so that the vessel became unseaworthy, the underwriters were not discharged. See also. Shore (. Beutall, 7 B. & C. 798, n.; Paddock v. Franklin Ins. Co. 1 1 Pick. 227 ; American Ins. Co. v. Ogden, 20 Wend. 287 ; Hazard v. N. E. Mar. Ins. Co. 1 Sumn. 218; Copeland ;;. N. E. Mar. Ins. Co. 2 Met. 432. In this last case, Shaiv, C. J., after an elaborate review of the authorities, says : " No case has gone the length of deciding, that where there is a long voyage, con- sisting of several stages, or where there is a policy on time, which may last several years, if the vessel becomes damaged and unfit for navigation, it is not the duty of the owner to make the necessary repairs, to lit her for the service on which she is destined, and in case of failure to do so, and a loss happens from that cause that the insurers are liable, as for a loss by one of of the perils insured against. Nor, aso think, has any case decided that, in the absence of proof of any other provision for the performance of this duty, the captain shall not be presumed to be the agent of the owner for this pm'pose. If so, we think the English and American cases can be reconciled." [474] CH. XVIII.] MARINE INSURANCE. *427 she does, the insurers are no longer held. But their liability may be not destroyed but only suspended, if the seaworthiness be cyred at the next port, especially if that be not a distant port.^ For a loss happening while the unseaworthiness continues they are liable, unless the loss was occasioned by that unseaworthi- ness.^ There cannot possibly be a definite and universal standard for seaworthiness. The ship must be fit for her voyage or for her place. But a coasting schooner needs one kind of fitness, a freighting ship to Europe another, a whaling ship another, a ship insured only while in port another. So as to the crew, or provis- ions, or papers, or a pilot, or certain furniture, as a chronometer or the like ; or the kind of rigging or sails. In all these respects, much depends upon the existing and established usage. There is, perhaps, no better test than this ; the ship must have all those things, and in such quantity and of such quality as the law requires, provided there is any positive rule of law affecting them ; and otherwise such as would be deemed requisite accord- ing to the common consent and usage of persons engaged in * that trade. And the reason for this rule is, that this is exactly what the insurers have a right to expect, and if the insured intend any thing less, or the insurers desire any thing more, it should be the subject of special bargain.^ If a policy be intended to attach when a ship is at sea, — as, for example, upon a whaler that has been out a year or more, — we should say the same principle would apply, and ought to be sufficient as a rule of law, although it might sometimes involve difficult questions of fact. That is, we think the ship must be seaworthy in that sense and in that way, in which a ship of her declared age, size, employment, and character, after being at sea 1 Paddock v. Franklin Ins. Co. 11 Pick. 227 ; Starbuck v. New Eng. Mar. Ins. Co. 19 Pick. 198; Am. Ins. Co. v. Ogden, 15 Wend. 532, 20 Wend. 287. 2 See Taylor v. Lowell, 3 Mass. 331 ; Paddock v. Franklin Ins. Co. 11 Pick. 227, 234 ; Capen v. Washington Ins. Co. 12 Cusli. 517 ; Starbuck u. N. E. Mar. Ins. Co. 19 Pick. 198. 3 Paddock u. Franklin Ins. Co. 11 Pick. 227; Wedderbum v. Bell, 1 Camp. 1 ; Woolf V. Claggett, 3 Esp. 257 ; Chase v. Eagle Ins. Co. 5 Pick. 51 ; Deblois v. Ocean Ins. Co. 16 Pick. 303 ; Clifford v. Hunter, 3 C. & P. 16; Treadwell v. Union Ins. Co. 6 Cowen, 270 ; Law v. Hollingsworth, 7 T. R. 160 ; Tidmarsh v. Washington F. & M. Ins. Co. 4 Mason, 439 ; BuUard v. Roger Williams Ins. Co. 1 Curtis, C. C. 148 ; SmalU-. Gibson, 16 Q. B. 141, 3 Eng. L. & Eq. 299; M'Lanahan v. Universal Ins. Co. 1 Pet. 170. [475] 428* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. at that time under ordinary circumstances, ought to be in, and may be expected to be in, by all concerned.^ It seems to be admitted that the standard of seaworthiness is to be formed from the usage and understanding of merchants, at the place where the ship belongs, and not at that where the ship is insured.^ If the question arises on a time-policy, whether a ship must be at the beginning seaworthy, and in such condition that she will remain so unless some accident intervene during the whole " of the period, we should answer, she must be seaworthy in the beginning, only in the sense in which her then place and condi- tion require — as, if in port, seaworthy for that; if just going to sea, seaworthy for that ; if at sea, seaworthy for that. And then she must be kept in a seaworthy state, -which means fit to encounter the perils of any service she is put to, from time to time, during the whole period. And if at any time during that period, she is unseaworthy for her then place and work, through the fault of the insured or his agents, and a loss occurs by rea- son of such unseaworthiness, the insurers will not be liable therefor.3 1 la Paddock r. Franklin Ins. Co. H Pick. 227, tlie insurance was on the cargo of the ship Tarquin, "lost or not lost, now on a whaling voyage in the Pacific Ocean." Tlic vessel had been out over three years ivhen the policy was effected. The court held that the policy related back to the commencement of the voyage, and if the ship was then seawortliy, the policy attached. But Shaw, C. J., goes on to consider the case in point. He says it may be a matter of doubt whether the rule of seaworthiness as a condition precedent, would apply, when tlie policy was to take effect on a particular day in the latter part of a long whaling voyage in distant seas, and intended to cover only the latter portion of such a voyage. He also says, that though the rule would be probably applied, yet it would lie with great liberality of construction, and what would be a condition of things in such a stage of the voyage sufficient to satisfy the character of seaworthiness, would fall far short of that required at its commencement. Seaworthiness applies to the intended uses and purposes to which the vessel is to be applied. Hucks v. Thornton, Holt, N. P. 30. In this case, the risk was to commence August 1, 1806. The vessel sailed on I)er voyage in 1805. Gibbs, C. J., held, that she must liave been seaw-orthy at the time tlie risk was to commence, and although the crew was greatly reduced in numbers, yet, if she had a competent force to pursue any part of her adventure, and could be safclv navigated home, she was seaworthv. See Cruder v. Phil. Ins. Co. 2 Wash. C. C. 262, 339. In Gibson v. Small, 4 H. L. Cas. 353, 24 Eng. L. & Eq. 36, Parle, B., says: "It is undoubted law that there is an implied warranty ^vith respect to a policy foi- a voyage, that the ship should be sea- worthy at the commencement of the voyage, or in port when preparing for it, or had been seaworthy when the voyage insm-ed had been commenced, if the insurance is on a vessel already at sea for the voyage, which voyage being commensurate with the risk insured, the warranty is compendiously described as a warranty of seaworthiness at the commencement of the risk." See also, remarks of Pollock, C. B. on page 43 ; and infra, n. 3. "" Tidmarsh v. Washington Ins. Co. 4 Mason, 439. ^ The question whether there is any implied warranty of seaworthiness, and if any, what, in a time-policy, has lately been the subject of considerable discussion in England. [476] CH. XVIII.J MARINE INSURANCE. 429 There are other implied warranties. One of these is, that the insured shall deal honestly with the insurer, and make a distinct The question arose in the Queen's Bencli, in the case of Small v. Gibson, 16 Q. B. 128, 3 Eng. L. & Eq. 299 ; whether there was any warranty of seaworthiness at the time the risk commenced, or at the making of the policy. " Insurance was made on the ship Susan, ' lost or not lost,' for twelve months, commencing Sept. 25, 1853. The defend- ant pleaded that the vessel was unseaworthy at the time the policy was made, and on Sept. 25, when the risk commenced. The Court of Queen's Bench sustained this plea; but it was reversed in the Exchequer Chamber, 16 Q. B. 141, 3 Eng. L. & Eq. 299. A writ of error was then taken to the House of liOrds, and the decision of the Exche- quer Chamber was affirmed. 4 H. L. Cas. 353, 24 Eng. L. & Eq. 16. The plea, as stated in 3 Eng. L. & Eq. 299, would seem to show that the defence was taken that the vessel was unseaworthy when she left home on the voyage. That this was not so is shown by the plea, as given in 24 Eng. L. & Eq., and by the remarks of Parke, B., on this point, p. 42. Two questions then were raised; 1st, whether there was an implied warranty of seaworthiness when the lisk commenced ; and 2d, whether there was any when the policy was made. The question whether there was any when the voyage commenced was, however, presented to the judges, and by them considered, though they expressly say that it was not necessarj' to decide it. In 3 Eng. L. & Eq. 299, Parke, B., says : " We are far from saying that there is no warranty of seaworthiness at all, — so to hold would be to let in the mischief which the law provides against, by the implied warranty in a voyage policy, — or that there is not the same warranty in the case of a time-policy, according to the situation in which the ship may be at the com- mencement of the term of the insurance. If, then, a ship were insured in terms, from a given day, for the remainder of the voyage to a foreign port, there may be a waixanty of seaworthiness when the voyage commenced." He then goes on to say tliat if the vessel had met with damage, and could have been repaired, but was not, previous to the commencement of the risk, the policy might not attach. And that all tlie court intended to decide was, that there was no warranty of seaworthiness wherever the ship might be, or in whatever circumstances placed, at the commencement of the term in- sui-ed. In the House of Lords the judges stood seven to two on the questions pre- sented by the plea. Lord St. Leonards and Lord Campbell concurred with the major- ity. The other point in regard to a time-policy on a vessel, beginning on her departure from her home port, was not discussed by all the judges. Lord Campbell was in favor of not having an implied warranty in any case. Lord St. Leonards on p. 48, and Mar- tin, B., on p. 20, 22, thought the same rule in such a case would apply to a time as well as to a voyage contract of insurance. It has since been decided that if a vessel leaves an intermediate port with an insufficient crew, and is lost in consequence thereof, the underwriters are liable although a crew might have been obtained there. Jenkins V. Heycock, 8 Moore, P. C. 351. Subsequent cases show that in England there is no implied warranty in a time-policy. Michael v. Tredwin, 17 C. B. 551, 33 Eng. L. & Eq. 325 ; Thompson v. Hopper, 6 EUis & B. 172, 34 Eng. L. & Eq. 266, 6 Ellis & B. 937, 38 Eng. L. & Eq. 39; Eawcus v. Sarsfield, 6 Ellis & B. 192, 34 Eng. L. & Eq. 277.' In Jones v. Ins. Co. 2 Wallace, 278, Mr. Justice Grier held that there was no implied warranty in a time-policy, with these exceptions. Speaking of Small o. Gib- son, as decided in the Exchequer, he says : "It is true that this case does not decide that there is no warranty of seaworthiness at all in a time-policy, or that there is not a warranty that the ship is or shall be seaworthy for that voyage, if the ship be then about to sail on a voyage. It may be true, also, that there is in a time-policy a war- ranty of seaworthiness at the commencement of the risk, so far as lay in the power of the assured to effect it, so that if the ship met with damage before, and could have been repaired with the exercise of reasonable care and pains, and was not, the poUcy would not attach. But in all such cases, the plea must state such facts and circumstances as shall show either that at the time the insurance commenced, the ship was in her original port of departure, and commenced her voyage in an unseaworthy condition, and so continued till the time of her loss, or that, having come into a distant' port in a dam- aged condition, before or after the commencement of the risk, where she might and ouo-ht to have been repaired, and the owner or his agents neglected to make such repairs, and the vessel was lost by a cause which may be attiibuted to the insufficiency of the [477] 430* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. and true statement of all material circumstances affecting the risk. Another is, that the ship shall pursue the usual course of her voyage, without deviation from it, or the unnecessary en- counter of unusual risks. But these will be considered in sub- sequent sections. SECTION IX. OF KEPRESENTATIOX AND CONCEALMENT. If there be an affirmation or denial of any fact, or an allega- tion which would lead the mind to that conclusion, — whether made orally or in writing, or by exhibition of any written or printed paper, or by a mere inference from the words of the policy, before the making of the policy, or at the making, and the same be false, and tend to procui'e for him who makes it, the bargain, or some advantage in the bargain, it is a misrep- resentation} And it is * the same thing, whether it refers to a subject concerning which some representations were necessary or otherwise.^ ship.'' In the case of Capon v. Washington Ins. Co. 12 Cush. 517, the policy was subscribed April 30 ; the risk commenced March 30, at noon, to continue one year, on the ship Riga, to and at all ports and places to which she might proceed in that time. The vessel was at sea in March, and returned to Boston the following September, and was destroyed by fire in a subsequent voyage. At tlie trial in tlie court below, Shaw, C. J., ruled that tliere was no implied warranty, in the ordinary acceptation of that term, either at the time that the policy was underwritten, or on the day the risk was to commence, but that tlie only implied warranty in this respect was that the vessel was to be in existence as a vessel at the time fixed for the commencement of the risk ; capable, if then in port, of being made useful, with proper repairs and fittings, for navigation, and was seaworthy when she first sailed from port ; or if at sea when tlie risk com- menced, that she liad sailed in a seaworthy condition, and was safe so as to bo a proper subject of insurance at the time the risk attached. But if tlie vessel was then lost, had ben.iinc a wreck, or ceased to exist as a vessel, or was, if at sea, in such u condition that she could not on her arrival in port, be made available, by seasonable and suitable repairs, for navigation, then there was no subject for tlie policy to take effect upon. Exceptions were taken to tliese rulings, and the rulings sustained in the Supreme Court, Shaw, C. J., giving tlie opinion. See also, Paddock v. Franklin Ins. Co. 11 Pick. 227, 2.31, 232 ; Martin v. Fishing Ins. Co. 20 Pick. 389 ; Am. Ins. Co. u. Ogdon, 20 Wend. 287. t Livingston v. Maryland Ins. Co. 7 Cranch, 506; N. Y. Firemen Ins. Co. v. Wal- den, 12 .Jolins. 517 ; Pawson v. Watson, Cowp, 785. See also, cases infra. - Sawyer v. Coasters' Mut. Ins. Co. 6 Gray, 221 ; Lewis !■. Eagle Ins. Co. Sup. Jtid. Ct. Mass., March T. 1858. In Sibbald v. Ili'll, 2 Dow, P. C. 263, the party wishing to olitain insurance stated to the undenvriter that eiglit guineas was the highest he had paid for the same risk in London, whereas ho had paid twenty-five. The House of Lords [478] CH. XVIII.] MARINE INSURANCE. *431 Concealment is the suppression of a fact not known to the other party, referring to the pending bargain, and material thereto ; and the effect of it is not removed by a result which shows that the circumstances to which it refers, do not enter into the risk.i A misrepresentation or a concealment discharges the insurers. To have this effect it must continue until the risk begins, and then be material.^ It is no defence that it arose from inadvertence or misappre- hension, because the legal obligation of a full and true state- ment is absolute ; ^ nor that the insurers were not influenced by it, if it were wilfully made with intention to deceive.* If it be in its nature temporary and begins after the risk begins, and ends before a loss happens, the insurers are not dis- charged.^ And if it relate to an entirely several subject-matter of insurance, * as the goods only, and has no effect upon the risk as to the rest, it discharges the insurers only as to that part.® hdd, that the contract was void, on the gi-ound " that eveiy misrepresentation is fatal to a contract which is made under such circumstances, and in such a way as to gain the confidence of the other party, and induce him to act when otherwise he would not." See also, De Costa v. Scandret, 2 P. Wms. 170 ; Hoyt v. Gilman, 8 Mass. 336. 1 Hoyt V. Gilman, 8 Mass. 336; Seaman v. Fonereau, 2 Stra. 1183. In Lynch v. Hamilton, 3 Taunt. 37, Mansfield, C. J., says : "A person insuring is bound to com- municate every intelligence he has that may affect the mind of the underwriter in either of these two ways, — ^ first, as to the point whether he will insure at all ; and secondly, as to the point at what premium he will insure." In Lynch v. Dunsford, 14 East, 494, intelligence was not communicated, and the report of the supposed risk afterwards turned out to be untrue. It was held that the policy was nevertheless avoided. If the risk which the underwriter has to nm be covered by a warranty, then as to that a representa- tion is not necessary. Shoolbred v. Nutt, Park on Ins. 493 ; Haywood v. Rodgers, 4 East, 590. See also, Ruggles v. Gen. Int. Ins. Co. 4 Mason, 74, and cases cited, p. 80 ; Carter v. Boehm, 3 Burr. 1905; Rickards u. Murdock, 10 B. & C. 527; Beckwith v. Sydebotham, 1 Camp. 116. ''■ 2 Daer on Ins. 702. 3 In Bumtt V. Saratoga Co. M. F. Ins. Co. 5 Hill, 188, Bronson, J., said: "In ma- rine insurance the misrepresentation or concealment by the assured of a fact material to the risk, will avoid the policy although no fraud was intended. See also, Curry v. Com- monwealth Ins. Co. 10 Pick. 535; N. Y. Bowery Ins. Co. v. N. Y. Fire Ins. Co. 17 Wend. 359 ; Bridges v. Hunter, 1 M. & S. 15 ; Fitzherbert v. Mather, 1 T. R. 12 ; Bufe V. Turner, 6 Taunt. 338. See also, Dennison u. Thomaston Mut. Ins. Co. 20 Me. 125. * 1 Phillips on Ins. § 541 ; Arnould on Ins. 500. 5 This question has not yet come before the courts. In 2 Duer on Ins. p. 698, the author says : " That when the breach of a representation is transitory in its nature, and the immediate peril is surmounted, it would be held by. the tribunals of the continent not to affect the validity of the contract, I have, indeed, no doubt ; but that such would be the rule, when the breach, without producing a loss, changes essentially the subse- quent risks, I am not prepared to affirm." See also, cases on Warranties, ante, p. 426. " 1 Phillips on Ins. § 680. [479] 431- ELEMENTS OF MERCANTILE LAW. [CH. XVIII. Ignorance is never an excuse, if it be wilful and intentional. If one says only, '' he believes so and so," the fact of his belief in good faith is sufficient for him. But if he says that is true, of which he does not know whether it be true or false, and it is actually false, it is the same misrepresentation as if he knew it to be false. If a statement relate to the future, a future compli- ance or fulfilment is necessary.^ Any statement in reply to a distinct inquiry, will be deemed material ; because the question implies that it is.^ On the other hand, the insured is not bound to communicate any mere ex- pectation or hope or fear ; bat only all the facts material to the risk.3 If the concealment or misrepresentation by the insured arose from the master's concealment from his owner, it seems to be the law in this country, that the insurers are not discharged.* K the insured state honestly that he is informed so and so, giving his authorities, this is no misrepresentation, although he is misinformed.^ But generally, the insured who procures in- surance through an agent, is liable for that agent's concealment or misrepresentation, although unknown and unauthorized by him.fi 1 Callnshan v. Atlantic Ins. Co. 1 Edw. Ch. 64. In this case, in the application for insurance, the vessel was described to lie in a certain port. Tlie court held that if this was not a waiTanty, still it was a material re]iresentation, and if false would avoid the policy. But tliat if it had been stated that she was there according to last advices, or was there on such a day and intended remaining; till such a time, it would have been different. See also, Hubbard v. Glover, 3 Camp. 313; Bowden v. Vaughan, 10 East, 41 5 ; Kemble r. Bowne, 1 Caincs, 75 ; JIaryland Ins. Co. !'. Bathurst, 5 Gill & J. 159 ; Pawson '•. Watsun, Cowp. 785; Whitney v. Haven, 13 Mass. 172; Brvant v. Ocean Ins. Cti 22 Pick. 200 ; Uire v. N. Eng. Mar. Ins. Co. 4 Pick. 439 ; Christie v. Secre- tan, 8 T. K. 192; Brine v. Featherstone, 4 Taunt. 869; Astor v. Union Ins. Co. 7 Cowen, 202. 2 Burritt v. Saratoga Co. Mut. F. Ins. Co. 5 Hill, 188; 1 Phillips on Ins. § 542; 2 Duer on Ins. 088 ; Dennison v. Thomaston Mut. P. Ins. Co. 20 Maihe, 125. " Bell r. Bell, 2 Camp. 475. But if the beliefs or expectations are of such a nature that, if communicated, tlicj' would influence the mind of the insurer in determining whether to take the risk or not, and if he would take it, at what premium, they should be made known, Willes v. Glover, 4 B. & P. 14; Marshall v. Union Ins. Co. 2 Wash. C. C. 357. * Pugf;les c. Gen. Int. Ins. Co. 4 Mason, 74; Gen. Int. Ins. Co. o. Euggles, 12 Wheat. 408. In England, a different rule appears to be laid down. Fitzlierbert v. JIatber, 1 T. R. 12; Gladstone v. King, 1 M. & S. 35. These cases, however, were cited by counsel in Gen. Int. Ins. Co. v. Rnggles, and were commented on by Mr. Jus- tice Thompson, in delivering the opinion of the court. They were not considered by him to warrant the conclusions contended for. ^ Tidmarsh y. Washington Ins. Co. 4 Mason, 439, 443. Per Story, J. See also, 1 Phillips on Ins. § 563. ^ See cases cited ante, note 6 ; also, Stewart v. Dunlop, 4 Brown, P. C. 483. [480] CH. XVIII.] MARINE INSURANCE. *432 If one who is insured, proposes to another insurer a second * insurance on the same policy, on the same terms expressly or impliedly, and the first is founded on concealment or misrep- resentation, this taint extends to the second.^ A premium much lower than would be proper for a certain risk, if certain facts were disclosed, may be evidence tending to show that they were not disclosed.^ SECTION X. WHAT THINGS SHOULD BE COMMUNICATED. Not only ascertained facts should be stated by the insured, but intelligence and mere rumors, if of importance to the risk ; ^ and it has been held that intelligence known to his clerks would be generally presumed to be known to him ; * and it is no defence that the things have been found to be false." It has been held that an agent was bound to state that his directions were sent him by express ; because this indicated an emergency.^ If the voyage proposed would violate a foreign lawnot generally known, this should be stated.'' It is impossible to give any other criterion to determine what should be communicated, than the rule that every thing should 1 Pawson u. Watson, Cowp. 785 ; Barber v. Fletcher, Doug. 305 ; Feise v. Parkin- son, 4 Taunt. 640. But this rule applies only to representations favorable to the under- writer and not to those which would, if communicated, increase their liability. Robert- son V. Marjoribanks, 2 Starkie, 573. In Bell o. Carstairs, 2 Camp. 543, Lord Ellen- borough, says : " It is difficult to see on what principle of law a representation to the first underwriter is considered as made to all those who afterwards underwrite the policy. That rule being established, I will abide by it ; but I will, by no means, allow it to be extended. ' You must show the representations to have been made to the first under- writer on the policy, or to the defendant himself." In Marsdeu v. Eeid, 3 East, 572, it was intimated by the court that if it had appeared that a material fact had been repre- sented to the first undenvriterto induce him to subscribe the policy, it should be taken to have been made to all the rest without the necessity of repeating it to each. 2 Bridges v. Hunter, 1 M. & S. 19; Freeland v. Glover, 7 Bast, 457; NicoU v. Am. Ins. Co. 3 Woodb. & M. 529, 535. 3 Lynch v. Hamilton, 3 Taunt. 37, 44 ; Walden v. La. Ins. Co. 12 La. 134 ; Durrell V. Bederley, Holt, N. P. 283. * Himeley «. Stewart, 1 Brevard, 209 ; Byrnes v. Alexander, 1 id. 213. 6 See ante, p. 430. s Court V. Martineau, 3 Doug. 161. In this case, it was held, that such a fact need not be disclosed where the dates plainly show that the message must have so come. And seel Phillips, § 581. ' Hoyt V. Gilman, 8 Mass. 336. See also, ante, p. 409, n. 7. 41 [ 481 ] 433* ELEMENTS OF MEKCANTILE LAW. [CH. XVIII. be stated which might reasonably be considered in estimating the risk. And it is obvious that the season, or political events, or the character of the voyage, may make that material in a par- " ticular case, which is not so generally; as the national character of the ship or goods ; ^ whether contraband or not ; ^ the interest of the insured ; ^ the time of sailing ; * and the last news as to weather and the like, from that part of the ocean in which the ship to be insured is supposed to be.^ And so every other thing of any kind which the insurer might reasonably wish to take into consideration in estimating the value of the risk which he is invited to assume.^ The question, however, being one of concealment as it affects the estimation of the risk, it is obvious that the insured need not state to the insurer things which he already knows ; and for the same reason he is not bound to state things which the insurer ought to know, and might be suppossed to know. These are, in general, all those things which the insured learns by means which are quite as open to the insurer as they are to him ; '^ as general facts widely p^^blished, and known by others long enough to justify the inference that all interested in such matters are ac- quainted with them.^ So things resting upon a general rumor, which is known to all alike.^ So facts of science ; as the posi- tion of a port ; the peculiar dangers or liabilities of any well- known navigation ; the prevalence of winds, currents, or weather of any particular description at a certain place or in a certain season. ^0 Whether the suppression of such a thing be a faulty 1 Campbell v. Innes, 4 B. & Aid. 423. ' Seton V. Low, 1 Johns. Cas. 1. See ante, p. 417, note 2. 3 Wolcott u. Eagle Ins. Co. 4 Pick. 429; La\¥renee v. Aberdcin, 5 B. & Aid. 107; Coit V. Smith, 3 Johns. Cas. 16. * Per Stori/, J., in M'Lanahan v. Universal Ins. Co. 1 Pet. 170, 189 ; M' Andrew v. Bell, 1 Esp.'373 ; Webster v. Foster, 1 Esp. 407 ; Johnson v. Phoenix Ins. Co. 1 Wash. C. C. 378 ; Livingston v. Delafleld, 3 Caines, 49. See also, Itiie v. N. Eng. M. Ins. Co. 4 Pick. 439 ; Fiske v. New Eng. Mar. Ins. Co. 15 Pick. 310 ; Littledale v. Dixon, 4 B. & P. 151. 6 Moses V. Delaware Ins. Co. 1 Wash. C. C. 385 ; Piske v. N. Eng. M. Ins. Co. 15 Pick. 317 ; Ely v. Hallett, 2 Caines, 57. " See cases cited supra, generally. ' Carter v. Boehm, 3 Burr. 1910. "But either party may be innocently silent, as to grounds open to both, to exercise their judgment upon." Per Lord Mansfield. » Eriere v. Woodhouse, Holt, N. P. 572 ; Elton v. Larkins, 8 Bing. 198 ; Green v. Merchants Ins. Co. 10 Pick. 402. ^ Alsop V. Commercial Ins. Co. 1 Sumner, 451. 1° De Longuemere V. N. Y. Fire Ins. Co. 10 Johns. 120; Stewart i-. Bell, 5B. & Aid. 238 ; Kingston v. Knibbs, 1 Camp. 508, n. ; Bell v. Mar. Ins. Co. 8 S. & R. 98. [482] CH. XVIII.J MARINE INSURANCE. *434 concealment on the part of the insured, or only an innocent silence, must depend upon the standard above stated. If it be known to him in such a way, that he ought as a reasonable man to doubt whether the insurer knows it, then he ought as an * honest man to put an end to the doubt by stating it ; otherwise he may be silent.^ And so he may be about any thing expressly provided for in the policy, unless he be expressly interrogated on the subject.^ If either party says to the other so much as should put the other upon inquiry, in reference to a matter about which inquiry is easy and would lead to information, and the other party makes no inquiry, his ignorance is his own fault, and he must bear the consequences of it.^ An intention, which if carried into effect would discharge the insurers, as, for example, an intention to deviate, need not be stated, unless the intention itself can be shown to affect the risk.* So a part damage to the property need not be stated, unless it affects its present probability of safety.^ A false statement that other insurers have taken the risk on such or such terms, is a misrepresentation, but not a false state- ment of an opinion that they would take it on such terms,^ for of this the insurers can judge for themselves. Every statement or representation will be construed rationally, and so as to include all just and reasonable inferences. A sub- 1 Dickenson v. Com. Ins. Co. Anthon, N. P. 126. 2 Walden v. N. Y. Eiremen Ins. Co. 12 Johns. 128; Farmers Ins. Co. v. Snyder, 16 Wend. 481; Lexington Ins. Co. v. Paver, 16 Ohio, 324; Coulon c. Bowne, 1 Caines, 288. ' Court V. Martineau, 3 Doug. 161 ; Fort v. Lee, 3 Taunt. 381 ; Alsop v. Commer- cial Ins. Co. 1 Sumner, 451 ; Carr v. Hilton, 1 Curtis, C. C. 390. * Houston V. N. Eng. Ins. Co. 5 Piclt. 89 ; Firemen Ins. Co. v. Lawrence, 14 Johns. 46. In this case, Kent, Chancellor, says : " An intention to deviate is nothing, because the intention may be given up before the vessel arrives at the dividing point ; but if the captain be under positive instructions to take one course, and not the other, he has no discretion to act, and no liberty to repent. This cause alone is sufficient to discharge the underwriter." For this position, Middlewood v. Blake, 7 T. R. 162, is cited by the learned Chancellor. In this case, the insurance was on a vessel on a voyage from London to Jamaica. The captain had instructions to stop at Cape Nicola Mole, in St. Domingo. She was captured after having passed the dividing point of three different tracks to Jamaica, but before she had reached the sub-dividing point of the courses to the Mole and to Jamaica. It was held that the underwriters were discharged. Some of the judges put it on the ground that the captain had no discretion at the first dividing point, and consequently the deviation took place then. See also, the opinion of Law- rence, J., in this case ; and Marine Ins. Co. v. Tucker, 3 Cranch, 357. 5 Boyd V. Dubois, 3 Camp. 133 ; Gladstone v. King, 1 M. & S. 35. 6 Sibbald v. Hill, 2 Dow, P. C. 263; Clason v. Smith, 3 Wash. C. C. 156. [483] 435* ELEMEKTS OF MERCANTILE LAW. [CH. XVIIL stantial compliance with it will be sufficient ; and a literal com- pliance which is not a substantial one, wiU not be sufficient.^ ♦SECTION XL OF THE PREMIUM. This is undoubtedly due when the contract of insurance is completed ; but in practice in this country, the premium in marine insurance is usually paid by a premium note on time, which is given at or soon after the delivery of the policy. If the policy acknowledge the receipt of the premium, if it be not paid, this receipt would be no bar to an action for it.^ The premium is not due unless the risk is incurred ; ^ whether this be caused by the non-sailing of the ship ; or by the insured not having goods on board ;^ or not so much cargo as he is insured for ; or by any error or falsity in the description which prevents the policy from attaching.^ But the insured cannot annul the insurance by serving on the underwriters a notice of his desire to put an end to the contract, if the voyage is not actually abandoned.^ If the premium be not earned, or not whoUy earned, it must be returned in whole or in part by the insurers if it have been paid; and not charged in account with the insured, if it be unpaid.^ 1 Suckley v. Delafield, 2 Caines, 222 ; Alsop v. Coit, 12 Mass. 40 ; MuiTay v. Alsop, 3 Jolins. Cas. 47 ; VandenlieuTel v. United Ins. Co. 2 Johns. Cas. 173, n. ; "Pawson v. Watson, Cowp. 785. - In England the law is, that as against the assured the underwriter cannot set up that the broker has not paid the premium of which he has acknowledged the receipt. Anderson v. Thornton, 8 Exch. 425, 20 Eng. L. & Eq. 339. But between the under- writer and the broker it is not conclusive. See Eoy v. Bell, 3 Taunt. 493. In Ins. Co. of Penn. ;;. Smith, 3 Whart. 520, it was held that a policy of insurance did not differ from any other contract in this respect, and that a receipt might therefore be in- quired into. Eor the law in regard to a receipt being conclusive or not, see 1 Greenl. Evid. p. 354. 2 Tyrie v. Fletcher, Cowp. 666. In this case. Lord Mansfield says : "Where the risk has not been run, whether its not having been run was owing to the fault, pleasure, or will of the insured, or to any other cause, the premium shall be returned." See also, Emerigon on Ins. (Meroditli's ed.), p. 52. * Waddington v. United Ins. Co. 17 Johns. 23. " Foster v. U. S. Ins. Co. 11 Pick. 85 ; Amery v. Rodgers, 1 Esp. 207 ; Holmes v. United Ins. Co. 2 Johns. Cas. 329. 6 New York Fire M. Ins. Co. v. Roberts, 4 Buer, 141. ' Taylor v. Sumner, 4 Mass. 56 ; M'CuUoch v. Roy. Exch. Ass. Co. 3 Camp. 406. [484] CH. XVIII.J MARINE INSURANCE. *436 The premium may be partially earned ; and then there must be a part return only. As if the voyage consist of several pas- sages, or of " out and home " passages, and these are not con- nected by the policy as one entire risk ; ^ or if the insured has some goods at risk, but not all which he intended to insure.^ ' It is, however, an invariable rule, that if the whole risk at- taches at all, that is, if there be a time, however short, during which the insurers might in case of loss from a sea-peril, be called on for the whole amount they insure, there is to be no return of premium.^ If there be simultaneous policies, and taken together they cover more than the whole amount at risk, there must be a pro rata return of premium. If they are not simultaneous, and the earlier policies attached for their whole amount before the later ones were made, the earlier ones earn their whole premium ; and the later policies must return theirs, in whole or in part.* If the policy be effected by an agent who is responsible for the premium, and the insurance is neither authorized nor confirmed by the principal, there is no return of premium for this cause, if the principal might have adopted the insurance and made it obligatory on the insurers, at a time when the property insured was at risk.^ 1 Waters v. Allen, 5 Hill, 421 ; Lovoring v. Mercantile Mar. Ins. Co. 12 Pick. 348; Stevenson v. Snow, 3 Burr. 1237. In Homer v. Dorr, 10 Mass. 26, there waS an insur- ance on a cargo from Boston to Archangel and back. The outward cargo was safely landed, but no homeward cargo was shipped. A usage was proved in such a case to return the premium for the homeward voyage. But the cotu't decided against it. The premium was given for the whole voyage. 2 See ante, p. 435, n. 4. 3 Mutual Mar. Ins. Co. v. Swift, 7 Gray, 256 ; Tyrie v. Fletcher, Cowp. 666. In this case the insurance was on a vessel warranted free from capture, for twelve months, at 9l. per cent. The vessel was taken by a privateer about two months after she sailed. It was held that no part of the premium was to be returned. See also, Taylor v. Low- ell, 3 Mass. 331 ; Hendricks v. Com. Ins. Co. 8 Johns. 1 ; Loraine v. Thomlinson, Doug. 585; Moses v. Pratt, 4 Camp. 297 ; Tait v. Levi, 14 East, 481. * Fisk V. Masterman, 8 M. & W. 165. Insurance was effected on the 12th of AprU, on a cargo of cotton at sea, by five policies, and on the 13th, a further insurance was made by six different policies. Taken together they exceeded in value the amount at risk, but the amount insured by the five did not. It was held that the assured were entitled to a retm-n of premium on the amount of the over insurance to which the un- derwriters of the 13th were to contribute ratably, the amount of over insurance to be .ascertained by taking into account all the policies, but that no return of premium was to be made in respect of the policies effected on the 12th. See eases cited p. 420, n. 3. The doctrine of Fisk v. Masterman, is founded on the principle that those underwriters, who have, at any time, been liable to pay the whole amount of their subscriptions, are entitled to retain the whole amount of the premium. 2 Arnould on Ins. 1229 ; 2 Phil- lips on Ins. 5 1838. 6 Hagedorn v. Oliverson, 2 M, & S. 485 ; Routh v. Thompson, 13 East, 274. In this 41 * [ 485 ] 437* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. If the note be signed by an agent, the insurers may look to a principal actually insured by it, whether known or unknown to them at the time. Unless it can be inferred from the facts or otherwise shown that with a knowledge of the principal, the insurers accepted the note of the agent or broker as that upon which they should exclusively rely.^ * There is no return of premium for avoidance of the contract by its illegality ; if both parties knew this and were equally in fault.2 In this country, insurers usually retain one half of one per cent, of a returnable policy. And om- policies contain a clause permitting the insurers to set off the premium due against a loss, whether the note be signed by the insured or another.^ SECTION xn. OF THE DESCRIPTION OF THE PROPEETY INSTJEED. The description must be such as will distinctly identify the property insured, as by quantity, marks, and numbers, or a refer- case, Bayley, J., says : " Could the agent who procured the insurance, hare recovered back the premiums paid by him, if the crown had not adopted the insurance ? I should think not, because of the choice which the crown had to adopt it, in respect to which the insurer would have incurred the risks." See also, Finney v. Fairhaven Ins. Co. 5 Met. 192, 197, where the doctrine of the two cases above cited is adopted. 1 Paterson v. Gandascqui, 15 East, 62; Addison v. Gandassequi, 4 Taunt. 538; Thomson v. Davenport, 9 B. & C. 78. See 2 Smith's Leading Cases, 222, note; Ins. Co. of Penn. u. Smith, 3 Whart. 520 ; Patapsco Ins. Co. v. Smith, 6 Harris & J. 166. " If an illegal insurance is effected which is not known to be such at the time, as where the insured was the subject of a foreign country, with which war had been declared, though the parties were ignorant of it at the time, the premium may be recovered back. Oom v. Bruce, 12 East, 225. But where the fact was known, the maxim in pari delicto potior est conditio possidentis will apply. See LowiT v. Bourdieu, Doug. 468 ; Andre v. Eletcher, 3 T. E. 266 ; Vandyck v. Hemtt, 1 East,"96 ; Lubbock V. Potts, 7 East, 449 ; Juhel v. Church, 2 Johns. Cas. 333. The question has arisen whether a party effecting an illegal insurance, and having paid the premium, has not a locus pcenitenticc, so that he can rescind the contract, and recover the premium, before a loss occurs. It was hdd that he might in Tappenden v. Eandall, 2 B. & P. 467 ; and in Aubert v. Walsh, 3 Taunt. 277. This view is also supported by Bidler, J., in Lowry v. Bourdieu, Doug, 468. But in Palyart v. Leckie, 6 M. & S. 290, it was held that to entitle the assured to recover back the premium in such a case, he must have made a formal renunciation of the contract prior to the bringing of the action, although the adventure had never commenced. Lord Ellenborough expresses his regret that the rule of locus pceiiitentim was ever adopted. 8 Wiggin V. Suffolk Ins. Co. 18 Pick. 145. See 2 Phillips on Ins. \ 1839. [486] CH. XVIII.J MARINE INSURANCE. *438 ence to the fact of shipment,^ or the time of shipment ; ^ or the voyage, or the consignee ; ^ or in some similar and satisfactory- way ; and no mere mistake in a name, or elsewhere, vitiates the description if it leaves it sufficiently certain.* If different ship- ments come within the policy, the insured may attach it to either by his declaration, which may be done after the loss, provided * this appears to have been the intention of the parties.^ " Car- go," " goods on board," " merchandise " mean much the same thing; and do not attach to ornaments, clothing, or the like, owned by persons on board and not intended for commercial purposes.^ " Property " is the word of widest, and almost' un- limited meaning.'' '' Ship " or " vessel " includes all that belongs to it at the time^ — even to sextants or chronometers belonging to the ship-owner, and by him appropriated to the navigation of the ship.® So it includes all additions or repairs made during the insurance.^" The phrase, " a return cargo," will generally apply to a home- ward cargo of the party insured in the same ship, however it be procured ; but the phrases " proceeds " or " returns," are generally regarded as limited to a return cargo bought by means of the outward cargo.^^ And neither of these, or any similar phrases, 1 Murray v. Col. Ins. Co. 11 Johns. 302; Rickman v. Carstairs, 5 B. & Ad. 651 ; Hunter v. Leathley, 10 B. & C. 858. See also, M'Cargo v Merch. Ins. Co. 10 Bob. La. 334 ; Courtnay v. Miss. I". & M. Ins. Co. 12 La. 233. 2 Sorbe v. Merch. Ins. Co. 6 La. 185. In this case the iDSurance was on goods to be shipped from Havre or any port south of it in France during a period of six months. The goods were put on board before the expiration of the time, but the ship did not sail till after. Held that they were covered. See, however, Atkins v. Boylston F. & M. Ins. Co. 5 Met. 439. = Ballard v. Merch. Ins. Co. 9 La. 258. * Euan V. Gardner, 1 Wash. C. C. 145 ; Hall v. Mollineaux, cited in Le Mesurier v. Vaughan, 6. East, 382, 386 ; Clapham v. Cologan, 3 Camp. 382 ; Bmerigon, Meredith's ed. ch. 6, 4 2. See Sea Ins. Co. v. Fowler, 21 Wend. 600. * See Henchman v. Offley, 2 H. Bl. 345, n. In Kewley v. Eyan, 2 H. Bl. 343, there were two cargoes to which the policy would apply. The court held that the insured had a right to apply it to either so that they came within the terms of the policy. See Harman v. Kingston, 3 Camp. 150; Edwards v. St. Louis Perpetual Ins. Co. 7 Mo. 382; and ante, p. 406. ^ Ross 0. Thwaite, Park on Ins. 23. ' In Whiton v. Old Colony Ins. Co. 2 Met. 1, it was hdd that the term "property " included current bank-bills on board a vessel, the insured intending to use the same in purchasing merchandise, which would, when bought, be covered by the policy. See also, Wiggin v. Mer. Ins. Co. 7 Pick. 271 ; Holbrook v. Brown, 2 Mass. 280. 8 Robertson v. Ewer, 1 T. R. 127 ; Forbes v. Aspinall, 13 East, 325 ; Brough v. Whitmore, 4 T. R. 208 ; Hill v. Patten, 8 East, 373 ; Blackett v. Roy. Ex. Ass. Co. 2 Cromp. & J. 244 ; Hall v. Ocean Ins. Co. 21 Pick. 472. 9 1 Phillips on Ins. § 468. 1° Le Cheminant v. Pearson, 4 Taunt. 367. 11 Haven v. Gray, 12 Mass. 71 ; Whitney v. Am. Ins. Co. 3 Cowen, 210, 5 Cowen, [487] 439* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. will apply to the same cargo brought back again, unless it can be shown, by the usage, or other admissible evidence, that this was the intention of the parties.' The interest of the insured need not be specified, unless pecu- liar circumstances, closely connecting this interest with the risk, * may make this necessary .^ But either a mortgagor or a mort- gagee,^ a charterer,* an assignee,^ or consignee,^ or trustee,' or carrier,^ may insure as on their own property. We have seen that it is common to cover profits by valuation of the goods ; ^ but no insurance on ship, goods, or freight, will, as such, cover the profits.'" So it is common to cover the freight, by over-valuation of the ship ; but an open policy on the ship does not cover the freight. All owner of both ship and cargo may cover by the word freight, what his ship would earn by carrying that cargo for another.'' Lisurance on freight from one port to another, covers the freight or goods taken in by agreement at ports intermediate to them.'^ But if the insurance be on freight, and the description of the 712. In this case the insurance was on the outward cargo and the returns home. The returns were valued in the policy, at $14,000. The court held that if the outward cargo had been sold for $7,000, and the return cargo purchased with the avails, the in- sured could recover to the amount of $14,000 ; and so if the outward cargo had been pledged to the full value instead of being sold. 1 Dow V. Hope Ins. Co. 1 Hall, 166 ; Dow v. Whetten, 8 Wend. 160. In this case, the captain, on arrival at the outward port of destination, finding no market for the goods, brought them home again. They were damaged on the homeward voyage, and the owners claimed to recover on the ground that the term " proceeds " would cover the same goods if brought home. The Superior Court of New York City decided in favor of the defendants. An appeal was taken to the Supreme Court, and the plaintiff non- suited. It then came up before the Court of Errors (8 Wend. 160), and the judgment of the Supreme Court was reversed solely on the ground that evidence was rejected tending to show a usage that the term "proceeds " was meant to cover the same goods if brought back. 2 Lawrence v. Van Home, 1 Caines, 276; Murray v. Columbian Ins. Co. 11 Johns. 302. 2 Traders Ins. Co. v. Robert, 9 Wend. 404 ; Carpenter v. Providence Wash. Ins. Co. 16 Pet. 495. See also, ante, p. 413, u. 6. * Oliver V. Greene, 3 Mass. 133; Bartlet v. Walter, 13 Mass. 267. ^ Paradise v. Sun Mut, Ins. Co. 6 La. Ann. 596. « Putnam ;;. Mercantile Mar. Ins. Co. 5 Met. 386. See also, De Forest u. Pulton P. Ins. Co. 1 Hall, 84. In this case the question of the right of a special owner to insure without specifying his interest, is thoroughly discussed. See ante, p. 413, a. 3. ' Stetson V. Mass.'p. & Mar. Ins. Co. 4 Mass. 330; Bell v. Western Mar. & P. Ins. Co. 5 Bob. La. 424. 8 Seeanfe, p. 413, n. 1. 9 See ante, p. 410, n. 7. » Lucerta v. Craufurd, 5 B. & P. 315. " Wolcott V. Eagle Ins. Co. 4 Pick. 429, 435 ; Dum.as v. Jones, 4 Mass. 647 ; Hart V. Del. Ins. Co. 2 Wash. C. C. 346 ; Flint v. Elemyng, 1 B. & Ad. 45. w Barclay v. Stirling, 5 M. & S. 6. [488] OH. XVIII.] MARINE INSURANCE. *440 goods be such that the insurance, had it been on goods, would not have attached, the insurance will not attach to the freight.^ Freight " to " a place is valid, although the cargo is to go fur- ther, and the freight be paid only at the more distant port.^ But insurance on freight " at and from " a place does not cover freight " to " that plaee.^ K a charterer pays a certain price to the * owner, and has agreed to carry cargo for another at a higher price, he may insure the difference, which is his profit, under the name of freight.* SECTION XIII. OF THE PERILS COVERED BY THE POLICY. The poHcy enumerates, as the causes of loss against which it insures, Perils of the Sea, Fire, Piracy, Theft, Barratry, Cap- ture, Arrests, and Detentions ; ^ and " all other perils," by which ' Adams v. Warren Ins. Co. 22 Pick. 163. In this case, the insurance was on freight generally. Tlie goods had not been put on board, but a specific contract had been en- tered into respecting them. Some were to be carried above, and some under deck. It was held that for the portion to be carried under deck, the insured might recover his freight, but not for that which was to have been carried on deck. See also, Wolcott v. Eagle Ins. Co. 4 Pick. 429. AUegre v. Maryland Ins. Co. 6 Harris & J. 408. '^ Taylor v. Wilson, 15 East, 324. Freight was insured, in this case, from St. Ubes to Portsmouth ; the ship was to sail from St. Ubes to Gottenburgh intending to proceed first to Portsmouth. Held, that the plaintiff might recover, though the ultimate desti- nation of the ship was not known to the underwriters. See also, Hughes u. Un. Ins. Co. 3 Wheat. 159. 8 Bell V. Bell, 2 Camp. 475. The policy was on freight " at and from Riga," in con- tinuation of two other policies to Riga. The vessel was seized at Riga before the out- ward cargo was discharged. It was held that the policy did not apply to the freight lost, but to that of the return cargo. 4 Clark v. Ocean Ins. Co. 16 Pick. 289. In Riley v. Delafield, 7 Johns. 522, the plaintiff was not the charterer. Previous to the insurance he had owned the vessel, and had chartered her to A, and then had sold her to B. On account of the charter it was agreed between the plaintiff and B that the former should have the benefit of the freight arising from that voyage, which was the one insured. The plaintiff was thus neither the general owner of the vessel nor the owner pro hac vice, and on these grounds, the court held that he could not recover, having insured his interest under the title of freight, without stating the circumstances of the case. In Mellen v. Nat. Ins. Co. 1 Hall, 463, the plaintiff^ on the arrival of the vessel, was to receive a certain amount for carrying goods, and to pay an equal or greater amount as charterer. As he would lose nothing if she did not arrive, the court held that he had no insurable interest. 5 The perils usually enumerated in the Boston policies are " of the seas, fii'e, enemies, pirates, assailing thieves, restraints, and detainments of all kings, princes, or people of what nation or quality soever, barratry of the master, unless the insured be owner of the vessel, and of mariners, and all the losses and misfortunes which have, or shall come to the damage of the said or any part thereof, to which insurers are liable by the [489 J 441* ELEMENTS OF MERCANTILE LAW. [CH. XVin. is meant by construction of law, all other perils of a like kind with those enumerated.^ It is a universal rule, that the insurers are liable only for extra- ordinary risks. The very meaning of " seaworthiness," which the insured warrants, is that the ship is competent to encounter with safety all ordinary perils.^ If she be lost or injured, and the loss evidently arose from an ordinary peril, as from common weather, or the common force of the waves, the insurers are not liable, because the ship should be able to withstand these as- "saults.2 And if the loss be unexplained, and no extraordinary peril be shown or indicated, this fact would raise a very strong presumption of unseaworthiness.* So the insurers are not liable for loss or injury by wear and tear, or natural decay, or the effect of age.^ The ship itself, and every part of it, and every thing which belongs to it, must give out at some time ; and when it is actually lost, the insurers are not held without sufficient evidence of a cause adequate to the loss of such a thing, if it were in a good condition and properly secured. For without this evidence it would be presumed to have been lost by its own defect.® rules and customs of insurance in Boston." And they are substantially the same in our other commercial cities. 1 In EUery v. N. Eng. Ins. Co. 8 Pick. 14, it was held that damage done to a ship by the violence of the wind while being hauled upon a marine railway for the purpose of being repaired, and while she was partly on land, was covered by the general clause. In Butler v. Wildman, 3 B. & Aid. 398, dollars were thrown overboard to prevent their being captured. It was held that it was covered by the general clause. So, where a ship was fired into by mistake and sunk. Cullen v. Butler, 5 M. & S. 461. See also, Devau.'i v. J' Anson, 5 Bing. N. C. 519 ; Phillips v. Barber, 5 B. & Aid. 161 ; Skidmore V. Desdoity, 2 Johns. Cas. 77 ; Caldwell v. St. Louis Porpet. Ins. Co. 1 La. Ann. 85. See also, Moses v. Sun. Mut. Ins. Co. 1 Duer, 159, post, p. 451. - See M'Lanahan t. Univ. Ins. Co. 1 Pet. 170; Small v. Gibson, 3 Eng. L. & Eq. 299, 24 id. 16. 8 In BuUard v. Eodger "Williams Ins. Co. 1 Curtis, C. C. 148, Mr. Justice Curtis held that the law required vessels to be sufficiently strong to resist the ordinary action of the sea in the voyages for which they might be insured ; but that the ordinary action of the wind and sea did not mean the winds and sea to be ordinarily met with in the voyage insured. He accordingly held that heavy cross-seas were not the ordinary action of the sea within the meaning of this rule, however common they might be in the voyage in- sured. See also, ante, p. 425, n. 1. * See cases cited ante, p. 425. ■"' Where a cable is chafed by the rocks, or the fluke of an anchor broken off, in a place of usual anchorage, and under no extraordinary circumstances of wind and weather, this is ordinary wear and tear for which the owner is alone liable. Benecke, Pr. of Indcm. 456. See also, 1 Phillips on Ins. \ 1105; Coles c. Marine Ins. Co. 3 Wash. C. C. 159 ; Dupeyre v. Western Mar. & F. Ins. Co. 2 Rob. La. 457. * In Coles V. Marine Ins. Co. 3 Wash. C. C. 159, it was held that it was not suffi- cient for the insured to prove that there were storms dming the voyage, unless the inju- [490] CH. XVIII.] MARINE INSURANCE. *442 It is, indeed, another universal rule, that the insurers are never liable for a loss which is caused by the quality of the thing lost. This rule applies, as above stated, to the ship, her rigging and appurtenances, when worn out by age or hard service. But its most frequent application is to perishable goods. The memo- randum, already spoken of,^ provides for this in some degree. But the insurers are liable for the loss of no article of merchan- dise whatever, if that loss were caused by the inherent qualities or tendencies of the article, unless these qualities or tendencies were excited to action, and made destructive by a peril insured against.^ Thus, if hemp rots from spontaneous fermentation, * which cannot occur if it be dry, the insurers are not liable if the loss arose from the dampness which the hemp had when laden on board ; but if the vessel were strained by tempest, and her seams opened, and the hemp was in this way wet, and then rotted, they are liable.^ The insurers do not, of course, insure any man against his own acts. But when we consider whether they are liable for losses caused by the agents or servants of the insured, it is necessary to make a somewhat nice distinction. Beginning with the general principle, which should apply as weU to the contract of insurance as to all others, we say that the owner, as principal, is liable for the acts of his agents while they are acting as his agents, and only executing the work he gave them to do, in a manner which conforms with his instructions and authority. But for the negligence or wilful misconduct of the master or crew, the insurers may be liable, because, in this respect, they ries sustained could be fairly traced to that cause. In Louisville Mar. & F. Ins. Co. v. Bland, 9 Dana, 143, a declaration which did not state the cause of the loss, nor that the loss arising from the damage to the goods, even if it were occasioned by one of the perils insured against, was one for which the insurers were liable under the several ao-reements of warranty, was held defective. See also, Flemming u. Marine Ins. Co. 4 Whart. 59; Leftwitch v. St. Louis Perpet. Ins. Co. 5 La. Ann. 706. 1 Seean(e, p. 421, Sect. 6. 2 See Clark v. Barnwell, 12 How. 272; Tatham v. Hodgson, 6 T, R. 6.56; 1 Emer. 393, c. 12, ^ 9; Goold v. Shaw, 1 Johns. Cas. 2932, id. 442. Nor are they liable for the waste occasioned by ordinary leakage. 2 Val. 83, tit. Ins. a. 31 . Nor for breakage. Stevens, pt. 3, a. 1. " In Boyd v. Dubois, 3 Camp. 133, insurance was effected on hemp, on a voyage from London to the coast of Devonshire. On the voyage, a fire broke out in the night, and the greater part of the cargo was consumed. Lord Ellenborough said : " If the hemp was put on board in a state liable to effervesce, and it did effervesce, and generate the fire which consumed it ; upon the common principles of insurance law, the assured can- not recover for a loss which he himself has occasioned." [491 J 443* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. are not the agents of the owner. They are his agents, if he directed the very negligence or wrongful act which destroys the property insured, and the insurers are, of course, discharged.^ So they are, * if the misconduct be such as to prove the original unfitness of the master or crew, and therefore to show the un- seaworthiness of the ship in this particular ; ^ or if they give the insurers the defence of deviation, or the like.^ The insurers may take upon themselves whatever risks they choose to assume. And express clauses in a policy, or the uni- form and established usage and construction of policies, may throw upon them, as in fact it does, a very large liability, for the effects of the misconduct — wilful or otherwise — of the master and crew. The clause relating to barratry, to be spoken of presently, is of this kind.* If the cargo is damaged through the fault of the master or 1 In General Int. Ins. Co. v. Euggles, 12 Wheat. 410, Thompson, J., says: "If the loss of the Yusscl had been occasioned by any misconduct of the master, short of bar- ratry, whilst in the prosecution of the voyage, and before the loss happened, or if, at the time this misconduct is alleged in him, he was the exclusive agent of the owner, for any purpose connected with procuring the insurance, the owner must bear the loss." In this case, the vessel had been lost before tlie insurance was procured, but the captain kept this fact from the owner, ivho procured the insurance bond fide. Held, that the insurers were liable. See Patapsco Ins. Co. v. Coulter, 3 Pet. 222 ; Buslj v. Roy. Exch. Ass. Co. 2 B. & Aid. 73 ; Jordan v. Wan-en Ins. Co. 1 Story, 342 ; AA^alker v. Mait- land, 5 B. & Aid. 171 ; Dixon v. Sadler, 5 M. & W. 415; Williams v. Suffolk Ins. Co. 3 Sumn. 270, 13 Pet. 415. See also, the remarks of Shaw, C. J. in Copeland v. New Eng. Mar. Ins. Co. 2 Met. 443. But if tlie master acts in bad faith, or is guilty of gross negligence in the discharge of his duty, or violate the law, tlien the underwriters are discharged. Cleveland o. Union Ins. Co. 8 Mass. 308 ; Phvn v. Roy. Exch. Ass. Co. 7 T. R. 505; Siordet v. Hall, 4 Bing. 607; Coffin v. Newburyport Ins. Co. 9 Mass. 436. A more difficult question has arisen, whether the insurers are liable for a loss, the remote cause of which was the negligence of the master or mariners, but the proxi- mate cause a peril insured against. In Andrews v. Essex F. & M. Ins. Co. 3 Mason, 6, Mr. Justice Story considered this a vexed qacstion. In Williams v. Suffolk Ins. Co. 3 Sumn. 276, he says : " As to the point of gross negligence, not amounting to fraudu- lent conduct, if such a case were made out, it would not help the defence. It has been repeatedly settled, by tl\e Supreme Court of the United States, that, if the immediate cause of a loss is a peril insured against, it is no ground of defence that it was remotely caused liy the negligence of the master or crew ; the rule being, causa proxima, non remota spectatur." See also, Patapsco Ins. Co. v. Coulter, 3 Pet. 222; Columliian Ins. Co. V. Lawrence, 10 Pet. 507; Waters i. Merchants Ins. Co. 11 Pet. 213; Delano v. Bedford Ins. Co. 10 Mass. 347 ; Walker p. Maitland, 5 B. & Aid. 171. See, however, De Vaux v. Salvador, 4 A. & E. 420. Sec also, Th? Gen. Mut. Ins. Co. v. Sherwood, 14 How. 351 ; Matthews c. Howard Ins. Co. 1 Kernan, 9; Nelson v. Suffolk Ins. Co. 8 Cush. 477 ; Montoya v. London Ass. Co. 6 Exch. 451, 4 Eng. L. & Eq. 500. See also, remarks in section 15, p. 445, ou Collision. - If a ship sail with an incompetent crew, the policy, as we have seen, never at- taches. Walden v. Firem. Ins. Co. 12 Johns. 133; Copeland v. N. E. Ins. Co. 2 Met. 432. ^ Sec infra, tit. "Deviation." * See infra. [ 492 ] CH. XVIII.] MARINE INSURANCE. *444 crew, the shipper has a remedy against the owner of the ship. But this does not necessarily discharge the insurers. If, how- ever, he enforces his claim against them, he is bound to transfer to them, by a kind of subrogation, his claim against the ship- owner. For the insurers of the cargo, by paying a loss thereon, put themselves, as it were, in the position of the shippers, and acquire their rights.^ Generally, no loss will be attributed to the negligence or de- fault of the master or crew, which can be with as good reason attributed to any of the perils insured against.^ SECTION XIV. OF PERILS OF THE SEA. By this phrase is meant all the perils incident to navigation ; and especially those arising from the wind and weather, the state of the ocean, and its rocks and shores. But it will be remem- * bered that the insurers take upon themselves only so many of these as are " extraordinary." ^ Hence, destruction by worms, is not such a peril as the insurers are liable for, because it is not extraordinary.* It is known to exist in all waters ; and in cer- tain waters, and at certain seasons, this danger is very great ; and it is the duty of the insured to guard against this. But if the vessel, or the cargo — which is far more common — be in- jured by rats, this has been regarded as so far an extraordinary peril, that, if the insured have taken reasonable precaution against them, the insurers are liable. There is now, however, some dis- 1 Atlantic Ins. Co. v. Storrow, 5 Paige, 285 ; Bell v. Western M. & P. Ins. Co. 5 Eob. La. 423, 442 ; Russell v. Union Ins. Co. 4 Dall. 421 ; Grade v. N. Y. Ins. Co. 8 Johns. 245. See also, ante, p. 413, n. 6. 3 Potter V. Suffolk Ins. Co. 2 Sumn. 197. 3 The Schooner Eceside, 2 Sumn. 567, 571. In this case, Mr. Justice Story said: " The phrase, ' danger of the seas,' ivhether understood in its most limited sense, as im- porting only a loss by the natural accidents peculiar to that element ; or whether under- stood in its more extended sense, as including inevitable accidents upon that element, must still, in either case, be clearly understood to include only such losses as are of an extraordinary nature, or arise from some irresistible force, or some overwhelming power, which cannot be guarded against by the ordinary exertions of human skill and pru- * Kohl V. Parr, 1 Esp. 445 ; Martin v. Salem Ins. Co. 2 Mass. 420; Hazard v. N. E. Mar. Ins. Co. I Sumn, 218, 8 Pet. 557. 42 [ 493 ] 445* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. position to put the danger from rats on the same footing as that from worms.i If a vessel reach a harbor in the course of its voyage, and is therein detained by stress of weather, or by being frozen in, or by any such cause, the expenses of the delay, which may be very considerable, are the loss of the owner, and not of the insurers.^ * But those incurred by bearing away for repair, fall, as will be more fully stated hereafter, upon the insurers.^ If a vessel be not heard from, it will be supposed, after a reasonable interval, that she has perished. The presumption of law will be, that she was lost by an extraordinary peril of the sea, and, of course, the insurers will be answerable for her. But this presumption may be rebutted by any sufficient evidence.* 1 Hunter v. Potts, 4 Camp. 203. In this case, goods were insured on a voyage from London to Honduras, with loarc to toucli at Antigua. Wliile' at the last-named port, the timbers of the vc.s.sel \sere so damaged by rat.s that a survey was called, and the ves- sel condemned. Lord E/lenboronqk held that the underwriters were not liable. See also, Aymar v. Astor, 6 Cow. 266; Dale o. Hall, 1 Wils. 281. In this last case, it was decided that a common carrier was liable for damage caused liy rats. And it is fully sustained in a late case in England, Laveroni r. Drirry, 8 Exch. 166, 16 Eng. L. & Eq. 510. This was an action against a common carrier for damages caused by rats. The defence was, that the captain had two cats on board. According to the writers on foreign maritime law, this would have been a good defence. See Emerigon, 377, 378 ; Eoccus de Xavibus, n. 58 ; Consulat de la Mer, cc. 66, 67. But the court held that it was no excuse. Pollock, C. B., said : " Now, whatever might have been the case when Eoccus wrote, we cannot l)at think that rats might be banished from a ship by no very extraordinary degree of diligence on the part of the master, and we are further very strongly inclined to liclieve, that, in the present mode of stowing cargoes, eats would afford a very slight protection, if any, against rats. It is difficult to understand how, in a full ship, a cat could get at a rat in the hold at all, or at least with the slightest chance of catching it." If a common carrier is responsible for such a peril, it follows that an underwriter is not. The ca^e of Garrigues v. Coxe, 1 Binney, 592, supports thoview that an insurer will be liable in such a case, if there be no f lult on the part of the cap- tain. Chancellor Ketit says (3 Cora. p. 301 ) : " The better opinion would seem to be, that an insurer is not liable for damage done to a ship by rats, because it arises from the negligence of the carrier, and may be prevented by due care, and is within the con- trol of human prudence and sagacity." 2 Evcrth V. Smith, 2 M. & S. 278". 5 See infra, \i. 481. * Brown v. Neilson, 1 Gaines, 525. In this case, the judge ruled that there was no time fixed by law, after which a missing vessel should be presumed to be lost, but that, if a vessel did not arrive within the most usual limits of the voyage she was prosecuting, she ought to be iiresumcd to be lost, and that it would not be reasonable to calculate on the utuioit or greatest limit of it. See also. Given r. Brown, Stra. 1199 ; Patterson v. Black, Marsh, on Ins. 781; Watson «. King, 1 Stark. 121; Twemlow r. (>swin, 2 Camp. 85 ; Cohen v. Hinckley, 2 Camp. 51 ; Houstman v. Thornton, Holt, N. P. 242 ; Koster v. Eeed, 6 B. & C. 19. [494] CH. XVIII.] MARINE INSURANCE. *446 SECTION XV. OF COLLISION. Collision is a peril of the sea which may deserve especial notice. In the chapter on Shipping, it has been stated that, where a collision is caused by the fault of one of the ships, the ship in fault sustains the whole loss ; that is, it must bear its own loss, and must indemnify the other ship for the injury that ship sustains. It has been held that the insurers of the ship in fault are liable for the whole of this loss, because it is all caused by collision, which is a peril of the sea.i But the Supreme Court of the United States have recently decided that the insurers are not held for more than the loss directly sustained by the ship they insure ; because they neither insure the ship not in fault, nor do they insure the owners of the ship in fault against mere indebtedness which is cast upon them by the negligence of their servants ; for negligence can never be the ground of a claim, al- though it may be no defence against a claim arising from a peril insured against.^ This view has been adopted and emphatically approved by the Court of Appeals ^ of New York, reversing a decision of the Supreme Court ; * and this rule now rests on the weight of authority. The question is one of much difficulty ; * but upon the whole, we think the rule as now established by the Supreme Court of the Union, and the highest court of our principal mercantile State, rests on the better reason. The Supreme Court of Mie United States ^ once confirmed a decision of the Circuit Court for the first circuit,^ to the effect, that, where a collision takes place without fault, in a port of which the local law divides the whole loss (therein opposing the general maritime law), the insurers of a vessel the owners of which by this law, were made to pay a large sum, were liable 1 Nelson v. Suffolk Ins. Co. 8 Cnsh. 477. So hdd, also, in Hale v. Washington Ins. Co. 2 Story, 1 76. 2 Gen. M. Ins. Co. v. Sherwood, 14 How. 351. 3 Matthews v. Howard Ins. Co. I Kem. 9. * Matthews v. Howard Ins. Co. 1.3 Barb. 234. 5 Peters v. Warren Ins. Co. 14 Pet. 99. « Peters v. Warren Ins. Co. 3 Sumn. 389. [495] 447* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. for it. But this case was exactly opposed to a contemporary decision in the Court of Queen's Bench in England ; ^ and its authority has certainly been shaken by the recent decision of the Supreme Court of the United States. SECTION XVI. This peril also must come under the common rule, and the insurers will not be held, unless it be caused by something extra- ordinary, and not belonging to the inherent qualities of the thing which takes fire.^ The master and crew may burn a ship and cargo, to prevent their capture by an enemy ; for this is their duty to the State ; ^ and, therefore, it would seem that the insurers would be liable for such a destruction by fire, although their policy expressly exempted them from liability for loss by capture, or by war risks generally. The insurers would be held also for any direct and immediate consequences of the fire ; and for loss caused by the endeavor to extinguish it ; and, perhaps, for all that arose from, or was due to, honest and reasonable efforts to prevent it.* It is, indeed, a general rule, that the insurers are liable for the loss or injury which is the natural, direct, and proximate effect of any peril insured against, although the loss may be the immediate effect of * a preceding loss ; as, if a part of the cargo was burned up, and another part injured by water used to arrest the fire.^ The risk does not cease on the ship or furniture, if, during the voyage, any part of it is taken on shore in the ordinary 1 De Vaux v. Salvador, 4 A. & E. 420. 2 Sue ante, p. 442, n. 3. 8 Gordon v. Rimmington, 1 Camp. 123 ; Potliier, h. t. n. 53 ; 2 Valin, 75 ; Emeri- gon, Tome 1, 434. See Wcskctt, tit. Fire, n. 6. * See post, section on General Average. 5 Case V. Hartford Ins. Co. 13 111. 680. In this case TurnbuU, J., says : " Surely, an injury to the goods by water thrown to extinguish a fire, would not be' an injury to the goods by actual ignition, and yet, no case can bo found where an insurance against diiraage by tiro has been held not to extend to such a case." See also, Hillier v. Allegheny Co. Mut. Ins. Co. 3 Barr, 470, per Grier, J., and post, ch. XIX. ^ 7. [496] CH. XVIII.] MARINE INSURANCE. -447 course of events.^ But the rule does not apply to cargo which is taken on shore for the purposes of barter.^ SECTION XVII. OP PIRACY, ROBBERY OR THEFT. There can be no piracy or robbery, without violence ; but this is not necessary to constitute the crime of theft.^ Piracy and robbery are most usually committed by strangers to the ship ; they may, however, be committed by the crew ; and the insurers are answerable for such a loss, unless it arose from the fault of the owner.* If theft be committed by the crew, we should still hold the insurers liable.^ This may be doubtful ; but insurers 1 Pelly V. Eoyal Exch. Ass. Co. 1 Burr. 341 ; Brough v. Whitmore, 4 T. R. 406. 2 Martin v. Salem Mar. Ins. Co. 2 Mass. 420. See Harrison v. Ellis, 7 Ellis & B. 465. ' It is laid down, by Chancellor Kent (3 Com. 303), that theft means that which is accompanied with violence, and not simple theft. On this authority, the case of Map- shall V. Nashville M. & P. Ins. Co. 1 Humph. 99, was decided. In New York, how- ever, after most elaborate arguments, it was held, both by the Supreme Court and the Court of Errors, that the word theft did not mean a stealing by violence necessarily, but would also include a simple larceny. Am. Ins. Co. v. Bryan, 1 Hill, 25, 26 Wend. 663. In this case, the goods had been stolen while on the voyage, but it could not be shqwn by whom, whether by a passenger, or by one of the crew. The insurers were held hable. See also, Atlantic Ins. Co. v. Storrow, 5 Paige, Ch. 285 ; De Eothschild v. Royal Mail Steam Packet Co. 7 Exch. 734, 14 Eng. L. & Eq. 327. * Brown v. Smith, 1 Dow, 349. In this case, however, the insurance was against bar- ratry and not against puracy or robbery. In Nayler v. Palmer, 8 Exch. 739, 22 Eng. L. & Eq. 573, insurance was effected on advances for the outfits, provisions, &c., of cool- ies, to be repaid upon the safe delivery of the emigrants at the port of destination in Peru. The insurance was against pirates, thieves, and all other the usual perils. On the voyage, the coolies rose upon the crew, murdered part of them and the captain, took the ship, and sailed for land ; on reaching which they left the ship, and escaped. Pol- lock, C. B., said : " The act of seizure of the ship, and taking it out of the possession of the master and crew, by the passengers, was either an act of piracy and theft, and so within the express words of the poUcy, or, if not of that quality, because it was not done animo furandi, it was a seizure ejusdem generis, analogous to it, or to barratry of the crew, falling within the general concluding words of the perils enumerated by the poUcy." The plea averred that the loss occurred through the refusal of the coolies to return to the ship after they landed, and not by reason of the seizm-e ; but the court said : " The running away with the ship was as much the cause of the loss as if the ship had been seized and taken out of the possession of the crew by strangers, and then abandoned, and the cargo had consisted of wild animals, who had escaped or been let loose by them whilst they were in possession, and could not be caught again after the captors aban- doned the possession." This case was affirmed, on appeal, in the Exchequer Chamber, 10 Exch. 382, 26 Eng. L. & Eq. 455. See McCargo v. New Orleans Ins. Co. 10 Rob. La. 202 ; Nesbitt v. Lushington, 4 T. R. 783 ; Dean c. Hornby, 3 ElUs & B. 80, 24 Eng. L. & Eq. 85. s See supra, n. 3. 42 * [ 497 ] 448* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. regard it as at least possible, and provide against it by the phrase, " assailing thieves." This excludes theft without violence, and, perhaps, all theft by those lawfully on board the vessel, as a *part of the ship's company.^ If, after shipwreck, the property is stolen, the insvirers are liable, and would probably be so if there were no insurance against theft, if this was a direct effect of the wrecking.^ SECTION xvm. OP BARRATRY. This word has given rise to much discussion, and its meaning may not be now positively determined. We understand by it, however, any wrongful act of the master, officers, or crew, done by them, or either of them, against the owner.^ If he directed the act, or consented to it, or by his negligence or default caused it, — whether actual owner, or quasi owner, by hiiingthe vessel, — it is no barratry.* But it is not necessary that it should be done with an intention hostile to him. For an act otherwise barra- trous, would be none the less so because the committer of it sup- posed it would be for the advantage of the owner. So, too, the voluntary and unnecessary encounter of any extraordinary peril. 1 See 1 Phillips on Ins. 4 1106. 2 In Magoun v. New Eng. Mar. Ins. Co. 1 Story, 157, 164, Mr. Justice Stonj, said ; "All tlie consequences naturally flowing from the peril insiured against, or incident thereto, are properly attributable to the peril itself. If there be a capture, and, before the vessel is delivered from that peril, she is afterwards lost by fire, or accident, or negligence of the captors, I take it to be'clear that the whole loss is properly attribut- able to the capture." See also, Pothier on Ins. n. 55 ; Bondrctt v. Hentigg, Holt, N. P. 149. In two early cases, it is held tliat a loss by piracy is a loss by a peril of the sea, though piracy be not specifically insured against. Pickering v. Barclay, 2 Roll. Ab. 248, pi. 10 ; Barton u. WoUiford, Comb. 56. 3 Considerable discussion has arisen in regard to the meaning of this word. In nearly all the early cases, it is defined to be a fraud, cheat, or trick on the part of the captain. In Patapsco Ins. Co. v. Coulter, 3 Pet. 222, the whole subject is ably reviewed by Mr. Justice Johnson, and the cases, which say that the act must be a fraudulent cue, are shown to be inconsistent with the language used in them. Thus, as said in the text, gross negligence will be held to be barratry, and a mere non- feasance by the captain of the duty enjoined upon him will be a, barratrous act, in some cases. Sec, however, Wiggin v. Amory, 14 Mass. 1 ; Stone v. National Ins. Co. 19 Pick. 34 ; Loekyer v. Oflley, 1 T. R. 259 ; Vallejo v. Wheeler, Cowp. 143 ; Wil- cocks V. Un. Ins. Co. 2 Binney, 574; Phyn v. Roy, Exch. Ass. Co. 7 T. R. 505. * Pipon V. Cope, 1 Camp. 434 ; Nutt v. Bourdieu, 1 T. R. 323, 330, per Lord Mans- field, C. J. ; Vallejo v. Wheeler, Cowp. 155; Soares v. Thornton, 7 Taunt. 627. [498] CH. XVIII.] MARINE INSURANCE. *449 although done from a belief that it would be advantageous to the owner, would be a barratrous act ; ^ and of course it would be if done by the master for his own benefit.^ Mere negligence, if gross and extreme, may be barratrous, even if there be no pur- 'pose of helping or of hurting any one.-^ And, indeed, mere non- feasance, or the not doing of an act, may be barratrous, if thereby an injury was sustained, which might have been prevented by a proper and reasonable resistance, and therefore should have been -SO prevented.* It must be an act against the owners. Therefore, if the mas- ter be the sole owner of the vessel, he cannot commit barratry against other parties in interest as shippers of goods ^ or as char- terers.^ But it seems that a captain who is a part-owner may commit barratry against his other part-owners, and also against a charterer.'^ Nor will any act of a master be barratrous, which is done by him as supercargo, consignee, or factor, or in any capacity or function whatever, other than that of master.^ Not only is a quasi owner's consent to an act destructive of its barratrous character, but his consent will have this effect, and the legal owner's will not. Thus, if there be a quasi owner, as a charterer who loads and sails her, the master, however, being '' In Eai'le v. Rowcroft, 8 East, 126, the master had general instructions to make the best purchases with despatch. It was held that this would not justify his trading with the enemy, and that such an act would be barratry. 2 Vallejo V. Wheeler, Cowp. 143 ; Eoss v. Hunter, 4 T. R. 33. See Lawtou v. Sun Mut. Ins. Co. 2 Cush. 500. ^ In the case of Heyman v. Parish, 2 Camp. 149, the captain sailed contrary to the directions of the pilot, and the ship having been stopped by getting out an anchor, the captain cut the cable, and let her drift on a rock. Park, for the defendant, suggested that there did not appear to be any fraud. Lord Ellenborough said : " This is not nec- essary. It has been solemnly decided, that a gross malversation by the captain in his office, is barratrous." See also, Richardson v. Maine Ins. Co. 6 Mass. 117, 121 ; Gold- schmidt V. Whitmore, 3 Taunt. 508. * In Patapsco Ins. Co. v. Coulter, 3 Pet. 234, Mr. Justice Johnson said : " And, certainly, a master of a vessel who sees another engaged in the act of scuttling or firing his ship, and will not rise from his berth to prevent it, is prima facie chargeable with barratry. Although a mere misfeasance, it is a breach of trust, a fault, an act of infidel- ity to his owners." See p. 447, n. 4. ^ Taggard v. Loiing, 16 Mass. 336 ; Lewen v. Suasso, Postleth. Diet. art. Assurance, 147 ; Barry v. La. Ins. Co. 11 Mart. La. 630. ^ Marcardier v. Chesapeake Ins. Co. 8 Cranch, 39. ' Jones V. Nicholson, 10 Exch. 28, 26 Eng. L. & Eq. 542; Strong v. Martin, 1 Dunl. Bell & Mur. Sess. Cas. 1245. See contra, Wilson v. Gen. Mut. Ins. Co. 12 Cush. 360. ^ Emerigon, Meredith's ed. p. 296. The act, however, if done by the master in his capacity of master, although he may fill other offices, will be barratry. Kendrick v. Delafield, 2 Caines, 67; Cook v. Comm. Ins. Co. 11 Johns. 40; Earle v. Rowcroft, 8 East, 126, 140. [499] 450* ELEMENTS OF MERCANTILE LAW. [CH. XVIIL appointed by the actual owner, — if this master commits an act of barratry, its character is not taken away by the fact that he did it with the consent, or by the order of the actual or legal owner.i The master being appointed by the owner, and controlled by him, many policies provide that they do not insure against bar- ratry, if the insured be the owner of the ship.^ The purpose of * this is obvious ; it is to prevent an insurance of the owner against the acts of one for whom he ought to hold himself, responsible. The effect of the clause is, generally, to limit the insurance against barratry, to goods shipped by one who is not owner of the vessel.^ Still, if a charterer who filled the ship he hired with his own goods and those of others, insured his freight — meaning the excess of what he would earn over what he must pay — the insurance against barratry would not be prevented by this clause from extending to him, because he is not the owner of the ship.* As a general rule, the insurers are liable for the misconduct of the crew, when all usual and reasonable precautions have been taken by the owner, and his servant, the master, to prevent such misconduct.^ SECTION XIX. OF CAPTURE, AKKEST, AND DETENTION. The phrase which refers to these perils, is usually in these words : " Against all captures at sea, or arrests, or detentions of 1 Vallcjo V. Wheeler, Cowp. 143, Lofft, 631, and in a note to 1 Johns. 234. See also, Bomflowcr v. Wilmer, 2 Selw. N. P. 11th ed. 969. The question which most frequently arises, in such cases, is, who is the owner for the voyage. It was held in England, in Hutton v. Bragg, 7 Taunt. 14, that if the charter-party contained words of demise, the possession of the vessel passed thereby to the charterers, though there were words repugnant to this construction in other parts of the instrument. This case has been overruled in England, in Christie v. Lewis, 2 Bred. & B. 410, where it was hdd that the whole contract must be taken together. In this country, Hutton v. Bragg, has nowhere been followed. The law is stated with great accuracy 'in Marcardier v. Chesa- peake Ins. Co. 8 Cranch, 49, "where the general owner retains the possession, com- mand, and navigation, and contracts to carry the goods on freight, the charter-party is a mere affreightment sounding in covenant." See also, M'Intyro v. Bowne, 1 Johns. 229. See ante, chapter on Shipping, p. 359, n. 2. ^ Paradise v. Sun Mat. Ins. Co. 6 La. Ann. 596. ^ Brown u. Union Ins. Co. 5 Day, 1. * Pipon V. Cope, 1 Camp. 434. ^ Supra, p. 442, n. 2. [500] CH. XVIII.] MARINE INSURANCE. ' *451 all kings, princes, and people." Almost every word of this sen- tence has been the subject of litigation or of discussion. The provision has been held to apply not only to captures, arrests, or detentions by public enemies,^ by^foreign belligerent powers,^ but to those by the very government of which the insured is himself a subject, unless the same be for a breach of the law by the insured.^ By the " people " are understood the sovereign power of a State, whatever be its form of government.* " Capture " and "seizure" are equivalent — they differ from "detention" in this respect ; the two former words mean a taking with intent to *keep ;^ the latter, a taking with intent to restore the property.® " Arrest," is any taking possession of the property for any hostile or judicial purpose.'' SECTION XX. OF THE GENERAL CLAUSE. This clause has a very limited operation. We have already remarked, that it is usually restricted to perils of a like kind with those already enumerated ; and although this phrase has been 1 Levy V. Merrill, 4 Greenl. 180. 2 Ehinelander v. Ins. Co. of Penn. 4 Cranch, 29 ; Lee v. Boardman, 3 Mass. 238 ; Powell V. Hyde, 5 Ellis & B. 607, 34 Eng. L. & Eq. 44; Olivera u. Union Ins. Co. 3 Wheat. 183; Rotch v. Edie, 6 T. R. 413. 3 Odlin V. Ins. Co. of Penn. 2 Wash. C. C. 312 ; Lorent v. S. Car. Ins. Co. 1 Nott & McC. 50,5 ; M'Bride v. Mar. Ins. Co. 5 Johns, 299 ; Ogden v. N. Y. P. Ins, Co. 10 Johns. 177. * In Nesbitt v. Lushington, 4 T. R. 783, 787, Lord Kenyan says : " The meaning of the word ' people ' may be discovered here, by the accompanying words : noscitur a sociis — it means 'the ruling power of the country.'" Mr, Justice Buller said: "It means 'the supreme power;' 'the power of the country,' whatever it may be." See also, Simpson v. Charleston P. & M. Ins. Co. Dudley, S. Car. 239. ^ Emerigon, ch. xii., § xxx., p. 420, Meredith's ed. See also, Powell v. Hyde, 5 Ellis & B. 607, 34 Eng. L. & Eq. 44; Black v. Marine Ins. Co. 11 Johns, 287. ^ See Emerigon as cited above, Mumford v. Phoenix Ins. Co. 7 Johns. 449 : Green V. Young, 2 Salk. 444, 2 Ld, Raym. 840, per Holt, C. J., and cases in note, infra. ' Lord Ellmborough held, in Carruthers v. Gray, 3 Camp. 142, that an averment stat- ing that a ship and goods were arrested by the powers of government at a certain place, and the goods were there detained and confiscated, was supported by proof that the goods were forcibly taken possession of by the officers of government. In Olivera v. Union Ins. Co. 3 Wheat. 183, Mr. Chief Justice Marshall, speaking of arrest and detainment, said : " Each of these terms implies possession of the thing, by the power which arrests or detains." He accordingly hdd that a blockade could not be either of these, because the vessel remained in the possession of the master, — but that it would be a restraint. [501 J 452* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. declared to be substantial and material,^ it might be difHcult to hold an insurer liable on tenable grounds, under this clause, when he would not have been liable under any of the enumerated perils.^ Another phrase sometimes used, " against all risks," has been construed very widely, and as if it included every cause of loss, except the fraud of the insured.^ If it stood by itself, it might be difficult to define it ; but if it followed the usual enu- meration, we should say that it should be limited by them in its significance and operation.'* * SECTION XXI. OF PROHIBITED TRADE. This is not the same with contraband trade, although the words are sometimes used as if they were synonymous. It is perfectly lawful for a ship to break through a blockade if it can, or to carry arms or munitions of M^ar to a belligerent. But then it is perfectly lawful for the State whose enemy is thus aided, to catch, seize, and condemn the vessel that does this, if it can. The vessel takes upon itself this risk ; and we have seen that it is not 1 In Cullen v. Butler, 5 M..& S.461, Lord Elleiihorough, B-peakinr^ of the words in the general clause, said : '* Tlicy are entitled to be considered as material and operative words, and to have their due effect assii;ned to tliem in the construction of this instru- ment." See De Peau !■. rvussell, 1 Brev. 441. '^ Moses V. Sun Mut. Ins. Co. 1 Duer, 159. It was held in this case, that the gen- eral clause covered only losses of a similar nature to those specifically described, and that it would not therefore cover a loss resulting from the consumption of cargo by the crew or passengers, or from a sale of it to defray the necessary expenses of repairing the vessel. For cases under this clause, see Phillips v. Barber, 5 B. & Aid. 561 ; Per- rin u. Protection Ins. Co. 11 Ohio, 147 ; Ellery c. New England Ins. Co. 8 Pick. 14; Devaux v. .I'Anson, 5 Bing. N. C. 519 ; Butler v. Wildman, 3 B. & Aid. .398; Jones V. Nieliolson, 10 Exch. 28, 26 Eng. L. & Eq. 542 ; Caldwell v. St. Louis Perpet. Ins. Co. 1 La. Ann. 85 ; Perkins v. >fuw England Mar. Ins. Co. 12 Mass. 214 ; Frichetto v. State Mut. F. & M. Ins. Co. 3 Bosw. 190. ^ In Goix a. Kno.x, 1 Johns. Cas. 337, the court said : " This expression is vague and indefinite, but if we allow it any force, it mu-;t be considered as erecting a special insurance, and extending to other risks than are usually contemplated. We are incHned to apply it to all losses, except such as arise from the fraud of the assured." See also, Skidmoro v. Desdoity, 2 Johns. Cas. 77 ; Marcy v. Sun. Mut. Ins. Co. 11 La. Ann. 748. * The maxim nosdtur a sodis would seem to apply as well here, as in Nesbitt v. Lush- ington, 4 T. R. 783, 787, where it was held that the word "people," was to be taken in connection with the context, and it was accordingly construed to mean the sovereign povTer of the State. See also, cases cited ante, p. 440. [502] CH. XVIII.J MARINE INSURANCE. *453 covered by a common policy, unless the purpose is disclosed and permitted.! Prohibited trade belongs to a time of peace. It is either trade prohibited by the State to which the ship belongs, — and then it is wholly illegal, — and the insurers are not only not answerable under a general policy for a loss occasioned by this breach of law, but an express bargain to that effect would itself be illegal and void ; ^ or it may be trade prohibited only by a foreign State. And then it is not an illegal act in the vessel by whose sovereign it is not prohibited. On general principles, we should say, that the intention to incur this risk should be communicated.^ But in practice, our policies generally, if not universally, except expressly the risks arising from prohibited trade. If there has actually been such a trade, and a seizure, forfeit- ure, and condemnation because of it, the insurers are certainly discharged by the operation of this exception.* If there has been an attempt at such a trade, which was not carried into effect, but the vessel was seized and condemned * therefor, according to the laws of the country where the attempt was made, here, also, we should say, that the insurers were dis- charged.^ If, however, the seizure and condemnation were for an alleged trade, or attempt to trade, but there was no justification for the same, in fact, the vessel being wholly innocent, such a loss as this would not come under the exception, and the insurers would be liable.'' If there be such a trade, or attempt thereto, and no seizure or ■ See ante, p. 418. 2 United States v. The Paul Shearman, Pet. C. C. 98 ; Delmada y. Mottenx, Park on Ins. 505, 544; KusseU v. Degrand, 15 Mass. 35; Richardson v. Maine Ins. Co. 6 Mass. 102. ^ In Archibald v. Mercantile Ins. Co. 3 Pick. 70, the court said : " The law is clearly settled, that an insurance does not cover an illegal voyage, unless by tlie terms of the contract the intention to do so is expressed, or unless the voyage insured is known to the assurer to be illegal at the time when he makes the contract." In this case, the risk was a prohibited one. See also, Andrews v. Essex F. & M. Ins. Co. 3 Mason, 6 ; Rich- ardson V. Maine Ins. Co. 6 Mass. 102 ; Livingston v. Maiyland Ins. Co. 7 Crauch, 506 ; Pollock V. Babcock, 6 Mass. 234. * See cases cited in note above. ^ But if at the time of the seizure, the port to which the vessel was going had ceased to be hostile, or another port had been substituted for it, then the capture is invalid. The Abby, 5 Rob. Adm. 251 ; The Imina, 3 Rob. Adm. 167 ; The Trende Sostre, 6 Rob. Adm. 390, n. 15 Sawyer v. Maine F. & M. Ins. Co. 12 Mass. 291. [503] 454* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. condemnation, the insurers are not discharged from their liability for an independent Ioi?s, by this exception. ^ The parties may always agree to add such risks or except such as they choose.^ And sometimes an excepted risk and one in- sured against are mingled. If, for example, all war risks and all captures are excepted, and a vessel is stranded upon a foreign and hostile shore, and captured there and condemned, are the in- surers liable ? Yes, if the vessel would have been lost by the stranding; but not, if notwithstanding this peril, the owners would have recovered her.^ * SECTION XXII. OF DEVIATION. As the insurers must know, either from information given them or from the known course of trade, what risks they assume, it is obvious that the insured have no right to change those risks, and that if they do, the insurers are not held to the new risk. Such i In Richardson v. Maine Ins. Co. 6 Mass. 112, Parsons, C. J., said; "And if the assurer will expressly insure against seizure for illicit trade, or with a full knowledge of the nature of tlie vorat,'e, he will insure it without making any exception, he will be bound to indemnify the assured for the losses arising from the breaches of the trade-laws of the foreign [State. But although he may not take upon himself these losses, and thus be irresponsilile for them, yet he is answerable for any other losses insured against, be- cause the policy is not void." - " It is a niaxim as old as our law, conventio vindt legem. The parties may, if they please, introduce into their contract an article to prevent the application of a general rule of law to it." Per Lord Kniiinn, C. J., in Walker v. Birch, 6 T. R. 262. ^ The ease of Livie v. Janson, 12 East, 648, where a ship insured, warranted free from American condemnation, was driven on shore by perils insured against, and after- wards captured, proceeds upon this distinction. Lord Ellenhorough, in giving the opin- ion of the court, states this case : " If, for instance, a ship meet with sea damage, which checks her rate of sailing, so that she is taken by an enemy, fi-om whom she would otherwise have escaped, tliough she would have arrived safe hut for the sea damage, the loss is to be ascribed to the capture, and not to the sea damage." Tliis case is said by an eminent writer on Insurance, to be " surely wrong " — (see 1 Phillips on Ins. § 1136) — but it appears to us to come cleai-ly within the rule laid down in the text. If the decision is wrong, it is not a mistake of law, but one of fact, as is said by Best, C. J., in Hahn v. Corbett, 2 Biiig. 205, because the facts would have warranted the coiurt in finding tliat the stranding produced a total loss independently of the seizure. In the ease of Rico v. Homer, 12 Mass. 230, the ship was damaged to the amount of three fourths of her value, but as she existed in specie, there could not be a total loss before an abandonment should be made ; and, consec|uently, as there was no total loss before seizure, the capture was held to be the cause. See a'lso. Green v. Blmslie, Peake, 212; Schiefferlin v. New York Ins. Co. 9 Johns. 21 ; Levi v. AUnutt, 15 East, 267 ; Knight V. Faith, 15 Q. B. 649. [504] CH. XVIII.] MARINE INSURANCE. *455 a change of risk is called a deviation ; it certainly discharges the insurers ; and although the v\rord originally meant in law what it means commonly, a departure from the proper course of the voyage, it now means, in the law of insurance, any departure from, or change of the risks insured against. And it discharges the insurers, although it does not increase the risk, as they have a right to stand by the bargain they have made.^ There may be a deviation while the ship is in port ; ^ or where the insurance is on time, and no voyage is indicated.^ And a very slight devi- ation may suffice to discharge the underwriters.* But no deviation discharges the insurers, or, in the language of the law, no change of risk is a deviation, unless it be volun- tary, — that is, unless it be made without sufficient necessity.^ Nor is this necessity determinable altogether by the event ; for it must be judged of by the circumstances as they existed at the time, and entered into, or ought to have entered into considera- tion.^ K a deviation is only temporary, it only suspends the liabiKty * of the insurers. But it is not temporary, unless after its termina- tion all other risks are precisely what they would have been if there had been no deviation.^ And this is true of very few devi- ations indeed, and certainly not of any change of course ; for the ship will not be again in the same place, and subject to the same winds and waves, as she would other-wise have been.^ '^ Maryl. Ins. Co. v. Le Roy, 7 Cranch, 26. In this case, Mr. Justice Johnson, said : " The discharge of the underwriters from their liability, in such cases, depends, not upon any supposed increase of risk, but wholly on the departure of the insured from the con- tract of insm-ance." ^ Palmer v. Marshall, 8 Bing. 79. In this case, the risk commenced "at" the port of departure. It was held tliat an inexcusable delay to sail would be a deviation. See also. Palmer v. Fenning, 9 Bing. 460; Earl v. Shaw, 1 Johns. Gas. 313; Seamans v. Loring, 1 Mason, 127 ; Grant v. King, 4 Esp. 175, per Lord Ellenhorough. 3 V. Westmore, 6 Esp. 109 ; Bell v. Western F. & M. Ins. Co. 5 Rob. La. 423. * Maryland Ins. Co. v. Le Roy, 7 Cranch, 26. See also, cases passim. 6 Thus it is allowable to go out of the course to avoid capture. Oliver v. Maryland Ins. Co. 7 Cranch, 487; and to avoid ice — Graham v. Com. Ins. Co. 11 Johns. 352. See also, Vallejo v. Wheeler, Cowp. 143; Green v. Elmslie, Peake, 212; Robinson v. Mar. Ins. Co. 2 Johns. 89 ; Lee v. Gray, 7 Mass. 349. « Byrne v. Louisiana State Ins. Co. 19 Mart. La. 128; Gazzam v. Ohio Ins. Co. Wright, 202; Toulmin v. Inglis, 1 Camp. 421. ' See 1 Phillips, H 975, 989. 8 CofBn V. Newburyport Mar. Ins. Co. 9 Mass. 436, 449. Mr. Justice Sedgwick, in delivering the opinion of the court, in this case, said : " Now it is undoubtedly true, that the shortness of the time, or the distance of a deviation, makes no difference as to its effect on the contract — whether for one hour or one month, or for one mile or one hun- 43 [ 505 ] 456* ELEMENTS OF MBECANTILB LAW. [CH. XVIII. The proper course — a departure from which is a deviation — is always the usual course, provided there be a usage ; for a master is not bound to follow their track, wherever one or two have gone before, but must be allowed his own reasonable dis- cretion. ^ If there be no course so well established that every one would be expected to follow it, the master must go to his destined port in the most natural, direct, safe, and advantageous way. And a mere mistake on this point does not constitute a deviation. A deviation from one course marked out by estab- lished usage, is not, however, excused by a mistake.^ And if a master, where there is no controlling usage, has made up his mind that a certain course is the best and proper course, and takes another, whether from some motive of his own or by the order of his owner, this is a deviation. The insurers have a right to the master's best discretion, and to his following it.^ An extraordinary and unnecessary protraction of a voyage would be a deviation. But the mere length of the voyage, with- out other evidence, would not prove this.* Liberty policies, so called, are often made. That is, the in- sured is expressly permitted to do certain things, which, with- out such permission, would constitute a deviation. And a large proportion of the cases on the subject of deviation, has arisen under * these policies. Most of the phrases commonly used have been construed by the courts ; and generally quite strictly. A liberty to " enter " a port, or " touch " at a place, permits a ship to go in and come out with but little delay, because for this purpose the word " stay " or " remain," is necessary.^ And it is dred miles, the consequence is the same. If it be voluntary, and without necessity, it puts an end to the contract." 1 Martin t-. Del. Ins. Co. 2 Wash. C. C. 254 ; Folsom v. Merchants Mut. Mar. Ins. Co. 38 Maine, 414. '•^ Phyn V. Royal Exch. Ass. Co. 7 T. R. 505. This follows as a natural se- quence of the rule above laid down, that the usual course, if there be one, is to be fol- lowed, .and if this is not done, the risk is a different one from that concerning which the contract was made, and consequently the insurers will bo discharged. See Maryland Ins. Co. V. Le Roy, 7 Cranch, 26. » Middlewood v. Blakes, 7 T. R. 162; Vallejo o. Wheeler, Cown. 143; Ross v. Hunter, 4 T. R. 33. * Syers v. Bridge, Doug. 529 ; Columbian Ins. Co. v. Catlctt, 12 Wlieat. 383 ; Smith V. Sun-idgo, 4 Esp. 25 ; Suydam v. Marine Ins. Co. 2 Johns. 138, 143. ^ Urquhart v. I?arnard, 1 Taunt. 450. Sir J. Mansfield, C. J., in delivering the opin- ion of the court in this case, said : " It is doubtful; nor can I find it anywhere defined, what is the precise meaning of ' liberty to touch,' as contradistinguished from the mean- ing of 'liberty to touch and stay.' No case decides this difficulty, though there must be [506] CH. XVIII.] MARINE INSURANCE. -456 said that even to" 'i enter and stop at," gives no liberty to trade at the port, but that word itself, or its full equivalent, must be used. Still the circumstances of each case would influence the court very strongly in construing any such phrase or permis- sion.i It is certain that no permission is necessary for any change of course or risk that is made for the saving of life, or even for the purpose of helping the distressed.^ Always provided, however, that the change of course, or the delay, was no greater and no longer continued than this cause for it actually and rationally considered, required. And the rule applies to every case in which it is attempted to justify a deviation on the ground of necessity .3 It is, however, equally well settled that a change of course or of risk for the purpose of saving property, is a devia- tion not justified by its cause.* A delay for the purpose of tow- ing a vessel is certainly a deviation.^ But not if there are per- sons on board the vessel which is towed, and they can be saved in no other Way.'^ some difference between the two phrases." See also, Duerhagen v. U. S. Ins. Co. 2 S. & R. 309. So it has been held that liberty to touch at one port will not authorize the substitution of another port, though the latter was not more out of the course. Elliot V. Wilson, 4 Brown, P. C. 470. And if the vessel is unable to enter the port by reason of a municipal regulation, the liberty is consti-ued so stiictly that she cannot go to any other port. Stevens v. Comm. Mut. Ins. Co. 6 Duer, 594. The better opinion now seems to be that where a ship is rightly at a port, any thing can be done there which will not delay her or increase the risk. Raine v. Bell, 9 East, 195 ; Kane v. Col. Ins. Co. 2 Johns. 264; Hughes v. Union Ins. Co. 3 Wheat. 159; Thorndike v. Bordman, 4 Pick. 471 ; Chase v. Eagle Ins. Co. 5 Pick. 51 ; Cormack v. Gladstone, 11 East, 347 ; Laroche v. Oswin, 12 East, 131. 1 Ashley v. Pratt, 16 M. & W. 471, 1 Exch. 257 ; Metcalfe v. Faxry, 4 Camp. 123 ; Houston V. New England Ins. Co. 5 Pick. 89. See also, cases supra. 2 Bond V. Brig Cora, 2 Wash. C. C. 80 ; Lawrence v. Sydebotham, 6 East, 54, per Lawrence, J. In the case of The Schooner Boston, 1 Sumner, 328, Mr. Justice Story said : " The stopping for this purpose could not, in my judgment, be deemed by any tribunal in Christendom a deviation from the voyage, so as to discharge any insurance, or to render the master criminally or civilly liable for any subsequent disasters to his vessel occasioned thereby. See also. The Ship Henry Ewbank, 1 Sumner, 400 ; Settle V. St. Louis Perpet. M. F. & L. Ins. Co. 7 Misso. 379 ; Walsh v. Homer, 10 Misso. 6. And a deviation to save lives on board is also justifiable ; but the plaintiff is bound to show th.at all medicines, &c., generally necessary for the voyage were on board, but were insufficient in the emergency. Woolf v. Claggett, 3 Esp. 257. In Perkins v. Augusta Ins. & Banking Co. Sup. Jud. Ct. Mass. Nov. T. 1855, the wife of the captain was on board in a pregnant condition, and it was held that a deviation to obtain medical assist- ance and advice was justifiable. 3 Lavabre v. Wilson, Doug. 290, per Lord Mansfield. * Bond V. Brig Cora, 2 Wash. C. C' 80 ; Mason v. Ship Blaireau, 2 Cranch, 240 ; Warder v. La Belle Creole, 1 Pet. Adm. 40. 5 Natchez Ins. Co. v. Stanton, 2 Smedes & M. 340 ; Hermann v. Western M. & F. Ins. Co. 13 La. 516. 8 Crocker v. Jackson, Sprague, 141. [507] 457* ELEMENTS OP MERCANTILE LAW. [CH. XVIII. Sometimes it is intended that a ship shall visit many ports, and even go backwards and forwards, at places between the port * from which she sails, and that at which the voyage is finally to terminate. Such purposes as this are sometimes provided for by a policy on time ; and sometimes by express permission to go to and trade at certain ports. But there must be no going back and forth unless this is also expressly stated. Otherwise, the ports mentioned must be visited in a certain order. If a port is named as one to which the ship will go, to that she must go. If it be only said that she may go to it, she may pass by without entry. If permission be given to enter and stop at a dozen different ports, the vessel may omit any of them or the whole, but must visit in the proper order all to which she goes.^ What this order is, must be determined by the words used, and by the facts, in each case. Generally, if ports are enumer- ated, they must be visited in the order in which they are men- tioned ; or if it appears that this was not intended, then in their geographical order, which may not be that which the map indi- dates, but that settled by the course of navigation." Where no final port is designated, it would seem that the ports permitted may be visited in any order ; but even here the voyage cannot be unreasonably protracted.^ ■ The substilTution of a new voyage for that agreed upon, is of course a deviation, and one that can very seldom be justified by any necessity so as to carry the insurers' liability on the new voyage. If an entirely new voyage is intended, and a vessel sails upon it, but in the same direction in which she would have gone on the insured voyage, the policy never attaches, and the pre- mium is never earned, because the ship never sails on the voyage insured.* But if it is intended that the ship should pursue the insured voyage to its proper terminus, and at a certain point of the voyage to deviate by going into another port, there is no 1 Andrews v. Mcllish, 5 Taunt. 496 ; Marsden v. Eeid, 3 East, 572 ; Kane v. Colum- bian Ins. Co. 2 Johns. 264; Hale v. Mercantile Ins. Co. 6 Pick. 172; Houston v. New England Ins. Co. 5 Pick. 89. ■^ In Beatson v. Haworth, 6 T. R. 531, Lord Kent/on held that, where the geographi- cal order was different from that named in the policy, the latter must be followed, unless a usage could be shown to the contrary. Where a usage can be shown, it will govern. Gairdner v. Scnhouse, 3 Taunt. 16 ; Bragg v. Anderson, 4 Taunt. 229. See also, Ashley v. Pratt, 16 M. & W. 471, 1 Exch. 257. ^ Deblois V. Ocean Ins. Co. 16 Pick. 303; Gau'dner v. Senhouse, 3 Taunt. 16. * Wooldridge v. Boydell, Doug. 16. [ 508 ] CH. XVIII.] MARINE INSURANCE. *458 deviation until that point is reached and the deviation actually begun ; because it is certain that no mere intention to deviate * discharges the insurers until it is carried into execution. Whether the intended deviation was only an intended deviation, or was so great a change of the voyage that the mere intention to make it was an intention to sail on an entirely different voyage, in which case the policy does not attach, would be in every case a question of mixed law and fact. And if it was a part of the intention not to go finally to the proper terminus of the voyage, this would generally, we think, indicate that the old voyage was given up and a new one substituted.^ If the ship actually sails on the voyage intended, the fact that she cleared for a different voyage does not discharge the insurers.^ SECTION XXIII. OF THE TEEjilNI OF THE VOYAGE, AND OP THE KISK. These must be distinctly stated, whether they be termini of time or place. A policy from to , or from B to , or from to B, is void.* Nor would it be any better if the termini were named with apparent distinctness, but in such wise as to mean nothing, or nothing sufficiently certain.^ A policy takes effect from its date, if the bargain was then complete, although not delivered until afterwards.^ And it may 1 Houston V. New Eng. Ins. , Co. 5 Pick. 89; Firemen's Ins. Co. v. Lawrence, 14 Johns. 46, per Kent, Chancellor ; Hogg v. Homer, Park on Ins. 626, 782 ; Henshaw v. Mar. Ins. Co. 2 Caines, 274 ; Hobart v. Norton, 8 Pick. 159 ; Hare v. Travis, 7 B. & C. 14. 2 Tasker v. Cunninghame, 1 Bligh, 87 ; Middlewood v. Blakes, 7 T. R. 162. ^ Planche v. Fletcher, 1 Doug. 251 ; Bamewall v. Church, 1 Caines, 217 ; Talcot v. Marine Ins. Co. 2 Johns. 130. In "Winter v. Delaware Mut. Ins. Co. 30 Penn. State, 334, the vessel was compelled to put into an intermediate port for repairs, and the mas- ter could only obtain money for that purpose by giving a bottomry bond payable on the arrival of the vessel at a port, other than that to which she was insured. She accordingly was repaired and sailed for the substituted port. It was hdd that while she was still on the track to the original port, there was merely an intention to deviate, and not an abandonment of the original voyage, if the jury should find that the intention was, after leaving the substituted port, to proceed to the original port of destination. 1 MoUoy, book 2, eh. 7, § 14. See also. Manly v. United Mar. & Fire Ins. Co. 9 Mass. 85. But see Folsom v. Merchants Mut. M. Ins. Co. 38 Me. 414. 5 Kobertson v. French, 4 East, 130 ; Langhorn v. Hardy, 4 Taunt. 628 ; Spitta v. Woodman, 2 Taunt. 416; Graves v. Marine Ins. Co. 2 Caines, 339; Richards v. Ma- rine Ins. Co. 3 Johns. 307. 6 Lightbody v. North Am. Ins. Co. 23 Wend. 18. See also, Union Mut. Ins. Co. V. Commercial Mut. Ins. Co. ante, p. 403, n. 2. 43 * [ 509 ] 459* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. be remarked that if there be an unreasonable delay in the sailing of the vessel, the policy never attaches, for the bargain is consid- ered as annulled.-' The common phrase "lost or not lost," or any equivalent words, make the policy retrospective, so far that the insurers are responsible for any loss which occurred before the policy was made, but within the time or the voyage insured.^ If the loss be known, it must of course be stated ; but even then, if its extent or amount is wholly unknown, it may be the subject of valid insurance.^ If the policy is to take effect on the occur- rence of a certain event, it will attach, although the event has taken place before the date of the policy, if at the time of the date the subject insured is in the condition described in the policy.* If the policy is to take effect " on " a certain * day, it begins with the beginning of that day. K " from and after " a day, that day is excluded, but " from " only may be more ambig- uous, and the construction of the word be open to evidence. It has been said, however, that " from the date," includes the day, and " from the day of the date," excludes it ; but this is a very nice distinction.^ A policy on a vessel "at" such a place, generally attaches when she is there and in safety." But if there were a policy " to " a place, and another was made out between the same par- ties " from " the same place, we should say that the law would presume that the parties intended that the second policy should 1 See ante, p. 454, n. 2. 2 See ante, p. 414, n. 2. 8 Mead v. Davison, 3 A. & E. 303. * Cobb V. New England Mat. M. Ins. Co. 6 Gray, 142. ^ Sir Kobert Howard's Case, 2 Salk. 625. This subject was elaborately considered by Lord Mansfield, in Pugh v. Leeds, Conis. 714. He held that the word "from" might be either inclusive or exclusive, according to the context and subject-matter. He also held that the day, and the day of the date meant in every case the same thing. He said : " The date is a memorandum of the day when the deed was delivered. In Latin it is ' datum ; ' and ' datum tali die ' is, delivered on such a day. Then in point of law, there is no fraction of a day ; it is an indivisible point. What is ' the day of the date "? ' It is ' the day the deed is delivered.' ' The date,' therefore, being also defined to be the day the deed is delivered ; ' the date,' and ' the day of the date,' must mean the same thing. The day of the date is only a superfluous expression." ° In P.arraeter v. Cousins, 2 Camp. 235, the insurance was at and from the Island of St. Michael's. The ship arrived in a, very disabled state, and, after lying at anchor there twenty-four hours, was blown out to sea and wrecked. Lord Etlenborough held that the policy under these circumstances never attached. He says : " She must have once been at the place in good safety. If she arrived at the outward port so shattered as to be a mere wreck, a policy on the homeward voyage never attaches." [510] CH. SVIII.] MARINE INSURANCE. *460 attach whenever the first one ceased by her arrival, without refer- ence to the condition of the ship or her peril at the time.i Generally, a policy on goods attaches to them at the time when it would have attached to the vessel had she been insured. And if the risk is to begin at a certain time, and also at a cer- tain port or place, the latter words may be shown to be mere surplusage, and not intended to control the former ; and the risk will begin at that time wherever the ship may be.^ The extent which should be given to the meaning of the word " port " is sometimes a question of some difficulty ; but in general all places are within a port which belong to it by mercantile usage and acceptance, although not within the same municipal or legal precinct.^ * " At and from " cover a vessel in a port as well as after she leaves it. " From " only covers the vessel after she gets under way. " At and from " applied to goods, do not cover them in the port until they become subject to marine risk, by being water- borne.* They are covered not only when they reach the ship, but as soon as they are put on board of boats or fighters or any other usual water conveyance to the ship.^ And if insured to a port, they continue covered after they leave the ship by any usual conveyance for the shore.^ The word " at " appfied to an island 1 See Spitta v. Woodman, 2 Taunt. 416 ; Bell v. Hobson, 16 East, 240; 1 Arnould on Ins. p. 427 ; 3 Kent, Com. 310. 2 Manly v. Unit. M. & F. Ins. Co. 9 Mass, 85. In Martin v. FisMng Ins. Co. 20 Pick. 389, a vessel was insured "at and from Calais, Maine, on the 16th day of July, at noon, to, at, and from all ports and places to which she may proceed in the coasting business, for six mouths." The court held that the policy attached, although there was no evidence that the vessel was at or prosecuting her voyage from Calais on the day named. 3 See McCargo v. Merch. Ins. Co. 10 Eob. La. 334 ; Park v. Hammond, 2 Marsh, 189 ; Payne v. Hutchinson, 2 Taunt. 405, n. ; Constable v. Noble, 2 Taunt. 403 ; Mur- ray V. Col. Ins. Co. 4 Johns. 443. And see n. 1 on nextjjage. * Spitta V. Woodman, 2 Taunt. 416. And where the risk is to commence "in the loading of goods " at A, the policy will not cover goods shipped before the arrival of the vessel at A. MelUsh v. AUnutt, 2 M. & S. 106 ; Langhom v. Hardy, 4 Taunt. 628 ; Horneyer v. Lushington, 15 East, 46 ; Rickman v. Carstairs, 2 Nev. & M. 571. See also. Graves v. Mar. Ins. Co. 2 Caines, 339 ; Scriba v. Ins. Co. of N. H. 2 Wash. C. C. 107. In Murray «. Col. Ins. Co. 11 Johns. 302, it was held that the hoisting the cargo out of the hold of the ship, and restoring it, did not amount to a loading it on board the ship. s Parsons v. Mass. P. & M. Ins. Co. 6 Mass. 197; Coggeshall v. Am. Ins. Co. 3 Wend. 283. In this case, the vessel was on a trading voyage on the western coast of South America. The policy covered goods laden on board said vessel from the 10th of July to the 10th of January. During this time a basket of virgin silver was lost, while being brought from the snore to the vessel, in a flat boat. Held, that this being the customary mode of taking goods on board, the assured were entitled to recover. ** Per Lord Mansfield, C. J., in Hurry v. Eoyal Exch. Ass. Co. 2 B. & P. 430 ; [511] 461* ELEMENTS OF MERCANTILE LAW. [CH. XVIII. or a coast, may embrace all the ports therein, and cover the ship while sailing from one to another.^ " To a port and a market " covers a voyage to the port, and thence to every place to which, by mercantile usage or reasonable construction, a ship may go thence in search of a market.^ If the insurance be on a certain voyage, a very strong presumption of law would confine it to the next voyage which came under that description.^ If the insurance be to " a port of discharge," this does not ter- minate if the vessel goes to a port for inquiry, or for needful refreshment or repair.* If it be " a final port of discharge," the * insurance ceases upon such parts of the cargo as are left at one port or another, and continues on the ship, and on all the goods on board) until arrival at the port, where they will be finally dis- charged.^ It is generally provided in time-policies that if the vessel be at sea at the expiration of the time agreed on, the risk shall con- tinue until her arrival at a port of discharge, or at her port of destination. If, then, before the expiration of the year she is actually at sea, or has broken ground for the voyage,^ or if when Rucker v. London Ass. Co. 2 B. & P. 432, note ; Sparrow v. Carruthers, 2 Stra. 1236 ; Matthie v. Potts, 3 B. & P. 23 ; Wadsworth v. Pac. Ins. Co. 4 Wend. 33 ; Stewart v. Bell, 5 B. & Aid. 238. 1 Cruikshank o. Janson, 2 Taunt. 301 ; Dickey Salttt3 v. Ocean Ins. Co. 12 Johns. 107. ' Am. Ins. Co. v. Coster, 3 Paige, Ch. 323 ; The Zephyr, 3 Mason, 341. 8 Idle V. Royal Exch. Ass. Co. 8 Taunt. 755. * Mount V. Han-ison, 4 Ring. 388. i" Callender v. Ins. Co. of N. A. 5 Binn. 525. M Ogden V. General Mut. Ins. Co. 2 Duer, 204; M'Gaw v. Ocean Ins. Co. 23 Pick. 405. [526] CH. XVIII.] MARINE INSURANCE. *475 and is under the duty, as we have seen, of transmitting the goods if he can. And if he does, the owner of the ship is en- titled to the whole of his freight ; and the expense of the trans- mission is all his loss.i If the master might have done this, and fails to do it, the estimated expense of transmission is still all the loss for which the insurers are responsible.^ So, if the ship can be repaired and go on again, and finish her voyage, the owner would have the right to hold on to the goods, and finally carry them and earn his freight.-^ And he has this right, although the delay would be very long, and even if the * goods are injured, and it would cost time and money to put them in a condition of safety for the residue of the voyage. Still the ship-owner, by his agent, the master, may do all this, and then earn his freight; and, therefore, if it can be done, whether it is done or not, all the claim which the insured on freight can make on the insurers, is for the expense of doing it* The rule of fifty per cent, has been held to apply to freight also. If, therefore, freight pro rata be paid, it will be a total loss by construction, if less than half be paid. So, if the ship be injured, and part of the cargo be lost, but the ship may be repaired and carry the remaining goods on, if that part would pay more than half of the whole freight, it has been held not to be total, and otherwise it is.^ Freight is fully earned if the goods remain substantially in specie, and are so delivered to the consignee, although there be a very great deterioration. But freight is lost, and the insurers 1 Bradhurst v. Col. Ins. Co. 9 Johns. 17 ; Hugg u. Augusta Ins. & Banking Co. 7 How. 595. 2 Searle v. Scovell, 4 Johns. Ch. 218. 3 Herbert v. Hallett, 3 Johns. Cas. 93 ; GriswoM v. New York Ins. Co. 1 Johns. 205, 3 Johns. 321. And if the ship cannot be repaired, yet it is the duty of the master to send on the goods by another ship, if one can be procured. See Jordan v. Warren Ins. Co. 1 Story, 342; Bradhurst v. Col. Ins. Co. 9 Johns. 17. * Clark V. Mass. P. & M. Ins. Co. 2 Pick. 104; M'Gaw v. Ocean Ins. Co. 23 Pick. 405. In Lord v. Neptune Ins. Co. Sup. Jud. Ct. Mass. March term, 1854, insurance •was effected on the freight of the barque Dana, from New York to Havre. On the third day out, the ship met with a peril and was obliged to put back to New York, where the cargo was discharged, in order to repair the vessel, and sold. It would have taken several months to have prepared the cargo by drying for reshipment, and it was conceded by both parties, that the master acted for the benefit of all concerned in sell- ing it. The court held that, under these circumstances, the insured could not re- cover. 5 Am. Ins. Co. v. Center, 4 Wend. 45. But we know of no other case where it has been so decided. [527] 475- ELEMENTS OF MERCANTILE LAW. [CH. XVIII. are responsible, if nothing is left of the goods but the mere pro- ducts of decomposition, so that they are lost in fact.^ In England it has been held that the master is bound to repair the ship at an intermediate port, in order to bring on the cargo and earn his freight, if this can be done at an expense less than the value of the ship when repaired, although the expense would be greater than the value of the freight.^ And if the master repairs the ship at an expense exceeding her value and that of the freight when repaired, and hypothecates both ship and freight to pay the expenses incurred, and afterwards pursues the voyage, delivers the goods and the ship and freight seized by the bondholders, so that the owner derives no benefit from either, this is still no loss of freight, which can be recovered from the insurer.^ Nor does the fact that the ship was totally lost, and being insured, the freight passed by abandonment to the under- writers on the ship, make the underwriter on the freight liable, if he would not have been so, had the owner not insured his vessel* Nor does it make any difference in this respect, that the ship and freight are insured by the same person.^ If, after some freight is earned, there is an abandonment of the ship, and after the abandonment, more freight is earned, the American cases hold, that the freight earned before the abandon- ment,' goes to the insurers on freight ; while that earned after 1 Of;(Jcn V. Gen. Mut. Ins. Co. 2 Duer, 204; Hugg v. Augusta Ins. Co. 7 How. 595. In Lord v. Neptune Ins. Co., Shaio, C. J., in delivering the opinion of the court, said : " The question, therefore, is not, whether the flour and grain and other articles composing tlie cargo, would have been of any, or what value at Havre ; but whether, on such rcshipmcnt and arrival, they Avoukl have remained in specie, as tioui-, wheat, bacon, palm leaf, &c. If so, then, it is clear that they were not so totally lost that the plainlilfwas prevented, by the peril insured against, from carrying them and earning his freight." And, again : " But we think that, if the goods are perishable in their nature, and so much damaged, and in such a fermenting and decaying condition, that, though renuiining in specie at the intermediate port, they will utterly decay and lose their specific character, before they would arrive at the port of destination, it is now the better opinion that tlicy may be deemed totally lost, and sold at the place where they arc, and the ]irocceds will be a salvage for the bencflt of the owner of the goods. It is regarded as a total loss, not because of the sale, but because the goods are so far deteri- orated and in process of decay, that, before they could reach their place of destination, they would wholly lose their s|)ecific character, and cease to be the goods insured." - Moss u. Smith, 9 C. B. 94. 3 Benson v. Chapman, 2 H. L. Cas. 296, 8 C. B. 950, affirming the decision of the Exchequer Chamber, which reversed that of the Common Pleas, 6 Man. & G. 792. * Scottish Marine Ins. Co. v. Turner, 4 II. L. Cas. 312, note, 20 Eng. L. & Eq. 24; .Fiedler u. New York Ins. Co. 6 Dner, 382. But a different decision was given in Coolidge V. Gloucester Mar. Ins. Co. 15 Mass. .'341 . ^ Scottish Mar. Ins. Co. v. Turner, and Fiedler v. N. Y. Ins. Co. supra. [528] CH. XVIII.] MARINE INSURANCE. 476 the abandonment, goes to the insurers of the ship. But the French law is the reverse, and, perhaps, the rule in England.^ SECTION XXV. OF KEVOCATION OF ABANDONMENT. An acceptance of an abandonment makes it irrevocable, except with the consent of the insurers.^ But the insurers may assent ; and the assured may, by his acts, revoke his abandon- ment, and then the insurers, by words, or by their silence, assent. As if the ship be sold as a wreck, and he buys it himself, and treats it as his own, by selling it as his own, or sending it on another voyage.^ It is a different question, whether subsequent events can have the effect of revocation, and make void an abandonment which was justified by facts and rightly made in point of form, at the time. The rule, we should say, was, that no subsequent events could thus annul an abandonment.* But if, for example, a ves- 1 By the French law, an abandonment of the ship gave to the underwriters the bene- fit of the freight pending at the time of the loss. Boulay Paty, tome 3, p. 481 ; Valin, tome 2, p. 115 ; Bmerigon, c. 17, ^ 9. In England, the point does not appear to be fully settled. See Luke v. Lyde, 2 Burr. 882 ; Morrison v. Parsons, 2 Taunt. 407 ; Thompson v. Eowcroft, 4 East, 34 ; M'Carthy v. Abel, 5 East, 388 ; Ker v. Osborne, 9 East, 378 ; Sharp v. Gladstone, 7 East, 24 ; Case v. Davidson, 5 M. & S. 79 ; David- son V. Case, 2 Brod. & B. 379; Stewart v. Greenock Mar. Ins. Co. 2 H. L. Cas. 159. In this country, it seems now to be well settled that the freight earned prior to the loss, goes to the underwriter on freight, and that earned subsequent, to the underwriter on the sMp. Thus, in Coolidge v. Gloucester Ins. Co. 15 Mass. 346, Mr. Justice Putnam said, speaking of the loss : " Until that event happens, the property remains in the assured ; and the freight, or her earnings, belong to him till that time, if he stands his own insurer'for the fi'eight; otherwise to the insurer on the freight. But after the loss has happened, the insurers, in virtue of the abandonment, become the owners, and are liable to the repairs and expenses, and entitled to the earnings of the ship." See also. United Ins. Co. v. Lennox, 1 Johns. Cas. 377 ; Leavenworth v, Delafield, 1 Caines, 574 ; Simonds v. Union Ins. Co. 1 Wash. C. C. 443 ; Kennedy v. Bait. Ins. Co. 3 Harris & J. 367 ; Teasdale v. Charleston Ins. Co. 2 Brev. 190. 2 King V. Middletown Ins. Co. 1 Conn. 184. s Abbott . Pacific Ins. Co. 2 Sumner, 471, an agent effected insurance for the benefit of whom it might concern, and after a loss, brought an action against the under- writers in his own name, for the benefit of the owners of the vessel. The court held, that the underwriters could not set off debts or demands due from the agent in his own right, against the amount claimed for the loss. Mr. Justice Story held, that by the common law, the right of set-off was limited to cases of mutual connected debts, and did not extend to debts unconnected with each other. See also, Wiggin v. Suffolk Ins. Co. 18 Pick. 145. [538] CH. XVIII.] MARINE INSURANCE. -487 that the insured will pay not only the premium, " but any pre- miums or balances due to the insurers," or uses other language to the same effect. Such a note is a valid contract, but although made payable to order, it cannot be, on general principles, a negotiable note ; and, therefore, an indorsee must sue it in the name of the insurers, and be subject to equitable defence.^ 1 See ante, pages S6, 87, and notes. [539] 488 ELEMENTS OF MERCANTILE LAW. [CH. XIX. CHAPTER XIX. THE LAW OF FIRE INSURANCE. SECTION I. OF THE USUAL SUBJECT AXD FORM OF THIS INSURANCE. We have seen that fire is one of the perils insured against by the common marine policies. It is usual, however, to insure buildings, and personal property which is not to be water-borne, against fire alone ; and this is what is commonly understood by Fire Insurance. The general purposes and principles of this kind of insurance, are the same as those of marine insurance; and the law in respect to it differs only in those respects and in that degree in which the difference is made necessary by the subject-matter of the contract. It will be proper, therefore, to confine ourselves, in this chapter, mainly to the statement of these differences, and to consider those general principles which have already been discussed, only so far as this may be necessary for the compre- hension or Ulusti-ation of the peculiarities which belong to fire insurance. This kind of insurance is sometimes made to indemnify against loss by fire, of ships in port ; ^ more often of warehouses, and mercantile property stored in them ; stiU more frequently of personal chattels in stores, or factories, in dwelling-houses, or barns, as merchandise, furniture, books, and plate, or pictures, 1 The insurance on a ship, " on the stocks building," does not include the materials which are so far wrought as to be in a condition to be framed, if they are actually incor- porated into the parts on the stocks, although they were in a proper place to be con- veniently applied to that use, and by reason of such adaptation had become valueless for other purposes. Hood v. Manhattan Fire Ins. Co. 1 Kern. 532, oveiTuling the same case in the Superior Court, 2 Duer, 191. See also, Mason v. Franklin F. Ins. Co. 12 Gill & J. 468. [540] CH. XIX.] THE LAW OF FIRE INSURANCE. *489 or live-stock. But by far the most common application of this mode of instirance is to dwelling-houses. * Like marine insurance, it may be effected by any individual who is capable of making a legal contract. In fact, however, it is always, or nearly always in this country, and we suppose else- where, made by companies. There are stock companies, in which certain persons own the capital and take all the profits by way of dividends, and mutual companies, in which every one who is insured becomes thereby a member, and the net profits, or a certain proportion of them, are divided among all the members in such manner as the char- ter or by-laws of the company may direct. Sometimes both kinds are united, in which case there is a capital stock provided, as a permanent guaranty fund, over and above the premiums received, and a certain part or proportion of the net profits is paid by way of dividend upon this fund, and the residue divided among the insured. Of late years the number of mutual fire insurance companies has greatly increased in this country, and probably by far the largest amount of insurance against fire is effected by them. The principal reason for this is, undoubtedly, their greater cheapness ; the premiums required by them being, in general, very much less, in fact, than in the stock offices. For example, if the insur- ance is effected for seven years, which is a common period, an amount or percentage is charged, about the same as, or a little more than is charged by the stock companies. Only a small part of this is taken in cash ; for the rest a premium note or bond is given, promising to pay whatever part of the amount may be , needed for losses which shall occur during the period for which the note is given. More than this, therefore, the insured cannot be bound to pay, and it frequently happens that no assessment whatever is demanded ; and sometimes where the company is well established and does a large business upon sound principles, a part of the money paid by him is refunded when the insurance expire*, or credited to him on the renewal of the policy if such be his wish.^ 1 A policy issued by a mutual insui'ance company, and a premium note given at the same time, for the payment of assessments, are independent contracts, and a vote by such a company that if the assessments upon its premium notes should not be punctu- ally paid, the insurances previously made, should be suspended, is of no validity, unless 46 [541] 490 ELEMENTS OF MERCANTILE LAW. [CH. XIX. The disadvantage of these mutual companies is, that the pre- miums paid and premium notes, constitute the whole capital or fund, out of which losses are to be paid for. To make this more secure, it is provided by the charter of some companies, that they should have a lien on the land itself on which any insured building stands, to the amount of the premium. But while this adds very much to the trustworthiness of the premium notes, and so to the availability of the capital, it is, with some persons, an objection, that their land is thus subjected to a lien or incum- brance. There is another point of difference which recommends the stock rather than the mutual company. It is that the stock company will generally insure very nearly the full value of the property insured, while the mutual companies are generally re- strained by their charters from insuring more than a certain mod- erate proportion, namely, from one half to three fourths, of the assessed value of the property. It would follow, therefore, that one insured by a mutual company, cannot be fully indemnified against loss by fire ; and may not be quite so certain of getting the indemnity he bargains for, as if he were insured by a stock company. But this last reason is, practically, of very little im- portance, and the lowness of the premiums effectually overcomes the other^ • The method and operation of fire insurance have become quite uniform throughout this country ; and any company may appeal to the usage of other companies to answer questions which have arisen under its own policy; only, however, within certain rules, assented to by the insured. New England Mutual Fire Ins. Co. v. Butler, 34 Maine, 451. Wliere the policy has been rendered void by a transfer of interest, the insured is personally liable on tlie premium note, until an actual surrender of the policy, and the payment of all assessments against him for losses sustained before the surrender. In- diana Mutual Fire Ins. Co. v. Coquillard, 2 Cart. Ind. 645. So the insured is liable for premiums during tlic whole term of tlio insurance, even though there was a previous loss, unless tliere is somethinp: in the policy, charter or by-laws, or premium note, show- ing a diffei-ent contract or discharge. N.'H. Mutual Fire Ins. Co. v. Rand, 4 JFoster, 428 ; Swamscot Machine Co. u. Partridge, f> id. 369. Where the cliarter and by-laws of the company provide for assessments in case of losses not to exceed the amount of the premium notes, it was held that witliout such losses no recovery could be had on the notes, although absolute on the face. Insurance Co. o. Jai-vis, 22 Conn. 133. It has l)ccn held tliat where the policy of a mutual insurance company becomes ipso facto void by an alienation, a member will not be liable for assessments for losses occurring after an alienation. Wilson v. Trumbull Mutual Fire Ins. Co. 19 Penn. State, 372. The giving of tlie premium note is not necessary to the consummation of the contract of insurance. Blanchard v. Waite, 28 Maine, 51. [542] CH. XIX.J THE LAW OF FIRE INSURANCE. *491 and under some well-defined restrictions. In the first place, usage may be resorted to for the purpose of explaining that which needs explanation, but never to contradict that which is * clearly expressed in the contract.^ And no usage can be admit- ted even to explain a contract, unless the usage be so well estab- lished and so well known, that it may reasonably be supposed that the parties entered into the contract with reference to it. Thus if, under a policy against fire on a vessel in one port of this country, an inquiry is raised as to the local usage, the policy is not to be affected by proof of usage upon any particular matter in other, ports of the world, or even of the Uaited States.^ And not only the terms of the contract must be duly regarded, but those of the charter ; thus, if this provides, that " all policies and other instruments made and signed by the president, or other officer of the company, shall bind the company," an agreement to cancel a policy should be so signed ; ^ although it cannot be 1 2 Parsons on Contracts, 48, n. (y), 49, n. (z), 55, n. (f) ; Blackett v. Royal Ex- changer Assurance Co. 2 Cromp. & J. 244; The Schooner Reeside, 2 Sumner, Story, J., 569, 570; Illinois Mutual Fire Ins. Co. v. O'Neile, 13 111. 89. Evidence of usage in New Yorlc for the insured to give notice of any increase of risk by his act, to the insurer, who is then to have the option of continuing or annulling the policy, is inadmissible, for the double reason that it is local, and would besides alter the legal operation and effect of the policy. Stebbins v. Globe Ins. Co. 2 Hall, 632. Where the company promised the insured that their directors " shall settle and pay (to him ) all losses, within three months after notice shall have been given as aforesaid," " and that the payment of the loss ascertained shall be made within the time prescribed by the charter, without deduction from the sum decreed by the charter," it was held that proof of a custom or usage on the part of the company, in case of a total loss, to retain of the amount of the ascertained loss, two per cent, per month on the balance of the premium note, from the date of the last assessment upon it, until the expiration of the term of the pohcy, was inadmissible, the effect being to limit and control the clear and unequivocal terms of an express contract. Swamscot Machine Co. o. Partridge, 5 Foster, 369. But where the loss was occasioned by lightning, it was hdd that the usage of other insurance com- panies restricting their liability to losses occasioned by lightning, may be resorted to to show what the general usage is in regard to losses caused by liglitning. Babcock V. Montgomery Mutual Ins. Co. 6 Barb. 637. A general usage which contradicts a settled rule of commercial law, is not admissible. Thus evidence of a usage in the city of New York, by which the re-assurer pays the same proportion of the entire loss sus- tained by the original assured, that the sum re-insured bears to the first insurance writ- ten by the re-assured, was rejected. Hone v. Mutual Safety Ins. Co. 1 Sandf. 137, 2 Comst 235. And parol evidence, generally, is not admissible to vary or contradict the terms of the policy. Holmes v. Charlestown Mutual Fire Ins. Co, 10 Met. 211 ; Fiin- ney v. Bedford Commercial Ins. Co. 8 id. 348; Stacey v. Franklin Fire Ins. Co. 2 Watts & S. 506. But proof of the enlargement of the time of performance is admissi- ble. Franklin Fire Ins. Co. v. Hamill, 5 Md. 170. 2 Mason v. Franklin Fire Ins. Co. 12 Gill & J. 468 ; Stebbins v. Globe Ins. Co. 2 Hall, 632 ; Child v. Sun Mutual Ins. Co. 3 Sandf. 47. " Head v. Providence Ins. Co. 2 Cranch, 127; Beatty w. Marine Ins. Co. 2 Johns. 109. Where by the uniform practice of an insurance company, a deviation from the ri^ik assumed in the policy is waived by the president, for a compensation agreed upon [543] 492* ELEMENTS OF MERCANTILE LAW. [CH. XIX. doubted that a party insured might otherwise give up his policy, or renounce all claim under it, and that a valid agreement to that effect between him and the company would not be set aside for his benefit, on the ground of a merely formal defect. * In regard to the execution of a fire policy, and what is neces; sary to constitute such execution, — as, for example, whether delivery is necessary, or a signed memorandum be sufficient, or, indeed, an oral bargain only, and whether this insurance may be effected by correspondence, and if so, when the proposition and assent complete the contract, — we are not aware of any mate- rial difference, on any of these points, between the law of fire insurance and that which has already been presented as applica- ble to marine insurance. i It has been held in an action on a by him and by the assured, the waiver and assent, with the terms thereof, are written across the policy, without any new signature, and recorded liy the secretary; a contract made in this manner is binding on the corporation. Warner v. Ocean Ins. Co. 16 Maine, 439. ^ When the offer to insure has been accepted, and the applicant has complied with all the conditions imposed, the risk commences, although the policy has not been issued. Thus the plaintiff, having an interest in a building, applied to the agent of a mutual company for an insurance, and at the same time made the necessary cash ])av- mcnt and executed the premium note. The application being transmitted to the corii- pany, an alteration in the building was directed, and an authority required from the trustees of tlie building to effect the insurance. This was communicated to the plain- tiff' by the secretary, wlio stated when the company were duly certified that these had been complied witli, a policy would be sent. The conditions were complied witli, and the agent notified, and the agent requested to call and examine ; but he neglected to do so. It was hdd that tlio risk commenced from the notification of compliance with the terms of the conditional agreement. Hamilton v. Lycoming Ins. Co. 5 Barr, 3.39 ; Andrews v. Essex Fire and Marine Ins. Co. 3 Mason, 6 ; Kohne u. Ins. Co. 1 Wash. C. C. 93 ; Palm v. Medina Fire Ins. Co. 20 Ohio, 529 ; Blanchard v. Waite,28 Maine, 51 ; Bragdon i>. Appleton, M. F. Ins. Co. 42 Maine, 259. AVhere the agreement to insure is complete, equity will compel the execution of a policy, or if a loss hsive occurred, decree its payincnt. Perkins v. Washington Ins. Co. 4 (3ow. 645 ; Lightbody V. North American Ins. Co. 23 Wend. 18; Carpenter v. Mutual Safety Ins. Co. 4 Sandf Ch. 408; Suydam v. Columbus Ins. Co. 18 Ohio, 459 ; Neville k. Mer. & Man. Ins. Co. 19 id. 452. Where the offer of tlie company by letter to insure is accepted in due season, the contract is complete by a deposit of their letter of accept- ance in tlie mail before the building is burned, or before the other party has withdrawn his offer. Tayloe v. Jlcrchants Fire Ins. Co. 9 Howard, 390. Tlie facts of the case are briefly as follows : Jolm Minot, the agent of the company at Fredericksburg, at the request of Tayloe, who was about leaving for Alabama, made application for an insur- ance on his dwelling-house, to the amount of -58,000, for one year. This application was dated 25th Nov. 1844, A reply from the defendants was received, under the date 30th Nov. 1844. On the 2d Dec, Minot wrote to Tayloe, informing him of their will- ingness to effect the insurance, stating terms, &e., and added, " Should you desire to effect the insurance, send me your check, payable to my order, for $57, and the busi- ness is concluded." But in consequence of a misdirection of the letter, it did not reach Tayloe till the 20th. On the next day, the 21st, Tavloe mailed a letter, accepting the terms, and remitting a check for the premium, with a request that the policy should be deposited in the bank for safe-keeping. This letter of acceptance was received by Minot on the 31st Dec, and upon the 1st of Jan. 1845, he wrote to Tayloe, communi- [544] CH. XIX.] THE LAW OP FIRE INSURANCE. 493 fire policy, as doubtless it would be on a marine policy, that a memorandum made on the application book of the company by the president, and signed by him, was not binding where the party to be insured wished the policy to be delayed until a dif- ferent adjustment of the terms could be settled, and after some delay was notified by the company to call and settle the busi- ness, or the company would not be bound, and he did not call ; because there was here no consummated agreement.^ So, too, a subsequent adoption or ratification is equivalent, either in a fire or marine policy, to the making originally of the contract ; with this limitation, however, that no party can, by his adoption, secure to himself the benefit of a policy, if it had not been intended that his interest should be embraced within it.^ It is quite common to describe the insured in marine policies, by gen- eral expressions — as, " for whom it may concern," or " for own- ers," or the like ; but such language is seldom if ever used in fire policies, the insured being specifically named in them.^ It may be remarked that the efiecting of a fire insurance is eating his refusal to carry into effect the insurance, on the ground that his acceptance came too late, the house having been burned on the 22d Dec. The company confirmed the view of the case taken by their agent, and refused to issue the policy or pay the loss. The court below passed a decree that the case should be dismissed with costs, and upon appeal to the Supreme Court, it was held that the decree should be reversed. See also, Mactier v. Frith, 6 Wend. 103 ; Hamilton v. Lycoming Mutual Ins. Co. 5 Barr, 339 ; Palm v. Medina Fire Ins. Co. 20 Ohio, 529. The case of McCuUoch v. Eagle Ins. Co. 1 Pick. 278, so far as it decides, that a letter of acceptance does not bind the party accepting, till it is received by the party making the offer, and that, until that time, the party offering has a right to retract his offer, is effectually overruled by the above cases. But no contract subsists between the parties, where the policy issued by the company varies from the offer of the applicant. Ocean Ins. Co. v. Car- rington, 3 Conn. 357. See a recent and interesting case on this question. Kentucky Mut. Ins. Co. V. Jenks, 5 Port. Ind. 96, of which we give the facts and decision in the notes to the chapter on Life Insurance. See post, p. 540. 1 Sandford v. Trust Fire Ins. Co. 11 Paige, 547. Where written applications for insurance had been made, and the rates of premium agreed upon, and when the policies were made out the applicant refused to take them or sign the deposit notes, and the policies remained in the possession of the company, it was held that there was no com- pleted contract, which would sustain an action against the applicant on the deposit notes. Real Estate Mut. Fire Ins. Co. v. Eoessle, 1 Gray, 336 ; Lindauer v. Delaware Mutual Safety Ins. Co. 8 Eng. Ark. 461. So, where the buildings were burned, while the proposal of the company and the acceptance of the applicant remained in the pos- session of the agent of the latter, the company was held not to be liable. Thayer v. Middlesex Mutual Fire Ins. Co. 10 Pick. 326. Where the applicant is notified that the payment of the premium is a condition precedent to the taking effect of the insur- ance, no contract subsists while it remains unpaid. Flint v. Ohio Ins. Co. 8 Ohio, 501 ; Berthoud v. Atlantic Ins. Co. 13 La. 539. 2 De Bolle v. Pennsylvania Ins. Co. 4 Whart. 68. s De Forest v. Fulton Fire Ins. Co. 1 Hall, 112. See Alliance Marine Ins. Co. v. La. State Ins. Co. 8 La. 11. 46* [545] 494* ELEMENTS OF MERCANTILE LAW. [CH. XIX. not SO often done through the agency of a broker, as that of marine insurance ; nor is it so usual to pay nothing down, but to give a note for the whole premium. If, however, an insur- ance company has an express rule to that elFect, it may be waived ; and this waiver may be express or implied, from the conduct of officers of the company who have the right to act for it. And their admissions bind the company.^ * SECTION n. OP THE CONSTRUCTION OF POLICIES AGAINST FIRE. The rules of consti-uction are generally the same in reference to fire policies as to marine policies. It is sufficient if the words of the policy describe the persons, the location, and the property, with so much distinctness that the court and jury have no diffi- culty in determining their identity with a certainty which pre- vents any real and substantial doubt. Perhaps some of the cases which we cite in our notes to this section, wiU show that courts have gone quite far enough in recognizing such descrip- tion as sufficient. In the construction of this as of other contracts, the intention of the parties is a very important and influential guide ; but it must be the intention as expressed; for otherwise a contract which was not made, would be substituted for that which was made ; and evidence dehors the contract would be permitted to vary and to contradict it.^ But even to this limitation there are ' In First Baptist Cliurch v, Broolclyn Fire Ins. Co. 18 Barb. 69, it was held that an insurance company may waive its general rule requiring premiums to be paid before policies shall take effect, and give credit for a premium until called for ; and that the president and secretary of an insurance company are the officers to whom the prelimi- nary proofs of loss are to be presented, and if, on being notified of a loss, they admit that they had agreed to insure the property, or to keep it insured, it is a statement made in the course of their duties, and binds the company as much as their certificate of premium paid, and of a renewal, would bind the company. ^ Where stock in trade, household furniture, linen, wearing apparel, and plate were insured, in a policy. Lord Ellenhorougli held, on the principle of nosciter a sociis, that the term " linen " must be confined to " household linen," and would not include linen drapery goods purchased on speculation. Watchorn v. Langford, 3 Camp. 422. Where the policy required that the houses, buildings, or other places where goods are deposited and kept, shall be truly and accurately described, and the place was described as the dwelling-house of the insured, whereas he occupied only one room in it, as a lodger, this description was held sufficient, the condition relating to the construction of [546] CH. XIX,] THE LAW OF FIRE INSURANCE. 495 exceptions ; for if it appears by clear and positive evidence that the written contract does not express the actual and certain agreement of the parties, by reason of an accidental mistake or omission of phraseology, a court of equity will correct this mis- take ; 1 but courts of law cannot reform a policy.^ We are not the house, and not to the interest of the parties in it. Friedlander v. London Assm-ance Co. 1 Moody & K. 171. See Dobson v. Sotheby, 1 Moody & M. 92. The insurance by an innkeeper against fire of his " interest in the inn and offices," does not cover the loss of profits during the repair of the damaged premises. In re Wright & Pole, 1 A. & E. 621. The terra " stock in trade," when used in a policy of insurance in reference to the business of a mechanic, as a baker, includes not only the materials used by him, but the tools, fixtures, and implements necessary for the canying on of his business, and the term in question was held to have a broader application to the business of me- chanics than to that of merchants. Moadinger v. Meclianics Fire Ins. Co. 2 Hall, 490. Capstans of locust, partly prepared for vessels, which the insured was building, were held to be within his policy "on his stock of ship timber, including locust, &e." Webb V. National Fire Ins. Co. 2 Sandf 497. Where a policy of insurance for $1,800 on a grist mill, and $700 on machinery therein, was renewed in general terms for the sum of $2,500, without making any distribution of the risk, it was held that it was the intention of the parties for the insurance thereafter to be without any distribution of the risk, and should apply generally to both the building and tlie machinery. Driggs v. Albany Ins. Co. 10 Barb. 440. The insurance on "a ship on the stocks building," does not include the materials which are so far wrought as to be in a condition to be framed, but which are not actually incorporated into the parts on the stocks, although they were in a proper place to be conveniently applied to that use, and by reason of such adaptation had become valueless for other purposes. Hood v. Manhattan Fire Ins. Co. 1 Kern. 532, 2 Duer, 191. See Stacey v. Franklin Fire Ins. Co. 2 Watts & S. 545; Mason v. Franklin Ins. Go. 12 Grill & J. 468; Nicolet v. Insurance Co. 3 La. 371. Where the plaintiff took out a policy of insurance against fire, "on his goods, stock in trade, &c." the policy was held to cover goods in stores, bonglit on joint account, and sold for the mutual profit of the insured and another person, the former being also in advance on the adventure. Millaudon v. Atlantic Ins. Co. 8 La. 557. An application by a tenant of a building during one year for an insurance on " his build- ing," is a good description. Niblo v. N. Am. Fire Ins. Co. 1 Sandf. 551 ; Clarke v. Firemens' Ins. Co. 18 La. 431 ; Franklin Ins. Co. v. Drake, 2 B. Mon. 51. A policy on an unfinished house covers materials got out for and deposited in it, but not materials got out for it and deposited in another building. EUmaker v. Franklin Fire Ins. Co. 5 Barr, 183. A policy upon wearing apparel, household furniture, and the stock of a grocery, covers linen sheets and shirts actually laid in for family use, if exhibited at tlie preliminary inspection, and such as were laid in for sale or traffic in the usual way, in the store ; but not such as, being smuggled, were concealed and intended for secret sale. Clary v. Protection Ins. Co. 1 Wright, 228. In a policy on a store and stock of goods, for the period of six years, notwithstanding a provision making it void in case of alienation, it was held that it would attach to any goods the insured might have in the store at anytime within the six years, not exceedmg the amount insured. Lane v. Maine Mutual Fire Ins. Co. 3 Fairf. 45 ; Hooper v. Hudson River Fire Ins. Co. 15 Barb. 413. A policy will be void for uncertainty, where it cannot be determined to which of two buildings it applies, but where it evidently applies to one of the two, it will be held to apply to that one, which, after rejecting as surplusage that part of the descrip- 1 Motteanxu. London Assurance Co. 1 Atk. 545 ; Collett v. Morrison, 9 Hare, 162, 12 Eng. L. & Eq. 171 ; Graves v. Boston Marine Ins. Co. 2 Cranch, 419; Ewer v. Washington Ins. Co. 16 Pick. 503; Dow v. Whetten, 8 Wend. 166. See also, ante, p. 406, n. 2 Constable v. Noble, 2 Taunt. 403; Kaines v. Knightly, Skin. 54; Mellen v. National Ins. Co. 1 Hall, 452 ; Chamberlaia v. Harrod, 5 Greenl. 420. [547] 496* ELEMENTS OF MERCANTILE LAW. [CH. XIX. aware, however, of any material difference in this respect between fire policies and marine policies, and the law on this subject in relation to them has already been stated.^ And the same remark may be extended to the rule respecting the admission, as a part of the contract, of a memorandum on the back of the policy, or attached to it by a wafer, and neither referred to in the policy itself, nor signed by the insurer.^ * There is, however, one very important difference between con- tracts of fire insurance, and those of marine insurance, as usually made. It is a general rule with our mutual insurance compa- nies, that every one who is insured becomes a member of the company. Indeed, the principle upon which this kind of insur- ance rests, is that all the insured insure each other. Every in- sured person is, then, an insurer of all the rest, as they are of him. And it follows, necessarily, that every insured party is bound by all the laws and rules of the company, as by laws and rules of his own making. This would be equally true of marine policies as of fire policies. There is, however, this difference in practice. The mutual fire insurance companies, by a law or rule which is perhaps universal, require that an application should be made in writing ; and this written application is after a pe- culiar form, prescribed by the rules. R always contains certain definite statements, which relate to those matters which effect the risk of fire importantly. In each form of application sundry questions are put, which are quite numerous and specific, and are those which experience has suggested as best calculated to elicit all the information needed by the insurers, for the purpose tion which is false when applied to it, is most clearly, and at the same time sufficiently, identified. Heath t>. Franklin Ins. Co. 1 Cush. 257. Where a certain sum was insured on the " stock of watches, watch trimmings, &c." contained in a certain store, and also another sum on " th,e furniture and fixtures " in said store, it was held that the word stock was used in opposition to furniture and fixtures, and was intended to cover the stock usually contained in such a store, such as silver ware, plated ware, fine hardware, clocks, watch tools, britannia ware, and fancy goods, as well as watches and watch trimmings. Crosby v. Franklin Ins. Co. 5 Gray, 504. And the words " starch manu- factory" includes fixtures, &c. necessary to the processes of the manufactory. Peoria Mar. & F. Ins. Co. v. Lewis, 18 111. 553. 1 See ante, p. 403, sec. 1. 2 Moliere v. Pennsylvania Fire Ins. Co. 5 Eawle, 342; Dow v. Whetten, 8 Wend. 166 ; Pawson v. Barnevelt, 1 Doug. 12, note 4 ; Bize v. Fletcher, id. 13, note. A paper purporting to bo "conditions of insurance," if annexed to and delivered with a fire policy, is deemed, prima fide, a part of it, although the policy do not contain any express reference to such paper. Roberts v. Chenango Co. Mutual Ins. Co. 3 Hill, 501 ; Murdock i'. Chenango Co. Mutual Ins. Co. 2 Comst. 210 ; Sexton v. Montgom- ery Co. Mutual Ins. Co. 9 Barb. 201. [548] CH. XIX.] THE LAW OF FIKE INSURANCE. *497 of estimating accurately the value of the risk they undertake. Specific answers must be given to all these questions. And this application, with all these statements, questions, and answers, is expressly referred to in the policy, and made a part of the con- tract ; 1 and a distinct reference to siich a paper might of itself incorporate it with the contract, without any words declaring it to be a part thereof,^ * if this reference imported that the contract was based upon the paper. If such a paper be referred to, the court will inquire into the purpose of the reference ; and it has been said that any conditions so referred to would be taken to be a part of the policy ; but that the application itself was merely for the purpose of describing and identifying the property.^ It is common to state in the printed part of the formal application that it is made on such and such conditions ; and these usually follow those statements which are deemed the most material in estimating the risk. These would be considered as technical conditions, and therefore the substantial truth of all of them. 1 Susquehanna Ins. Co. v. Perrine, 7 Watts & S. 348 ; Holmes v. CharlestO'ivn Mu- tual Fire Ins. Co. 10 Met. 211 ; Smith v. Bowditch Mutual Fire Ins. Co. 6 Cush. 448; McMahon v. Portsmouth Mutual Fire Ins. Co. 2 Foster, 15. ^ Where the policy insures certain property as described, or more particularly de- scribed on tlie application, such a reference is not sufficient to make the application a part of the policy and giye it the effect of a warranty, and it is sufficient if it be not false in any material point. Jefferson.Ins. Co. v. Cotheal, 7 Wend. 72 ; Snyder v. Farmers Ins. Co. 13 Wend. 92, 16 id. 481 ; Delonguemare v. Tradesmen's Ins. Co. 2 Hall, 611 ; Stebbins v. Globe Ins. Co. 2 id. 632 ; BiuTitt u. Saratoga Co. Mutual Fire Ins. Co. 5 Hill, 190; Wall v. Howard Ins. Co. 14 Barb. 383; Insurance Co. v. Southard, 8 B. Mon. 634. But see Sillem v. Thornton, 3 Ellis & B. 868, 26 Eng. L. & Eq. 238. Where the application is referred to " as forming a part of the policy," it will have the effect of a warranty. Burritt v. Saratoga Co. Mutual Fire Ins. Co. 5 Hill, 188; Wil- liams V. N. E. Mutual Fire Ins. Co. 31 Maine, 224; Murdock v. Chenango Co. Mutual Ins. Co. 2 Comst. 210 ; Sexton v. Montgomery Co. Mutual Ins. Co. 9 Barb. 200 ; Ken- nedy V. St. Lawrence Co. Mutual Ins. Co. 10 Barb. 285 ; Egan o. Mutual Ins. Co. 5 Denio, 326 ; Gates v. Madison Co. Mutual Ins. Co. 1 Seld. 469. 2 Where, in the policy, this clause occurred, "reference being had to the application of A B for a more particular description of the conditions annexed, as forming a part of this policy," Beardsley, J., said : " The conditions are thus undoubtedly made a pait of the contract of insurance ; as much so as if embodied in the policy. But it is other- wise with the application. That, as it seems to me, is referred to for the mere purpose of describing and identifying the property insured, and not to incorporate its statements into the policy as parts thereof." Trench v. Chenango Co. Mutual Ins. Co. 7 Hill, 124. But, contra, Jennings v. Chenango Co. Mutual Ins. Co. 2 Denio, 75. In Shel- don V. Hartford Fire Ins. Co. 22 Conn. 235, where the policy referred to the sui-rey in these words : " Reference is had to survey No. 83, on file at the office of the Protection Insurance Company," and the survey consisted of answers to questions, some of which were intended to draw forth a minute description of the premises, and others to enable the insurer to estimate the risk, it was held that the reference to the survey was not merely for a fuller description, but for the purpose of incorporating all the survey into the policy. [549] 498* ELEMENTS OF MERCANTILE LAW. [CH. XIX. is a condition precedent to any right of indemnity in the insured party.^ Sometimes there is no distinct application in writing, but the policy itself states the facts relied upon. For this purpose it contains many blanks, which are filled up according to the cir- cumstances of each case. It may happen that what is written in these places may be inconsistent with what is printed ; and then it is a general rule that what is written prevails, as that is more immediately and specifically the act of the parties, and may be supposed to express their precise purpose better than the printed phrases which were prepared without especial refer- ence to this case.^ But this rule would not be applied where it would obviously operate injustice ; and if the whole can be con- strued together so that the written words and those printed make an intelligible contract, this construction is to be adopted.^ * Policies of fire insurance, especially of mutual companies, often contain a scale of premiums, as calculated upon different classes of buildings, of stocks in trade, or other property, in con- formity with what is thought to be the greater or less risk of fire in each case. This is a matter of special importance ; * and if a statement were made by an applicant which put his building or property into a class of which the risk and premium were less than for the class to which the building or property actually belonged, and in that way an insurance was effected at such less premium, the policy would undoubtedly be void, although the false statement were made innocently.^ When certain trades or occupations, or certain uses of build- ings, or kinds and classes of property, are enumerated as " haz- 1 Wood !>. Hartford Fire Ins. Co. 13 Conn. 533 ; Egan v. Mutual Ins. Co. 5 Denio, 326; Farmers Ins. Co. v. Snyder, 16 Wend. 481. The proposals and conditions at- tached to a policy form part of the contract, and have the same force and effect as if contained in the body of the policy. Duncan v. Sun Fire Ins. Co. 6 Wend. 488. ^ Robertson v. Frcncli, 4 East, 136, per Lord Ellenborouqh, C. J. ; Coster t. Phcenix Ins. Co. 2 Wash. C. C. 51 ; Bargctt v. Orient Mut. Ins. Co. 3 Bosw. 385. '■> Cushman v. Northwestern Ins. Co. 34 Me. 487 ; Alsager v. St. Katherine's Dock Co. 14 M. & W. 794, 799; Goicoechea v. La. State Ins. Co. 18 Mart. La. 51, 55; Goix V. Low, 1 Johns. Cas. 341. * See Lee v. Howard F. Ins. Co. 3 Gray, 583 ; Macomber v. Howard F. Ins. Co. 7 Gray, 257. s Fosvler c. iEtna Fire Ins. Co. 6 Cowcn, 673, 7 Wend. 273; Wood v. Hartford Fire Ins. Co. 13 Conn. 533; Newcastle Fire Ins. Co. v. Macmorran, 3 Dow, 255. In this case, it was held that whether tlie misrepresentation was material or not, whether the risk on the one hand was as great as on the other, were questions which had noth- ing to do with tlie case. But sec Farmers Ins. & Loan Co. v. Snyder, 16 Wend. 481. [550] CH. XIX.] THE LAW OF FIRE INSURANCE. '499 ardous," or otherwise specified as peculiarly exposed to risk, the rule Expressio unius, exclusio est alterius, is applied, and some- times with severity. This is better illustrated by marine insur- ance ; but the same rule would be applied, for the same reason and in the same way to cases of fire insurance. ^ If the insured is described in the policy as being engaged in a particular trade or business, and insurance is made on his stock in trade, he may keep all articles necessary to and usually em- ployed in that trade, although such articles are set forth in the policy as extra hazardous.^ If the printed conditions represent one class of buildings, or * goods or property, as more hazardous than another, it would not be competent for the insured to prove by other testimony that it was not so in fact.^ Moreover, a description of the property 1 N. Y. Equitable Ins. Co. v. Langdon, 6 Wend. 623, 627, Sutherland, J. : "It was- an express provision of tlie policy in this case, that if the building insured should at any time during tlie continuance of the policy, be appropriated, applied, or used, to or for the purpose of can'ying on, or exercising therein any trade, business, or vocation, denominated hazardous, or extra hazardous, or specified in the memorandum of special rates in the proposals annexed to the policy, or for the purpose of storing therein any of the articles, goods, or merchandise, in the same proposals denominated hazardous or extra-hazardous, or included in the memorandum of special rates, the policy should cease, and be of no force or effect. The trade or bnsiness of a gi-ocer is not mentioned or specified in the proposals annexed to the policy. It was not, therefore, a prohibited trade. Expressio unlus, exclusio est alterius. The enumeration of certain trades, or kinds of business, as prohibited on the ground of being hazardous, is an admission that all other kinds are lawful under the contract. The case of Baker v. Ludlow, 2 Johns. Cas. 288, is precisely in point. There dried fish were enumerated in the memorandum clause as free from average, and all other articles perishable in their own nature. It was held that the naming of one description of fish implied that other fish were not in- tended ; and that the subsequent words, ' all other articles perishable in their own nature,' were not applicable to the articles previously enumerated, and did not repel the impli- cation arising from the enumeration of them. In Doe, ex dem. Pitt v. Laming, 4 Camp. 76-7, Lord EUenborough held that a coffee-house was not an inn, within the meaning of a policy of insurance against fire, enumerating the trade of an inn-keeper with others, as double hazardous, and not covered by the policy. If the business of a grocer is not prohibited under the policy, the ordinary incidents of that business, it would seem, were allowable ; not being prohibited, the party had a right to keep a grocery-store, and to conduct it in the usual manner. The cases of Suckley v. Furse, 15 Johns. 342, and Kensington v. Inglis, 8 East, 273, sanction this principle." 2 Harper v. Albany Mut. Ins. Co. 17 N. Y. 194; Bryant v. Poughkeepsie Mut. Ins. Co. 17 N. Y. 200. See Washington Mut. Ins. Co. v. Merchants & Manuf. Mut. Ins. Co. 5 Ohio State, 450. But see post, p. 503, n. 3. 3 Newcastle Fire Ins. Co. v. Macmorran, -3 Dow, 255 ; Farmers Ins. Co. v. Snyder, 16 Wend. 490; Richards v. Protection Ins. Co. 30 Maine, 273. It was held in West- fall o. Hudson River Eire Ins. Co. 2 Duer, 490, that where a clause in a policy of in- surance against fire, declared that " camphene," &c., when used in stores or ware- houses as a liglit, subjects the goods therein to an additional charge of ten cents per hundred dollars, and permission for such use must be indorsed on the policy, that the words were not a conditional prohibition of the use of camphene, but merely exempted the insurers from liability for a loss resulting from such use, unless the additional charge had been paid. A late case in England overrules the doctrine which has been [551] 500* ELEMENTS OP MERCANTILE LAW. [CH. XIX. insured, as it is a description /or a contract on time, is held to * amount to an agreement that the property shall continue within asserted there on the authority of earlier cases, that if there be an insurance against fire upon a house wliich is described in the policy as being of a particular specified descrip- tion, and in which it is stated that the occupier carries on a certain specified trade — this being true at tlie date of tlie policy, the assured presci-ving the identity of the house, may alter its construction, so as to render it more exposed to fire, and may carry on iu it a different and more dangerous nadc, witliout prejudice to the right to rcrovcr for a subsequent loss by fire, the warranty extending only to the state and use of the premises at the moment when the policy was signed. A fire policy was procured for one year on a hrick building used as a dwelling-house and store (described in a paper attached to this policy), situated at, &c. The description annexed, stated tliat the house was composed of two stories of giicn height, and materials with a given roof, and given means of obtaining water, &c. During the year, tlie house was altered by adding to it an additional stoi'y, but so that the alterations did not increase the hazard or probability of fire, except so far, if at all, as the increase of the area of the building by a third story may be considered to have necessarily increased such hazard, or proba- liility ; and, afterwards, during the year, the house was totally burned. It was held that the underwriter was not liable ; for the description was by reference incorporated into the policy and amounted to a warranty not only that the building was as described at the time the description was given and at the date of the |iolicy, but that it would not be altered by the assured so as to increase the j-isk durins: tlie year, and that it had hecn so altered. ' Sillera v. Thornton, 3 Ellis & B. 868, 26 JEng. L. & Eq. 238, 243. Lord Ciimjilidl, C. J.: "But we are further of opinion that the description in the policy amounts to a warranty that the assured would not, during the time specified in the policy, voluntarily do any thing to make the condition of the building vary from tliis description, so as thereby to increase the risk or liability of the underwriter. In tliis case, the description is evidently the basis of the contract, and is furnished to the under- writer to enable him to ilctermine whctlier he will agree to take the risk at all, and if he does take it, what premium he shall demand. The assured, no doubt, wished him to understand, that not only such was the condition of the premises wdicn the policy was to be effected, but, as fiir as depended upon them, it should not be altered so as to increase the risk during the vear for which lie was to be liable if a loss should accrue. Without suih assurance ami belief, the statement introduced into the policy of the existing condition of the prcmi.ses, would be a mere delusion. Identity might continue, and yet the quality, condition, and incidents of the subject-matter insured might be so changed as to iiirre.ise tenfidd the chances of loss, which, iipon a just calculation, might reasoiudily be expected to fall upon the underwriter. Can it be successfully contended that, having done so, the assured retain a right to the indemnity for which they had stipulated upon a totally different basis '^ With respect to marine policies we conceive that if there bo a warranty of neutrality, or of any other matter which continues of importance till the risk determines, whether the policy be for a voyage or for a time certain, sueh a warranty is continuous ; and if it be broken by the default of the assured, the underwriter is discharged. The implied wan'anty of seaworthiness applies onlv to the commencement of the voyage; but even here, if the assured, during the voyage, were voluntarily to do any act whereby the ship was rendered unseaworthy, and thereby a loss were to accrue, we conceive that they would have no remedy on the policy. A distinction, however, is taken in this res|)ect between marine policies and insurances of Ikjuscs against fire. It would probably be allowed that, if dm-ing the war there were a policy on a merchant .-hip described as carrying ten guns, and employed iu the coal trade, and after the policy was effected, the owner should reduce her armament to five guns, or load her with oil of vitriol, the undenvriter would not be liable for a subsequent lo.-s. But it is strenuiinsly a.-serted that, if there be an insurance against fire upon a house, which is described in the policy as being of a particular specified description, and in which it is stated that the occupier carries on a certain specified trade — this being true at the date of the policy, the assured, prescning the identity of the house, may alter its construction, so as to render it more exposeil to fire, and may carry on in it a different and more dangerous trade, without prejudice to the right to recover for a subsequent loss by fire, the warranty extending only to the state and use of the prem- [552] CII. XIX.J THE LAW OF FIEB INSURANCE. -500 the class where it is put, or at least shall not enter into another that is declared to be more hazardous, during the operation of the policy.! There must, however, be a rational, and perhaps a ises at the moment when the policy was signed. This seems quite contrary to the prin- ciples on which contracts are regulated. The construction and use of the premises insured, as described in the policy, constitute the basis of the insurance, and determine the amount of the premium. But this calculation can only be made upon the suppo- sition that the description in the policy shall remain substantially true while the risk is running, and that no alteration shall subsequently be made by the assured to enhance the liability of the insurer. It seems strange, then, that if a house be described in the policy as occupied by the owner, carrying on the trade of a butcher, so that the pre- mium is on the lowest scale, he may immediately afterwards, merely taking care that the walls and floor and roof remain, so that it is still the same identical house, convert it into a manufactory of fire-works, a trade trebly hazardous, for which the highest scale of premium would be no more than reasonable for the stipulated indemnity. . . . Now, assuming the law to be that, upon an insurance against fire there is an implied engagement, that the assured will not afterwards alter the premises so as that they shall not agree with the description of them in the policy, and so that thereby the risk and liability of the insurer shall be increased, we have only to consider whether, in this insta,nce, the assured have not done so by converting the house insured from ' a house composed of two stories ' into a house composed of three stories ; and this really admits of no reasonable doubt. Mr. Bramwell very candidly admitted that, if the policy remained in force after the alteration, it covered the third story, as well as the other two. This being so, the increase of the area of the building by a third story, must be considered by the court to have necessarily increased the hazard or probability of fire about as much as if the addition to the house had been lateral instead of vertical." In Pirn V. Reid, 6 Man. & G. 1, where the policy was effected on condition that if any person shall insure his goods or buildings, and cause the same to be described otherwise than they really are, to the prejudice of the company, or shall misrepresent or omit to communicate any circumstance which is material to be made known to the company in order to enable them to judge of the risk they have undertaken, or are required to under- take, such insurance shall be of no force ; it was hdd that this condition was to be referred to the time when the policy was effected, and that in the absence of fraud, neither by the general law of insurance, nor by such condition, was the policy avoided by the circumstance that, subsequently to eflFecting the policy, a more hazardous trade had, without notice to the company, been carried on upon the premises. 1 Where, in a policy insuring a stock of dry goods, it is provided that the policy shall be void, if " the risk shall be increased by any means whatever within the control of the assured ; or if such building or premises shall, with the consent of the assured, be occu- pied in any way so as to render the risk more hazardous than at the time of insuring." And among the articles denominated hazardous, is cotton in bales ; yet if cotton in bales is merely kept for sale as a part of the stock of dry goods, it does not vitiate the policy, unless the jury should find that the keeping of such cotton increases the risk. Moore v. Protection Ins. Co. 29 Maine, 97. Where, in a policy of insurance, on sun- dry buildings, they were described as bams, to which this clause was added : "All the above-described barns are used for hay, straw, grain unthreshed, stabling, and shelter," and on the trial, after proof of a loss by fire, it appeared that on the day preceding the night of the fire, the insured had caused about two bushels of lime and six or eight pails of water to be placed in a tub standing in u, room generally used for keeping therein unthreshed corn, in one of the barns, for the purpose of preparing the lime for rolling in it some wheat which he was about to sow on his farm ; that a short time previous to the fire, he had commenced the painting of his house, and his painter had mixed the paints in the same room, and at the time of the fire, there was in it an oil barrel con- taining about a gallon of oil, a keg of white lead, and a pot with about a pint of mixed paint ; that in another building described in the policy as used in jjart for a cider mill, the insured, before and after the execution of the policy, had been in the habit of repair- ing his farming utensils, and had also made in it a bee-hive, and planed some boards for a room in his house ; but a day or two before the fire, the building had been cleared 47 [653] 501 ELEMENTS OF MERCANTILE LAW. [CH. XIX. liberal construction of this rule. Thus, it does not apply where a single article, or one or two, are kept in a store as a part of the stock of goods, although that article, as cotton in bales, is among those enumerated as hazardous.^ But if the building is out, leaving nothing in it but some apples ; it was held : 1 . That the clause relating to the use of the building insured, was not a warranty that they should be used in that manner and in no otlier, but was inserted merely for the purpose of designating the buildings insured, and not to limit their use or deprive the insured of the enjoyment of his property in the same manner as buildings of that description are generally used and enjoyed. 2. That the acts of the insured, so far as they were or could have been the cause of the loss, were in accordance with tlie ordinary use of bucli buildings by farmers. Billings V. Tolland Co. Mutual Fire Ins. Co. 20 Conn. 139. 1 N. Y. Eqiiitalile Ins. Co. v. Langdon, 6 Wend. 623, 627, Sutherland, J.. "The only question then is, whether the liceping of oil or .spirituous liquors in tlie store, under the circumstances disclosed in the case, was appropriating or using the building for the purpose of storing those articles within the meaning of tlie policy. Every thing that was kept either in the store or cellar, was kept for the purpose of being retailed. The smaller vessels in the store were replenished from the larger ones in the cellar, which consisted, at, the time of the fire, of one cask of oil, one barrel of rum, one cask of Jamaica spirits, and one pipe of gin ; from all of which more or less had been drawn for the use of the store. It appears to me that the word storing was used by the parties in this case in the sense contended for by the plaintiff, namely ; a keeping for safe cus- totly, to be delivered out in the same condition, substantially, as when received ; and applies only where storing or safe-keeping is the sole or principal object of the deposit, and not where it is merely incidental, and the keeping is only for the purpose of con- sumption. If I send a cask of wine to a warehouse to be kept for me, that is a storing of it ; but if I put it into my cellar or my garret to be drawn off and drank, I apprehend the term would not be considered as apjjiying. Suppose all the varieties of wine ivere denominated hazardous by the various insurance companies, and the storing of them was prohibited in their policies ; could it possibly apply to the private stock which a gentleman might keep in his own house, for his own use and consumption 1 It cer- tainly would be perverting the term from its ordinary, and generally received accepta- tion." See s. c. 1 Hall, 226. It was held, in that case, that the word "storing" applies only where the storing or safe-keeping is the sole or principal object of the deposit, and not where it is merely incidental and the keeping is only for the purpose of consumption. This definition has been adopted by the courts. Thus, where oils and turpentine, which were classed among hazardous or extra-hazardous articles, were intro- duced for the purpose of repairing and ])ainting the dwelling insured, and the dwelling was liurned while being so repaired, the insurers were held liable. O'Nicl i'. Buffalo Fire Ins. Co. 3 Comst. 122 ; Lounsliury v. Protection Ins. Co. 8 Conn. 459. AVhere a policy of insurance contained a clause suspending the operation of the policy in case the premises should be appropriated, applied, or used to or for the purpose of storing or of keeping therein any of the .articles described hazardous, one of the buildings insured being occupied by a card machine, it was held that the mere fact that a small quantity of undressed flax (although a hazardous article), had been permitted to remain in the basement of the carding-machine building, since the removal of the flax-dressing machinery from such basement a few days prior to the issuing of the policy, was not conclusive evidence that the building was appropriated, applied, or used for storing or keeping flax within the meaning of those terms as used in the policy, and that leaving the small pile of undressed flax in the building, with no purpose of having it regularly stored or kept there, would not contravene the terms of the policy. Parher, J., dis- sented, being of opinion that the case came within the term "keepmg," introduced into the policy. Hynds v. Schenectady Co. Mutual Ins. Co. 16 Barb. 119. The keeping of S))irituous liquors in the building insm-ed, for the purposes of consumption or sale by retail to boarders and others, is not a storing within the meaning of the policy. Raf- ferty v. New Brunswick Fire Ins. Co. 3 Hanison, 480. See Williams f. New England Fire Ins. Co. 31 Maine, 225; Allen v. Mutual Fire Ins. Co. 2 Md. 125; Billings i'. Tolland Co. Mutual Fire Ins. Co. 20 Conn. 139; Duncan i. Sun Fire Ins. Co. 6 [554] CH. XIX.J THE LAW OF FIRE INSURANCE. *502 generally * appropriated to a more hazardous occupation than the proposals or the policy indicate, or if the jury find that the intro- Wend. 488. In England, tliere is not complete harmony in the decisions. The ear- liest case is Dobson v. Sotheby, ] Moody & M. 90. The policy was effected on prem- ises " wherein no fire is kept and no hazardous goods are deposited," and, provided that "if buildings of any description insured with the company, shall at any time after such insurance be made use of to store or warehouse any hazardous goods " without leave from the company, the policy should he forfeited." These words were held to mean the habitual use of fire or the ordinary deposit of hazardous goods, not their occa- sional introduction for a temporary purpose connected with the occupation of the prem- ises, so that the policy was not vitiated by bringing a tar ban'el and lighting a fire in order to effect repairs, in consequence of which the loss occurred. Where the premises insured were a granary and a " kiln for drying corn in use," and the policy was to be forfeited unless the buildings were accurately described, and the trades carried on therein specified, it was held, although proved that a higher premium was exacted for a bark kiln than a malt kiln, and that the latter was more dangerous, and the loss happened from the use of the kiln in drying the bark, that a temporary and gratuitous permission to a friend to dry bark in the kiln, did not avoid the policy. Shaw v. Robberds, 6 A. & E. 75. See Barrett v. Jermy, 3 Exch. 535. The authority of these cases has been diminished by a recent decision of the Court of Exchequer, under a condition providing that, in case any steam-engine, stove, &c. or any other description of fire-heat be intro- duced, notice thereof must be given, and every such alteration must be allowed by indorsement, and any further premium which the alteration may occasion, must be paid, otherwise no benefit will arise to the assured in case of loss. The assured, who was a cabinet-maker, placed a small engine on the premises with a boiler attached, and used it in a heated state for the purpose of turning a lathe, not in the course of his business, but for tlie purpose of a.scertaining by experiment whether it was worth his while to buy it to be used in that business ; and after the engine had been on the premises for several days, a fire happened. It was held that the policy was avoided, and that whether the engine was introduced for experiment as an approved means of carrying on the plain- tiff's business ; whether used for a longer or shorter time, or whether the fire was occa- sioned by the working of the steam-engine or not, were immaterial questions. Glen v. Lewis, s'Exch. 607, 20 Eng. L. & Eq. 364, Parke, B. : "Now the clause in question implies, that the simple introduction of a steam-engine, without having fire applied to it, will not affect the policy ; but if used with fire-heat, it will ; and nothing being said about the intention of the parties as to the particular use of it, and as, if it be used, the danger is precisely the same, with Avhatever object it is used, it seems to us that it makes no difference whether it is used upon trial with the intent of ascertaining whether it will succeed or not, or as an approved means of carrying on the plaintiflp's business, nor does it make any difference that it is used for a longer or a shorter time. The terms of the conditions apply to the introduction of a steam-engine in a heated state at any time, without notice to the company, so as to afford an opportunity to them to ascertain whether it will increase the risk or not. The clause proceeds to provide that every such alteration must be allowed by indorsement on the policy, and the premium paid, and if not, no benefit will arise to the insured in ease of loss. The expression ' alteration ' is inaccurate ; but it obviously means to embrace all the circumstances before mentioned, though all are not, properly speaking, alterations. This appears to be the natural and ordinary construction of this part of the contract, and it is far from unreasonable. In such cases, which are unquestionably likely to increase the risk, the company stipulate for notice in clear terms, in order that they may consider whether they will continue their liability, and on what terms. There is not a word to confine the introduction of the steam-engine to its intended use as an instrument or auxiliary in carrying on the business in the premises insured. If a constraction had already been put on the clause precisely similar in any decided case, we should defer to that author- ity. But, in truth, there is none. All the cases upon this subject depend upon the construction of different instruments, and there is none precisely like this. Indeed, it seems not improbable that the terms of this policy have been adopted, as suggested by Sir E. Thesiger, to prevent the effect of previous decisions ; the provision ' that no description of fire-heat shall be introduced ' in consequence of the ruling of Lord Ten- [555] 503* ELEMENTS OP MERCANTILE LAW. [CH. XIX. duction * of these goods materially increased the actual risk, evi- dence would be received as to the intention of the parties to the contract. And the true meaning of the contract and the intent of the parties would be considered. Thus, where the " storing " of certain goods was prohibited, as " hazardous " — it was held that the having a pipe or two of such articles in the cellar, from which smaller vessels in the store were replenished, did not come within the meaning of the word " storing " in the policy, any more than would the keeping of such articles for home con- sumption, in a dwelling-house insured by a similar policy.^ Policies at the present day frequently define what articles or trades are to be considered hazardous, and also that the using the premises for such purpose shall avoid the policy. When this is done the policy is avoided by such use,^ and evidence is not admissible to show that the risk was not thereby increased,^ or that it was usual for persons owning a stock of goods like that insured to keep the hazardous articles.* terden, in Dobson v. Sotheby, 1 Moody & M. 90 ; and the addition of ' process or ope- ration ' to trade or business, to prevent the application of that of Shaw v. Eobberds, 6 A. & E. 75. The latter case is the only one which approaches the present. One cannot help feeling that the construction of the policy in that case may have been some- what influenced by the apparent hardship of avoiding it, by reason of the accidental and charitable use of the kiln, the subject of the insurance. The court considered the conditions in that case to refer to alterations, either in the building or the business, and to those only. Here the introduction of steam-engines, or any other description of fire- heat, is specifically pointed at, and expressly provided for. If, in tliat case, the condi- tion had been {inter alia) that no bark should be dried in the kiln, without notice to the company, which would have resembled this case, we are far from thinking that the court could have held that the drying which took place did not avoid the policy, by rea- son of being an extraordinary occurrence and a charity. We are, therefore, of opinion that the defendant is erititlcd to our judgment, and that the material part of the second plea is proved." See Sillem v. Thornton, 3 Ellis & B. 868, 26 Eng. L. & Eq. 244. Where there was a warranty that a mill should be " worked by day only," it was held not broken by the working of part of the mill by night. Mayall v. Mitford, 6 A. & E. 670 ; Whitehead v. Price, 2 Cromp. M. & R. 447. 1 Catlin V. Springfield Fire Ins. Co. 1 Sumner, 4.34, 440. Where the premises were described in the application and policy as occupied by A as a private dwelling, this was held not to be a warranty of the continuation of the occupation during the risk, and the insurers were lial)le, although the loss happened after the occupant had left the premises vacant. O'Niel v. Buffalo Fire Ins. Co. 3 Comst. 122; Raflfcrty v. New Brunswick Fire Ins. Co. 3 Harrison, 480, In this case it was held that it is not a vio- lation of a policy of insurance, that a house insured as a dwelling-house, was afterwards occupied as a boarding-house, if boarding-houses are not in the list of prohibited occu- pations. A change of tenants, the policy being silent on the subject, docs not invali- date it, though the first tenant may bo a pradent, and the second a grossly careless man. Gates v. Madi,son Co. Mutual Ins. Co. 1 Seld. 469. - Harris v. Columbiana Mut. Ins. Co. 4 Ohio State, 285 ; Mead v. Northwestern In-i. Co. 3 Seld. 530. » Leo V. Howard F. Ins. Co. 3 Gray, 583. * Maeomber v. How.ard F. Ins. Co. 7 Gray, 257. See ante, p. 498, u. [556] CH. XIX.] THE LAW OF FIRE INSURANCE. *504 A description of a house as " at present occupied as a dwell- ing-house, but to be hereafter occupied as a tavern, and privi- leged as such," is only permission that it should be a tavern, and creates no obligation to occupy and keep it as a tavern on the part of the insured. But if the language is, " to be occupied as so or so, but not " in * some other certain way, this restriction is a part of the bargain ; and if they are so occupied, the insur- ers are discharged. So if the premises are described as " a pri- vate residence," the insurance is 'not avoided by the fact that the occupants moved out of the house, leaving it vacant, and not the " residence '■^ of any one, unless the jury find that the risk was thereby materially increased.^ But where the property was represented as a " tavern barn," and the insured permitted its occupation as a livery-stable, an expert was permitted to testify that a livery-stable was materially more hazardous than a tavern barn. And, on this ground, the policy was held to be discharged, although the keeper of the livery-stable was removable at the pleasure of the insured.^ The general subject of alterations of property under insurance against fire, is not without difficulty. On the whole, however, we are satisfied that mere alterations, although expensive and important, do not necessarily and per se avoid the insurance or discharge the insurers. But that they have this effect, if they are found by the jury to increase the risk materially ; or if they are specifically prohibited in the policy, for this amounts, in the one case, to an agreement by the parties that they shall be conrid- ered as increasing the risk, and in the other, as a promise by the insured that they shall not be made.^ Still other questions may arise where material alterations are 1 Hobby V. Dana, 17 Barb. 111. 2 Where a building insured by a company was represented at the time of effecting the insurance, as connected with another building on one side only, and before the loss happened it became connected on two sides, the policy was hdd not to be .avoided unless the rislc thereby became greater. Stetson v. Mass. Mutual Fire Ins. Co. 4 Mass. 330, 337, per SewaU, J. And wliethcr such alterations increased the risk, is a question for the jury. Curry v. Commonwealth Ins. Co. 10 Pick. 535. The following cases sustain the doctrine that an alteration which increases the risk avoids the policy. Jones' Manufacturing Co. v. Manufacturers Mutual Fire Ins. Co, 8 Cush. 82; Perry Co. Ins. Co. V. Stuart, 19 Penn. State, 45; Jefferson Co. Ins. Co. v. Cotheal, 7 Wend. 72; Grant v. Howard Ins. Co. 5 Hill, 10 ; Allen v. Mutual Fire Ins. Co. 2 Md. 125, 128. See Sillem v. Thornton, 3 Ellis & B. 868, 26 Eng. L. & Eq. 238. 5 Young V. Washington Co, Mut, Ins. Co. 14 Barb. 545. 47 * [ 557 ] 505* ELEMENTS OF MERCANTILE LAW. [CH. XIX. made, all of which are not easily disposed of. The following are instances. Suppose one gets his dwelling-house insured for seven years, truly describing it as having a shingled roof. After two or three years he determines to take off the shingles, but says nothing to the insurers about it. If he now puts on slates, or a metallic covering which does not require soldering, he does not increase the risk, nor is the work of putting on the new cov- ering * hazardous, and we see no grounds for its having any effect on the policy. But suppose the new metallic covering is secured by soldering. This is certainly a hazardous operation. And if the building takes fire in consequence of this dperation, the insur- ers are certainly discharged. If the operation is conducted safely through, and the work is entirely finished, we consider it clear that this greater hazard for a time has no effect whatever on the policy after that time, and after all the greater hazard has ex- pired. But let us suppose that while this operation is going for- ward, and the house is thereby certainly exposed to an increase of risk, the house is set on fire by an incendiary — without the slightest reference to this alteration — and burns down. It is not, perhaps, settled either by authority or practice, whether the insurers be or be not discharged. We are, however, of opinion that the principles of insurance would lead to the conclusion that, if the house be burned from a perfectly independent cause, during an increase of risk incurred in good faith, the insurers are not thereby discharged. It is, however, certain that it is al- ways prudent to obtain the consent of the insurers to any pro- posed alteration. If such consent be asked, and refused, we do not see that the insurers stand on any better footing, or the in- sured on any worse one ; and if the alterations are made and a loss occurs, we should say that the insurers would not, generally at- least, be discharged, unless they would have been, had the alteration been made without their knowledge. For if they have a right to object or refuse, it could only be because the contract in effect prohibited this alteration ; and then their refusal was not wanted for their defence. And if they have no right to re- fuse, they can acquire no rights by the refusal. If the alteration be of a permanent character, and causes a material increase of the danger of fire, then it is a substantial breach of contract ; and we should hold that the insurers were discharged as soon as the alteration was made, and indeed, as [558] CH. XIX.] THE LAW OF FIRE INSURANCE. *506 soon as the making of it, or preparations for it, as scaffolding or carpenter's work, materially increased the risk. And they are discharged equally, whether the fire be caused by the alteration, or by the work done, or by some wholly independent matter. But where an application for insurance upon a dwelling- house described a store owned by the applicant, situated near the house, ' and the policy contained no prohibition against the rebuilding of the store, and when it was burned the owner re- built the same, and in doing so a fire occurred in the store which communicated to and destroyed the house, but there was no negligence on the part of the insured, the insurers were held, because the insured had the right of rebuilding the store, using proper precaution s.^ We apprehend further, that the insured retains his right to keep his buildings in good repair ; and indeed, it is rather his duty, or at least for the interest of the insurers, that he should do so. For any condition of disrepair, would tend, more or less strongly, to increase the risk of fire, if only by causing a general neglect or lowering the class of occupants. The insured, there- fore, may repair without especial leave, and the insurers are lia- ble, although the fire take place while the repairs are going on ; and even if it be caused by the repairs ; and so they would be if this cause might seem to come within the express prohibition of the policy, if it were introduced merely for repair, and the pro- hibition should be construed as intended to prevent a general employment of the buildings in a hazardous way. Thus, a con- dition avoiding the policy "if the buildings at any time after the insurance, be made use of to store or warehouse any haz- ardous goods," did not discharge the insurers of a barn burned from the boiling over of a tar-barrel brought within it for the purpose of repair.^ It may be added that our fire policies now 1 Young V. Washington Co. Mut. Ins. Co. 14 Barb. 545. 2 Dobson V. Sothoby, 1 Moody & M. 90. Where a fire policy was conditioned to be- come void if the building insured should be used for the purpose of carrying on or exer- cising any trade, business, or vocation denominated hazardous or extra-hazardous, or spec- ified in the memorandum of special rates, and the memorandum referred to mentioned among other things, " houses, building or repairing," it was hdd that these words, taken in connection with the policy, must be understood in reference to carrying on the trade of house-building, or house-repairing, in or about the building insured, and that they did not apply to repairs made upon the building itself Grant v. Howard Ins. Co. 5 Hill, 10; O'Neil v. Buffalo Ins. Co. 3 Comst. 122; Jolly v. Baltimore Equitable Society, 1 Harris & G. 295 ; Allen v. Mutual Fire Insurance Co. 2 Md. 125-128 ; Lounsbury Pro- tection Ins. Co. 8 Conn. 459 ; Billings v. Tolland Co. Mut. F. Ins. Co. 20 id. 139. [559] 507* ELEMENTS OF MERCANTILE LAW. [CH. XIX. in use frequently give the insured the right of keeping the prop- erty in repair. In England, fire policies are often made with a right of renewal, and many questions have arisen there under this right.^ We are not aware of any such cases or any such practice in this coun- try. But it is generally understood, and sometimes agreed, that if a fire policy be renewed, there shall be no charge for the new policy. * And it has been held, where the policy was under seal, and was renewed several times by indorsement, that the renew- als were equivalent only to new orders for insurance assented to, and did not constitute new policies.^ SECTION in. OP THE INTEREST OF THE INSURED. As to what interest in the insured is sufficient to support an insurance, the principle is the same in fire as in marine insur- ance. Any legal interest is sufficient. And if it be equitable in the sense that a Court of Equity will recognize and protect it, that is sufficient ; ^ but a merely moral, or expectant interest 1 1 Beaumont on Insurance, ch. 3. - Luciani v. American Fire Ins. Co. 2 A¥hart. 167. 2 Tyler V. Mtnn Fire Ins. Co. 12 Wend. 507, 16 Id. 385; Swift v. Vt. Mutual Fire Ins. Co. 18 Vt. 305. A purchaser of a house and lot in possession under a written contract, who has made a partial payment and repaired the premises, has an insurable interest. McGi^^ley v. Phoenix Fire Ins. Co. 1 Wend. 85. Where a moiety of a build- ing insured by a company, was conveyed in fee, the grantor reserving a term of seven years therein, and the grantee immediately rcconveycd the same to the grantor on mort- gage, and the mortgagee demised them to the mortgagor and another for seven years, reserving rent, it was held that the company was liable in ease of loss, notwithstanding sucli conveyances. Stetson i'. Mass. Mutual Fire Ins. Co. 4 Mass. 330 ; see Morrison V. Tennessee Marine &, Fire Ins. Co. 18 Misso. 262. Where a party holds the legal title, and the equitable title is in another, he has an insurable interest. Thus, where one has made an agreement for the sale of his real estate insured, but has not made a convey- ance nor received the purchase-money, his interest in the property and policy is not thereby parted with so as to bar his right of action on the happening of a loss.' Perry Co. Ins. Co. V. Stewart, 19 Penn. State, 45, A vendor of real estate, after articles of agreement and before conveyance, may insure the full value of the buildings, and where the policy is in form an insurance on the buildings, it is prima facie an insurance on the whole legal and equitable estate, aiul not upon the balance of the purchase-money un- paid. Insurance Co. v. Updegraif, 21 Penn. State, 513. Personal property, after being insured against fire, was sold by the insurer, and but part of the purchase-money being paid, it was agreed between the vendor and vendee that the vendor was to retain possession of the property and of the policies of insurance, till he was paid in full. The property was destroyed by fire before payment in fidl, and on an attachment and cxe- [560] CH. XIX.J THE LAW OF FIRE INSURANCE. *508 is not enough.^ Hence, one who has made only an oral bargain with * another to purchase his house, cannot insure it; but if there be a valid contract in law, or if by writing, or by part per- formance, it is enforceable in equity,^ the purchaser may insure. So he may although there be a stipulation, the breach of which has made the contract void by its terms, if the other party might waive the condition and enforce the contract.^ So, if a debtor assign his property to pay his debts, he has an insurable interest in it until the debts are paid, or until the property be sold. This was so held where it appeared that the property would pay the debts and leave a surplus for the assignor ; but we should expect the same ruling where this was not the case, although in this instance there had been previously a verdict for the plaintiff and and a new trial for want of evidence of such surplus.* cution against the vendor by a creditor, the claims against the insurance company were attached ; it was hdd that such a possession was good as between parties to the sale ; in favor of creditors of the vendor, the goods might be treated as his ; as against the insur- ance companies the vendor was to be considered the owner to the extent of the unpaid purchase-money. That, notwithstanding his sale, the vendor still possessed an insura- ble interest, and he or his creditor was entitled to recover the amount payable under the policies of insurance. Norcross v. Insurance Companies, 17 Penn. State, 429. 1 Lucena v. Craufurd, 5 B. & P. 324, per Lord Eldon. One has no insui-able inter- est in a house erected on land of another without license or shadow of title. Sweeny v. Franklin !Fire Ins. Co. 20 Penn. State, 337. "But he has an insurable interest if his house was placed on another's land with the owner's consent." Fletcher v. Common- wealth Ins. Co. 18 Pick. 419. A party has no insurable interest on goods for which he has made an oral contract, where the sales of such goods is within the Statute of Frauds. Stockdale v. Dunlop, 6 M. & W. 224. It is held in Ohio that a stockholder in an in- corporated company has no insurable interest in its property. Phillips v. Knox Co. Mutual Ins. Co. 20 Ohio, 174. 2 See ante, p. .507, n. 3. ^ Columbian Ins. Co. v. Lawrence, 2 Pet. 25, Marshall, C. J. : " That an equitable interest may be insured is admitted. We can perceive no reason which excludes an interest held under an executory contract. Wliile the contract subsists, the person claiming under it has undoubtedly a substantial interest in the property. If it be destroyed, the loss in contemplation of law, is his. If the purchase-money be paid, it is his in fact. If he owes the purchase-money, the property is its equivalent, and is still valuable to him. The embarrassment of his aifairs may be such that his debts may ab- sorb all his property ; but this circumstance has never been considered as proving a want of interest in it. The destruction of the property is a real loss to the person in posses- sion, who claims title under an executory contract, and the contingency that his title may be defeated by subsequent events does not prevent this loss. We perceive no reason why he should not be permitted to insure against it. The cases cited in argument, and those summed up in Phillips on Insurance, 26, on insurable interest, and 1 Marshall, 104, c. 4, and 2 Marshall, 787, c. 11, prove, we think, that any actual interest, legal or equitable, is insurable." s. c. 10 id. 507. * Lazarus a. Commonwealth Ins. Co. 19 Pick. 81, 5 id. 76. A person discharged by the Insolvent Debtors' Court as an insolvent debtor, effected an insurance on some property acquired by him before the insolvency. The property having been destroyed by fire, the order for his discharge was afterwards annulled on the ground of fraud, and he was adjudged to imprisonment. In a suit on the policy, he was held to have an in- surable interest. Marks v. Hamilton, 7 Exch. 323, 9 Eng. L. & Eq. 503, Alderson, B. : [561] 509* ELEMENTS OF MERCANTILE LAW. [CH. XIX. A partner may have an insurable interest in a building pur- chased with partnership funds, although it stands upon land owned by the other partner.^ A mortgagor may insure the whole value of his property, even after the possession has passed to the mortgagee, if the equity of redemption be not wholly gone.^ So he may if his equity of * redemption is seized on execution, or even sold, so long as he may still redeem.^ And in case of loss he recovers the whole value of the building if he be insured to that amount.^ A mortgagor and a mortgagee may both insure the same property, and neither need specify his interest, but simply call it his property. The mortgagee has an interest only equal to his debt, and founded upon it ; and if the debt be paid, the inter- est ceases, and the policy is discharged ; and he can recover no more than the amount of his debt.^ And if a house, in- sured by a mortgagee, were damaged by fire, even considerably, or perhaps destroyed, it might be doubted, on what we should think good grounds, whether he could recover, if it were proved that the remaining value of the premises mortgaged, was cer- tainly more than sufficient to secure his debts, and all reasona- ably possible interest, cost, and charges.^ Whether he can hold " Tlio insolvent, having the possession of the property, is responsible for it to the assign- ees ; then wliy may he not insure it." Pollock, C. B. : " We are all clearly of opinion that as he was in possession as the apparent owner, responsible to those who were the real owners, he had, under those circumstances, an insurable interest. See Dadmuu Manuf. Co. v. Worcester Mut. Fire Ins. Co. U Met. 429. 1 Converse v. Citizens Mut. Ins. Co. 10 Gush, 37. ^ Columbian Ins. Co. c. Lawrence, 2 Pet. 25 ; Traders Ins. Co. v. Robert, 9 Wend. 404, 17 id. 631 ; Tillou v. Kingston Fire Ins. Co. 7 Barb. 570; Stetson v. Mass. Mutual Fire Ins. Co. 4 Mass. 330; Locke v. North American Ins. Co. 13 id. 66, 67. A mort- gagee may insure the property to secure his claim. Wheeling Ins. Co. v. Mon'ison, 11 Leigh, 362, 363 ; King u. State Mutual Fire Ins. Co. 7 Cush. 1 ; Allen v. Mut. Fire Ins. Co. 2 Md. 111. " Strong V. Manufacturers Ins. Co. 10 Pick. 40; Miltenberger v. Beacom, 9 BaiT, 199. * Jackson o. Mass. Mutual Fire Ins. Co. 23 Pick. 422 ; Traders Ins. Co. u. Robert, 9 Wi^nd. 4U4, 17 id. 631. '^ Jlotley ii. Manuf. Ins. Co. 29 Maine, 337 ; Carpenter v. Providence Washington Ins. Co. 16 Pet. 495; Wilson r. Hill, 3 Met. 66; Macomber v. Cambridge Mutual Fire Ins. Co. 8 Cash. 133. '' Smith V. Ins. Co. 17 Penn. State, 260. Per Gibson, J. : "The interest of a mort- gagee is a special, but an insurable one, and it may, at his option, be insured gener- ally or specially ; — generally, wlien he says nothing about his mortgage, and insures as the entire ownci- ; and specially, when the nature of his interest is specified in a memo- randum. By the first, he pays a premium proportional to the risk of the absolute own- ership; by tlie second, a premium proportional to the risk of a less and derivative ownership. In the one case, and in the other, the subject of the insurance is tlie corpus of the thing insured, but actually the interest of the party assured in it. If the abso- [562] CH. XIX.] THE LAW OP FIRE INSURANCE. *510 what he thus receives from the insurers, and also recover his debt from the debtor-, we have considered in the chapter on Ma- rine Insurance. We will only say, that while recent decisions have thrown much doubt upon this question, we are still of opinion that he cannot hold both ; and that the insurers should generally be, in some way, subrogated to his rights against the debtor, for the amount which they pay to him. The question might possibly arise, * whether the debtor could compel or re- quire him to enforce his claims against the insurers, and then consider the debt paid thereby, for his benefit ; but we should hold, very confidently, that he could not.^ lute owner be insm-ed, he recovers the full value of the thing lost, because his interest in it is commensurate with its value ; if the owner of a limited interest in it is insured, he recovers only to the extent of his interest. Each may insure separately, and recover separately, pro interesse sui. A policy of insurance has been, from the beginning, a rude and indigested instrument, whose legal effect, moulded by usage and judicial de- cision, is different from a strict interpretation of it. As the words of an execution are frequently controlled with us by an indorsement, so are the words of a policy fre- quently controlled by a memorandum. Notwithstanding the fomi of the contract, therefore, a mortgagee insures, whether generally or specially, not the ultimate safety of the whole of the property, but only so much of it as may be enough to satisfy his mortgage. It is not the specific property that is insured, but its capacity to pay the mortgage debt. In effect, the security is insured." 1 It was held in White v. Brown, 2 Cush. 412, that if a mortgagee in possession for condition broken, insure his interest in the premises without any agreement therefor be- tween him and the mortgagor, and a loss accrues, which is paid to the mortgagee, the mortgagor on a bill to redeem and an account stated for the purpose, is not entitled to have the amount of such loss deducted from the mortgagee's charges for repairs. There was no piivity in law or fact between the mortgagor and the mortgagee in the contract of insurance, and if the mortgagee gets his interest insured, and receives the amount of the insurance under his policy, it does not affect his claim against the mort- gagor. The two claims are wholly distinct and independent. Gushing v. Thompson, 34 Maine, 496. In King v. State Mutual Fire Ins. Co. 7 Cush. 1, it was held, that a mortgagee, who, at his own expense, insures his interest in the property mortgaged against loss by fire, without particularly describing the nature of his interest, is entitled, in case of loss by fire before payment of the mortgage debt, to recover the amount of the loss from the insurers to his own use, without first assigning his mortgage, or any part thereof, to them. In an elaborate opinion, the court maintain that, notwithstand- ing respectable authorities to the contrary, when a mortgagee causes insurance to be made for his own benefit, paying the premium from his own funds, in case a loss occurs before his debt is paid, he has a right to receive the total loss for his own benefit; that he is not bound to account to the mortgagor for any part of the money so recovered, as part of the mortgage debt; it is not a payment, in whole or in part; but he has still a right to recover his whole debt of.the mortgagor. And so, on the other hand, when the debt is thus paid by the debtor, the money is not, in law or equity, the money of the insurer, who has thus paid the loss, or money paid to his use. The court, in a note, cite the ease of Dobson v. Land, 8 Hare, 216, reviewed in 13 Law Reporter, 247 : " The question there was upon the branch of the proposition, whether a mortgagee in possession, on stating his account under a bill to redeem, had a right to charge premi- ums of insurances obtained by himself on buildings constituting part of the mortgaged property, and add the same to the principal and interest of his debt, and it was decided that he" could not. It was conceded that this involved the correlative proposition that if the mortgagee had received any sum by way of loss on such policies, he would be under no obligation in equity to credit it to the mortgagor, or be responsible to him for [563] 511* ELEMENTS OF MERCANTILE LAW. [CH. XIX. It has been held, for strong reasons, that if a mortgagor is bound by his contract with the mortgagee to keep the premises insured for the benefit of the mortgagee, and does Jteep them insured, the mortgagee has an equitable interest in or lien upon the proceeds of the policy.^ * A tenant, by the courtesy, may insure the property, even if his wife be only a joint-tenant.^ One who holds by disseisin, if he has a freehold interest, and the exclusive right of occupation, may insure the building, and as his own property, although he is liable to be ousted by another who has a right of action.^ And a tenant for years, or from year to year, may insure his interest, but would recover only the value of his interest, and not the value of the whole property.* it." Sec Morrison v. Tennessee Marine & Fire Ins. Co. 18 Misso. 262. In Pennsyl- vania, it is held that, where tlie mortgagee insures the debt, the underwriter liaving paid the mortgage debt, is entitled to have recourse to the mortgaged property, and to a cesFion of the seciu-jty. Smith v. Columbia Ins. Co. 17 Penn. State, 2.'i3 ; Insurance Co. !'. Upileijraff, 21 id. 51.3. The right of tlie insurers to subrogation, where they |iay the debt, is sustained in ^tna Insurance Co. v. Tyler, 16 Wend. 385, 397, pur' Wat- worth, Ciiancellor. Sec Cai-penter v. Providence Washington Ins. Co. 16 Pet. 495, 501. It seems to liave been allowed by the old French law, and its justice has been approved in England in a case which was appealed from the Court of Queen's Bench for tlie dis- trict of Montreal, to her JMaje.^ty in council. Quebec Eire Ins. Co. v. St. Louis, 7 Moore, P. C. 286, 22 Eng. L. & Eq. 73. Where buildings were destroyed liy gun- powder, under an order of the city authorities, to stop the ravages of a fire, the insur- ers were allowed to deduct from the sum insured, the amount received by the insured, from the city. Pent/, v. Eeccivers of Mtaa, Fire Ins. Co. 3 Edw. Ch. 341, 9 Paige, 568. 1 Thomas c. VonkapfF, 6 Gill & J. 372; Vernon u. Smith, 5 B. & Aid. 1. Bat where there is no such obligation on the part of the mortgagor to insure for the benefit of the mortgagee, the mortgagee has no such equitable lien upon the policy. Carter v. Eockett, 8 Paige, 437. Chancellor Wahmrtli : "A contract of insurance against fire, as a general rule, is a mere personal contract between the assured and the underwriter, to indemnify the former against any loss he may sustain. But the assured, by an agreement to insure for the protection and indemnity of another person, having an in- terest in the subject of the insurance, may unquestionably give such third person an equitable lien upon the money due upon tlie policy, to the extent of such interest. . . But a mere lien upon the property insured does not give the holder of that lien a corresponding claim upon the policy which the owner of the goods has obtained for the protection of his own interest therein ; although the assured is personally liable to pay the debt, which is a lien upon the property insured." Columbia Ins. Co. c. Lawrence, 10 Pet. 507, 512 ; McDonald v. Black, 20 Ohio, 193. It seems that an order indorsed by the assured, on a policy issued by a mutual insurance company, " to pay the within in case of loss " to a mortgagee, and assented to by the company, will enable the mortgagee to sue on the policy in his own name. Barrett v. Union Mutual Fire Ins. Co. 7 Cush. 175. Where the policy provides that the insurance, in case of loss, shall be paid to a tliird person, the action should be in the name of the party to the policy. Nevins v. Rockingham Fire Ins. Co. 5 Foster, 22. 2 Franklin Ins. Co. o. Drake, 2 B. Mon. 47. ^ Curry v. Commonwealth Ins. Co. 10 Pick. 535. * Niblo V. North American Fire Ins. Co. 1 Sandf. 551. But where the tenant owns the building and not the land under it, with the right of removing the building, he may [564] CH. XIX.] THE LAW OP FIRE INSURANCE. *512 We have said that, generally, any one having any legal inter- est in property, may insure it as his own. But there is one important exception to, or modification of this rule. By the charters of many of our mutual insurance companies, the com- pany has a lien, to the amount of the premium note, on all property insured. It is obvious, therefore, that no such descrip- tion can be given, or no such language used, as would induce the company to suppose they had a lien when they could not have one, or would in any way deceive them as to the validity or value of their lien. In all such cases, all incumbrances must be stated, and the title or interest of the insured fully stated, in all those particulars in which it aflFects the lien.^ * A trustee, agent, or consignee, may insure against fire, as he may against marine loss.^ But it is now often provided that property held in trust, or on commission, must be insured as such. And such a provision has been held to include every thing in which the insured has a qualified interest by its possession, while the ownership is in another person.^ Generally, the con- signee is not bound to insure against fire, but may, at his discre- tion.* If the insurance is expressly on goods held on commis- recover the Talue of the building, if insured to that extent. Laurent v. Chatham Ins. Co. 1 Hall, 41. See Fletcher v. Commonwealth Ins. Co. 18 Pick. 419. 1 Where "a mutual fire insurance company were entitled to a lien on all property insured by them, and one condition of the insurance was, that if the representation made by the applicant was false, the policy should not cover the loss ; and the insured, in his application, stated that he was the owner of the building insured, whereas he had only a bond for a deed of it, upon the performance of certain conditions, which he never performed, it was held that no recovery could be had on the policy. Brown v. Wil- liams, 28 Maine, 252 ; Smith v. Bowditch Mutual Fire Ins. Co. 6 Cush. 448 ; Lowell V. Middlesex Mutual Fu-e Ins. Co. 8 id. 127 ; Allen v. Charlestown Mut. F. Ins. Co. 5 Gray, 384 ; Jenkins v. Quincy Mut. F. Ins. Co. 7 id. 370. So where the building insured was on land held under a lease. Mutual Assurance Co. v. Mahon, 5 Call, 517. The policy is void where stockholders of a corporation insure its property as their own in fee-simple. Phillips v, Knox Co. Mutual Ins. Co. 20 Ohio, 174. So previous mort- gages on the property insured must be made known. Addison v. Ky. & Louisville Ins. Co. 7 B. Mon. 470 ; Smith v. Columbia Ins. Co. 17 Penn. State, 253 ; Warner v. Mid- dlesex Mut. Ass. Co. 21 Conn. 444. Where the application, which is made a part of the policy, declares that, if the assured should suffer a judgment, which should be a lien on the insured premises, without communicating it to the insurers, the policy should be void, hdd that this warranty having been broken, the policy was void. Egan v. Mutual Ins. Co. 5 Denio, 326. It has been hdd, that the applicant is bound to communicate the existence of prior incumbrances, without inquiry by the insurers. Smith v. Colum- bia Ins. Co. 17 Penn. State, 253. But see Fletcher v. Commonwealth Ins. Co. 18 Pick. 419 ; Masters v. Madison Co. Mutual Ins. Co. 11 Barb. 631. 2 Lucena v. Craufurd, 3 B. & P. 95 ; De Forest v. Fulton Fire Ins. Co. 1 Hall, 103. 3 Turner v. Stetts, 28 Ala. 420. See also, Stilwell o. Staples, 6 Duer, 63, 19 N. Y. 401. * Story on Agency, § 3. De Forest v. Fulton Fire Ins. Co. 1 Hall, 119-121. 48 [565 1 5] 3* ELEMENTS OF MERCANTILE LAW. [CH. XIX. sion, the insurers must take notice that the owner does not retain possession of them, and that they are to be in the custody, and under the vigilance, integrity, and care of the consignor only.^ He may insure, expressly, his own interest in them for advances, or the owner's interest. It has been held, in a recent case, and, as we think, on excellent reasons, that a consignee may, by virtue of his implied interest and authority, insure, in his own name, goods in his possession against fire, to their full value, and recover for the benefit of the owner.'^ And if the interest be not expressed, the policy will be construed as not covering the interest of the owners, if, upon a fair construction of the words and facts, it seems to have been the intention of the parties only to secure the consignee's interest.^ * It is now common for a commission merchant to cover, in one policy, in his own name, all the goods of the various owners who have consigned to him.* It has been held, that "goods held on com- mission " in fire policies, have an effect equivalent to " for whom it may concern," in marine policies.^ And it was also intimated, but, as we think, on doubtful grounds, that if the goods actually were held on commission, they would not be covered by the policy, unless so described, although the insured had a lien for 1 De Forest v. Fulton Fire Ins. Co. 1 Hall, 128. - De Forest v. Fulton Fire Ins. Co. 1 Hall, 84, 116; Siter v. Morrs, 13 Penn. State, 220 ; Goodall v. New England Mutual Fire Ins. Co. 5 Foster, 169, 186. '^ Parks V. Gen. Interest Assurance Co. 5 Pick. 34. An insurance upon merchan- dise in a warehouse, " for account of whom it may concern," protects only such interests as were intended to be insured at the time of effecting the insurance. Steele v. Insur- ance Co. 17 Penn. State, 290,298. Li-Acis^i. : "All the authorities go to show, that the intention of tlie party effecting an insurance, at the time of doing so, ought to lead and govern the future use of it, and that no one can, by any subsequent act, entitle himself to the benefit of it, without showing that his interest was intended to be embraced by it when it was made. This rule has especial application to insurances made ' for account of whom it may concern ; ' and where these terms are used in the policy, it is not suffi- cient for the party who claims the benefit of the insurance, to show merely that he is the owner of, or has an insurable interest in the goods. Ho must show that he caused the insurance to be effected for liis benefit, or that it was intended, at the time, for his secu- rity. These terms in the policy will not, in general, dispense with this evidence. And where the party claiming the benefit, cannot show that he caused or directed the insur- ance to be effected, it will not serve him to rest upon some supposed secret intention not manifested by a single word or act, at the time of the transaction, to mark its char- acter and indicate the person or interest intended to be instu-ed. That which is not manifested by evidence, is to be treated as having no existence. The natm-e of the transaction must be fixed at the time of insurance, and cannot be changed by subse- quent consent of the insured, without the authority of the underwriters. If this were not law, all the mischiefs arising from gambling policies might ensue." * Millaudon v. Atlantic Ins. Co. 8 La. 557. '^ De Forest v. Fulton Fire Ins. Co. 1 Hall, 124, 125. [566] CH. XIX.J THE LAW OF EIRE INSURANCE. *514 advances ; in this case, however, the condition in the policy excluded such goods.^ A consignee of goods, sent to him, but not received, may- insure his own interest in them against marine risks, and we know no reason why he may not against fire.^ So, any bailee, who has a legal interest in the chattels which he holds, although this be temporary and qualified, may insure the goods against fire. Thus, it has been held, that a common carrier by land, who has a lien on the goods, and is answerable for them if lost by fire (unless by the act of God or the pubfic enemy), may insure the goods to their full value, against fire.^ The insurers must know whom they insure ; for they may have a choice of persons, and it is important to them to know whether they are to depend on the care and honesty of this man or of that man. The insured must so describe the owner, as not to deceive them on this point, and so he must the ownership. Thus, if he aver an entire interest in himself, he cannot support this by * showing a joint interest with another ; and if he aver the latter, proof of the former is not sufficient.* So too, there must be actual authority to make the insurance. This may be express or implied, in some cases, as it seems to be with the consignee, or the carrier, and perhaps, generally, with any one who has an actual possession of, interest in, and lien on the property. But a tenant, in common, does not derive from his cotenancy authority to insure for his cotenant ; nor could a master of a ship or a ship's husband, merely as such, insure the 1 A policy was eifected by the plaintiiF " on goods and furniture contained in Iiis counting-room." One of the conditions of the policy provided that " goods held in trust or on commission " should not be covered unless they are insured as such, and the articles in question were held in trust and commission. The policy was accordingly held void. Brichta v. N. Y. Lafayette Ins. Co. 2 Hall, 372. 2 Putnam v. Mercantile Ins. Co. 5 Met. 386. 8 In Crowley v. Cohen, 3 B. & Ad. 478, it was held, that an insurance " on goods " was suiEcient to cover the interest of carriers in the property under their charge, and that their particular interest need not be spedtied. Van Natta v. Mutual Security Ins. Co. 2 Sandf. 490; Chase v. Washington Mutual Ins. Co. 12 Barb. 595. * Catlett V. Pacific Ins. Co. 1 Paine, C. C. 615. Where the act incorporating the company provided that the policy may be void where the true title of the assured is not expressed, and the plaintiff, in his written application, described himself as " the owner of the buildings," whereas he was tenant by the courtesy, it was held that he could not recover on the policy. Leathers v. Farmers Mutual Fire Ins. Co. 4 Foster, 259. Where the policy is effected " on account of the owners," it is competent to show by parol evidence, who were intended by that designation. Catlett c. Pacific Ins. Co. 1 Wend. 561 ; Foster v. U. S. Ins. Co. 11 Pick. 85. [567] 515* ELEMENTS OF MERCANTILE LAW. [CH. XIX. owner's interest against fire, any more than against marine loss.^ SECTION IV. OP KEINSURANCE. Reinsurance is equally lawful in fire policies as in marine policies, and in general is governed by the same rules. The reinsurance is an insurance not of the risk of the insured, for that is a merely ideal thing ; but it is an insurance of the prop- erty originally insured, in which the first insurers have an insur- able interest. If a common policy be used, with no other change than that the word reinsurance is used instead of insur- ance, all its requirements are in force. If, for example, in case of loss, this policy requires a certificate from a magistrate as to character, circumstances, &c., that must be furnished by the reinsured. But if a suitable certificate were given by the party first insured to the original insurer, and he transmit the same forthwith to those who insure him, that is enough ; and so it would be with notice, preliminary proof, and all similar require- ments.2 And an insurer who obtains * reinsurance, is bound to communicate (in addition to whatever else should be stated by one asking insurance), all the information he has concerning the character of the party originally insured ; and a material con- cealment on this point would avoid the policy.^ As the insurer, who is reinsured, effects an insurance not on his risk, but on the property, it seems to be very strongly held, that he recovers in case of loss, not merely what he actually pays — although this might be an adequate indemnity — but all that he was legally liable to pay. Of course if he has any valid defence, he must make it ; and if it discharges him, it destroys his claim 1 Allifince Marine Ins. Co. v. La. Stiite Ins. Co. 8 La. 1. A previous authority to insure is not necessary. But a subsequent adoption, even after a loss, is sufficient, pro- vided the party effecting the insurance intended at the time to have the interest of the ratifying party embraced in the policy. Durand v. Thouron, 1 Port. Ala. 238 ; Wat- kins V. Durand, id. 2.51 ; De Bolle v. Pennsylvania Ins. Co. 4 Wliart. 68 ; Miltenber- ger V. Beaoom, 9 BaiT, 198. 2 Foster v. XJ. S. Insurance Co. 11 Pick. 85. " N. Y. Bowery Fire Ins. Co. a. N. Y. Fire Ins. Co. 17 Wend. 359. [568] CH. XIX.J THE LAW OF FIRE INSimANCE. -515 on his insurers. But if there be a loss which he is bound to pay, he recovers from his insurers the whole amount of it, whether he actually pays or not.^ A qiiestion then arises, whether if an insurer who is reinsured becomes insolvent, so that the originally insured does not get a payment upon his policy, he has not a lien upon, or a specific interest in, the policy of reinsurance. But it is held that he has not. The reinsured, or their assignees or trustees, take all that is payable under the policy of reinsurance, and hold it as assets for the creditors generally of the reinsured; and the originally insured takes only his proper share or dividend as one of the creditors.^ A reinsurer is entitled to make the same defence and the same objections which might be asserted by the original insurers in a suit on the same policy.^ And if the reinsured defends the case in the first instance, he is entitled to recover from the reinsurer the entire loss sustained by him, and all the costs and expenses which he has incurred, provided they are reasonable in their nature, unless there was no ground of defence, or the reinsurer did not sanction the contestation either expressly or by implica- tion.* Where a reinsurer claimed, under the usage of the city of New York,' to pay only the same proportion of the entire loss of the original assured, which the sum reinsured bore to that of the original insurance, the court held that the usage could not be permitted to control the rules of law. The original insur- ance was for $22,000. The reinsurance was for f 10,000. The loss was $14,373.36. The amount payable by the usage (which was clearly proved) was $6,685.25. A verdict was taken for $10,962.11, subject to the opinion of the court, and was sustained. There was a clause in the policy, by which reinsurance was ef- fected, in these words : " In case of any other insurance upon the property hereby insured, prior or subsequent to the date of this policy, the insured shall not, in case of loss or damage, be entitled to recover on this policy any greater proportion of the 1 Hone V. Mutual Safety Ins. Co. 1 Sandf. 153; Eagle Ins. Co. v. Lafayette Ins. Co. 9 Ind. 443. 3 Herckenrath v. American Mutual Ins. Co. 3 Barb. Ch. 63. 3 New Tork Mar. Ins. Co. v. Protection Ins. Co. 1 Story, 458. * Nevr York Mar. Ins. Co. v. Protection Ins. Co. 1 Story, 458. See also, Hastie v. De Peyster, 3 Caines, 190. 48* [569] 516* ELEMENTS OF MERCANTILE LAW. [CH. XIX. loss or damage, than the amount hereby insured shall bear to the whole ' amount insured on the same property." And it was held to apply only to cases of double insurance, for which it was intended. And therefore it could have no bearing upon a policy of reinsurance, unless there was another policy of reinsurance, or a double reinsurance ; for it was only the interest of the orig- inal insurers that was covered by the reinsurance. ^ SECTION V. OF DOUBLE INSURANCE. Double insurance, although sometimes confounded with rein- surance is essentially different. By this, the party originally insured becomes again insured ; but by reinsurance, the original insurer is insured, and, as we have seen, the original insured has no interest in, and no lien upon this policy. If, by a double in- surance, the insured could protect himself over and over again, he might recover many indemnities for one loss. This cannot be permitted, not only because it is opposed to the first principles of insurance, but because it would tempt to fraud, and make it very easy. This effect may be obviated in two ways — one, by considering the second insurance as operating only on so much of the value of the property insured, as is not covered by the first ; and then, as soon as the whole value is covered, whether by the first or by subsequent policies, any further insurance has no effect. A second way is, by considering the second insurance as made jointly with the first. Then only as much would be paid on any loss, on many insurances, as on one only ; but this payment is divided ratably among all the insurers. All the pol- icies are considered as making but one policy ; and, therefore, any one insurer, who pays more than his proportion, may claim a contribution from others who are liable.^ In this country, fire policies usually contain express and exact provisions on this subject. They vary somewhat; but, gener- i Mutual Safety Ins. Co. v. Hone, 2 Comst. 235, 1 Sandf. 137. ^ Thurston v. Koch, 4 Dall. 348; Craig v. Murgatroyd, 4 Yeates, 161 ; Millaudon ! Western Marine & F. Ins. Co. 9 La. 27 ; Peters v. Del. Ins. Co. 5 S. & R. 475. [570] CH. XIX.J THE LAW OP tlRE INSURANCE. *517 ally, they require that any other insurance must be stated by the * insured, and indorsed on the policy ; and it is a frequent condi- tion, that each office shall in that case pay only a ratable pro- portion of a loss ; and it is often added, that, if such other insur- ance be not so stated and indorsed, the insured shall not recover on the policy. And it has been held that such a condition applies to a subsequent as well as to a prior insurance.^ Nor will a court of equity relieve if sufficient notice aud indorsement" have not been made.^ But it has been held that a valid notice might be given to an agent of the company, who was author- ized to receive applications and survey property proposed for insurance.^ 1 Harris v. Ohio Ins. Co. 5 Ohio, 466 ; Westlalce v. St. Lawrence Ins. Co. 14 Barb. 206; Stacey v. Franklin Fire Ins. Co. 2 Watts & S. 543. But it has been held, that, if the subsequent insurance is declared void in the policy, if there has been a previous insurance, without the knowledge and consent of the insurers, it cannot be set up as evidence of a subsequent insurance, where the first policy provides that a subsequent insurance, without the consent, in writing, of the underwriters thereof, shall be ijiso facto void. Jackson v. Mass. Mutual Fire Ins. Co. 23 Pick. 418. A policy of insurance to the amount of $1,000, say " $700 on stock of books and stationery, and $300 on music, musical instruments, fancy goods, bronze powder, and medicines," contained a cove- nant, that, if the insured " shall hereafter make any other insurance on the hereby in- sured premises, he shall, with all reasonable diligence, notify the same to this corpora- tion," so, " or, in default thereof, this policy shall cease and be of no effect ; " it was hdd that the policy became void if any part of the goods were afterwards insured with- out notice. Associated Firemen's Ins. Co. v. Assum, 5 Md. 165. 2 Carpenter v. Providence Washington Ins. Co. 4 How. 185. ' Sexton V. Montgomery County Mutual Ins. Co. 9 Barb. 191 ; Wilson v. Genesee Mutual Ins. Co. 16 id. 511 ; McEwen v. Montgomery Ins. Co. 5 Hill, 101. And such notice need not be in writing, unless specially required. Where a policy required notice of further insarance to be given, and the assent of the company to be indorsed on the policy, or otherwise acknowledged and approved by them in writing, it was held that a letter from the secretary of the company, saying, " I have received your notice of addi- tional insurance," was a sufficient acknowledgment and approval in writing. Potter v. Ontario Ins. Co. 5 Hill, 147. Where the charter of an insurance company provided, that, if any other insurance should he obtained on any property insured in that com- pany, notice should be given to the secretary, and the consent of the directors obtained, otherwise tlie policy should be void ; and the evidence tended to show that the secretary knew of and advised the second insurance, and that tlie directors really consented to the same ; it was held that written notice and consent were not necessary, and that the evidence was competent to show both. Goodall v. New England Mutual Fire Ins. Co. 5 Foster, 169. A substantial compliance with the by-law, requiring the notice of pre- vious insurance, is sufficient Liscom v. Boston Mutual Fu-e Ins. Co. 9 Met. 205. Where the by-laws of a mutual fire insurance company provided that any policy issued by the company to cover property previously insured, should be void, unless the pre- vious hisurance should be expressed in the policy at the time it was issued, it was held that a policy issued by the company, and made in terms subject to the conditions and limitations of the by-laws, in which policy a previous insurance on the property was not expressed, was void, even in the hands of an assignee, witliout notice of the defect ; altliough the insurers knew of the existence of such prior insurance, and of the inten- tion of the assured that it should remain in force, and assented thereto, and although the policy was prepared by the insm-ers, and delivered to the assured, as he supposed, pursuant to his said intention, without any knowledge, on his part, that the prior msur- [571] 518 ELEMENTS OF MERCANTILE LAW. [CH. XIX. In some instances, the charter of the company provides that any policy made by it, shall be avoided by any double insur- ance of which notice is not given, and to which the consent of the company is not obtained, and expressed by their indorse- ment in the policy.^ But this would not apply to a non-notice by an insured of an insurance effected by the seller on the house which the insured had bought, if this policy were not assigned "to him.^ We have seen that several policies insuring the same party on the same interest, are taken to be one policy, and therefore a payment of more than a due proportion gives a claim for contri- bution. But it seems that this is not the case where there is a clause in the policy like that above mentioned, providing that only a ratable proportion shall be paid by each insurer. For, this clause gives each insurer an adequate defence, if more than his share be demanded ; and, therefore, the ground of contribu- tion fails ; for this right exists only when two or more are bound severally to pay the whole, and one pays it, or more than his share, by compulsion, and therefore may ask the rest who were bound in the same way, to contribute.^ It is a double insurance if both policies cover the same insur- able interest, and they are all in the name of the same assured. ance was not mentioned therein, .and although the amount insured by the policy, to- gether with the amount of such prior insurance, did not exceed the value of the property insured. Barrett v. Union Mutual Fire Ins. Co. 7 Cush. 180. Fletcher, J. : "It was said in the argument, that there was a mistake or fault, on the part of the defendants ; that the policy was prepared by the defendants ; and that they should have expressed in it tlie prior policy, and omitted to do so by design or by wilful negligence ; and that the assured did not read it, l)ut supposed that the prior policy was expressed. The as- sured certainly had abundant opportunity to read the policy, and need not have accepted it, if it was not satisfactory to him, according to- the agreement of the parties. If the assured acce])ted the policy, without looking at it, or knowing what it was, he would seem himself to be liable to the charge of culpable negligence made against the defend- ants. But if, from mistake or fraud, an agreement is so defective, that, instead of con- veying the meaning of the parties, it express a different or opposite intent, if relief can be given at all, it must be sought exclusively in a court of equity. A court of law must act on the agreement as it is ; it cannot strike out or change any part, or add any thing to it, so as to contradict or vary the agi'ecment contained in the written instrument. The parol evidence offered in this case, was therefore clearly not admissible ; and tak- ing tlie policy as it is, the plaintiffs cannot recover." The insured is not bound to give the details of the previous insurance unless they are specially called for. JIcMahon v. Portsmouth Mutual Fire Ins. Co. 2 Foster, 15. 1 Stark County Mutual Ins. Co. v. Hurd, 19 Ohio, 149. 2 ^tna Fire Ins. Co. u. Tyler, 16 AVend. 385; Burbank v. Eockingham Mut. Fu'e Ins. Co. 4 Foster, 650. 8 Lucas V. JelTerson Ins. Co. 6 Cow. 635. See also, Mutual Safety Ins. Co. v. Hone, 2 Comst. 235. [572] CH, XIX.] THE LAW OF FIRE INSURANCE. *519 or, perhaps, all, or a part, are in the name of another, for his benefit. Insurance made by a mortgagee, at the expense of the mortgagor, is a subsequent insurance.^ * SECTION VI. OF WARRANTY AND REPRESENTATION. The law of warranty and representation is, in general, the same in fire as in marine insurance. A warranty is a part of the contract ; it must be distinctly expressed, and written either in or on the policy, or on a paper attached to the policy, or, as has been held, on a separate paper distinctly referred to and de- scribed as a part of the policy. Then, it operates as a condition precedent ; and if it be broken, there is no valid contract ; nor can it be helped by evidence that the thing warranted was less material than was supposed, or, indeed, not material.^ It may be a warranty of the present time or, as it is called, affirmative, or of the future or promissory. And it may be, although of the present and affirmative, a continuing warranty, rendering the policy liable to avoidance by a non-continuance of the thing which is warranted to exist. Whether it is thus con- tinuing or not, must evidently be determined by the nature of the thing warranted.^ A warranty that the roof of a house is slated, or that there are only so many fireplaces or stoves, would, generally at least, be regarded as continuing ; but a warranty that the building was five hundred feet from any other building, would not cause the avoidance of the policy if a neighbor should afterwards put up a house within one hundred feet, with- out any act or privity of the insured.^ This subject has, how- ever, been somewhat considered under the topic of alteration. 1 Holbrook v. American Ins. Co. 1 Curtis, 193. 2 See ante, p. 497, and notes. 3 See Blood v. Howard F. Ins. Co. 12 Cash. 472. ^ Where the insured, on applying for insurance on buildings, promised the under- writers, verbally, that, if they accepted the risk, he would discontinue the use of a fire- place in the basement, and use a stove instead thereof, but, after obtaining the policy, omitted to perform his promise, in consequence of which the building was burned, it was held to be no defence to an action on the policy. Alston v. Mechanics Mutual' Ins. Co. 4 Hill, 329. A mere statement in a notice of alterations, by the assured, that a machine put up by them upon the premises, is designed " for burning hard coal," will [573] 520 ELEMENTS OF MERCANTILE LAW. [CH. XIX. We have seen that statements made on a separate paper, may be so referred to as to make them a part of the policy. And it is usual to refer in this way to the written application of the insured, and to all the written statements, descriptions, and answers to questions, which he makes for the purpose of obtain- ing insurance. And although there is some indication of distin- guishing between the application itself and the conditions on which the policy is made, we see no reason for saying that any statements whatever, made in writing, for the purpose of ob- taining insurance, and referred to distinctly in the policy as a not be considered an agreement to burn hard coal only, or not to use other fuel, should it become necessary, and can be used without increasing the risk. Tillou u. Kingston Mutual Ins. Co. 7 Barb. 570. In the application for insurance, referred to in the policy as forming part thereof, it was stated thus ; " There is one stove ; pipe passes through the window, at the side of the building. There will, however, be a stove chimney built, and the jjipe will pass into it at the side." It seems that this amounted to a warranty that the chimney should be built within a reasonable time. Murdock v. Chenango County Mutual Ins. Co. 2 Comst. 210. Statements wliich are made a part of the policy, and arc prospective, as, that water casks shall be kept in an upper story, or a watch kept, or an examination made at night, must be substantially complied with. Houghton c. Manufacturers Mutual Fire Ins. Co. 8 Met. 114; Jones Manufacturing Co. v. Manufacturers Jlutual Fire Ins. Co. 8 Cush. 82 ; Hovey v. American Mut. Ins. Co. 2 Duer, 554 ; Glendale Woollen Co. u. Protection Ins. Co. 21 Conn. 19; Slieldon v. Hartford Fire Ins. Co. 22 id. 235. See ante, p. 503, n. 1. Where, by the tex'ms of a policy, a misrepresentation or concealment as to the distance of the building insured from other buildings, avoids it, such misrepresentation or con- cealment will have that effect. Burritt v. Saratoga County Mat. Fire Ins. Co. 5 Hill, 188; Jennings v. Chenango County Mutual Ins. Co. 2 Denio, 75; Kennedy o. St. Lawrence County Mut. Ins. Co. 10 Barb. 285 ; Wilson v. Herkimer County Mut. Ins. Co. 2 Seld. 53 ; "Wall v. East River Mutual Ins. Co. 3 id. 370. But if the insurer, with a knowledge of the inaccuracj' of the statement, makes and receives assessments of premiums from tlie insm'ed, he will be estopped from setting it up in defence in a case of loss. Frost V. Saratoga Mutual Ins. Co. 5 Denio, 154. But it is held that a mis- statement as to the distance of other buildings, which is not material, will not avoid the insurance, wliere the policy does not specially give it the effect of a warranty. Gates V. Madison County Mut. Ins. Co. 2 Comst. 43, 1 Seld. 469, overruling the decision of the Supreme Court, 3 Barb. 73. See Wall v. East Elver Mutual Ins. Co. 3 Seld. 374. The erection by the party insured, without notice to the insurers, of a new building nearly adjoining the building insured, does not invalidate the policy ; there being no provision on the subject, and no actual injury liaving resulted from such ^'ection, al- though, when the insurance was effected, the building was in contemplation, and prep- arations for its erection had commenced. Gates v. Madison County Mut. Ins. Co. 1 Seld. 469. So, where the assured, upon an application by a diagram or otherwise, rep- resent the ground contiguous to the premises as " vacant," this does not amount to a warranty that it shall remain vacant during the risk, or prevent the insured himself from building thereon. Stcbbins v. Globe Ins. Co. 2 Hall, 632. Where the company insured the plaintiff $2,000 on his niacliine shop, "a watchman kept on the premises, it was held that tbe stipuhitiun, "a watchman kept on the premises," inserted in tlie body of the policy just after tlie descrijDtion of the property, is in the nature of a war- ranty, and must be suljstantially complied with. It does not require a watchman to be kept there constantly, but only at such times as men of ordinary care and skill in like business keep a watchman on their premises. And in an action on such policy, evi- dence of tlie usage, in this respect, of similar establishments, is admissible. Crocker V. Peoples Mutual Fire Ins. Co. 8 Cush. 79. See ante, p. 492, 493, and notes. [574] CH. XIX.] THE LAW OF FIRE INSURANCE. *521 part of it, and therein declared to be warranties or conditions on ■which the policy is made, — are any thing less than positive warranties. But a fair and rational, or, in some cases, a liberal construction will be given to such statements. Thus, where a charter of a company provided that no insurance on any prop- erty should be valid to the insured, unless he had a good and perfect and *unincumbered title thereto, and unless the true title of the assured be disclosed, and two persons made application for insurance upon a tannery and the stock therein, and were insured jointly ; and it turned out that one of them owned ex- clusively the building, and the other exclusively occupied it and owned the stock, the insurers were held.^ It is quite certain that the word warranty need not be used, if the language is such as to import unequivocally the same mean- ing.2 And an indorsement made upon the policy before it is executed, may take effect as a part of it.^ A statement may be introduced into the policy itself, and be construed, not as any warranty, but merely as a license or per- mission of the insurers that premises may be occupied in a cer- tain way, or some other fact occur without prejudice to the insurance.* A representation, in the law of insurance, differs from a war- ranty in that it is not a part of the contract. If made after the signing of the policy or the completion of the contract, it can- not, of course, affect it. If made before the contract, and with a view to effecting insurance, it is no part of the contract ; but if it be fraudulent, it makes the contract void. And if it be false, and known to be false by him who makes it, it is his fraud. To have this effect, however, it must be material ; and there is no better test or standard for this than the question, whether the contract would have been made, and, in its present form or on its actual terms, if this statement had not been made and be- lieved by the insurers. If the answer is, that the contract would not have been made if this statement had not been made, it is material ; otherwise, not.^ 1 JPeck V. New London County Mut. Ins. Co. 22 Conn. 575. 2 See p. 492, and notes. 3 Roberts v. Chenango County Mutual Ins. Co. 3 Hill, 601. * Catlin V. Springfield Fire Ins. Co. 1 Sumner, 434. 6 Clark V. Manufacturers Ins, Co. 2 Woodb. & M. 472 ; NicoU v. American Ins. Co. [575] 522* ELEMENTS OP MERCANTILE LAW. [CH. XIX. A statement in an application for insurance is to be consid- ered a representation rather than a warranty, unless it is clearly- made a warranty by the terms of the policy or by some direct reference therein.^ * A representation may be more certainly and precisely proved if in writing ; but it will have its whole force and effect if only oral.^ In some instances, by the terms of the policies, any misrepre- sentations or concealments avoid the policy. And it is held that the parties have a right to make such a bargain, and that it is binding upon them ; and the effect of it would seem to be to give to representations the force and influence of warranties.^ There seems to be this difference between marine policies and fire policies. In the former, a material misrepresentation avoids the policy although innocently made ; in the latter, it has this effect only when it is fraudulent. This distinction seems to rest upon the greater capability and therefore greater obligation of the insurer against fire to acquaint himself fully with all the particulars which enter into the risk. For he may do this either by the survey and examination of an agent, or by specific and minute inquiries.* The question whether a statement which is relied upon as a representation, be material, and whether there is or has been a substantial compliance with it (for this is all the law requires), 3 id. 529. The statements in the application on a separate sheet, have the effect only of rc]iresentations, and do not avoid the policy unless void in a material point, or un- less the poliiy makes them specially a part of itself, and gives them the effect of war- ranties. Jeifcrson Ins. Co. v. Cothcal, 7 Wend. 72 ; Snyder v. Farmers Ins. Co. 13 Wend. 92, 16 id. 481 ; Delonguemare v. Tradesmen's Ins. Co. 2 Hall, 611 ; Stebbins V. Globe Ins. Co. id. 632 ; Burritt v. Saratoga County Mut. Fire Ins. Co. 5 Hill, 190 ; Murdock v. Chenango County Mut. Ins. Co. 2 Comst. 210; Sexton v. Montgomery County Mut. Ins. Co. 9 Barb. 200 ; Kennedy v. St. Lawrence County Mut. Ins. Co. 10 id. 285 ; Williams v. Now Eng. Mutual Fire Ins. Co. 31 Maine, 224; Insurance Co. c. Southard, 8 B. Jlon, 634 ; Egan o. Mutual Ins. Co. 5 Denio, 326. 1 Daniels v. Hudson Eivur F. Ins. Co. 12 Cush. 416. 2 2 Duer on Ins. 644 ; 1 Arnould on Ins. 489. 8 Burritt v. Saratoga Co. Mutual Fire Ins. Co. 5 Hill, 188 ; Williams v. N. E. Mu- tual Ins. Co. 31 Maine, 224; Murdock o. Chenango Co. Mutual Ins. Co. 2 Comst. 210; Sexton v. Montgomery Co. Mutual Ins. Co. 9 Barb. 200; Kennedy v. St Law- rence Co. Mutual Ins. Co. 10 id. 285; Houghton c. Manufacturers Mutual Fire Ins. Co. 8 Met. 114; Lee v. Howard F. Ins. Co. 3 Gray, 583; Macomber v. Howard F. Ins. Co. 7 Gray, 257. * Burritt v. Saratoga Co. Mutual Ins. Co. 5 Hill, 188 ; Gates v. Madison Co. Mutual Ins. Co. 2 Comst. 49; Holmes v. Charlestown Mutual Fire Ins. Co. 10 Met. 214; In- surance Co. ('. Southard, 8 B. Mon. 648. [576] CH. XIS.J THE LAW OF FIRE INSURANCE. *023 seems to be for the jury rather than for the court.i But it is not unfrequently determined by the court as matter of law.'^ And if the jury find the representation to be material, and to be false, the consequence follows as a matter of law, and the policy is avoided.^ Concealment is the converse of representation. The insured is bound to state all that he knows himself, and all that it imports *the insurer to know for the purpose of estimating accu- rately the risk he assumes. A suppression of the truth has the same effect as an expression of what is false. And the rule as to materiality, and a substantial compliance are the same.* And we know no reason why the distinction above mentioned between fire policies and marine policies as to representation, should not be made for the same reason in regard to conceal- 1 Grant v. Howard Ins. Co. 5 Hill, 10 ; Gates v. Madison Co. Mutual Ins. Co. 2 Comst. 43 ; Percival v. Maine M. M. Ins. Co. 33 Maine, 242. 2 Carpenter v. American Ins. Co. 1 Story, 57, 16 Pet. 495, 4 How. 185; Colum- bian Ins. Co. V. Lawrence, 2 Pet. 25 ; Houghton v. Manufacturers Ins. Co. 8 Met. 114. 3 Howell V. Cincinnati Ins. Co. 7 Ohio, pt. 1, 284. "The fact is to be settled by the jury, but it must he upon legal and suflBcient evidence ; and where the evidence is agreed, it is a question of law whether it be sufficient or not to establish the fact." Putnam, J., in Fletcher v. Commonwealth Ins. Co. 18 Pick. 421 . * See Daniels v. Hudson River P. Ins. Co. 12 Cush. 416 ; Lindenau v. Desborough, 8 B. & C. 592 ; Pim v. Eeid, 6 Man. & G. 1 ; Columbian Ins. Co. v. Lawrence, 2 Pet. 49 ; Clark v. Manufactuers Ins. Co. 8 How. 248. The plaintiff having one of several warehouses, next but one to a boat-builder's shop which took fire, on the same evening, after it was apparently extinguished, sent instructions to his agent by extraordinary con- veyance for insuring that warehouse without apprising the insurers of the neighboring fire. It was held that although the terms of the insurance did not expressly require the com- munication of tliis fact, the concealment avoided the policy. Bufe v. Tm'ner, 6 Tatmt. 338, 2 Marsh. 46. Where, pending the negotiations for a policy, the insurers expressed an objection to insuring property in the vicinity of gambling establishments, and the ap- plicant knew at the time that there was one on -the premises, it was hdd that if, in the opinion of the jury, the risk was materially increased by such occupancy, the policy could be avoided. Lyon v. Commercial Ins. Co. 2 Hob. La. 266. So, it seems that the fact that a particular individual had threatened to bum the premises in revenge for a supposed injury, should be disclosed to the insm-er. Cuny v. Commonwealth Ins. Co. 10 Pick. 537, 542. The rumor of an attempt to set fire to a neighboring building should be communicated. Walden v. Louis. Ins. Co. 12 La. 135. The insurer should be informed of any unusual appropriation of the building materially enhancing the risk. Clark V. Manufacturers Ins. Co. 8 How. 249. Where the plaintifS underwrote a policy on the household goods and stock in trade of a party, and after being informed that the character of the insured was bad, that he had been insured and twice burnt out, that there had been difficulty in respect to his losses, and he was in bad repute with the insurance offices, effected a ireinsurance with the defendants without communicating these facts ; and the property insured was shortly after destroyed by fire ; it was held that there had been a material concealment, which avoided the policy, and whether occa- sioned by mistake or design was immaterial. N. Y. Bowery Ins. Co. v. N. Y. Fire Ins. Co. 17 Wend. 359. A pending litigation, affecting the premises insured, and not communicated, will not vitiate the policy. Hill v. Lafayette Ins.Co. 2 Mich. 476. 49 [577] 524* ELEMENTS OF MERCANTILE LAW. [CH. XIX. raent.' Indeed, in one respect, adjudication has gone somewhat further. Where the by-laws of a company provided that a sur- veyor should always examine, report, &c., and there was a mate- rial concealment by the insured, the court say it was the duty of the insurers to examine for themselves, and their neglect shall not be permitted to operate to the injury of the insured ; and the judge, delivering the opinion, adds : " I will never agree to extend to them (mutual fire insurance companies), the law as it has been settled in cases of marine insurance." ^ * Insurers must be understood as knowing aU those matters of common information, that are as much within their reach, as in that of the insured ; and these need not be especially stated.^ But any special circumstance, as a great number of fires in the neighborhood, and the probability or belief that incendiaries were at work, should certainly be communicated ; and silence on such a point, — especially if the place of business of the insurers was at a considerable distance from the premises, — 1 Burritt v. Saratoga Co. Mutual Ins. Co. 5 Hill, 188; Gates v. Madison Co. Mu- tual Ins. Co. 1 Seld. 474, 475 ; Clark v. Manufacturers Ins. Co. 8 How. 235 ; Cumber- land Valley Mut. Ins. Co. v. Schell, 29 Penn. State, 31. 2 Satterthwaite v. Mutual Benelicial Insurance Association, 14 Penn. State, 393. Burnside, J. : " The offer was to prove ' tliat at the time when the application for in- surance was made, and tlie policy granted, the plaintiffs gave to the secretary of the company a statement of the personal property they desired to have insured, and they omitted to state that there was a com-kiln attached to the mill, in which personal prop- erty was deposited — that the tire, which consumed the building, originated in the corn- kiln. And further, that the secretary and company had no knowledge, when the policy of insurance was issued, or at any time, till after the tire, that there was a corn- kiln attached to the mill ; and if they had known that fact, tlie rate of insurance would have been higher. And that one of the plaintiffs admitted that it was not made known to tlie company that there was a corn-kiln, when the contract of insurance was effected.' The court rejected this offer, and this is the error assigned. If the company had not reserved all subsequent duties of survey and examination to tliemselves and their own officers, after the application was made for the insurance, there would be some weight in tliis offer, and it ought to liavc gone to the jury ; but as they have imposed no duty, beyond the application, on the insured, it was the business of the company, before they issued the policy, to see wlicther the corn-kiln was adjacent to the mill insured, as well as to examine all other buildings adjacent thereto. If the company had made in- quiry, and a false statement had been given, it no doubt would have been receivable in evidence. And if given by the plaintiffs, or cither of them or their agent, it would have tended to avoid the policy. But the mere omission by the plaintiffs when they made their application to insure grain in the mill, to return the corn-kiln or to say any thing about it, when it is well known that there are com-kilns attached to half or more of the grist and merchant mills in Bucks County, would not excuse the ofiBcers of the company who neglected inquiry, from gross negligence. No men of common pru- dence would grant a policy on the grain, in a grist or merchant mill, without inquiry into its situation, and the situation of the adjacent buildings. As regards this mutual insurance company, under the rules and regulations, the evidence would have been ir- relevant, and the court were right in refusing to receive it. * Clark V. Manufacturers Ins. Co. 8 How. 249. [578] CH. XIX.] THE LAW OF FIKE INSURANCE. "525 would operate as a fraud and avoid the policy.^ And any questions asked must be answered, and all answers must be as full and precise as the question requires. Concealment in an answer to a specific question can seldom be justified by showing that it was not material.^ Thus, in .general, nothing need be said about title. But * if it be inquired about, full and accurate answers must be made.^ Where the insurance company has, by the terms of the policy, a lien upon or interest in the premises insured, to secure the pre- • mium note, here it is obvious that any concealment of incum- 1 N. T. Bowery Ins. Co. v. N. Y. Fire Ins. Co. 17 Wend 359 ; Walden v. La. Ins. Co. 12 La. 135 ; Bufe v. Turner, 6 Taunt. 338, 2 Marsh. 46. 2 Burritt v. Saratoga Co. Mutual Ins. Co. 5 Hill, 188 ; Gates v. Madison Co. Mutual Ins. Co. 3 Barb. 73, 3 Comst. 43. Possibly, it may be inferred from the above author- ities, that the concealment must in the case stated in the text, be material in order to avoid the policy, unless the policy specially gives to a concealment the effect of a war- ranty. But we should say that this fact would, generally at least, be made material by the specific question respecting it, and that the answer would have the effect of a war- ranty, unless the question were obviously, or on clear evidence, quite irrelevant and un- important ; but tliis case would not be likely to occur. If there were a provision in the policy, that a certain fact if existing, must be stated, silence in referenccfto it would be fatal, however immaterial the fact. In Loehner v. Home Mut. Ins. Co. 17 Misso. 256, Scott, J. said : " The thirteenth section of the charter provides that, if the assured has a lease estate in the buildings insured, or, if the premises be incumbered, the policy shall be void, unless the true title of the assured and the incumbrances be expressed thereon. There is no question but that the buildings insured were a leasehold estate and that there was an incumbrance on them at the date of the policy. The application contains an interrogatory, whose aim was to ascertain whether there was an incumbrance on the premises proposed to be insured, but no response is made to it ; leaving room for the inference that none existed. The charter then made the policy void. The plaintiffs were not at liberty to obviate this objection by showing that the agent of the company was informed of the existence of an incumbrance at the time of the application, but that he refused to write down the answer, saying that the incumbrance was too trifling. Independently of the statute, which required the incumbrance to be expressed in the policy at the peril of its being void, there was a memorandum indorsed on it, which made known that the company would be bound by no statement made to the agent not contained in the application. The facts being as represented, they could not give the plaintiffs a right of action on the policy in the teeth of the statute and against the terms of the contract. If the conduct of the agent was such as is alleged, he was guilty of a gross fraud, as is shown by his setting up this defence, which would avoid the policy and give a right of action for the recovery of the premium, but could not, for reasons given, entitle the plaintiffs to an action on the policy." 8 Where the mortgagor whose right to redeem had been seized on execution, not be- ing specially inquired of as to the state of his title, stated the property to be his own, on the application, this was held to be no material misrepresentation or concealment. Strong V. Manufacturers Ins. Co. 10 Pick. 40; Delahay u. Memphis Ins. Co. 8 Humph. 684. So where the store insured stood on the land of another person under an oral a<'reement, terminable at the pleasure of the owner of the land on six mouths' notice, no inquiry being made as to the title, the concealment was held not material. Fletcher V. Commonwealth Ins. Co. 18 Pick. 419. So where a tenant from year to year insured the building as "his building." Niblo v. North American Ins. Co. 1 Sandf 551 ; Ty- ler tf. iEtna Ins. Co. 12 Wend. 507, 16 id. 385. But see Catron v. Tenn. Ins. Co. 6 Humph. 176 -Columbian Ins. Co. v. Lawrence, 2 Pet. 25; Carpenter v. Washington Ins. Co. 16 id. 495. [579] 526* ELEMENTS OP MERCANTILE LAW. [CH. XIX. brance or defect of title would operate as a fraud, and defeat the policy.-' But in all such cases it is probable that specific ques- tions are put respecting the estate and title of the insured. It is often required that all buildings standing within a cer- tain distance of the building insured, shall be stated.^ But this might not always be considered as applicable to personal and movable property .^ StiU, an insurance of chattels, described as in a certain place or building, would be held to amount to a warranty that they should remain there ; or rather it would not cover them if removed into another place or building, unless perhaps, by some appropriate phraseology, the parties expressed their intention that the insured was to be protected as to this property wherever it might be situated.* Owing to the form of the pleadings in Massachusetts, a mis- representation of the assured, not specified in the defendants' answer, cannot be relied on to show a policy of insurance to be void, and so defeat an action thereon, although first disclosed by the plaintiff's evidence.^ It is not uncommon to insure goods that are in 'transitu against fire ; but then it is usual to name the termini from which and to which the goods are passing.^ SECTION VII. or THE KI8K INCURRED BY THE INSURERS. At the time of the insurance, the property must be in exist- ence, and not on fire, and not at that moment exposed to a 1 Locke V. North American Ins. Co. 13 Mass. 67. 2 Burritt !>. Saratoga Co. Mut. Ins. Co. 5 Hill, 188; Jennings v. Chenango Co. Mut. Ins. Co. 2 Denio, 75; Hall v. People's Mut. F. Ins. Co. 6 Gray, 185 ; Wilson t. Her- kimer Co. Mut. Ins. Co. 2 Seld. 53 ; Wall v. East River Mut. Ins. Co. 3 id. 370; Gates [■. Madison Co. Mut. Ins. Co. 2 Comst. 43, 1 Seld. 469 ; Allen o. Charlestown Mut. F. Ins. Co. 5 Gray, 384. 8 Trench v. Chenango Co. Mutual insurance Co. 7 Hill, 122. But the authority of this case is questioned. Smith v. Empire Ins. Co. 25 Barb. 497 ; Wilson v. Herkimer Co. Mutual Ins. Co. 2 Sold. 53 ; Kennedy v. St. Lawrence Co. Mutual Ins. Co. 10 Barb. 285. See ante, p. 524, n. * Sexton V. Montgomery Co. Mutual Ins. Co. 9 Barb. 191. 5 Mulry V. Mohawk Valley Ins. Co. 5 Gray, 541 ; Haskins v. Hamilton Mut. Ins. Co. 5 Gray, 432, 438. These decisions were made under a statute which requires that " The answer shall set forth, in clear and precise terms, each substantive fact in- tended to be relied upon in avoidance of the action." " See ante, p. 458. [580] CH. XIX.] THE LAW OF FIRE INSURANCE. -526 dangerous fire in the immediate neighborhood ; because the in- surance assumes that no unusual risk exists at that time.^ And the general agent of an insurance company has no authority to bind it by insuring property which had been burned at the time of the issuing of the policy, and while an application for insur- ance was on its way from the owner of the property to the agent.2 But where there is no fraud, concealment, or misrepre- sentation, a policy signed after the loss has occurred, for a risk taken, to commence before its date, may be retroactive, although it does not contain the clause, " lost or not lost." ^ The risk taken, is that of fire. And therefore the insurers are not chargeable if the property be destroyed or injured by the in- direct effect of excessive heat or by any effect which stops short of ignition or combustion, when this heat is purposely applied, and the injury is caused by the negligence of the person in charge of it.* Where, however, an extraordinary fire occurs, the insur- ers are clearly liable for the direct effects of it, as where furni- ture or pictures are injured by the heat, although they do not actually ignite.^ And they are liable for the injury from water used to extinguish the fire.^ Or injury to or loss of goods caused by their removal from immediate danger of fire ; but not from a mere apprehension from a distant fire, even if it be reasonable ; and not if the loss or injury might have been avoided by even so much care as is usually given in times of so much excitement and bustle.^ In some instances the policies require that the in- 1 Babcock v. Montgomery Co. Mutual Ins. Co. 6 Barb. 637, 643, 4 Comst. 326 ; Aus- tin V. Drew. 4 Camp. 360, 6 Taunt. 436. ■•2 Bentley v. Columbia Ins. Co. 17 N. Y. 421. 3 Hallock V. Ins. Co. 2 Dutch. 268. * Austin V. Drew, 4 Camp. 360, Holt, N. P. 126, 6 Taunt. 426, 2 Marsh. 130. The injury in this case was caused by a register at the top of a chimney of a sugar-house being shut, and the smoke and heat were consequently forced into a room, and the sugar was thereby damaged. It was held that the underwriters were not liable. 5 Case V. Hartford T. Ins. Co. 13 111. 676. See also, Scriptm:e ii. Lowell Mut. F. Ins. Co. 10 Cnsh. 356. e Case V. Hartford F. Ins. Co. 13 111. 676, 680, per Turnbull, J. ; Hillier v. Alle- ghany Co. Mut. Ins. Co. 3 BaiT, 470, per Grier, J. ; Agnew v. Ins. Co. Dist. Ct. Phil- adelphia, 7 Am. Law Register, 168; Babcock v. Montgomery Co. Mut. Ins. Co. 6 Barb. 637, per Pratt, J. ; Scripture v. Lowell Mut. F. Ins. Co. 10 Cush. 356, per Ciish' ing, 3. ' Case V. Hartford Fire Ins. Co. 13 111. 676 ; Babcock %'. Montgomery Co. Mutual Ins. Co. 6 Barb. 640; Hillier v. Alleghany Co. Mut. Ins. Co. 3 Barr, 470; Agnew v: Ins. Co., Dist. Ct. Philadelphia, 7 Am. Law Keg. 168 ; affirmed Independent Mut. Ins. Co. V. Agnew, 34 Penn. State, 96 ; Tilton v. Hamilton F. Ins. Co. 1 Bosw. 367 ; Webb V. Protection Ins. Co. 14 Misso. 3. 49* [581] 527* ELEMENTS OE MERCANTILE LAW. [CH. XIX. sured should use all possible diligence to preserve their goods ; and such a clause would strengthen the claim for injury caused by an endeavor to save them by removal.^ So the insurers are liable for injury or loss sustained by the blowing up of buildings to arrest the progress of a fire.^ But we should say that if goods were damaged by water thrown on to extinguish a supposed fire when there was none in fact ; or by the wholly unnecessary and useless destruction of a house distant from the fire, the insurers should not be held. It must now be conceded to modern science, that lightning is " not fire ; and if property be destroyed by lightning, the insurers are not liable, unless there was also ignition.^ An explosion, caused by gunpowder, is a loss by fire ; * not so it is said, is an explosion caused by steam.^ Scientifically, it might be difficult to draw a wide distinction between these cases ; but the difl^erence is sufficient for the law.® Whether, when the negligence of the insured or his servants is to be considered as the sole or direct cause of the fire or loss, the insurers can be held, has been somewhat considered. And as this is the most common and universal danger, and the very one which induces most persons to insure, there has been some disposition to say that no measure or kind of mere negligence can operate as a defence. And in effect this is almost the law." 1 Case V. Hartford Fire Ins. Co. 13 111. 676. 2 City Fire Ins. Co. v. Corlies, 21 Wend. 367 ; Pentz v. Receivers of JEtna Fire Ins. Co. 3 Edw. Ch. 341, 9 Pai;,'L', 568; Gordon v. Rimmington, 1 Camp. 123. In Green- wald ii. Ins. Co., District Ct. Philadelpliia, 7 Am. Law Reg. 282, it was held that insurers were liable where a house actually on fire was blown up by gunpowder, although the policy provided that the insurers should not be liable for a loss from an explosion of gunpowder. The clause was construed to mean " fire originating from an explosion of gunpowder." 8 Babcock v. Montgomery Co. Mutual Ins. Co. 6 Barb. 637, 4 Comst. 326 ; Kennis- ton V. Mer. Co. Mutual Ins. Co. 14 N. H. 341. * Scripture v. Lowell Mut. F. Ins. Co. 10 Cush. 356; Waters v. Merchants Louis- ville Ins. Co. 11 Pet. 213, 225 ; Grim v. Phoenix Ins. Co. 13 Johns. 451. '' Millaudon v. N. 0. Ins. Co. 4 La. Ann. 15. Where it was provided by the condi- tions annexed to a policy of insurance against fire, that the company should not be liable ' for any loss occasioned by the explosion of a steam-boiler, or explosions arising from any other cause unless specially specified in the policy," the company was held not liable, where fire, which was directly and wholly occasioned by an explosion, was the proximate cause of the loss. St. John v. American Mutual Fire & Marine Ins. Co. 1 Duer, 371, 1 Kern. 516. " In Scripture v. Lowell Mut. F. Ins. Co. 10 Cush. 356, 363, the court said : " Our opinion excludes, of course, all damage by mere explosion, not involving ignition and combustion of the agent of explosion, such as the case of steam, or any other substance acting by expansion without combustion." ' Shaw V. Eobberds, 6 A. & E. 75, 83. Denman, C.J. : "One argument more re- [582] CH. XIX.J THE LAW OF FIRE INSURANCE. *528 But if the loss be caused by negligence of the insured himself, of so extreme and gross a character, that it was hardly possible to avoid the conclusion of fraud, the defence might be a good one, although there were no direct proof of fraud.^ That the fire was caused by the insanity of the insured should be no defence. * In Beaumont's work on Fire and Life Insurance, he gives some instances drawn from the practice of English Assurance Companies, a part of which at least, rest upon sound principled, and illustrate what is probably the law, although not yet deter- mined by adjudication. Thus, if implements or apparatus used for fire, as ranges, grates, or the like, are destroyed by fire, this loss gives no claim on the insurers. But if the chimney or other parts of the house in which the apparatus is set, is injured by the same fire, for this the insurers are liable. He says also that where the loss is caused only by an excess of the heat or fire which was designedly used, they are not liable.^ But we should have some doubt as to this rule ; especially as applied to clothes hung up to dry, and catching fire from the flame, and the like. Nor are we satisfied that if a haymow takes fire by its own fer- mentation, it is not a loss within the policy. If quicklime be so heated by water, as to set on fire the barrels or other wood near it, it may be said that the lime itself is not burnt, and might not be hurt by being burnt, and if destroyed by water, is not a loss mains to be noticed viz. : that the loss here arose from the plaintiff's own negligent act in allowing the kiln to be used for a purpose to which it was not adapted. There is no doubt that one of the objects of insurance against fire is to guard against the negligence of servants and others ; and therefore, the simple fact of negligence has never been held to constitute a defence. But it is argued that there is a distinction between the negligence of servants and strangers and that of the assured himself. We do not see any ground for such a distinction, and are of opinion that in the absence of all fraud, the proximate cause of the loss only is to be looked to." This doctrine is now well- settled law in this country. Patapsco Ins. Co. v. Coulter, 3 Pet. 222 ; Columbia Ins. Co. V. Lawrence, 10 Pet. 517, 518; Waters v. Merchants Louisville Ins. Co. 11 id. 213, 225; Perrin v. Protection Ins. Co. U Ohio, 147, overruling Lodwicks v. Ohio Ins. Co. 5 id. 433; St. Louis Ins. Co. v. Glasgow, 8 Misso. 713 ; Mathews v. Howard Ins. Co. 13 Barb. 234, overruling Grim v. Phojnix Ins. Co. 13 Johns. 451 ; Hynds v. Schenectady Co. Mut. Ins. Co. 16 Barb. 119; St. John v. American Mut. Pire & Ma- rine Ins. Co. 1 Duer, 371 ; Gates v. Madison Co. Mutual Ins. Co. 1 Seld. 469 ; Cope- land V. New England Ins. Co. 2 Met. 432 ; Butman v. Monmouth Fire Ins. Co. 35 Maine, 227 ; Catlin v. Springfield Pire Ins. Co. 1 Sumner, 434 ; Henderson v. Western Marine & Fire Ins. Co. 10 Bob. La. 164. 1 Chandler v. Worcester Fire Ins. Co. 3 Cush. 328. In this case it was held that the assured may be guilty of such gross negligence and misconduct, as although not amounting to a fraudulent intent to burn the building, yet will preclude him from recovering for a loss. 2 See ante, p. 526, n. 4. [583] 529* ELEMENTS OF MERCANTILE LAW. [CH. XIX. within the policy. But if lime be put in a building, and set fire to it, and for the purpose of extinguishing this fire, water is so used as to slack the lime and render it valueless, it would be a loss within the policy, unless we say that no loss gives a claim if the thing destroyed contribute to the loss, proximately or remotely. We are aware of no such rule. Thus, if cotton, by fermentation, ignited, and set fire to a mill, undoubtedly the loss of the mill would be within the policy, or the loss of other and disconnected cotton. And we see no good reason for saying that the loss of the very cotton of which the spontaneous combustion caused the fire, should not be within the policy. There are various exceptions in the policies used in this coun- try ; but they have not given rise to much adjudication, and do not, generally, need explanation. It may be remarked, that the exception of " military or usurped power," or any similar phrase, would not be extended so as to cover a common mob.^ But if the word "riot" be used, insurers are not liable for a fire caused by a tumultuous assemblage, whatever may have been the orig- inal purpose of the meeting.^ * If the insured be charged with burning the property insured himself, it has been held in England, that this defence could be supported only by evidence which would suffice to convict the plaintiff, if tried upon an indictment.^ But in this country it has been ruled otherwise.* SECTION VIII. OP VALUATON. Valuation, precisely as it is understood in a marine policy, seldom enters into a fire policy — never, perhaps, in a policy 1 Drinkwator v. Corporation of London Ass. Co. 2 Wilson, 363. 2 Dupin V. Mutual Ins. Co. 5 La. Ann. 482. See Spruill v. N. C. Mutual Life Ins. Co. 1 Jones, N. Car. 126, An unlawful use of the house, which is not included in the exceptions, where it was not the cause of the fire, does not avoid the policy. Boardman V. Merrimack Mutual Fire Ins. Co. 8 Cush. 583. ^ Thurtell v. Beaumont, 1 Bing. 339, 8 Moore, 612. ' Hoffman v. Western Marine & Fire Ins. Co. 1 La. Ann. 216 ; Schmidt v. N. Y. Union Mutual Fire Ins. Co. 1 Gray, 529. And evidence of character is not admissi- ble on such an issue. Fowler v. JEtna Fire Ins. Co. 6 Cowen, 675 ; Schmidt v. N. Y. Union Mutual Fire Ins. Co. supra. [684] CH. XIX.] THE LAW OF FIRE INSURANCE. *530 made by any of those mutual companies, who now do a very large part of the insurance of this country. And quite seldom is a bunding valued when insured by a stock company. If a loss happens, whether it be total or partial, the insurers are bound to pay only so much of the sum insured as will indem- nify the assured.^ But, as care is always taken — and some- times required by law — to insure u,pon any house less than its value ; it seldom happens, and, if the proper previous precau- tions are taken, should never happen, that any question arises in case of a total destruction of a building by fire. But mutual companies are usually forbidden by their charter to insure more than a certain proportion of the value of a building ; and this requires a valuation in the policy which is conclusive, for some purposes against both parties. Of course the insured can never be held to pay more than the sum insured. And if their charter or by-laws permit a company to insure only a certain proportion of the value, as three-fourths, — on the one hand, if the company insure more than that proportion, as $3,500 on property valued at $4,000, they are held to pay only $3,000, and the assured cannot show that the building was really worth more than $4,000.^ And, on the other hand, the •valuation, if not fraudulent, is conclusive against the insurers, and they cannot show, in defence, that the building was worth less.^ A by-law of a company prohibiting an insurance that exceeds two-thirds the estimated value of the property has been held to be directory only and not a condition of the contract.* We know nothing to prevent the parties from making a val- ued policy, if they see fit to do so,^ although this has been ques- 1 Niblo V. North American Fire Ins. 1 Sandf. 551. . 2 Holmes v. Charlestown Mutual Fire Ins. Co. 10 Met. 211. 8 Borden v. Hingham Mutual Fire Ins. Co. 18 Pick. 523 ; Fuller v. Boston Mutual Fire Ins. Co. 4 Met. 206 ; Cane v. Com. Ins. Co. 8 Johns. 229 ; Cushman v. N. W. Ins. Co. 34 Maine, 487 ; Phillips v. Merrimack Mut. F. Ins. Co. 10 Gush. 350. * Cumberland Valley Mut. Prot. Co. v. Schell, 29 Penn. State, 31. 6 In an action on a policy of insurance against fire on merchandise, among which ■were 380' kegs of manufactured tobacco, stated on the back of the policy "as worth $9,600," 157 kegs of which were destroyed by fire. The insurance company contended that the plaintiff was entitled to receive only the first cost of the tobacco, together with the cost of manufacturing it, and a reasonable allowance for his attention, and the use and risk of his capital employed, it was held that the insured was entitled to re- cover for the loss of the 157 kegs, according to the valuation of the whole number of kefs and not the cost of the tobacco at the manufactory or prime cost ; and that where [585] 531* ELEMENTS OF MERCANTILE LAW. [CH. XIX. tioned. It is not uncommon for companies who insure chattels, — as plate, pictures, statuary, books, or the like, — to agree on what shall be the value in case of loss. Sometimes the policy reserves to the insurers the right to have the valuation made anew by evidence in case of loss. Then, if a jury find a less valuation, the insurers pay the same proportion of the new value which they had insured of the former valua- tion.i The value which the insurers on goods must pay, is their value at the time of the loss. And it has been held, that a fair sale at auction, with due precaution, will be taken to settle that value after the fire, provided the insurers have reasonable notice, or knowledge that the auction is to take place." SECTION IX. OF ALIENATION. Policies against fire are personal contracts between the insured * and the insurer and do not pass to any other party, without the consent of the insurers.^ It is essential to the validity and efficacy of this contract, that the insured have an interest in the property when he is in- sured, and also when the loss takes place ; for otherwise it is not his loss, and he can have no claim for indemnity.* If, therefore, there is an actual or total loss of any article distinctly valued in the policy, that valua- tion is in tlie nature of liquidated damages, and must govern in all cases. Hams v. Eagle Fire Company, 5 Johns. 368. The late authorities require, that in order to be a valued policy, the sum insured must be stated expressly to be a valuation. Laurent v. Chatham Fire Ins. Co. 1 Hall, 41 ; Wallace v. Ins. Co. 4 La. 289 ; Millaudon v. Western Ins. Co. 9 id. 32. 1 Post V. Hampshire Mutual Fire Ins. Co. 12 Met. 555. ^ HofiTman v. Western Marine & Fire Ins. Co. 1 La. Ann. 216. The profits which the insured might have made in his business carried on in the building, had no loss oc- curred, cannot, unless insured as such, bo taken into consideration in assessing the damages. Niblo v. N. A. Fire Ins. Co. 1 Sandf. 551. The actual value of the build- ing, as such, without reference to its productiveness, or the liability of the insured to be obliged to remove it from a leasehold estate, and thus lessen its value, is the measm-e of damages. Laurent v. Chatham Fire Ins. Co. 1 Hall, 41. 2 Granger v. Howard Ins. Co. 5 Wend. 200 ; Lane v. Maine Mutual Fire Ins. Co. 3 Fairf 44; Morrison v. Tennessee Marine & Fire Ins. Co. 18 Misso. 262; Rollins v. Columbian Fire Ins. Co. 5 Foster, 204. This doctrine was early held in England. Lynch v. Dalzell, 4 Brown, P. C. 431 (1729); Sadler's Co. u. Badcock, 2 Atk. 554, (1743). * Carroll v. Boston Marine Ins. Co. 8 Mass. 515; Wilson v. Hill, 3 Met. 66. [586] CH. XIX.] THE LAW OF FIRE INSURANCE. *o32 he alienates the whole of his interest in the property before the loss, he has no claim ; and if he alienates a part, retaining a par- tial interest, he has only a partial and proportionate claim.^ After a loss has occurred, the right of the insured to indem- nity is vested and fixed; and this right may be assigned for value, so as to give an equitable claim to the assignee, without the consent of the insurers.^ But we should not consider a mere assignment or conveyance of the premises, as of itself an assign- ment of the right to recover on a policy of insurance for a pre- vious loss, unless something in the contract, either of word or fact, showed clearly that this was intended by the parties. Policies against fire contain a provision, that an assignment of the property, or of the policy, shall avoid the policy. So, generally, it is hardly worth while to inquire what right an assignee, without consent, would acquire at common law, or in equity, where there is no such provision. We think, however, that the weight of authority is strongly, though not conclusively, against his acquiring any claim.^ There seems to be some dif- ference between fire policies and marine policies, on this subject; the necessity of consent being held more strongly in the case of fire policies ; * but it is not easy to see a very good reason for this difference. Where, by the policy itself, a transfer of the interest of the * insured is forbidden, it seems to be held, but not uniformly, that this prohibition refers to his interest in the property insured, and not in the contract of insurance.^ 1 JEtna Fire Ins. Co. v. Tyler, 16 Wend. 385, 401. 2 Wilson V. Hill, 3 Met. 69 ; Brichta v. N. Y. Lafayette Ins. Co. 2 Hall, 372. But see Lynch v. Dalzell, 4 Brown, P. C. 431. 3 In Smith v. Saratoga Mut. Fire Ins. Co. 1 Hill, 500, it is said that the policy, "in its own nature, is assignable so as to pass an equitable interest to the assignee." * Sadler's Co. v. Badeock, 2 Atk. 554. Lord Hardwicke: "Now these insurances from fire hare been introduced in later times, and therefore differ from insurance of ships, because there interest or no interest is almost constantly inserted, and if not in- serted, you cannot recover, unless you prove a property." 5 Carpenter v. Providence Washington Ins. Co. 16 Pet. 502. Where a policy is- sued by a mutual fire insurance company contained this clause : " The interest of the assured in this policy is not assignable without the consent of said company in writing, and in case of any transfer or termination of the interest of the assured, either by sale or otherwise, without such consent, this policy shall thenceforth be void, and of no effect " it was held that this clause did not merely nullify the assignment of the policy, when made without consent, but operated in the policy. Smith v. Saratoga Co. Mu- tual Fire Ins. Co. 1 Hill, 497, 3 id. 508. As to the meaning and effect of the word " assigns " see an interesting case, Holbrook v. American Ins. Co. 1 Curtis, 198. [587] 533* ELEMENTS OF MERCANTILE LAW. [CH. XIX. Nothing is properly an alienation of the property, which is less than an absolute conveyance of the title thereto.^ But where an insured conveyed half the premises in fee, taking back a lease of the same for five years at a nominal rent, and agreeing to keep and leave the premises in repair, it was held to be an alienation, although the insured would have been bound, as les- see, to rebuild. Where the insured mortgaged the premises, and assigned the policy to the mortgagee, with the consent of the insurer, before such conveyance, it was held that the policy re- mained valid as to the mortgagee, and for the amount of the debt, on the ground that the insured could do nothing to affect the rights of the assignee without his privity. In this case it was also held, that payment of an assessment after the property is burned, does not remove the effect of an alienation.^ A con- veyance intended to secure a debt, will be treated in equity as a mortgage, but it does not terminate the interest of the insured.^ A contract to convey is not an alienation.* Nor is a conditional sale, where the condition is precedent, and is not yet performed.* Nor is a mortgage, not even after breach, and, perhaps, entry for a ' breach, and not until foreclosure.^ Nor selling and immediately ^ It has been held, that a sale by one joint owner of his interest in the property to the other, does not avoid the policy. TiUon v. Kingston Mutual Ins. Co. 7 Barb. 570. But contra, Howard w. Albany Ins. Co. 3 Denio, 301 ; Murdock v. Chenango Co. Mu- tual Ins. Co. 2 Comst. 210 ; Tillou v. Kingston Mutual Ins. Co. was overruled in the Court of Appeals, and such sale held to avoid the policy, except where the rights of third parties had intervened. 1 Selden,.405. An assignment by one partner of his in- terest in the partnership property to the other, is held not to prevent a recovery in case of loss. Wilson v. Genesee Mutual Ins. Co. 16 Barb. 511. But a dissolution of the partnership before loss, and a division of the goods, so that each partner owned distinct portions, was held to be in violation of a condition against " any transfer or change of title in the property insured." Dreher v. Mtoa. Fire Ins. Co. 18 Misso. 128. See McMas- ters V. Westchester Co. Mutual Ins. Co. 25 Wend. 379, and cases ante, p. 408, n. 1. 2 Boynton v. Clinton & Essex Mut. Ins. Co. 16 Barb. 254. " Holbrook v. American Ins. Co. 1 Curtis, 198. * Trumbull v. Portage Co. Mutual Ins. Co. 12 Ohio, 305; Masters o. Madison Co. Mutual Ins. Co. 11 Barb. 624; Pen-y Co. Ins. Co. v. Stewart, 19 Penn. State, 45. ^ Tittemore v. Vt. Mutual Fire Ins. Co. 20 Vt. 546. " Jackson v. Mass. Mutual Fire Ins. Co. 23 Pick. 418 ; Conover v. Mutual Ins. Co. 3 Denio, 254 ; Rollins v. Columbian Ins. Co. 5 Foster, 200 ; Pollard v. Somerset Mut. F. Ins. Co. 42 Maine, 221 . A sale by a master in chancery under a decree of foreclo- sure, avoids the policy. McLaren v. Hartford Fire Ins. Co. 1 Seld. 151. But in In- diana, a mortgage is held to be an alienation, which avoids the policy. M'CuUoeh v. Indiana Mutual Fire Ins. Co. 8 Blackf. 50 ; Indiana Mutual Fire Ins. Co. v. Coquillru'd, 2 Carter, 645. In Rice v. Tower, 1 Gray, 426, it was held, that a mortgage of personal property, without a transfer of possession to the mortgagee, is not such an alienation of the property as will avoid the policy ; nor will a seizure of goods on execution, with- out removing them, have that efifect. Where the insurance company insured mort- gaged property, and by a memorandum on the policy agreed to pay the amotmt of [588] OH. XIX.J THE LAW OF FIRE INSURANCE. *534 taking back.^ But bankruptcy is said to an alienation;^ and if there were a voluntary assignment to assignees in trust, it should operate so, as much as a direct transfer to creditors.^ There are reasons, however, for drawing a distinction between such a case, and one where the law takes possession of property insured, for creditors ; at least, we should say that, in such case, the insurance might remain valid until the assignees or commis- sioners sold the property.* If several estates are insured in one policy, and one or more are aliened, the policy is void as to them only.^ If many owners are insured in one policy, a trans- fer by one or more to strangers, without the act or concurrence of the other owners, will avoid the policy for only so much as is thus transferred. And if it be transferred to one or more of the insured, it is, we think, no alienation, and works no forfeiture.^ But the authorities are not in agreement on this point. * Policies of insurance are not negotiable ; that is, not assign- able in such a way as to give to the assignee a right of action in his own name.'^ But his moral or equitable interest will sus- tain a promise by the insurers to him, and if such express prom- insurance, in case of loss, to the mortgagee, with the consent of the mortgagor, and the mortgage was afterwards foreclosed, without any act of the mortgagor to whom the policy was issued, it was held that the foreclosure did not worlc an alienation of the property so as to defeat the policy. Bragg v. N. E. Mutual Fire Ins. Co. 5 Foster, 289. Where A effected an insurance on property, and afterwards conveyed it to B, who at the same time reconveyed it to a trustee, to secure A the payment of the purchase- money, the policy was not avoided. Morrison v. Tennessee M. &F. Ins. Co. 18 Misso. 262. The conveyance of a moiety of the premises in fee, and taking back a lease for years of the same, was held to avoid the policy. Boynton v. Clinton & Essex Mutual Ins. Co. 16 Barb. 254; Abbot v. Insurance Co. 30 Maine, Hi. 1 Tittemore v. Vt. Mutual Fire Ins. Co. 20 Vt. 546. 2 111 the charter of an insurance company, it was enacted, that if the insured should alienate the property the policy should be void, it was held that an alienation had oc- curred, when upon his own application he had been decreed a bankrupt, and his as- signee in bankruptcy appointed. Adams v. Kockingham Mut. Fire Ins. Co. 29 Maine, 292. ^ And such a conveyance to a trustee for the benefit of creditors, will have the effect of an alienation, although subsequently declared void, on account of fraud. Dadmun Manuf. Co. v. Worcester Mutual Fire Ins. Co. 11 Met. 429, 434. * See Bragg v. 'S. E. Mutual Fire Ins. Co. 5 Foster, 298. The death of the assured does not work an alienation of the property within the meaning of the prohibition in the policy. Burbank v. Rockingham Mutual Fire Ins. Co. 4 Foster, 5.50, 558. *> Clark V. N. E. Mutual Fire Ins. Co. 6 Cush. 342 ; iEtaa Fire Ins. Co. v. Tyler, 16 Wend. 385. ^ Tillou V. Kingston Mutual Ins. Co. 7 Barb. 570. See ante, p. 532. ' Lynch v. Dalzell, 4 Brown, P. C. 431 ; Carroll v. Boston Marine Ins. Co. 8 Mass. 515 ; Smith v. Saratoga Co. Mutual Ins. Co. 3 Hill, 508 ; Bodle v. Chenango Co. Mu- tual Ins. Co. 2 Comst. 53 ; Carpenter v. Providence Washington Ins. Co. 16 Pet. 502, 503 ; Sherman v. Fair, 2 Speers, 647 ; Nevins v. Rockingham Fire Ins. Co. 5 Foster, 22 50 [589] 535* ELEMENTS OF MERCANTILE LAW. [CH. XIX. ise be made, on this he may bring his action.^ If he brings it in the name of the assignor, it must, generally at least, be subject to all the defences which the insurers could make against him. It is possible that there should be some qual- ification of this rule. Undoubtedly, no insured party can make a transfer which shall operate injuriously on the insurers, and yet preserve the rights so transferred. On the other hand, if he, by the terms of the policy, may transfer it with the con- sent of the insurers, and after such transfer and consent the originally insured frau.dulently burns the building, there would be strong reasons for holding the insurance still valid, in favor of the innocent transferree. Perhaps the question would turn upon this : did the transferree pay, or assume the obligation of paying, or guarantee the payment of any premiums. If so, he should be held insured, although the terms of the policy and transfer might oblige him to bring his action in the name of the incen- diary. Where possible, such transfer, with such consent, would, undoubtedly, be regarded as a new and independent contract with the transferree.^ An alienation, or even actual surrender of the policy, does not avoid the premium note, or the obligation of the insured, to pay his share of the previous losses. If, therefore, after an alienation, the insurers, with full knowledge of it, demand and receive from the insured payments on such account, it is no waiver of the forfeiture.^ From some cases it would seem, that if the in- surers called for and received payments accruing subsequently, it would not revive their obligation on the ground that the pol- icy is completely annulled by the alienation — that it cannot be revived by any waiver.* But we should have much doubt of this. And it has been held that application to an insurance company for consent to the assignment of the policy, is no- tice of the acquisition, contemplated or actual, of an interest on the part of the applicant in the property insured.^ * In practice, care should be taken to have all such transfers 1 Rollins V. Columbian Fire Ins. Co. 5 Foster, 207. - Tillou V. Kingston Mutu.il Ins. Co. 7 Barb. 573, 1 Seld. 405. See Wilson v. Hill, 3 Met. 69 ; Boynton i'. Clinton & Essex Mutual Ins. Co. 16 Barb. 254. 3 Smith V. Saratoga Co. Mutual Fire Ins. Co. 3 Hill, 508. See Wilson v. Trumbull Fire Ins. Co. 19 Pcnn. State, 372. * Neely v. Onondaga Co. Mutual Ins. Co. 7 Hill, 49 ; Boynton v. Clinton & Essex Mutual ins. Co. 16 Barb. 257. * Hooper v. Hudson River F. Ins. Co. 17 N. Y. 424. [590] CH. XIX.] THE LAW OF FIRE INSURANCE. -535 regularly made and notified, and the consent obtained fully au- thorized, and duly indorsed or certified, and all the rules or usages of the insurers in this respect complied with. Where a party insured recovered for a loss caused by a rail- road company, for which they were liable, it was held, that this operated as an equitable assignment to the insurers of the claim of the insured against the railroad company ; and the insurers might enforce this by a suit in the name of the insured.^ SECTION X. OF NOTICE AND PEOOP. Where the policy requires a certificate of the loss, the pro- duction of it is a condition precedent.^ And it must be such a certificate as is required ; but a substantial compliance with its requirements is sufficient.^ So, too, if the notice is to be given forthwith, there must be no unreasonable or unnecessary delay. And all the circumstances of the case are considered in deter- mining whether there was due diligence or laches.* Generally, 1 Hart V. Western E. R. Corp. 13 Met. 99. 2 Worsley v. Wood, 6 T. E. 710, 2 H. Bl. 574; Mason v. Harvey, 8 Exch. 819, 20 Eng. L. & Eq. 541 ; Columbia Ins. Co. v. Lawrence, 10 Pet. 513. It will bo no legal justification, if the omission to procure the certificate that the persons from whom it was to be obtained wrongfully refused to give it. Worsley v. Wood, supra; Leadbet- ter u. Mtan Ins. Co. 13 Maine, 265. In determining the contiguity of the magistrate to the place of the fire, whose certificate is required, the place of his business will be regarded, and a nice calculation of distances will not be made. Turley v. North Amer- ican Fire Ins. Co. 25 Wend. 374. 3 Norton v Eensselaer & Saratoga Ins. Co. 7 Cow. 645 ; N. Y. Bowery Eire Ins. Co. V. N. Y. Eire Ins. Co. 17 Wend. 359 ; Sexton v. Montgomery Co. Mutual Ins. Co. 9 Barb. 191. It is not necessary to state the nature of his interest in the account of the loss. Gilbert v. North American Eire Ins. Co. 23 Wend. 43. The notice may be oral, unless required to be in writing. Curry v. Commonwealth Ins. Co. 10 Pick. 536. The manner of the loss, it has been held, need not be stated. Catlin v. Springfield Ins. Co. 1 Sumner, 434. * A notice of a loss which was required by the policy to be given " forthwith," thir- ty-eight days after a loss, was held insufficient. Inraan v. Western Eire Ins. Co. 12 Wend. 452. See also, Trask v. State Eire & Mar. Ins. Co. 29 Penn. State, 198 ; Peo- ria Mar. & E. Ins. Co. v. Lewis, 18 111. 553. But circumstances may justify a longer delay. Cornell v. Le Eoy, 9 Wend. 163. Where a certificate is required to be fur- nished " as soon as possible," it is sufiicient if it be furnished within a reasonable time. Columbia Ins. Co. v. Lawrence, 10 Pet. 513, 514. See Wightman v. Western M. & E Ins. Co. 8 Rob. La. 442 ; Kingsley v. N. B. Mutual Eire Ins. Co. 8 Cush. 393 ; Hovey v. Am. Mutual Ins. Co. 2 Duer, 554. But where the fire took place in Novem- ber and the account of loss was not furnished till the March following, it was held not to be a compliance with the conditions. Edwards v. Baltimore Eire Ins. Co. 3 Gill, 176. [591] 536* ELEMENTS OF MERCANTILE LAW. [CH. XIX. this is a qnestion for the jury.^ In fire policies, as the premises may be "supposed always open to the inspection of the agents of the insurers, a general notice of the fire will be probably enough.^ If the assured has assigned the policy with consent, the as- signee may give the notice ; and if he does, the neglect of the original insured does not prejudice the assignee.^ The insurers may waive their right of notice wholly or par- tially. And they may do 'this expressly, or by any acts which fairly indicate to the insured that they accept an imperfect no- tice given to them, or that they do not need and do not require that any notice should be given,* or that they have taken the matter into their own hands, and have made inquiries, and ob- tained all the information possible.^ And a refusal " to settle the claim in any way," has been held to supply a good excuse for not offering notice.'' The preliminary proofs, though required by the policy, are not admissible as evidence as to the damages or amount of claim. If it were provided in the policy that they might be so used, this would make them evidence, but we are not aware that this 1 Sexton V. Montgomery Co. Mutual Ins. Co. 9 Barb. 191. 2 Angell on Fire and Life Insurance, § 238. 3 Cornell v. Le Roy, 9 Wend. 163. * Where an account of tlie loss was required within thirty days, and when the in- sured furnished one within the proper time, made out under the advice of an agent of the company, and subsequently produced his books for further explanation at the re- quest of the company, and the company made no objection to liis account at that inter- view, but offered to pay a sum amounting to about three fourths of the loss, a subsequent objection, in general terms, was not allowed to avail for the defence to a suit on the policy. JBodle v. Chenango Co. Mutual Ins. Co. 2 Comst. 53. So where the notice was merely of a loss, but was not objected to, and no request for further partic- ulars made by the company, it was held sufficient. Heath v. Franklin Ins. Co. 1 Cush. 257 ; Clark v. New England Mutual Fire Ins. Co. 6 id. 342 ; Underbill v. Agawam Mut. Eire Ins. Co. id. 440. It has been held, that a waiver will not lie implied where the insurer has given tlie insured explicit warning that he shall waive nothing, or where the insured could not have removed the objection to the want of proof, if it had been made. Edwards v. Baltimore Fire Ins. Co. 3 Gill, 176. See Columljiau Ins. Co. u. Lawrence, 2 Pet. 53. s Sexton V. Montgomery Co. Mutual Ins. Co. 9 Barb. 191 ; Clark u. N. E. Mutual Fire Ins. Co. 6 Cush. 342. 8 Francis v. Ocean Ins. Co. 6 Cowen, 404 ; Tayloe v. Merchants Fire Ins. Co. 9 How. 390 ; AUegre v. Maryland Ins. Co. 6 Harris & J. 408. So wlicre the refusal is put on other grounds, and not on the insufficiency of the notice and preliminary proofs. Vos V. Robinson, 9 Johns. 192; iEtna Fire Ins. Co. v. Tvler, 16 Wend. 401 ; 'McMas- ters V. Westchester Co. Mutual Ins. Co. 25 id. 379; O'Neil v. BuffiUo Fire Ins. Co. 3 Comst. 1 22 ; Clark !-. N. E. Mutual Fire Ins. Co. 6 Cush. 342 ; Boynton v. Clinton & Essex Mutual Ins. Co. 16 Barb. 254. Partial payment of loss is equivalent to a waiver of the preliminary proofs. Wostlake v. St. Lawrence Co. Mutual Ins. Co. 14 Barb. 206. [592] CH. Xrx.] THE LAW OP FIRE INSURANCE. *537 is ever said expressly ; and it cannot be inferred from the mere requirement of them.^ If the policy provide that the assured shall, if required, sub- mit * to an examination under oath, the insurers are not bound by his statement under oath ; but if he be duly required, and therefore submit himself to an examination under oath, he can- not afterwards be required to submit to further examination un- der oath.2 SECTION XL OP ADJUSTMENT AND LOSS. Insurers against fire are not held to pay for loss of profits, gains of business, or other indirect and remote consequences of a loss by fire. We do not know, however, why profits may not be specifically insured against fire, where it is not forbidden by, or inconsistent with, the charter of the insurers.^ There is a wide difference between the principle of adjust- ment of a marine policy and of a fire policy. In the former, if a 1 Sexton V. Montgomery Co. Mut. Ins. Co. 9 Barb. 200. ^ Moore v. Protection Ins. Co. 29 Maine, 97. ^ Under an insurance by the plaintiff, of his "interest in the Ship Inn and offices," it was held' that he could not recover for the loss of his business as an inn-keeper in the interval between the fire and the rebuilding. In re Wright & Pole 3 Nev. & M. 819, 1 A. & E. 621. Taunitm, J.: "I think that profits are insurable, but they must be insured qua profits. A party is not entitled to compensation for loss of profits under an insur- ance of his ' interest in the Ship Inn.' " A tenant, from year to year, insured premises used for an .armory, n theatre, and other purposes of amusement. The armory was partially, and all the other buildings were destroyed by fire. In a suit on the policy, the assured offered In proof that, by reason of engagements actually existing at the time of the fire with an opera company ; with the Ravels, conducting a series of amuse- ments ; with the American Institute for an exhibition ; with a military company, hiring the armory ; and other persons hiring other parts of the premises, he had sustained by the defeating of these engagements, to the extent of the sums insured, and not exceed- ing the estimated or actual cost of the premises destroyed ; it was held that there could be no allowance to the insured for the loss of his business and these interrupted gains ; and that one mode of putting the inquiry to the jury, would be this : " How much would a stranger, having no contracts or engagements pending, such as the plaintifls offered to prove, have given for the unexpired lease when the fire occurred "i " Niblo v. North American Ins. Co. 1 Sandf. 551. Where, by the terms of a policy on goods in public stores, the underwriters agree to make good to the assured all such loss as should hap- pen to the goods by fire, " to be estimated according to the true and actual cash value of the property at the time the loss ■ should happen," the measure of damages is such value, notwithstanding the duties have not been paid or secured. Wolfe v. Howard Ins. Co. 3 Seld. 583, 1 Sandf 124. Actual and not consequential damages are recover- able. Bllmaker v. Franklin Fire" Ins. Co. 5 Barr, 183. 50 * [ 593 ] 538* ELEMENTS OF MERCANTILE LAW. [CH. XIX. proportion only of the value is insured, the insured is considered as his own insurer for the residue, and only an equal proportion of the loss is paid. Thus, if on a ship valued at 610,000, §5,000 be insured, there is a loss of one half, the insurers pay only one half of the sum they insure, just as if some other party had in- sured other §5,000. But in a fire policy, the insurers pay in *all cases the whole amount which is lost by the fire, provided only that it does not exceed the amount which they insure.^ It is said that general average clauses or provisions are in- eerted in fire policies in England, but are not known here. In one case, blankets were used by the assured, with the consent of the insurers, to protect a building from a near fire ; they did this effectually, but were themselves made worthless, and an ac- tion of the insured against the insurers, for this loss, was sus- tained by the court.^ As a contract of fire insurance is an entire one, if the policy ever attaches, there should be no return of premium, although the property be destroyed the day after, and not by fire ; as by demolition by whirlwind, or other similar accident.^ If, however, there were an insurance on goods believed to be at a certain place, at a certain time, and none of them were there, there might be an entire return of premium, because there was never any insurance.* But if a part were there, there should be no partial return ; because, the rule that where a part only is insured, only a proportionate part is paid by the insurers in case of loss, applies only to marine policies, as stated above. Most of the fire policies used ixi this country, give the insurers the right of rebuilding or repairing premises destroyed or injured 1 Liscom V. Boston Mutual Fire Ins. Co. 9 Met. 211 ; Trull v. Eoxbury Mutual Pire Ins. Co. 3 Cush. 267. - But the owners of other buildings in the neighborhood, who may hare been pro- tected by the use of the blankets, are too remotely interested to be liable to contribution. Welles V. Boston Ins. Co. 6 Pick. 182. ° Ellis on Insurance, 23. ' Where the representation was made that no lamps were used in the picking-room of the manufactory insured, and lamps had been suspended and occasionally used there for sereral years, it was held that the policy never attached, and there being no fraud in the representation, the return of the premium was ordered. Clark v. Manufacturers Ins. Co. 2 Woodb. & M." 472, 494. It is held that they have not this right unless it is expressly given. Wallace v. Insurance Co. 4 La. 289. AVhere the insurance is ou personal property, the same right is given. Franklin Fire Ins. Co. v. Hamill, 5 Md. 170. [594] CH. XIX.J THE LAW OF FIRE INSURANCE. *539 by fire, instead of paying the amount of the loss. If under this power, the insurers rebuild the house insured, at a less cost than the amount they insure, this does not exhaust their liability; they are now insurers of the new building for the difl'erence between its cost and "the amount they have insured. And if the new building burns down, or is injured while the policy coutin- * ues, the insured may claim so much as, added to the cost already incujred, shall equal the sum for which he was insured.^ There is no rule in fire insurance similar to that which makes a deduction, in marine insurance, of one third, new for old. Still, the jury, to whom the whole question of damages is given, are to inquire into the greater value of a proposed new building, or of a repaired building, and assess only such damages as shall give the insured complete indemnity.^ Where insurers had reserved a right to replace articles de- stroyed, and the insured refused to permit them to examine and inventory the goods, that they might judge what it was expedi- ent for them to do. Chancellor Walivorth refused to aid the in- surers in equity ; but such conduct, on the part of the insured, would be evidence to the jury of great Aveight, to prove an over- statement of loss.3 If the insurers agree to pay the loss or reinstate the buildings, or other property insured, they must do one or the other, and in one case it was held that a plea which stated that the insurers had elected to reinstate the building insured, but were prevented by the authorities who ordered them to be taken down as a structure in a dangerous condition ; that such condition was caused by the fire, and that if the authorities had not caused them to be taken down, the defendants would have restored them to the condition they were in before the fire, was bad and no defence to an action on the policy.* There are some further decisions on the right of the insurers to rebuild which depend so 1 Trull V. Roxbury Mutual Eire Ins. Co. 3 Cash. 263. See N. H. Mutual Ins. Co. V. Rand, 4 Foster, 428. The insured wiU also be liable for assessments for losses after the destruction of his building by fire, during the whole term of the policy. Kf. H. Mu- tual Fire Ins. Co. v. Rand, 4 Foster, 428 ; Swamscot Machine Co. v. Partridge, 5 id. 369. 2 Brinley v. National Ins. Co. 11 Met. 195. 8 N. Y. Fire Ins. Co. w. Delaran, 8 Paige, 419. * Brown v. Royal Ins. Co. Jurist for 1859, p. 1255, 8 Am. Law Reg. 235. [695] 539- ELEMENTS OF MERCANTILE LAW. [CH. XIX. much on the peculiar wording of the by-laws of the insurers that we can merely mention them in our note.^ If after the adjustment and payment, there appears to have been fraud in the original contract, or in the adjustment, or material mistake of fact (but not so if the mistake be of law), it would seem that money paid may be recovered back.- If the policy contains a provision that any fraud in the claim, or any false swearing or affirmation in support of it, shall avoid the policy (as is frequently the case in England), it would seem that it would be left to the jury to say whether there was any material and substantial fraud connected with the matter, and if so, to find for the defence.^ From the present state of the authorities, it may be stated, as a general rule, that there are no equities upon the proceeds of policies of fire insurance, in favor of any third parties, unless there be a bargain or contract, or a trust, to that effect.'' 1 See Haskins v. Hamilton Mut. Ins. Co. 5 Gray, 432. - Bilbio V. Lumley, 2 East, 469 ; Herbert v. Champion, 1 Camp. 134. " Woods V. Masterman, Ellis on Insurance, 14; Levy t'. Baillie, 7 Bing. 349. * A tenant haa no equity to compel his landlord to expend money received from an insurance office on the demised premises being burnt down, for rebuilding them, or to restrain the landlord from sning for the rent until the premises are rebuilt. Leeds v. Cheetham, 1 Simons, 146. See Brown v. Quilter, Ambler, 619. [596] CH. XX.J LIFE INSURANCE. 540 CHAPTER XX. LIFE INSURANCE. SECTION I. OF THE PURPOSE AND METHOD OP LIFE INSURANCE. If a insures B a certain sum payable at B's death to B's rep- resentatives, we have only the insurer and insured a^ in other cases. But if A insures B, a. sum payable to B or his represen- tatives, on the death of C, although C is often said to be insured, this is not quite accurate ; more properly B is the insured party and C is the life-insured. Life insurance is usually effected in this country in a way quite similar to that of fire insurance by our mutual companies. That is, an application must be first made by the insured ; and to this application queries are aimexed by the insurers, which relate, with great minuteness and detail, to every topic which can affect the probability of life. These must be answered fully ; and if the insured be other than the life-insured, there are usually questions for each of them. There are also, in some cases, ques- tions which should be answered by the physician of the life-in- sured, and others by his friends or relatives ; or other means are provided to have the evidence of the physician and friends. These questions are not, perhaps, precisely the same, in the forms given out by any two companies ; and we do not speak of them in detail here. The rules, as to the obligation of answer- ing them, and as to the sufficiency of the answers, must be the same in life insurance as in fire or marine insurance ; or rather must rest upon the same principles. And the same rules and principles of construction, would doubtless be applied to the question whether a contract had been made, or at what time it [597] 541* ELEMENTS OF MERCANTILE LAW. [CH. XX. went into effect.^ In a recent case a person was insured from the 24th of February for one year, the insured having the privi- lege of insuring for another year. On the 31st of May in the same year, the insurance company reinsured the risk for one year, without stating when the risk commenced or terminated. The insured died on the 4th or 5th of May, but this fact was not known when the reinsurance was effected. It was held that the reinsurers were liable.^ * SECTION II. OP THE PREMIUM. If the insurance be for one year only, or less, the premium is usually paid in money or by a note at once. K for more than a year, it is usually payable annually. But it is common to provide or agree that the annual payment may be made quar- 1 The case of the Kentucky Mut. Ins. Co. v. Jenks, 5 Port. Ind. 96, is of much in- terest on tliis subject. On the 27th of September, 1850, Jenks, of Lafayette Co. being then in good health, completed an application to the Kentucky Insurance Company for an insuratice of $1,500 on his life, for the benefit of his wife. The company's agent at Lafayette on that day mailed the application to the company. The application was duly approved, and a policy was issued thereon and mailed to the agent on the 2d October, 1850. It insured the life of J. in the sum of 1,500 dollars, for five years from date, for the benefit of liis wife. The policy was received by the agent on the 5th of October, 1850. On the 29th September, 1850, .T. was taken sick, and lingering until the 4th October following, died. On the receipt of the policy (J. being dead), the agent immediately returned it by mail to the company. While the treaty for insurance was pending, and before J. 's application was completed, the company agreed to take the first year's premium in an advertisement of their agency, for six months, in J.'s news- paper at Lafayette ; and accordingly the agent in August, 1 850, furnished to J. the ad- vertisement, which was published in the paper continuously thereafter, as dii'ected by the agent, for six months. The price of the advertisement fell short of the first year's premium 45 cents. This was a bill in chancery by J.'s widow, praying discovery of the entries upon the company's books, &c., and that the original application for the insur- ance, and the original policy issued thereon, should be produced, &c. ; that an account should be taken, &c. ; and for general relief. And it was held that the contract of insurance was, at least, complete on the 2d of October, 1850, when J.'s application was approved and the policy was mailed to him ; and that there was weighty authority that the acceptance related back to the period when J. completed his application. 2 Philadelphia Life Ins, Co. u. American Life & Health Ins. Co. 23 Penn. State, 65. The second policy contained a statement that if the declaration made by the secretary of the company obtaining the reinsurance, was false, the policy should be void. This declaration stated that the secretary believed the age of the life-insured did not exceed thirty years, and that " he is now in good health." This declaration was dated May 31. See also, Foster v. Mentor Life Ins.'Co. 3 Ellis & B. 48, 24 Eng. L. & Eq. 103. [598] CH. XX.] LIFE INSURANCE. *542 terly, with interest from the day when the whole is due.^ Notes are usually given ; but if not, the whole amount would be con- sidered due. If A, whose premium of $100 is payable for 1856, on the 1st day of January, then pays f 25, and is to pay the rest quarterly, dies on the first of February, the |75 due, with inter- est * from the 1st , of January, would be deducted from the sum insured. Provision is sometimes made that a part of the premium shall be paid in money, and a part in notes, which are not called in unless needed to pay losses.^ The greater the accommoda- tion thus allowed, the more convenient it is, obviously, 'to the insured, and the less certain can he be of the ultimate payment of the policy, because, in the same degree, the fund for the pay- ment consists only of such notes, and not of payments actually made and invested. There is a great diversity among the life insurance companies in this respect. But even the strictest, or those which require that all the premiums shall be paid in money, usually provide also that an amount may remain over- due without prejudice which does not exceed a certain propor- tion — say one half or one third — of the money actually paid in on the policy. This is considered, under all ordinary circum- 1 In Buckbee v. United States Insurance Annuity and Trust Company, 1 8 Barb. 541, a policy of life insurance contained a provision that in case the quarterly premi- ums should not be paid on the days specified, the policy should be void ; but that in such case it might be renewed, at any time, on the production of satisfactory evidence as to the health of the insured, and payment of bade praminras, &c. The premium due on the 10th December, 1851, was not paid until the 16th, when it was received by the insurers, without objection, and entered to the credit of the policy, and a receipt given for it. No evidence was produced in respect to the health of the insured, and none was required. The insured was, in fact, sick at the time, and died on the 19th January, 1852, of the disease under which he was then laboring. It appeared that it had not been the practice of tlie insurers to exact prompt payment of the premiums, when due, but they had allowed the same to lie over several days, and then accepted them, without objection. Held, that the conduct of the insurers had been such as to amount to a waiver of a literal compliance with the condition as to punctual payment ; and that the policy not having lapsed or become void, did not require renewal upon a disclosure of the state of the insured's health, within the meaning of that condition. Hdd also, that such waiver restored the policy to the same condition in which it would have been had the premium been paid on the precise day when it fell due. In Euse V. Mut. Benefit L. Ins. Co. 26 Barb. 556, the insurance was for life, subject to be defeated by tlie non-payment of the annual premium. A prospectus of the com- pany contained the clause, " Every precaution is talccn to prevent a forfeiture of the policy. A party neglecting to settle his annual premium within thirty days after it is due, forfeits the interest in the policy." Hdd that this was a waiver of the condition in the policy, and that if the insured died before the thirty days had expired, the party in interest might pay the premium. 2 Insurance Co. v. Jarvis, 22 Conn. 133. [599] 542- ELEMENTS OF MERCANTILE LAW. [CH. XX. stances, safe for the company, because every policy is worth as much as this to the company. Or, in other words, it would al- ways be profitable for the company to obtain a discharge of its obligation on a policy by repaying the insured a small propor- tion of what has been received from him. It is sometimes provided that the policy shall not take effect until the premium is paid, or that the policy shall determine if the annual premium is not paid in advance, but these conditions may be waived by the insurers and by their agents, and it has been held that an agreement made in good faith between an in- surance agent and the insured, that the agent shall become per- sonally responsible to his principals for the amount of such premiums and the insured his personal debtor therefor, consti- tutes a payment of the premium as between the insured and the insurance company.^ Taking a note would certainly be a waiver, if not a payment. The premiums, after the first, must be paid on the days on which they fall due. If no hour be mentioned, then it is be- lieved that the insurer would have the whole day, even to mid- night. It is possible, however, that he might be restricted to the usual hours of business, and perhaps even to those in which the office of the insurers is open for bvisiness. In some poli- cies a certain number of days is allowed for the payment of the premium. Then, if the loss happen after the premium is due and unpaid, and during this number of days and before they have expired, biit after the loss the premium is paid, the insur- ers should be bound by a subsequent payment of the premium, by the insured or his representatives, within the designated pe- riod.^ Where this time had elapsed, and the insurers, under 1 Slicklon V. Conn. Mut. L. Ins. Co. 25 Conn. 207 ; Bouton v. Am. Mut. L. Ins. Co. ill. .542. •^ M'Donnell v. Can-, Hayes & Jones (Irish), 2.')6. But see Mutual Benefit Life Insurance Co. u. Ruse, 8 Ga. .'i-tS. If the language of the policj' be such as indicates the intention of the parties that the payment of the premium, during a specified time, is to bo made by the life-insured personally, or during his life, then if he dies, and the premium is paid by his executors during fliis time, the sum insured cannot be recovered of the company. Want v. Blunt, 12 East, 183. Where the printed proposals allow a certain time within whicli the premium may be paid, after it becomes due, and they are not referred to in the policy so as to become a part of the contract, the life-insurecl dy- ing after the premium becomes due, the executors cannot, by a tender thereof within the time allowed by the proposals, recover on the policy. Mutual Benefit Life Insur- ance Co. !'. Ruse, supra. [600] CH. XX.J LIFE INSURANCE. -542 their rules, had charged their agent with the amount — not hear- ing of the default from him, of which it was the agent's duty to notify them immediately, — and the insured, some days after- wards, paid the premium which was received by the agent, it was held that this was not sufficient to renew the policy.^ This seems to be a harsh and extreme case ; for if the insurers had themselves received and accepted the money from the insured, there seems no reason for doubting that this would have bound them. Practically, the utmost care is requisite on the part of the assured, to pay his premium before, or as soon as it is due. This is the only proper and safe course. But we believe it to be not unusual for the insurers to accept the premium if offered them a few days after, and continue the policy as if it were paid in season, provided no change in the risk has occurred in the mean time. SECTION III. OF THE EESTEICTIONS AND EXCEPTIONS IN LIFE POLICIES. Our policies usually contain certain restrictions or limitations as to place ; the life-insured not being permitted to go beyond certain limits, or to certain places.^ But there is nothing to pre- 1 Acey w.*Fernie, 7 M. & W. 151. Lord Abinger, C. B., said : " It seems to me that the provision that he (the agent), should be debited as if the premium was paid, was to operate as a penalty on him ; but does not authorize third persons to take advantage of that which was a mere private arrangement between the company and the agent, for the purpose of insuring the due payment of all moneys which were to be received by him." Parke, B., after stating that the agent was not the general agent of the company but merely an agent with limited powers to receive premiums, said : " It is impossible to consider the debiting of the agent with the amount of the premium as a payment oti the original day, according to the allegation in the first count ; the only question is, did the company mean to make themselves liable as on a new contract ? It seems to me that they did not, and that the meaning of the transaction was merely to keep their agents right, and in case of neglect to be able to come upon agents for the amount of the premium, by way of penalty ; but they did not mean thereby to make themselves liable for the amount of the policy. It is 9nly on the ground that they became liable upon a new contract, that any thing can be made of the case on the part of the plain- tiff. It appears to me that this was purely a mode of keeping their own agents in order, by holding over them, in terrorem, that they should be responsible for the amount of the money not received." , 2 In Wing V. Haiwey, 5 De G., M. & G. 265, 27 Eng. L. & Eq. 140, Bennett, at the instance of his creditor, having procured insurances on the life of his debtor, and one of the conditions of the policies was that, " if the party upon whose life the insurance is granted, shall go beyond the limits of Europe without the license of the directors, this policy shall become void, the insurance intended to be hereby effected shall cease, 51 [601] 543 ELEMENTS OF MERCANTILE LAW. [CH. XX. vent a bargain permitting the life-insured to pass beyond these bounds, either in consideration of new and further payments, or of the common premium.^ and the money paid to the society become forfeited to its use." These policies were duly assigned to Bennett, and notice given to Lockwood, the general agent of the com- pany at Bury St. Edmunds, through whom the policies had been eifected. After the assignments the premiums were regularly paid by Wing, or his brother in his behalf. In June, 1835, five years after the effecting of the last policy, Bennett infringed on the condition of the policies, by going to live in Canada, where he resided till his death in 1849. Lockwood, applying to Wing for the premiums afterwards, was informed of Bennett's departure, and being inquired of whether it would be safe to pay the premi- ums under the circumstances, replied that the policies would be perfectly good provided the premiums were regularly paid, and Wing thereupon paid them to Lockwood, who transmitted them to the head office of the society. , To the successor of Lockwood, who died in 1847, the same inquiries were put, the same reply was received, and the premi- ums received and transmitted in the same manner. There was some evidence which tended to show that the officers of the company had incidentally become informed of Bennett's residence in Canada. It was held that whether the office had express notice of the forfeiture or not, it was waived by the act of the agents in receiving the premi- ums paid to them in faith of the policies continuing valid and effectual notwithstanding the departure, and transmitting them to the directors, who retained them without objec- tion. Knight Bruce, L. J., said : "If the directors represented by the defendant liad themselves personally received the premiums which Mr. Lockwood and Mr. Thompson received, with the same knowledge they had, that woulil certainly have been a waiver of the forfeiture, and the defence would have been ineffectual; but they were their agents for the purpose of receiving the premiums upon subsisting policies — premiums paid to them upon the faith of the policies continuing valid and effectual, notwithstand- ing the departm'e and residence at Canada of the person whose life was insxu-ed, — a faith in which Lockwood, and afterwards Tliompson knowingly acquiesced, and ex- pressly sanctioned. Those premiums having been, from time to time, transmitted to the directors, and retained by them without objection, I think, whether Lockwood or Thompr-on informed, or did not inform them in fact, of the true state of the circum- stances in which tlie premiums were paid to them, the directors became and are, as be- tween themselves and plaintiffs, as much bound as if those premiums had been paid by the plaintiff directly to themselves, they knowing at the time, on each occasion, the place of Bennett's residence. The directors taking the money, were or are precluded from saying they received it otherwise than for the purpose and on the faith for which and on which Rlr. Wing ex]jresslv paid it." See also, Bouton v. Am. ilut. Life Ins. Co. 25 Conn. 542. 1 In Hathaway r. Trenton Mut. Life & F. Ins. Co. 11 Cush. 448, a person whose life was insured had permission gJAcn him "to make one voyage out and home to Cal- ifornia in a iirst rate vessel round Cape Horn or by Vera Cruz." Being taken sick in California he returncil home by way of Panama and Cliagres, and soon after died. It was Jitld that the policy was thereby avoided although at the time be left California there was no usually travelled route by way of Vera Cruz, and in his then state of health, a return home l>y that way would have been attended with great risk and ex- ])ense, and although the route taken was the shortest and the safest one. In Bevin v. Conn. Mut. L.-Ins, Co. 23 Conn. 244, liberty was given "to pass by sea in decked vessels, from any port in the United States to and from any port in North and South America, Chagr'cs excepted, and to reside in California." The insured went to \er.\. Cruz and then across the country to San !Blas, a distance of one thousand miles, and thence by sea to San Francisco, ^^■herc he arrived in good health and died three years afterwards. Tlie court were not agreed on the exact construction to be put on the per- mit, but held that as the defendants know the route which the insured had gone and afterwards received the annual premiums, they had waived their right to such a defence. In Taylor v. iEtna Life Ins. Co. 13 Gray, 434, the policy permitted the insured to pass between certain ports " on first class decked vessels." It was hold that the policy was not forfeited by the insured going as a steerage passenger in such vessels, in the absence of any evidence to show that life was loss safe in the steerage. [602] CH. XX.] LIFE INSURANCE. *544 So certain trades or occupations, as of persons engaged in making gunpowder, or as engineers or firemen about steam en- gines, are considered extra-hazardous, and as therefore prohib- ited, or requiring an extra premium. The exception, however, which has created most discussion, is that which malves death by suicide an avoidance of the pol- icy. The clause respecting duelling is plain enough; and no one can die in a duel without his own fault. But it is other- wise with regard to self-inflicted death. This may be voluntary and wrongful, or the result of insanity and disease for which the suffering party should not be held responsible. If a policy is accepted, which expressly declares that the sum insured shall not be payable if the life-insured die by his own hands, whether wilfully, knowingly, or intentionally, or otherwise, there is no doubt that this clause would have its full and literal effect. But it might then be very difficult to limit its application. If, for example, a nurse gave a sick man a fatal dose by mistake, and he took the glass in his hand, put it to his lips, drank and died, it might fall within the language of such a provision, but could hardly come within any principle that would be recognized. Most persons *die by their own act, in this sense ; because most owe their death to some act or acts of indiscretion or exposure. The insurers may provide against any kind of death, as they may against death by a certain disease, or by a certain cause or in a certain place. The difficult question is, what is the con- struction and operation of law, where the clause is only " death by his own hands," or some equivalent phrase. Although strong authorities favor that construction of any clause of this kind, which would avoid the policy if death were actually self-inflicted, although in a state of insanity, the oppo- site view is also well sustained. And we are of opinion that the general principles of the law of contracts, and of the law of insurance ■ particularly, would lead to the conclusion that " death by his own hands," but without the concurrence of a responsible will or mind, would not discharge the insurers, with- out a positive provision to that effect. We should put such a death on the same footing with one resulting from a mere ac- cident, brought about by the agency but without the intent of the life-insured. As if, in a case like that above-supposed, poi- [603] 544- ELEMENTS OP MEKCANTILE LAW. [CH. XX. son were sent to him by mistake for medicine, and he swallowed it under the same mistake.^ '' In Borradaile v. Hunter, 5 Man. & G. 639, the policy contained a proviso, that in case " the assured should die by his own hanels, or by the hands of justice, or in conse- quence of a duel," the policy should be void. The assured threw himself from Vaux- hal^ Bridge into the Thames and was drowned. In a suit on the policy, J^rshne, J., instructed the jury that if the assured, by his own act, intentionally destroyed his own life, and that he was not only conscious of tlie probable consequences of the act, but did it for the express pm-pose of destroying himself Toluntarily, having at the time suf- ficient mind to will to destroy his own life, the case would be brought within the condi- tion of the policy. But if he was not in a state of mind to know the consequences of the act, then it would not come within the condition." The jui-y found that the assured " threw himself from the bridge with the intention of destroying his life ; but at the time of committing the act he was not capable of judging between right and wrong." It was held (Tindal, J., dissenting), that the policy was avoided, as the proviso included all acts of intentional self-destruction, and was not limited by the accompanying pro- visos to acts of felonious suicide. Erskine, J., said: "Looking simply at that branch of tlie proviso upon which the issue was raised, it seems to me that the only qualifica- tion that a liberal interpretation of the words with reference to the nature of the con- tract requires, is, tliiit the act of self destruction shoidd be the voluntary and wilful act of a man, having at the time sufficient powers of mind and reason to understand the piiysical nature and consequences of such act, and having at the time a purpose and intention to cause his own death by that act ; and that the question whether at the time lie was capable of understanding and appreciating the moral nature and quality of his purpose is not relevant to the inquiry, further than as it might help to illustrate the ex- tent of his capacity to understand the physical character of the act itself It appears, in- deed, to me, that, excluding for the present the consideration of the immediate context of the words in question, the fair inference to be drawn from the nature of the contract would be, that the parties intended to include all wilful acts of self-destruction whatever might be the moral responsibility of the assured at the time ; for, although the probable results of bodily disease producing deatli by physical means may be the fair subjects of calculation, the consequences of mental disorder whether produced by bodily disease, by external circumstances, or by con-upted principle, are equally beyond the reach of any reasonable estimate. And reasons might be suggested why those who have the di- rection of insurance otfices should not choose to undertake "the risk of such conse- quences, even in cases of clear and undoubted insanity. It is well known that the conduct of insane patients is, in some degree, under the control of their hopes and fears, and that especially their affection for others often exercises a sway over their minds wliere fear of death or of personal suflering might have no influence"; and insur- ers might well desire not to part with tliis restraint upon the mind and conduct of the assured, nor to release from all pecuniary interest in the continuance of the life of the assured, tliose on whose watchfulness its preservation might depend ; and they might, further, most reasonably desire to exclude from all questions between themselves and llie representatives of the assured, the topic of criminality so likely to excite the com- passionate prejudices of a jury, which were most powerfully appealed to on the trial of this cause." Tindall, C. J., held that the terms " dying by his own hands," being as- sociated with the terms "dying by the hands of justice or in consequence of a duel," whicli last cases designated criminal acts, on the principle of nosdtur a sociis should be interpreted as meaning felonious self-destruction. It will be observed the majority of the court in the above case exclude from the condition cases of mere accident, and of insanity extending to unconsciousness of the act done or of its physical consequences. In CMift V. Scliwabe, 3 C. B. 437, which was determined in the Exchequer Chamber, in 1846, where the condition was that the policy should be void if the life-insured " should commit suicide," it was held by a majority of the court (Eolfe, B,, Patteson, J., Alder- son, B., Parke, B.), that the terms of tlie condition included all acts of voluntary self- destruction, and tlierefore if the life-assured voluntarily killed himself, it was immaterial wliother he was or was not at the time a responsible moral agent. Pollock, [604] CH. XX.] LIFE INSURANCE. 545-*546 It was once made a question upon which high authorities differed, whether death by the hands of justice discharged the- insurers when the policy made no express provision for this. Perhaps the weight of authority is in the affirmative.^ But the question *has now but little practical importance, as our pol- icies always express this exception. In England many of the policies which contain the above clauses, now provide that the exceptions shall be inoperative if the policy is legally transferred,^ or if words to that effect are used.^ C. B., and Wightman, J., dissented. So held also in Dufanr v. Professional Life Ass. Co. 25 Beav. 599.' On the other hand, in New York, in a case decided before the above eases, it was held that a provision in a life policy that it is to be deemed void in case the assured shall " die by his own hand," imports a criminal act of self-destruction, and the underwriters were liable, where the assured drowned himself in a fit of insanity. Breasted v. Farmers Loan and Trust Company, 4 Hill, 73. The decision of the Supreme Court was affirmed in the Court of Appeals, but not with unanimity. Five judges voting for an affirmance, and three for a reversal. The opinion of the majority, delivered by Willard, J., and the dissenting opinion of Gardiner, J., present the argu- ments on their respective sides, the latter sustaining the'decisious of the English courts. 4 Seld. 299. Where a condition of the policy was, tha,t it shall be void, if the party " shall die by his own hand in or in consequence of a duel," it was held to include the case of suicide by swallowing arsenic, and that the first part of the clause was to be sepa- rated from the latter, as the whole taken together would lead to an absurdity. Hart- man V. Keystone Insurance Co. 21 Peun. State, 466. 1 Amicable Society v. Bolland, 4 Bligh, n. s. 194. In the court below, BoUaude v. Disney, 3 Kuss. Ch. 3.51. In this — Fauntleroy's case — there was no clause in the policy in regard to death by the hands of justice, but the life-assured was convicted of forgery, sentenced, and executed. The policy was sustained at the Rolls, but upon appeal to the House of Lords, the decree was reversed. Lyndhurst, Lord Chancellor, held that a policy expressly insuring against such a risk, would be void on the plainest principles of pubUc policy, as taJsing away one of the restraints operating on the minds of men against the commission of crime — namely, the interest we have in the welfare and prosperity of our connections — - and effect could not be given to it on an event which, if expressed in terms, would have rendered the policy, as far as that con- dition went at least, altogether void. Where a policy provided that it should be void if the life-assured " should die in the known violation of a law of the State," it was held that to avoid it, the killing of the life-assured, in an altercation, must have been justifiable or excusable homicide, and not merely under circumstances which would make the slayer guilty of manslaughter only. Harper v. Phoenix Insurance Co. 18 Misso. 109, 19 Misso. 506. Where a slave refused to surrender to patrols, and at- tempting his escape, was shot by one of them in the right side, of which wound he died in a few minutes, this was held not to come within the cases excepted in a policy of insurance on his life of " death by means of invasion, insurrection, riot, or civil com- motion, or of any military or usurped authority, or by the hands of justice." Spruill v. N. C. Mutual Life Insurance Co. 1 Jones, N. C. 126. 2 Dufaur v. Professional Life Ass. Co. 25 Beav. 599. The policy in this case had been deposited with the plaintiff as security for money advanced to the life-insured. No assignment had been made and no notice given to the office of the deposit, but the plaintiflT retained possession of it and paid the premiums. It was held that the words "legally assigned" meant "validly and effectually assigned," and were not used in a technical sense, and that the plaintiff was entitled to recover to the extent of the sums advanced by him. 3 In Jackson v. Foster, 28 Law J., Q. B. 166, 32 Law T. 272, 7 Am. Law Register, 51 * [ 605 ] 547-548* ELEMENTS OF MERCANTILE LAW. [CH. XX. The time of the death is sometimes very important. If the policy be for a definite period, it must be shown that the death occurs within it.i And the terms of the policy may possibly make it necessary to determine which of two persons lived long- est ; as, if a sum were insured on the joint lives of two persons, to be paid to the representatives of the survivor. In the cases in which a question of this kind has been raised, there has been some disposition to establish certain presumptions of the law ; as that the older survived the younger, or the reverse ; or that the man survived the woman.^ We apprehend, however, that there is not, and cannot be any other presumption of law on the "subject, than that, after a certain period of absence and silence, there is a presumption of death ; and seven years has been men- tioned in England and in this country ^ as this period, and even 302, after the elause declaring the policy void if the life-insured should die by liis own hands, &c. was tlie following : " but if any third party have acquired a bona fide inter- est therein, by assignment or by legal or equitable lien for a valuable consideration, or as security for money, the assurance thereby ettl'cted, shall nevertheless to the extent of such interest, be valid and of full effect." Held, that assignees in insolvency, in whom the property of the life-insured, liad vested by operation of law, before his decease, could not recover, on the ground that the assignment contemplated in the policy was a voluntary one. 1 In Lockyer v. OflSey, 1 T. E. 260, it was said by Willes, J. : " Suppose an insur- ance on a man's life for a year, and some short time before the expiration of the term, he receives a mortal wound, of which he dies after the year, the insurer would not he hable." ^ 1 Greenl. Ev. § 29. The arbitrary presumptions of the civil law have not been adopted in the common law. In Kex v. Hay, 1 W. Bl. 640, the case of Gen. Stan- wix, who perished, with his wife and daughter, in a vessel which was ne^er heard from, according to Sir Wm. Scott, a compromise was effected on the recommendation of Lord iJiuisfitld, who said there was no legal principle on which he could decide it. 2 Phillim. 268, n. In Mason v. Mason, 1 Mcriv. 308, where all on board a vessel on a voyage from India, were shipwrecked, and the question was as to the survivorship between a father and son, the rules of the civil law were not accepted, and an issue of fact was directed to the jury. In some cases the comparative age, health, strength, and experi- ence of the parties have been regarded as sufficient to furnish presumptions of stuwivor- ship. Sillick V. Booth, 1 Younge & C. Oh. 121 ; Coye o. Leach, 8 Met. 375. And where these furnish no decisive tests, the presumption that both died at the same time has been adopted. Taylor v. Diplock, 2 Phillim. 261 ; Selwyn's case, 3 Hagg. Ec. 748 ; Coye v. Leach, 8 Met. 371 ; Moehring v. Mitchel, 1 Barb. Ch. 264. But by this is meant probably no more than that as it is impossible to say which of two persons died first, the effect is the same as if they had died together. And then the party on whom is tlie burden of proof of course fails. Underwood v. Wing, 4 De G., M. & G. 633, 31 Eng. L. & Eq. 293 ; Wing v. Angrave, 8 H. L. Cas. 183. '^ In Loring v. Steineman, 1 Met. 2U, Shaw, C. J., said : " The only remaining ques- tion is a question of fact upon the evidence. It is a well-settled rule of law, that upon a person's leaving his usual home and place of residence for temporary purposes of busi- ness or pleasure, not being heard of, or known to be living, for tlie term of seven years, the presumption of life then ceases, and that of his death arises. 2 Stark. Ev. 457 ; Doe V. Jesson, 6 East, 85. But this presumption may be rebutted by counter-evidence, Hopewell u. De I^inna, 2 Camp. 113, or by a conflicting presumption. The King v. Twyning, 2 B. & Aid. 386. This presumption is greatly strengthened, when the depart- [ G06] CH. XX.] FIRE INSURANCE. 548 sanctioned by legislation in New York.^ But all questions of this kind we regard as pure questions of fact. Whichever party rests his case upon death or life, at a certain time, must satisfy the jury upon this point, by such evidence as may be admissible, and relevant.^ If the presumption of death in seven years is re- lied upon, it has been supposed that this strongly imports life during that period and death only at the end,^ unless there be evidence of some particular peril at some definite time ; but this may be doubted.* Policies of life insurance are generally payable in a certain time after due notice and proof of the death of the life-insured. What is such notice and proof is usually regulated by the rules of the insurers which are generally made part of the contract. But in the absence of this it has been held that the usage of the insurers in this respect is not binding unless known to the in- sured before he took the policy, and also that the by-laws of the insurers cannot be referred to unless the policy is in terms made subject to the by-laws, or in some way has made them a part of the contract contained in the policy.^ ure of an individttal from his natire place, the seat of his ancestors, and the home of his brothers and sisters and family connexions ; and still further, where it was to enter upon the perilous employment of a seafaring life, and when he has not been heard of by those who would be most likely to know of him-, for upwards of thirty years." Mc- Cartee v. Camel, 1 Barb. Ch. 455; Smith v. Knowlton, U N. H. 196; Gofer v. Flana- gan, 1 Kelly, 538. This presumption does not arise whei-e the party, when last heard from, had a fixed and known residence in a foreign country. McCartee v. Camel, supra. In re Creed, 1 Drury, Ch. 235. 1 2 N. Y. EcT. Stats, u. 34, 5 6. 2 See cases cited supra. ^ Smith V. Knowlton, 11 N. H. 196; Burr i'. Sim, 4 Whart. 150; Bradley v. Brad- ley, id. 173; Tilly v. Tilly, 2 Bland, Ch. 445. ^ It is held in Enghand that where a person has not been heard of for seven years, there is no presumption as to the time of his death, and the fact that he died at the expi- ration of seven years, or at any other time within the seven years, must be proved by the party relying on it. Knight v. Nepean, 5 B. & Ad. 86, 2 M. & W. 894, 913. Lord Denman, C. J. : "Now when nothing is heard of a person for seven years, it is obviously a matter of complete uncertainty at what point of time in those seven years he died ; of all the points of time, the last day is the most improbable, and most incon- sistent with thqlground of presuming the fact of his death." The King v. Harborne, 2 A. & E. 540; Ti re Creed, 1 Drury, Ch. 235. The English doctrine is held in New York. McCartee v. Camel, 1 Barb. Ch. 462. See also, Paterson v. Black, 2 Park on Ins. 920 (8th ed.). ^ Taylor v. iEtna Life Ins. Co. 13 Gray, 434. In this case it was held that in the absence of such usage known to the insured, a physician's certificate of the death was not an essential part of the proof. [607] 549* ELEMENTS OF MERCANTILE LAW. [CH. XX. SECTION IV. OF THE INTEREST OP THE INSURED. Every one insured in any way, must have an interest in the subject-matter of the insurance. A person may effect insurance on his own life, in the name of a creditor, for a sum beyond the amount of the debt, the balance to enure to his family, and the policy will be valid for the whole amount insured.' Any one may insure his own * life ; but if the insured and the life-insured are not the same, interest may be shown.^ The English statutes have been supposed to require this ; and although we have no precise legislation on the subject, it must be true in this country, that an insurance of any kind without interest, is a mere wager, and a void contract.* A father has an insurable interest in the life of his minor son.* And the general rule is, that any substantial pecuniary interest is sufficient, although not strictly legal nor definite. This has been held in the case of a sister, dependent on a brother for sup- port ; ^ and the rule would be held to apply not only to all rela- 1 American Life & Health Ins. Co. i'. Robertshaw, 26 Penn. State, 189. 2 "Wainewright v. Bland, 1 Moody & R. 481, 1 M. & W. 32. But although the policy on its face may apiiear to hare been obtained by the life-assured, if in fact another person, not interested in his life, found the funds for the premiums, and in- tended, when it was procured, to get the benefit of it by assignment or otherwise, it wiU be declared the policy of that other person, and void, as an evasion of the statute of 14 Geo. 3, c. 48, sH 1, 2. See also. Shilling c. Accidental Death Ins. Co. 2 H. & N. 42, 40 Eng. L. & Eq. 465. ^ But see post, p. 550, n. ■• Loomis V. Eagle L. & H. Ins. Co. 6 Gray, 396 ; Mitchell v. Union L. Ins. Co. 45 Me. 104. 5 Lord V. Diill, 12 Mass. 115, 118. Parker, C. J. : "But it is said the interest must be pecuniary, legal interest, to make the contract valid ; one that can be noticed and protected by the law ; such as the interest which a creditor has in the life of a debtor, a child in that of his parent, &c. The former case, indeed, of the creditor, would have no room for doubt. But with respect to a, child, for whose benefit a*olicy may be effected on the life of the parent, the interest, except the insurable one which may result from the legal obligation of the parent to save the child from public charity, is as precarious as that of a sister in the life of an affectionate brother. For, if the brother may withdraw all support, so may the father, except as before stated. And yet a policy effected by a child upon the life of a father, who depended on some fund termin- able by his death, to support the child, would never be questioned; although much more should be secured than the legal interest which the child had in the protection of his father. Indeed, we are well satisfied that the interest of the plaintiff in the life of her brother is of a nature to entitle her to insvire it." [608] CH. XX.J LIFE INSURANCE. *550 tions, but. where there was no relationship, if there were a posi- tive and real dependence.^ So, an existing debt gives the creditor an insurable interest in the life of the debtor.^ But if the debt be not founded on a legal consideration, it does not sustain the policy .^ In a recent case M. V. & S. formed a copartnership, M. and V. furnished the cap- ital, and S. shared equally in the profits on account of his sldll in the business, but in lieu of capital on the part of S. and as an indemnity, an insurance was effected on his own life by S., and it was agreed between the partners that should S. die during the continuance of the partnership and unmarried, the benefit of the policy should go to the survivors of the firm. It was held that this was not a wager policy.* And if the debt *be paid, even after the death of the debtor, but before the sum insured is paid by the insurers, they were, as the law formerly stood, discharged. So they would be on the general principles of insurance, if on any ground, or by any means, the whole risk of the insured is terminated, and he cannot suffer any loss by the death of the 1 A Avife has an insurable interest in the life of her husband. Eeed v. Eoyal Ex- change Assurance Co., Peake's Ad, Cas. 70 ; St. John v. American Mutual Life Ins. Co. 2 Duer, 429. In Hiilford v. Kymer, 10 B. & C. 724, it was held that a father can- not in his own name, for his own benefit, insure his son's life, though he may make an insurance on the son's life, in the son's name and for the son's benefit. ^ Anderson v. Edie, N. P., B. R. 1795, 2 Park on Ins. {8th ed.) 915. In this case, Lord Kenyan said : " It was singular that this question had never been directly decided before ; that a creditor had certainly an interest in the life of his debtor, because the means by which he was to be satisfied, might materially depend on it ; and that, at all events, the death must, in all cases, in some degree, lessen the security." See com- ments on this case, in Ellis on Ins. p. 125. A creditor of a firm has been held to have an insurable interest in the life of one of the partners thereof, although the other part- ner may be entirely able to pay the debt, and the estate of the insured is perfectly sol- vent. Morrell v. Trenton Mut. L. & F. Ins. Co. 10 Cush. 282. It seems that the pur- chaser of an expected devise from the expectant devisee, may instu-e the life of the tes- tator. Cook V. Field, 15 Q. B. 460. A trustee may insure for the benefit of the trust. Tidswell v. Angerstein, Peake, 151 ; Ward v. Ward, 2 Smale & G. 125, 23 Eng. L. & Eq. 442. If A, being indebted to B, die, and C agree to pay the debt, by instal- ments, in five years, B has an insurable interest in the life of C, for those five years. Von Lindenau v. Desborough, 3 C. & P. 353. So, the grantee of an annuity for one or more lives, has an insurable interest in those lives. Holland v. Pelham, 1 Cromp. ■ & J. 575. Where A furnished funds to B to enable him to go to California, and it was agreed that A should have one half of all the profits which should arise from gold digging by B, it was held that A had an insurable interest in B's life, and that the policy was to be treated as a valued one, and it was not necessary to show that B would have' dug any gold or made any profit. Miller v. Eagle Life & Health Ins. Co. 2 E. D. Smith, 268. See also, Bevin v. Conn. Mut. Life Ins. Co. 23 Conn. 244; Loomis y. Eagle Life & Health Ins. Co. 6 Gray, 396 ; Morrell v. Trenton Mat. L._Ins. Co. 10 Cush. 282 ; Mitchell v. Union L. Ins. Co. 45 Me. 104. 3 Dwyer v. Edie, 1788 ; 2 Park on Ins. (8th ed.), p. 914. ; * Valton V. National Loan Fund Life Ass. Co. 22 Barb, 9. See also, Trenton Mut. L. & F. Ins, Co. V. Johnson, 4 N, J. 576. [609] 551* ELEMENTS OF MERCANTILE LAW. [CH. XX. life-insured. But recent adjudication in England has unsettled the former rule in regard to this question.^ In this * country, life 1 The case of Godsall v. Boldero, 9 East, 72, has a double interest, as well in the celebrity of the life-insured, as in the severe examination to which it has recently been subjected. The plaintiffs wer-e creditors of the Rt. Hon. William Pitt, and on Novem- ber 29, 1803, obtained from the Pelican Life Insurance Company, an insurance on his life for seven years, renewable froin year to year, at an annual premium which was duly paid, and the policy renewed until his death, on January 23, 1806. The debt of Mr. Pitt, at the time the policy wa,s effected, and during the rest of his life, was equal to the sum of £500, and at his decease amounted to £1,109. lis. 6d., which sum, he dying insolvent, was paid to the plaintiffs by his executors, the Earl of Chat- ham and the Lord Bishop of Lincoln, out of the money granted by parliament for. that purpose. The insurance company, against which this suit was brought on the pol- icy, resisted payment, on the ground that the contract of life insurance was one of in- demnity, and the plaintiffs, having been fully paid, had been fully indemnified. This defence was sustained. Lord Ellmborough, C. J., delivering the opinion, said : " This assurance, as every other to which the law gives effect (with the exceptions only which are contained in the second and thu'd sections of the statute Geo. 2, c. 27), is in its nature a contract of indemnity, as distinguished from a contract by way of gaming or wagering. The interest which the plaintiff's had in the life of Mr. Pitt, was that of creditors ; a description of interest which has been held in several late cases to be an insurable one, and not within the prohibition of the statute 14 Geo. 3, c. 48, ^ 1. That interest depended upon the life of Mr. Pitt, in respect of the means, and of the proba- bility, of payment which the continuance of his life afforded to such creditors, and the probability of loss wliich resulted from his death. The event against which the indem- nity was sought by this assurance, was substantially the expected consequence of his death as affecting the interest of these individuals assured in the loss of their debt. This action is, in point of law, founded upon a supposed damnification of the plaintiffs, occasioned by his deatli, existing and continuing to exist at the time of the action brought ; and being so founded, it follows, of course, that, if, before the action was brought, the damage, which was at first supposed likely to result to the creditors from the death of Mr. Pitt, were wholly obviated and prevented by the payment of his debt to tliem, the foundation of any action on their part, on the ground of such insurance, fails. And it is no objection to this answer, that tlie fund out of which their debt was paid, did not (as was the case in the present instance) originally belong to the execu- tors, as a part of the assets of the deceased ; for, though it were devised to them aliunde, the ikljt of the testator was equally satisfied by them thereout ; and the damnification of the creditors, in respect of which their action upon the assurance is alone maintain- able, was fully obviated before their action was brought. This is agreeably to the doc- trine of Lord Mniisjiihl, in Hamilton v. Mcndes, 2 Burr. 1210. The words of Lord Mansfield are : ' The plaintiff's demand is for indemnity ; his action, therefore, must be founded upon the nature of the damnification, as it really is at the time the action is brought. It is repugnant, upon a contract for indemnity, to recover as for a total loss, when the event has decided that the damnification in truth is an average, or, perhaps, no loss at all. Whatever undoes the damnification in the whole, or in part, must ope- rate upon tlie indemnity in the same degree. It is a contradiction in terms, to bring an action for indemnity, where, upon the whole event, no damage has been sustained.' Upon this ground, therefore, that the plaintiffs had, in this case, no subsisting cause of action in point of law, in respect of their contract, regarding it as a contract of indem- nity at the time of the action brought, we are of opinion that a verdict must be entered for the defendant on the first and third pleas, notwithstanding the finding in favor of the plaintiffs on the second plea." The case of Godsall v. Boldero, was recognized and approved in several subsequent decisions. Bainbridge v. Neilson, 10 East, 344; Tunno v. Edwards, 12 id. 493; Barber !'. Morris, 1 Moody & E. 62. Ex parte, An- drews, 1 Madd. 573; Humphrey a. Araljin, Lloyd & Goold, temp. Plunkett, 318; Pliillips D. Eastwood, id. temp. Sugden, 281 ; Henson o. Blaekwell, 4 Hare, 434. It also found a place in Smith's Leading Cases, vol. 2, p. 157, and was there character- ized as "established doctrine," and so cited by all the text--wi-ite.rs on the subject of life insurance. Notwithstanding this arrav of authority in its support, it is no longer law in [610] CH. XX.] LIFE INSURANCE. *552 insurance companies sometimes avoid the question, by making it a part of the contract, that the insured creditor ^ shall transfer England. It seems to have been disregarded from the first by the insurance companies, as appears from the evidence of custom, in Barber v. Morris, 1 Moody & R. 62. Even in the principal case itself, the office is understood not to have availed itself of the verdict, but to have paid the money to the plaintiffs before they left the court. Ellis, 137, note (b). Its principle was strongly condemned by the learned Professor de Morgan, in his " Essay on Probabilities and their Application to Life Contingencies and Assurance Offices" (Cabinet Encj-clopajdia, Longman & Co. 1838, pp. 244-248), who says: " We cannot be too much surprised at the ignorance shown by that judge who de- clared that life insurance was of its own nature a contract of indemnity." It was fi- nally overruled (Nov. 13, 1854), by the Com-t of Exchequer, in Dalby v. India & London Life Assurance Co. 15 C. B. 365, 28 Eng. L. & Eq. 312. In this case Eev. John Wright, having an interest in the life of the Duke of Cambridge to the amount of .£3,000, effected four policies of insurance with the Anchor Assurance Company on the duke's life for that amount, and that company effected a policy with the defendants, by way of counter-assurance for £1,000 of the amount. Mr. Wright afterwards, in consideration of an annuity, surrendered the four policies to the Anchor Assurance Company, and three of them were cancelled ; but that company paid premiums to the defendants on the other policy effected with them, until the duke's death. The defend- ants, being sued by the last-named company on the £-1 ,000 policy, resisted payment on the ground that the Anchor Assurance Company had no interest in the life-assured at his decease, and the contract of life assurance was one of indemnity. This defence and the case of Godsall v. Boldero, were overruled. It was held {Parke, B. dehvering the opinion), that "the contract, commonly called 'life assurance,' when properly consid- ered, is a mere contract to pay a certain sum of money on the death of a person, in consideration of the due payment of a certain annuity for his life, the amount of the annuity being calculated in the first instance, according to the probable duration of the life ; and when once fixed, it is constant and invariable. The stipulated amount of annuity is to be uniformly paid on one side, and the sum to be paid in event of death, is always (except where bonuses have been given by prosperous offices), the same on the other. This species of assurance in no way resembles a contract of indemnity." Pages 317, 318. The case of Dalby v. India & London Life Assurance Co. has more recently (Jan. 15, 16, 1855), been followed and approved on the other side of West- minster Hall, by Vice-Chancellor Wood, in an able judgment, oven-uling Godsall v. Boldero. Law v. London Indisputable Life Policy Co. 1 Kay & J. 223. 'The plaintiff, on April 9, 1855 (the date of the policy in dispute), purchased a contingent legacy of upwards of £3,000, to which his son would be entitled on attaining the age of thuty years. The policy was granted for two years, and would expire April 9, 1852. The son lived to complete his thirtieth year on Jan. 16, 1852, thus fulfilling the contingency, and the legacy was received by the father. The son, singularly enough, died on Jan. 22, six days after attaining the age of thirty. The defendant company, notwithstanding its name and the promises to the contrary in its prospectus, refused to pay the sum in- sured, maintaining that the plaintiff '^ interest ceased on his receiving the legacy. The Vice-Chancellor, overruling this defence said : " On the main question, I think thc^ase which has been recently decided in the Court of Exchequer, reversing Godsall n.TBol- dero, completely rules the present. Godsall v. Boldero was not a decision which met with' universal approbation, and the decision of the Exchequer Chamber places the matter upon what, I confess, appears to me, independent of the high authority of that Court of Appeal, to be the right footing with regard to policies of this description. Policies on fire and on marine risks are policies expressly, in the vety words of the policies, made to recompense a loss which the parties may sustain in conseqiionce of the calamities against which the policies are effected ; therefore, when that loss is made good aliunde, the company are not liable in any way, under the express terms of their contract, in respect of that which has not accrued, namely, loss ; but when the question comes to be a question on a life policy, there is no such contract on the policy itself. The policy never refers to the cause or' reason for effecting the assignment. The policy is a contract in the simplest form ; that, in consideration of annuity payable annually to the insurer, the insurer will, at the expiration of a particular life, pay a certain sum [611] 553* ELEMENTS OP MEKCANTILE LAW. [CH. XX. to the company an amount of his debt equal to that for which he is insured. A diffii3ult question arises, when the representatives of the debtor, or a surety or guarantor of the debt, defend themselves on the ground that the debt is paid and fully discharged by the payment under the policy. The cases may not settle this ques- tion ; ^ nor does the practice, so far as we are aware of it. But we should say, very confidently, that the general principles of all insurance would lead to the conclusion, that by such pay- ment the debt is paid, so far as the creditor is concerned ; but that the insurers are subrogated to the rights of the insured, and may prosecute, in his name, but for their own benefit, any ac- tion which he might prosecute himself.^ It has however been of money to the insured, who pays those annual payments, which are calculated by the company upon the value which they think ought to be paid, in order to enable them to make tlie postponed payment. They make no reference to any other circumstance or event ; they have founded their calculation upon the probability of the duration of hu- man life, and tliey get paid the full value of tliat calculation. On what principle can it be afterwards said, that, because somebody else is good enougli to satisfy the object which the insured had in view when he effected the insurance, the insurer should be re- leased from the contract '> " These cases, it may be remarked, decide that the interest of the creditor in the life of his debtor, required by the English statute, is only an inter- est existing when the policy is procured. The overruling of Godsall i>. Boldero, on both sides of Westminster Hall, is welcomed by the London Jnrist, in two recent num- bers, with some well-considered remarks. Vol. 18, No. 935, p. 485, Dec. 9, 18.54; Vol. 19, 0. S. No. 944, p. 37, Feb. 10, 1855. See 39 London Law Mag. 0. S. p. 202. See also, Loomis v. Eagle Life and Health Ins. Co. 6 Gray, 396 ; Miller v. Eagle Life and Health Ins. Co. 2 E. D. Smith, 268; Trenton Mut. L. & F. Ins. Co. u. Johnson, 4 N. J. 576, decided in New Jersey, in whieli State all wagers are not contrary to law. In Ruse v. Mut. Benefit Life Ins. Co. 26 Barb. 556, 561, it is said; "We think tha the plaintiff's application in writing for the insurance, which was accepted by the de- fendants, and in which the plaintiff stated that he had an interest in the life of Bugbee (the life-insured), to the full amount of the sum of $2,000, sufficient proof of such in- terest as between the parties, if any proof of interest was necessary." In Bevin v. Conn. Mut. L. Ins, Co. 23 Conn. 244, there is a dictum to the effect that the Englisli statutes are but declarations of tlie common law, and that a life policy is a contract of indemnity. Craig V. Murgatroyd, 4 Yeates, 169, cited in the notes of the American Edition to God- sall V. Boldoro, in Smith's Leading Cases, as confirmatory of that case, involved a mar^ie and not a life insurance. In New York, on the contrary, it is held that where a debtor procures an insurance on his life and assigns the policy, the right nf the as- signee to demand and enforce the stipulated payment is no more liable to doubt or dis- pute than that of an executor or administrator. St. John v. American Mutual Life Ins. Co. 2 Duer, 419. In some policies there is a stipulation, that, in case of loss, the insured creditor will assign to tlie insurance company a portion of the debt equal to the sum received of the company. Cutler v. Rand, 8 Cu^li. 89. 1 But in Humphrey ;;. Arabin, Lloyd & Goold's Cases (temp. Plunkett), 318, it was held, that, if an insured creditor was paid the whole debt by insurers on the life of the debtor, the executor or administrator of the creditor could not require him to abate his claim ]»o tanio, or credit the estate with it. "We should say so too ; but we sliould be disposed to add, as in the text, that the wliole claim passed over by subrogation to the insurers. Recent decisions, however, leave this in some doubt. ■•^ See Ilenson v. Blackwell, 4 Hare, 434. It M'as held, in Humphrey v. Arabin, Lloyd & Goold's Cas. temp. Plunkett, 318, tliat, where there was nothing to raise the [612] CH. XX.] LIFE INSURANCB. *553 held where the death of the person insured is caused by the fault of a third party that the insurer cannot bring an action against this person, there being no privity between them.i Where the statutes of a State treat a wife as a feme sole in respect to a policy of insurance taken out in her name upon the life of her husband, the policy becomes her separate property, and is beyond the reach of her husband. He cannot, therefore, assign it, and his subsequent declarations in respect to his state of health at the time the policy was made, are not admissible to show that the representations which he made at the time the policy was made were false.^ * SECTION V. OF THE ASSIGNMENT OF A LIFE POLICY. Life policies are assignable at law, and are very frequently assigned in practice ; ^ and the assignee of a policy is entitled, on the death of the party insured, to recover the fuU sum in- sured without reference to the amount of the consideration paid by him for the assignment.* A large proportion of the policies which are effected, are made for the purpose of assignment ; that is, for the purpose of enabling the insured to give this ad- ditional security to his creditor. If the rules of the company or the terms of the policy refer to an assignment of it, they are binding on the parties. On the one hand, an assignment would operate as a discharge of the insurers, to which a rule or ex- pressed provision gave this effect.^ And, on the other, if the relation of trustee and cestui que trust between the creditor and debtor in respect to the policy, the debtor cannot avail himself of the payment of the sum insured in a policy. 1 Conn. Mut. Life Ins. Co. u. New York & New Haven Railroad Co. 25 Conn. 265. 2 Fraternal iVfut. L. Ins. Co. v. Applegate, 7 Ohio State, 292. In Risen v. Wilker- son, 3 Sneed, 565, where a statute provided that any husband might effect insurance on his own life, and the same shall in all cases enure to the benefit of his widow and heirs, without in any manner being subject to the debts of the husband, it was held that this did not prevent the husband, who had insm-ed his own life, without saying for whose benefit, from assigning the policy. 3 Ashley v. Ashley, 3 Sim. Ch. 149; Godsall v. "Webb, 2 Keen, 99; Barber v. Butcher, 8 Q. B. 863; N. Y. Life Ins. Co. v. Plack, 3 Md. 341. But see ante, p. 549, n. 2. * St. John V. American Mut. L. Ins. Co. 2 Duer, 419, 3 Kern. 31. 5 Where, by the terms of a life insurance policy, the company agreed with " the as- sured, his executors, administrators," to pay the amount to his " legal representatives," 52 [ 613] 554* ELEMENTS OF MERCANTILE LAW. [CH. XX. agreement were that the policy should continue in favor of the assignee, even after an act which discharged it as to the insured himself, — as, for example, his suicide, — the insurers would be bound by it.^ It is an important question, what constitutes an assignment. The general answer must be, any act distinctly importing an assignment. And, therefore, a delivery and deposit of the pol- icy, for the purpose of assignment, will operate as such, without a formal written assignment. So will any transaction which gives to a creditor of the insured a right to payment out of the insurance.^ It seems, however, that delivery is necessary. And where an * assignment was indorsed on the policy, and notice given to the insurers, but the policy remained in the possession of the in- sured, it was held that there was no assignment.^ Where, how- after due notice and proof of death, and at the foot of the policy were these words : "N. B. If assij^ned, notice to be j^iven to the company," it was held that the provis- ion to pay to the " legal representative," was designed to apply only to a case where the party died without having previously assigned, and is not to be construed as in any sense limiting the power of assignment ; and further, that the reasons which require the assent of the underwriters as indispensable to the validity of assignments of fire poli- cies, do not apply to insurance on life. N. Y. Life Ins. Co. v. Flack, .3 Md. 341 . ' Cook V. Black, 1 Hare, 390. And such a provision is not void as illegal or against public policy. Moore v. Woolsey, 4 Ellis & B. 243, 28 Eng. L. & Eq. 248, 255. But, in order to protect the assignee against acts of the assignor, which would amount to a forfeiture if he were the liolder of the policy, there must be this special provision in fa- vor of the assignee. Amicable Sm'icty v. BoUand, 4 Bligh, N. s. 194. 2 In re Styan, 1 Phillips, Ch. 105 ; Cook i\ Black, 1 Hare, 390 ; Moore v. Woolsey, 4 Ellis & B'. 243, 28 Eng. L. & Eq. 248 ; Wells v. Archer, 10 S. & R. 412; Harrison V. McConkey, 1 Md. Ch. 34 ; N. Y. Life Ins. Co. v. Flack, 3 Md. 341. The voluntary payment of premiums on a policy of life insurance, gives to the payer no interest in the policy. Burridge v. Row, I Younge & C. Ch. 183. ^ Palmer v. Merrill, 6 Cush. 282. In this case, where the sum insured was $1,000, a memorandum was indorsed by the life-assured on the policy, requesting the insurers to pay to the plaintiff, his creditor, the sum of $400, in case of loss on the same, and afterwards the assured, when paying the annual premium, exhibited the policy to the insurers with the indorsement and request. The policy remained in the custody of the life-insured, and on his decease came into the hands of his administrator, to whom the company, notwithstanding a previous demand of the plaintiff, paid the amount insured. The estate was insolvent, and this suit was brought against the administrator, to enforce an equitable lien on the sum received by the administrator of the office. The court held that, to sustain the plaintiff's claim, there should have been an assignment of the entire sura due ft'om the insurers, and a manual tradition of the policy to the assignee. Shaw, C. J. : "According to the modern decisions, courts of law recognize the assignment of a chose in action, so far as to vest an C(|uitable interest in the assignee, and authorize liim to bring an action in the name of an assignor, and recover a judg- ment for his own benefit. But, in order to constitute such an assignment, two things must concur; first, the party holding the chose in action must, by some significant act, express his intention that the assignee shall have the debt or right in question, and, according to the nature and circumstances of the case, deliver to the assignee, or to some person for his use, the security if there be one, bond, deed, note, or written agree- [614] CH. XX.J LIFE INSURANCE. 555 ever the assignment was by a separate deed, which was duly- executed and delivered, this is an assignment of the policy, without actual delivery of it.^ And a mere verbal promise to ment, upon which the debt or chose in action arises ; and, secondly, the transfer shall be of the whole and entire debt or obligation, in which the chose in 'action consists, and, as far as practicable, place the assignee in the condition of the assignor, so as to enable the assignee to recover, the full debt due, and to give a good and valid discharge to the party liable. The transfer of a chose in action bears an.analogy, in some respect, to the transfer of personal property ; there can be no actual manual tradition of a chose in action, as there must be of personal property, to constitute a lien ; but there must be that which is similar, a delivery of the note, certificate, or other document, if there is any, which constitutes a chose in action, to the assignee, witli full power to exercise every species of dominion over it, and a renunciation of any power over it on the part of the assignor. The intention is, as far as the nature of the case will admit, to substi- tute the assignee in place of the assignor as owner. It appears to us that the order in- dorsed on this policy, and retained by the assured, fails of amounting to an assignment in both these particulars. We do not question that an assignment may be made of an entire fund, in the form of an order drawn by the owner on the holder of the fund, or party indebted, with authority to receive the property or discharge the debt. But if it be for a part only of the fund or debt, it is a draft or bill of exchange, which does not bind the drawee, or transfer any proprietary or equitable interest in the fund, until ac- cepted by the drawee. It, therefore, creates no lien upon the fund. Upon this point, the authorities seem decisive. Welch v. MandeviUe, 1 Wheat. 233, 5 id. 277 ; Eobbins V. Bacon, 3 Greenl. 349 ; Gibson v. Cooke, 20 Pick. 15. It seems to us quite clear, that the plaintiff acquired no such interest in this policy, as would enable him to main- tain an action against the insurers. He seems himself to have thouglit so too ; for, although he demanded the amount of them, which they refused to pay, for reasons which seem to be conclusive, he yet declined bringing any suit against them, but per- mitted them to pay the money over to the administrator. If the plaintiff had no such legal or equitable interest in the debt duo on the policy, as would enable him to main- tain an action or suit in equity, either in his own name or in the name of the adminis- trator of the assignor, for his own benefit, it seems difficult to perceive on what ground he had any equitable lien on the debt due by the policy ; and if he had not, then the administrator took it as general assets, charged with no trust for the plaintiff. It ap- pears to us that a contrary doctrine would tend to a great confusion of rights. A man cannot, by his own act, charge a personal chattel, a carriage and horses for instance, with a lien in favor of a particular creditor, and yet retain tlie dominion and possession of them till his death ; a fortiori, when he retains the memorandum or instrument of transfer of such chattel in his own possession and imder his own control. It seems to us equally impracticable to charge a debt due to him, by an order or memorandum, retained in his own possession, purporting to give to a particular creditor an equitable lien, by the assignment of such chose in action, without a transfer or delivery of the security by which it is manifested. Such an assignment would not constitute the debtor himself a trustee to the creditors ; what trust, then, devolves on the administra- tor 1 Were the law otherwise, an administrator, instead of succeeding to the property and rights of his intestate, to be administered and distributed equally amongst all his creditors, might be obliged to dispose of it in very unequal proportions, according to such supposed declaration of trust. These considerations apply with peculiar force to a policy of insurance on the life of the assured himself, on which no money can become due until the death of the assured, at which time all his rights devolve on his personal representative. If, therefore, it is intended to supersede the right of the persoual rep- sentative, it must be done in the mode required for a complete assignment of the whole contract." It is added in a note to the case, that, it having been suggested in the ar- gument that other facts existed, not appearing in the report, showing that the assign- ments had been delivered to the respective assignees, at the time, notice thereof given to the company, and assented to by them, expressly or by implication, a new trial was granted on which the plaintiffii obtained verdicts and judgments. 1 ITortescue v. Barnett, 3 Mylne & K. 36. [615] 556* ELEMENTS OF MERCANTILE LAW. [CH. XX. assign, a valuable consideration being received for the promise, has been held good as against the insured ; and, perhaps, after proper notice, against his assignee in bankruptcy.-' This subject of assignment is frequently regulated by the by- laws of the insurers, or by the terms of the policy. Where it is not, we see no reason for saying that the delectus personarum does not apply as in other kinds of insurance ; and consequently the insurers are discharged if there be an assignment without their knowledge and consent. The cases however do not settle this question, and there are opinions that life insurance is in this respect distinguished from other insurance.^ SECTION VI. OF WAEEANTY, EEPEESENTATION AND CONCEALMENT. The general principles on this subject are the same which we have already stated in reference to other modes of insurance. In life policies, however, the questions which must be answered, are so minute and cover so much ground, that no difficulty often * arises except in relation to the answers. One advisable pre- caution is for the answerer to discriminate carefully between what he knows and what he believes. If he says simply " yes " or " no," or gives an equivalent answer, this is in most cases, at once a warranty, and avoids the policy if there be any material mistake in the reply. But if the answerer adds the words " to the best of my knowledge and belief," he warrants only the fact of his belief, or, in other words, nothing but his own entire hon- esty.^ The cases which turn upon the answers to the questions, are 1 Tibbits 0. George, 5 A. & B. 107. See Williams v. Thorp, 2 Sim. 257; Gibson V. Overbm-y, 7 M. & W. 557. It is held in Louisiana, that one who has effected insur- ance on his life, may assign the policy, or a part of it, to a bona fide creditor ; but such assignment will be without effect as to third persons, creditors of the insured, where there was no proof of notice to the assurers before the death of the assured, nor of the acceptance of the assignment by the transferree before that date, and the policy re- mained in the possession of the assignor. Succession of Eislcv, 11 Eob. La. 298. 2 N". Y. Life Ins. Co. v. Flack, 3 Md. 341. See ante, p. 553,'n. 3 ; Ellis on Life Ins. 152, 153. 8 Stackpole v. Simon, 2 Park on Ins. (8th ed.), 932. [616] CH. XX.J LIFE INSURANCE. -556 very numerous ; but they necessarily rest upon the especial facts of each case, and hardly permit that general rules should be drawn from them. Some, however, may be stated. The first is, that perfect good faith should be observed. The want of it taints a policy at once ; and the presence of it goes far to protect one. Thus where the life-insured was beginning to be insane, but was wholly unconscious of it, the policy was not vitiated by the concealment, although two doctors in attend- ance upon him knew how the case stood.^ Most of the policies of the present day provide that the pol- icy is made in the faith of the statements in the application for insurance with the stipulation that if they shall be found' in any respect untrue, the policies shall be void. Then the stipu- lations are considered as warranties, and if untrue, even in a point immaterial to the risk, avoid the policy.^ There is a warranty, or statement, usually making a part of nearly all life policies; it is that the life-insured is in good health. But this does not mean perfect health, or freedom from all symptoms or seeds of disease. It means reasonably good health ; and loose as this definition, or rule, may be, it would be difficult to give any other.^ And if a jury on the whole are sat- isfied that the constitution of one warranted to be " in good health," is radically impaired, and the life made unusually pre- carious, there is a breach of the warranty, although no specific disease is shown which must have that effect.* On the other hand, this warranty is not broken by the presence of a disease, if that be one which does not usually tend to shorten life — as dyspepsia — unless it were organic, or had increased to that ex- treme degree, as to be, of itself, dangerous.-^ 1 Swete V. Fairlie, 6 C. & P. 1. But insanity, if known, should be communicated, or the policy will be avoided by the concealment. Lindenau v. Desborough, 8 B. & C. 586, 3 C. & P. 353. 2 Miles V. Conn. Mut. L. Ins. Co. 3 Gray, 580. s Ross V. Bradshaw, 1 W. Bl. 312. * Aveson v. Kinniard, 6 East, 188. ^ Watson V. Mainwaring, 4 Taunt. 763. Chambre, J. : " All disorders have more or less a tendency to shorten life, even the most trifling ; as, for instance, corns may end in a mortification ; that is not the meaning of the clause ; if dyspepsia were a disorder that tended to shorten life within this exception, the lives of half the members of the profession would be uninsurable." In this case the jury had found that the dyspepsia was neither organic nor excessive, and the court refused to set aside the verdict for the plaintiff. See N. T. Life Ins. Co, v. Flack, 3 Md. 356, where it is said : " We cannot see how a person can be sound and healthy who is predisposed to dyspepsia to such a 52 * [ 617 ] 557 ELEMENTS OF MERCANTILE LAW. [CH. XX. Consumption is the disease which is most feared in this coun- try as well as in England. And the questions Avhich relate to the symptoms of it, as spitting of blood, cough, and the like, are exceedingly minute. But here also there must be a reasonable construction of the answers. Thus, if spitting of blood be posi- tively denied, there is no falsification in fact, though literally speaking, the life-insured may have spit blood many times, as when a tooth was drawn, or from some accident. The question usually put to the jury is, was the party affected by any of these or similar symptoms, in such wise that they indicated a disorder tending to shorten life. And any symptom of this kind, however slight — as a drop or two of blood having ever flowed from in- flamed or cong'ested lungs — should be stated.^ If the insurers degree as to produce bodily iniirmity." Where the insured was troubled with spasms and cramps from violent tits of the gout, but was in as good health when the policy was underwritten as he had been for a long time before, and the underwriters liad been told that he was subject to the gout, Lord Muimjitlii said : " The imperfection of lan- guage is such that we have not words for every ditferent idea ; and the real intention of parties must be found out by the subject-matter. By the present policy, the hfe is warranted, to some of the underwriters, in health, to others in good health ; and yet there was no difference intended in point of fact. Such a warranty can never mean that a man had not the seeds of disorder. AVe are all born witli the seeds of mortality in us. A man, subject to the gout, is a life capable of being insured, if he has no sick- ness at the time to make it an unequal contract." ^ In Vose V. Eagle Life & Health Ins. Co. 6 Cash. 42, an applicant for life insur- ance answered an interrogatory, whetlier he had ever been affiictecl with a pulmonary disease, in the negative ; and in answer to an interrogatory, whether he was then af- flicted with any disease or disorder and what, stated, that he could not say whether he was afflicted with any disease or disorder, but that he was troubled with a general de- bility of the system ; and it was proved that the applicant was then in a consumption, the symptoms of whicli had be^;un to develop themselves five months before, and were known to him ; but were not disclosed to the insurers, although sufiicient to induce a reasonable belief on the part of the applicant, that he had such a disease. It was hold that whether these statements amounted to a warranty or not, they were so materially untrue as to avoid the policy, although the insured, at the time of his application, did not believe that be had any pulmonary disease, and the statement made by him was not intentionally false, but according to his belief, true. According to the opinion delivered in the ease, the proposal or declaration when fonning a part of the policy has been held to amount to a condition in warranty which must be strictly complied with and upon the truth of which whether a misstatement be intentional or not, the whole instniraents depends; wliere there is no warranty, an untrue allegation of a material fact, or the concealment of a material fact when a general question is put by the insur- ers at the time of effecting the policy, which would elicit it, will vitiate the policy, al- though such allegation or concealment be the result of accident or negligence and not of design ; where the agent for receiving the application and forwarding ft to the direct- ors of the company at their place of business, by whom the contract and policy are made and signed on the basis of the application, had reasonable cause to believe' that the party was laboring under pulmonary disease, this does not cure the effect of the untrue statement. Geaeh v. Ingall, 14 M. & W. 95. In this case the life-assured stated in his declaration, that he wa:; at that time in good health, and not afflicted with any disorder, nor addicted to any habit, tending to shorten life ; that he had not any time had among other things auy spitting of blood, consumptive symptoms, asthma, [618] CH. XX.] ' LIFE INSURANCE. -557 defend on the ground that the insured weis not in good health at the time of effecting the insurance, the burden is on them to prove this.i cough, or other affection of the lungs. One of the terms of the policy was that it should be -void if any thing stated by the assured in the declaration should he untrue. The defendants' witnesses proved that about four years before the policy was effected, the assured had spit blood, and had subsequently exhibited other symptoms usual in consumptive subjects; and it appeared that he died of consumption in the year 1843. The Lord Chief Justice told the jury that it was for them to say whether at the time of his making the statement set forth in the declaration, the assured had such a spitting of blood, and such affection of the lungs and inflammatory cough, and such a disorder as would have a tendency to shorten his life. This was held a misdirection, for although the mere fact of the assured having spit blood would not vitiate the policy, the assured was bound to have stated that fact to the insurance company in order that they might make inquiry whether it was the result of the disease called spitting of blood. Alaerson, B. : " Then as to the misdirection, my Lord Denman certainly does not ap- pear to have sufSciently called the attention of the jury to the distinction between those disorders, respecting the existence of which, at the time of executing the policy, the assured was called on to make a specific declaration, and those which might have formerly existed. By ' spitting of blood ' must, no doubt, be understood a spitting of blood as a symptom tending to shorten life ; the mere fact is nothing. A man cannot have a tooth pulled out without spitting blood. But, on the other hand, if a person has an habitual spitting of blood, although he cannot fix the particular part of his frame whence it proceeds, still as this shows a weakness of some organ which contains blood, he ought to communicate the fact to the insurance company, for no one can doubt that it would most materially assist them in deciding whether they should exe- cute the policy; and good faith ought to be kept with them. So, if ho had had spitting of blood only once, but that once was the result of the disease called spitting of blood, he ought to state it, and his not doing so would probably avoid the policy. Again, sup- pose this man had an inflammation of the lungs, which had been cured by bleeding, many physicians would perhaps say, that it was an inflammation of the lungs of so mitigated a nature as not to tend to shorten life ; still that woitld be no answer to the case of the defendants, for it is clear that the company intended that the fact should be mentioned. As to the word 'cough,' it must bo understood as a cough proceeding from the lungs, or no one could ever insure his life at all ; and indeed it is so expressed in the policy — ' Cough or other affection of the lungs.' Again, it is obvious that the insurance company meant to guard against the disease of dysentery. Now, a man may have had the dysentery, and been cured of it, still the office should know of it ; and, indeed, that disorder may have been mentioned by name, as being one of a nature likely to return. AH these instances show that it was not intended to restrict the statement of the assured to disorders having a tendency to shorten life at the moment of executing the policy ; what the company demanded was, a security against the existence of such diseases in the frame. There must, therefore, be a new trial." Rolfe, B. : "I have no doubt, that, if a man had spit blood from his lungs, no matter in how small a quantity, or even had spit blood from an ulcerated sore throat, he would be bound to state it. "The fact should be made known to the office, in order that their medical adviser might make inquiry into its cause." In Anderson v. Fitzgerald, 4 H. L. Cas. 484, 24 Eng. L. & Eq. 1," determined finally by the House of Lords, the assm-ed proposed his life for insur- ance, and signed a " proposal," which contained his answers to twenty-seven questions, the twenty-first and twentj'-second of which were as follows : "21. Did any of the par- ty's near relations die of consumption, or any other pulmonary complaint ? Answer. No. 22. Has the party's life been accepted or refused at any office, &c. Answer. No." Tlie proposal also contained the following agreement : " I hereby agree that the particulars mentioned in the above proposal, shall form the basis of the contract between 1 Trenton Mutual L. & E. Ins. Co. v. Johnson, 4 N. J. 576. [619] 558-559* ELEMENTS OF MERCANTILE LAtI. [CH. XX. The insurers always ask who is the physician of the life-in- sured, that they may make inquiries of him if they see fit. And "this question must be answered fully and accurately. It is not enough to give the name of the usual attendant ; but every phy- sician really consulted should be named, and every one consulted as a physician, although he is an irregular practitioner, or quack.^ If the warranty be that the life-insured is a person of sober and temperate habits, it has been held, that the jury are not to the assured and the company; and if there be any fraudulent concealment or unti-ne allegation contained therein, or any circumstance material to this insurance shall not liare been fully communicated to the said company, or there shall be any fraud or mis- statement, all money which shall have been paid on account of this insurance, shall be- come forfeited and the policy be void." The policy contained a warranty on the part of the assured as to most of the facts replied to in the proposal, but those as to questions 21 and 22 were omitted therein. It then provided that the policy should be null and void, and all moneys paid by the assured forfeited, upon his dying, in certain enumer- ated modes, or if any thing so warranted as aforesaid shall not be true, or if any circum- stance material to this insurance shall not have been truly stated, or shall have been misrepresented or concealed or shall not have been fully and fairly disclosed and com- municated to the said company, or if any fraud shall have been practised upon the said company, or any false statement made to them in or about the obtaining or effecting of this insurance. The answers to questions 21 and 22 were proved to be untrue. It was held by the House of Lords, reversing the decisions of the Courts of Exchequer and Exchequer Chamber in Ireland, that the judge was wrong in directing the jury, that if they found the statements both false and material, tliey should find the verdict for the defendant ; and that the questions which tlie judge ought to have left to the jury were first, were the statements false, and secondly, wore they made in obtaining or effecting the policy. The ground of the decision was that the insurers had stipulated that the policy should be void unless the assured should answer certain questions coixectly, and thereby excluded the question of materiality. Lord St. Leonards, In opposition to Baron Parke and Lord Brougham, thought the woi'ds, " false statement," in the connection meant a statement untrue within the knowledge of the party making it, and not merely one which was in fact untrue, — but on the ground that a circumstance material to the insurance had not been truly stated concuiTcd in the motion. See Duckett v. Wil- liams, 2 Cromp. & M. 348, 4 Tyrw. 240. In this case it was agreed in the declaration signed by the assured previous to effecting the policy that if any untrue averment was contained therein or if the facts requireil to be set forth in the proposal annexed were not truly stated, the premiums should be forfeited and the assurance absolutely null and void. The statement as to the health of the life, was untrue in point of fact but not to the knowledge of the party making it. It was held, that the want of knowledge was immaterial, and the premiums were forfeited. It being provided in the conditions of insurance that any untrue or fraudulent allegation made in effecting the insurance will render the policy void, it was held that the representation by the insured that he was a farmer, whereas he was at the time a slave-taker by occupation, rendered the policy void, and it is not material that his death was not occasioned by his business of slave- taking. Hartman v. Keystone Insurance Co. 21 Penn. State, 466, 476. 1 Morrison v. Muspratt, 4 Bing. 60 ; Everett v. Desborough, 5 id. 503 ; Lindenau v. Desborough, 8 B. & C. 586 ; Huckman v. Fernie, 3 M. & W. 505. Where A insures the Ufe of a third person, he is bound by the misrepresentations of tlic life-assured although himself ignorant that they were false. Maynard v. Rhodes, 5 Dowl. & E. 266, 1 C. & P. 360. But he is not bound by the concealment of facts by the life-assured, of which he himself is ignorant, which are not called for by a general or particular ques- tion, unless the life-assured is his general agent to effect the policy. Huckman v. Fer- nie, 3 M. & W. 505. So if the third person is himself unconscious of concealing facts. Swete z). Fairlio, 6 C.&P. 1. [620] CH. XX.] LIFE INSURANCE. *560 inquire whether his habits of drinking — if they are proved — are such as might injure his health ; because the insurers have a right to say that they will insure only those who are temperate.^ But it might be answered that although the insurers have this right, and there may be good reasons why this should be the general practice, yet unless they use the word " abstinence " or * something equivalent, they have no right to say that any one is not "temperate," who does not drink enough to affect his health ; for, as generally all intemperance must effect health in- juriously, if there be no such injury the presumption would be that there was no intemperance. And there is clearly a broad distinction between temperance and total abstinence. An answer, " not subject to fits," is not necessarily falsified by the fact that the life-insured has had one or more fits. But if the question had been " have you ever had fits," then any fit of any kind, and however long before, must be stated.^ In general, as there is always a general question as to any facts affecting health not particularly inquired of, a concealment of such a fact goes to a jury, who are to judge whether the fact was material, and whether the concealment were honest.^ As when a life-insured was a prisoner for debt, and so without the benefit of air and recreation ; * and where a woman whose life was insured, had become the mother of a child under disgrace- ful circumstances, some years before, and this fact was con- cealed, the plaintiff was non-suited.® If the policy and the papers annexed or connected, put no limits on the location of the life-insured, he may go where he will. But if, when applying for insurance, he intends going to a place of peculiar danger, and this intention is wholly withheld, it would be a fraudulent concealment.^ If facts be erroneously but honestly misrepresented, and the insurers, when making the policy, knew the truth, the error does not affect the policy.^ Nor does the non-statement of a fact 1 Southcombe v. Merriman, Car. & M. 286. 2 Chattock V. Shawe, 1 Moody & E. 498. 8 Lindenau v. Desborough, 3 C. P. 353, 8 B. & C. 586 ; Morrison v. Muspratt, 4 Bing. 60 ; Everett v. Desborough, 5 id. 503 ; Dalglish ;;. Jarvie, 2 Macn. & G. 243. * Huguenin v. Kayley, 6 Taunt. 186. 5 Edwards v. Barrow, Ellis, Ins. 123. 6 Lord V. Ball, 12 Mass. 119. ' Carter v. Boehm, 3 Burr. 1910. [621 J 561* ELEMENTS OF MERCANTILE LAW. [CH. XX. which diminishes the risk ; or concerning which there is an ex- press warranty.! If upon a proposal for a life insurance and an agreement thereon, a policy be drawn up by the insurers, and presented to the insured and accepted by them, which differs from the terms of the agreement, and varies the rights of the parties concerned, equity will interfere and deal with the case on the footing of this agreement and not of the policy ; unless it seems, from the evidence and circumstances, that it was intended by the insurers to * vary the agreement, and propose a different policy to the in- sured, and this was understood by the insured, and the policy so accepted.^ SECTION vn. INSURANCE AGAINST ACCIDENT, DISEASE, AND DISHONESTY OE SERVANTS. Of late years both of these forms of insurance have come into practice ; but not so long or so extensively as to require that we should speak of them at length. In general, it must be true, the principles already stated as those of insurance against marine peril, or fire, or death, must apply to these other — and indeed to all other — forms of insurance, excepting so far as they may be qualified by the nature of the contract.^ 1 Hnywood v. Rodgcrs, 4 East, 590. Anderson v. Fitzgerald, 4 H. L. Cas. 484, 24 Eng. L. & Eq. 6, Parke, B. - CoUctt V. Monison, 9 Hare, 162, 12 Eng. L. & Eq. 171. 8 In Hooper v. Accidental Death Ins. Co. 5 H. & N. 546, 557, the plaintiff was a solicitor, registrar of a county court and clerk to a board of guardians. He effected insurance on his life, and the policy provided among other things that if the insured should receive or suffer any bodily injury from any accident or violence, which "should cause any bodily injury to the insured of so serious a nature as wholly to dis- able him from following his usual business, occupation, or pursuit," a compensation of a certain amount should be made. The plaintiff sprained his ankle and was thereby confined to his room for several weeks. His duties as registrar of the court were car- ried on by Ills clerks who attended to part of liis other business for him, but some por- tion of his business was wholly stopped for want of his own personal attention and atti'iiihincc. Held that he was entitled to recover. In Trew v. Railway Passengers Ass. Co. 5 H. & N. 211, a policy was conditioned for the payment of the sum insured, in the event of the assured sustaining any injury by accident or violence, and dying from the effects of such injury within three months. It also provided that no claim should be made in respect of anj' injury unless caused by some outward and visible means of which satisfactory proof could be furnished to the direc- tors. It appeared that the assured had left the house one evening with the intention of going to bathe. His clothes were found at the steps of a bathing machine, and six [G22] CH. XX.] LIFE INSURANCE. -561 From one interesting case which has occurred in England, it seems that when an application was made for insurance, or guaranty, against the fraud or misconduct of an agent, ques- tions are proposed, as we should expect, which are calculated to call forth all the various facts illustrative of the character of the agent; and all which could assist in estimating the probability of his fidelity and discretion. But a declaration of the appli- cant as to the course or conduct he was to pursue, was distin- guished from a warranty. He may recover on the policy, although he changes his course, provided the declai'ation was honest when made, and the change of conduct was also in good faith. In this case the application was for insurance of the fidelity of the secretary of an institution. There was a question as to when, and how often the accounts of the secretary would be balanced and closed ; and the applicant answered that these accounts would be examined by the financial committee once a fortnight. A loss ensued from the dishonesty of the secretary; and it appeared to have been made possible by the neglect of the committee or the directors to examine his accounts in the manner stated in the policy. But the insurers were held on the ground that there was no warranty.^ weeks after a body was washed ashore which was alleged to be his. Held that, admit- ting the defendant had died in the water, and that the body found was his, yet the fact of his so dying was no evidence that his death proceeded from an injury caused by ac- cident or violence within the meaning of the policy. 1 Benham o. United Guarantee and Life Insurance Co. 7 Exch. 744, 14 Eng. L. & Eq. 524. See also, Bunyon on Life Insurance, chap. 6. [623] II^DEX. A. ABANDONMENT, necessity of, 463. right of, 464. revocation of, 467. (See Maeine Insurance.) ACCEPTANCE, of a thing sold, 75. of a bill or note, 103-105, 128-133. of a proposition, 17-20. ACCEPTOR, rights and duties of, 128-131. (See Negotiable Papee.) ACCOMMODATION BILLS AND NOTES, rights and liabilities of parties to it, 93. of, when given by bankrupt, 291. ACCOUNTS, (See Limitations.) ADJUSTMENT, (See General Average, Marine and Fire Insurance.) ADMIRALTY, (See Shipping.) AGENCY, 134-163. Of agency in genefal, 134, 135. what is and who may be an agent, 134, 174. when is a person responsible for the acts of another, as his agent, 134. of a general and particular agent, 135. when they transcend their authority, 135. How authority may he given to an agent, 136-140. may be given to wife, son, or servant by implication, 137. may be given by ratification or acquiescence, 137. ratification must be with knowledge of all material facts, 137. ratification relates back, 137. corporation bound by ratification, 137. 53 626 INDEX. AGENCY,— Continued. ■what acts cannot be ratified, 138. Tvben ratification must take place, 138. distinction between a factor and broker, 138. of a cashier of a bank, 139. of a general agent of a corporation, 140. Extent and duration of authority, 140-144. notice of revocation must be given, 140. ■when agent has a right to sell on credit, 141. consequence of blending goods, 141. definition of a general authority to sell or transact business, 141, and n. 6, 142. principal ■when not liable for unauthorized act of agent, 142. ■when an agent's act is a fraud of the principal, 143. ■when ■withdrawal of authority does not take effect, 143. ■when and ho'w revocation may be made, 143. of a collecting agent, 144. ■when a bank is liable as an agent, 144, and n. 4. ■when can the power of an agent be extended, 144. Of the execution of authority, 145, 146. with what strictness agent must conform to the authority given, 145. when power given to two can be executed by one, 146. when notice to one of a number of agents is sufficient, 146. extent of an agent's or broker's power, 146. Liability of an agent, 147, 148. liable by express agreement, 147. liable when he exceeds or in any way departs from his authority, 147. liable if real principal, if he describes himself as agent of unknown prin- cipal, 147. of personal liability, 147. when should be sued \>y action on the case, 147. Riglits of action growing out of agency, 148-151. principal may afiirm or disaffirm an act done without authority, 148. when an undisclosed principal may sue a party trading with his agent, 148. whether knowledge of principal is knowledge of agent and vice versa, 149. of notice to an officer or member of a corpora^on, 149, and u. 6. when agent may be sued for money received for one who is apparently his principal, 150. when principal may sue third party for an injury, 151. when and for what principal or agent may sue third party, 151. power of an agent to dispose of negotiable paper, 151. How a principal is affected by the acts of his agent, 152-154. when principal responsible for fraudulent representations of his agent, 152. principal can take no advantage of agent's wrongful acts, 152. principal cannot restrict his liability by describing himself as agent, 152. INDEX. 627 AGENCY,— Continued. when payment made to an agent binds the principal, 152. payment to a sub-agent binds whom, 153. agent cannot pay his own debts with principal's money without author- ity, 153, and n. 4. when principal liable for agent's fraudulent or criminal acts, 154. Mutual rights and duties of principal and agent, 154-158. agent is liable for any departure from his instructions, 154. instructions determined by usages and customs, 154. of principal's right to accept or renounce agent's contracts, 155. when agent is entitled to indemnity from his principal, 155. agent cannot appoint a sub-agent, 155, and n. 7. for what care and skill an agent is responsible, whether he receives compensation or not, 156. rights of principal when his agent embezzles, or blends his goods, 156. agent employed to sell cannot buy, 157. but such act may be ratified, 157. duty of agent to keep an exact account, 157. when the law presumes an account of agent settled, 157. what interest principal may charge agent for money kept, 158, 263. when agent liable for acts done after revocation, 158. when agent liable for not performing what he agreed, 158. Of factors and brokers, 158-163. of a del credere commission or commission merchant, 158. liability of broker or factor, 159. how far a factor is a guarantor of the payment of money due to his principal, 159. when factor may pledge principal's goods, 159. what discretion a factor has in the performance of his duties, 160. liability of an ordinary factoi'in taking a note for goods sold, 160. what, if principal and factor have a claim against the same debt of a purchaser, 161. factor can use his own name, has a lien on goods, &c., broker has not, 161. factor has personal remedy against priflcipal, 161. broker may act for both parties, factor for one only, 161. of their right to receive payment, 161. when they can receive their commissions, 162. of principal's right to revoke the authority of factor, 162. distinction between foreign and domestic factor, 162. foreign factor when a principal as to third parties, 162, 163: for what factors are liable, 163. AGREEMENT AND ASSENT, Of the legal meaning of agreement, 14-16. must be a meeting of minds about the same thing, 14, and note. construction of a contract, 15. mistake by one or both parties may avoid the contract, 15< 628 INDEX. AGREEMENT AND ASS^^T,— Continued. mutual mistakes may be corrected, 16. but not mistakes of law, 16. fraud annuls all contracts, 16. What is an assent, 1 7. must be mutually obligatory and unconditional, 17. mere voluntary compliance with the proposed terms of a contract, does not make it obligatory, 1 7. 0/ offers giving lime, 18. continuing offers, 18, and notes. may be withdrawn at any time before acceptance, 18. Of a bargain by correspondence, 19-21. how such an offer may be withdrawn, 19. when the letter of acceptance completes the bargain, 20. may be withdrawn by any legal means, 21. What evidence may be received in reference to a written contract, 21-24. any evidence explanatory of a written contract is admissible, 21. parol evidence, admissible to explain, but not to vary or contradict the terms of a written instrument, 21. why the law prefers written to oral evidence, 21, n. 1. definition of explanatory evidence, 22, and notes, extrinsic evidence admissible to explain or even to contradict a written receipt, 23. evidence is not admissible to rebut a legal inference from written con- tract, 23. but it is admissible to supply an omission not inconsistent with what is written, 23. of the interpretation of written contracts by interested third parties, 24. rule of construction, 24. when parties are remitted to their original rights from the uncertainty of a written instrument, 24. ALIENATION, (See Fire Insurajjce.) ALTERATION, ANNUITIES, ARREST, 450, 451. ASSENT, ASSIGNEE, (See Fire Insurance.) (See Bankruptcy, 289.) (See Agreement.) (See Bankruptcy, 296.) ASSIGNMENT, voluntary, 276, 307. with preferences, 275, 276, 280. in insolvency, 286. (See Bankruptcy.) INDEX. 62& ASSIGNMENT,- Con(m«erf. conflict of laws, (See Bankruptcy.) preference of creditors, (See Bankruptcy.) of policy, 407, 531, 652-555. AVERAGE, particular, 483. general, (See Shipping and Marine Insurance.). B. BANK-BILLS. (See Negotiable Paper.)- BANKRUPTCY AND INSOLVENCY. Of the. history of the law of Bankruptcy, 270-273. derivation of the term, 270. arrest of debtors, under the English common law, 270, 271. criminality the early foundation of bankruptcy, 271. change in this latter respect, 271. provision of Constitution of United States and. laws passed under it, 271, 272. extent of relief afforded by them, 272. state laws on this subject, 272, 273-275. Of the difference between bankruptcy and insolvency, 273-278. English statutes of bankruptcy and insolvency, 273, 274. American statutes on these subjects, 274, 275. preference of creditors allowed at common law, 275, 276-280. voluntary assignments, 276-307. forbidden by statutes, 276, 277. The tribunal and jurisdiction, 278-283. in the United States, the District Court, 278. in the States, commissioners or judges of insolvency, 278. right to jury, in disputed cases, 278. manner of initiating proceedings, 278, 279. examination of debtor, 279. debtor excused from answering, if his answer could expose him to pun- ishment for crime, 279. power to compel answer, 280. preference of creditors forbidden by insolvent laws, 280. manner of enforcing the prohibition, 280, 281. assignments in contemplation of bankruptcy, 281, and n. time prior to which assignments made are valid, unless fraud in assignee, 281, and n. 2. day on which petition filed to be excluded, 282. fraction of day admitted, 282, and n. 53* 630 INDEX. BANKRUPTCY AND INSOLVENCY,— Continued. question of fraudulent preference one of mixed law and fact, 282, 283. transaction may be fraudulent, though money paid, 283. right to stop in transitu, 283, and n. Who may be insolvent, 283-287. provision made by statute, 283, and n. 3. English statutes of bankruptcy confined to traders, 284. who are traders, 284, n. insolvent laws not so confined, 285. in England, feme sole, unless sole trader could not be a bankrupt, 285. here, she may be insolvent, 285, and n. 3. infant cannot be bankrupt, 285. but may be insolvent on his own petition, 285, 286. infant like other debtor, unless his debt is avoided, 286. lunatic, while insane, could incur no debt but for necessaries, 286, and n. he could be insolvent for that, 286. could be declared insolvent on petition of guardian, 286. assignment for benefit of creditors where there is a bankrupt law, an act of bankruptcy, 286. this is so, if no intention to defraud, even if provided that effects be distributed according to bankrupt law, 286, 287. but in this country, this is so only when statutes expressly or impliedly supersede assignments, 287, and n. Proof of debts, 287-294. in general, all persons having claims may prove, 287. proof made by oath of creditor, 287. if further proof necessary, by admissible evidence, 287, n. 2. proof may be by agent or attorney, 287. in case of corporation, can only be by agent, 287. agent of corporation should be specially appointed, 287, and n. cesluis que trust should join in proof with trustees in proof, 287, and n. 4, 288. but not \i cestui que trust is an infant or lunatic, 288. if creditor bankrupt, assignee may prove, but in general practice credi- tor's oath required, 288. same rule applies when assignor not a bankrupt, 288. assignor and assignee should join, 288. if bankrupt is a trustee, he may so far prove against his own estate, 288. in such case, the money should be deposited or paid into court, 288, n. 4. debts not yet payable may be proved, 289, and n. 1. interest on claims, how cast, 289. interest in some cases, with annual rests, 289. persons having annuities may come in and prove, 289. wife in some instances permitted to prove against her husband, 289, and n. 4. INDEX. 631 BANKRUPTCY ANB J^SOL\E^CY,— Continued. assignees may make any defence which bankrupt could, 289, 290. may make some which he could not, 290. claim for damages for tort may be rejected, 290. but if judgment has been previously recovered, it may be proved, 290, and n. 2. statute provisions for claims for goods or chattels may be fully obtained, 290. contingent claim may be proved, 290, 291. but not to be paid unless the contingency happen, 291, and n. 1. accommodation paper, given by bankrupt, cannot be paid, 291. accommodation paper will not pass to assignees as part of bankrupt in estate, 291, and n. 2. exchanged notes governed by the same principle, 291, 292. but if either note transferred, principle would cease to apply, 292. at common law, surety has no claim against principal till payment, 292. in insolvency, the surety may prove for the amount for which he is surety, 292. no dividend paid him except on the sum he actually pays, 292, and n. 2. right of surety in proving, limited, 293. can prove only when debt exists, though it be not payable, 293, and n. 1. surety cannot compel creditor to come in and prove, 69, 294. pays the debts and is subrogated to the creditor's rights, 294. if the creditor refuse payment, and to prove his debt, this would be negligence or fraud, and the surety would be discharged, 294. Creditors with security, 294, 295. creditor may prove balance, after deducting value of security, 294.. this value ascertained by selling or appraisement, 294. if he has liens, must make them available, by reducing his debt or by surrendering them to assignees, 294, and n. 3. provision of United States Act of 1841, with relation to liens, 294. diversity of State laws on the subject, 294, 295. action commenced a lien in some, 295, and n. 1. no lien till property attached in others, 295, and n. 2. lien by judgment, 295, and n. 3. conflict of laws on matter of lien, 295, and n. 4. Of the assignee, 296-302. usually chosen by creditors, 296. a majority requisite, 296. if creditors fail to appoint, commissioners may, 296. assignees must signify assent, 296. by statute, power of appointment may be vested in court, 296, n. 1. no person interested in bankrupt's estate should be appointed, 296, n. 1. nor who has an interest hostile to the creditors, 296, n. 1. 632 INDEX. BANKRUPTCY AND INSOLVENCY, — Conftnuerf. new choice may be ordered if large proportion of creditors absent, 296, 11. 1. court may remove in case of incompetency or fraud in appointment, 296, n. 1. so if assignee remove from the State, 296, n. 1. assignee to, act as trustee, 297, 298. his duty to ascertain the regularity of proceedings, 298. to take possession of assets, 298. to collect outstanding assets, 298. not liable for loss without blamable negligence, 298, n. 1. may refuse assets which are worthless, 298, n. 2, 300. if he accepts lien, liable for covenants in it, 298, n. 2. must take due care of property collected, 298, 299. cannot buy property of insolvent, 299. may compound debts, 299. should deposit moneys in bank, 299. may compromise claims, 299. may redeem mortgages, 299. may transfer notes by indorsement, 299, n. 4. in ordinary duties liable for ordinary care, 299, 300. in others should take advice of court, 300. subject to same equities as insolvent, 300, n. 1. may sue in his own name even on covenants, 300. all the assignees should join, 300, 301. assignees of joint promisees should join, 301, n. 2. whether may sue in his own name on policy, 407, n. 1. if assignee dies, action survives to successor, 301. so in case of removal, 301, n. 3. if assignee become bankrupt, 301, n. 3. if cause of action arise before bankruptcy, must declare as assignee, If after, need not, 301, n. 4. if partner insolvent, assignee should join with remaining partners, 301, 302. What properly assignee takes, 302-307. property held in right of another does not, 302, and n. 2. debt collected for another, if distinguishable, 302. if not distinguishable, 302, and n. 3. if factor has received payment for goods, 302. property exempt from operation of bankrupt law, 303, n. 1. wearing apparel, 303, and n. 2, 3. gifts by bankrupt to his children, 303. by a stranger, 303, n. 4. must be assent of donee to complete gift, 304. so in general to a devise, 304. devise of real property to balikrupt, 304, n. 2. property coming to bankrupt after decree, 304. INBEX. 633 BANKRUPTCY AND INSOLVENCY,— Co«/m«e(f. property coming to bankrupt after petition and before decree, 304, n. 4. this controlled by statute, 304, 305. insolvency of partner dissolves partnership, 305. assignee takes his interest, 305, n. 1. this ascertained by allowing partners to retain on appraisement, 305. will not bind partners if without their knowledge, 305. assignee a tenant in common, 305. property falling to wife, after petition, 305. reasonable provision to be made for her support, 305, 306, and n. 1 money in the hands of an attorney, 306. possibility of estate if coupled with interest, 306. but not naked possibility, 306, n. 3. insolvency revokes attorney's lien, not coupled with interest, 307. Of the discharge of the insolt-ent, 307-309. various provisions of statutes, 307, 308, and n. 1. j^^ discharge avoided if money paid creditors to secure it, Sm. > if bond or note given, 308, and n. 2.1 discharge does not affect claims or co-sureties, 309. nor liability of insolvent for torts, 309. nor fiduciary, 309. nor for any debts not provable, 309, n. 1. Of foreign bankruptcy or insolvency, 309-316. conflict of opinion on this subject, 309. English rule, 310. continental rule the same, 310. on what principles based, 310, and n. early inclination of American authority, 311. present American doctrine, 311, n. 2, 312. exception to this doctrine, 313, and n. 2. transfer of real estate, 313, and n. 2. principle of the English rule, 313. limitation of the application of this rule, 314. States of the Union foreign to each other, 314. effect of discharge on debts contracted in other countries, 314, n. 1, 315. < claim in national constitution, 315. distinction between right and remedy, 315, 316, u. 1. partial exemptions may be made by a State, 316, n. 2. if both parties are citizens of same State at the time of contract and at time of discharge, the discharge is valid, 316. whether discharge can affect creditors in another State who do not come into the assignment, 316, n. 3, 4. discharge by insolvent law of State where the contract was made, and of which debtor was citizen, 316, and n. 5. disoharo-e granted in State when contract made between citizens of that State and action brought in another, 316, n. 6. Massachusetts rule as to discharge, 316. 634 INDEX. BANKS, liability of, as agents, 144. BARRATRY, (See Marine Insurance.) BILLS OP EXCHANGE, (See Negotiable Paper.) BILLS OF LADING, (See Stoppage in Transitu, Shipping.) BOATMEN, when liable as common carriers, 202. BOTTOMRY BOND, (See Interest and Usury, Shipping.) BROKERS, (See Agency.) CAPTURE, who liable for delay by, 365. definition of, 460. CARGO, lien of, on ship, 344. CARRIAGE OF GOODS. Of a pricale carrier, 196-198. definition of, 196. liable for ordinary care, 197. carrier without compensation liable for what, 197. whether private carrier has a lieu or not, 198. Of the common carrier, 198-204. rights and responsibihties of, 198. definition of, 199. diflference between the liabilities of private and common carriers, 199, and u. 3, 200, n. 1. who are common carriers, 200, 201, and n. 1. expressmen are included, 201. whether freighting vessels are, 202. of boatmen, ferrymen, and steamboat owners, 202. party may hold two offices or relations, 203. whether a party is a common carrier or warehouseman, 203. goods must be delivered to carrier and notice given him before his re- sponsibility commences, 204. delivery without notice sometimes sufficient, 204. what is a delivery, considered, 204. distinction between delivery by passenger and by freighter, 204. Of the obligation of the common carrier to receive and carry goods or pas- sengers, 214-211. of the extent of his contract with the people, 204. INDEX. 635 CARRIAGE OF GOOTlS,— Continued. when he may refuse to carry goods, 204. of his right to charge, 205. ■when and how he must receive goods, 205. carrier of passengers must take all who offer, 205, and n. 7. of his general treatment of them, 206. how and when carrier must deliver goods, 207, and n. 8. when he may refuse to deliver goods to consignee, 208. of notice to eonsignee.of the delivery, 209. what is a sufficient delivery, 209. what is a sufficient delivery and notice thereof by the carrier, 210. whether a railroad carrier must give notice of the arrival of goods at his depot, 210, and n. 3. of carrier's liability when a third party demands goods under his care, 211. when he may deliver goods to a third party on showing title, 211. Of the lien of the common carrier, 212. definition of the word Hen, 212. carrier's liability while detaining goods for freight, 212. no lien on goods carried for one not their owner, 212. Of the liability of the common carrier, 213-218. why his liability is so great, 213. limitation of that liability, 213. what are acts of God, 213, 215. liable for loss by fire unless caused by lightning, 214, and n. 1. fire not " act of God," 214. " peril of the sea," 214. liable for loss by theft, although inevitable, 214, and n. 4. when negligence is remote cause of loss, 515. carriers are liable for acts of their agents, 215, 216, and u. 3. when carriers liable beyond their route, 217. difference between the English and American decisions, 217, and n. 2. whether carrier is liable for not forwarding goods, 218. whether railroad is responsible for fire, how determined, 218. of common carrier's liability in case of collision, 218. Of the carrier of passengers, 218-220. to what extent carriers of passengers are liable, 218, and n. 3. of the carriage of slaves, 219. Of a notice by the carrier respecting his liability, 220-225. common carrier may limit his liability by special agreement, 220 and n. 2. whether passenger carriers may limit their liability, 221. whether a mere notice limits carrier's liability, 222, and n. 1. whether special agreement is made in each case, how determined, 222. how far carrier's liability may be limited by notice, 222, 223, and n. 1. 636 INDEX. CARRIAGE OF GOODS,— Continued. whether notice came to knowledge of a party, Low determined, 223. how far fraud affects carrier's liability, 224. how far party bound by carrier's authorized notice, 224. whether a common carrier can bargain away his liability, 224. Of carrier's liability for goods carried by passengers, 225-229. how much baggage a passenger may carry, 225. purpose of this rule, 226. for what baggage of passenger is carrier liable, 226. when passenger or wife may testify as to amount of baggage lost, 227. when common carrier liable for injury to third parties, 227. not liable for, if injured are negligent, 228, and n. 2. carrier may be liable although passenger was carried gratuitously, 228. CAVEAT EMPTOR, 57. CESTUI QUE TRUST, (See Bankkuptcy.) CHARTER-PARTY, (See Shipping.) CHECKS ON BANKS, 90-92. (See Negotiable Paper.) COLLISION, caused by master, 381, 382. (See Shipping, Carriage of Goods, and SIarine Insurance.) COMMISSIONERS, (See Bankruptcy.) COBIMON CARRIER, (See Carriage op Goods.) COMPANIES, difference between mutual and stock, 489, 490. CONCEALMENT, (See Insurance.) CONSIDERATION, Of the need of a consideration, 25, 26. in the civil and common law, 25, and n. 1. specialties generally form an exception to this rule, 25, and n. 2. negotiable paper forms another exception, 26, 96. meaning of the word " consideration," 26. the operation of this rule, 26. What is a sufficient consideration, 27-34. any thing that suspends or terminates litigation, 27. must not be of a wholly unfounded claim, 28. consideration when against public policy, 28. of discontinuance of criminal proceedings, 28. passage of law by corrupt means, 29. may consist of money, goods, work, or service, 29. may be a promise for a promise, if mutual, 32. when mutuality between parties not necessary, 33. INDEX. 637 CONSIDERATION, — Continued. when an agreement to refer to arbitration is mutual, 33. subscription, when a consideration for such promises, 33. Of illegal consideration, 34, 35. when a contract may be partially enforced, although the promise and consideration are partially illegal, 34, 54. a penal statute makes an act illegal though unprohibited, 35. other cases of illegal consideration, 35. Of impossible considerations, 35, 36. the impossibility must be natural, not merely personal to the promisor, 35, 36. Of failure of consideration, 36, 37. whether total or partial, 36. when money paid for such consideration, what can be recovered, or deducted and set oiF, 36, 37. of a part performance of a contract for service, 30. effect of a material departure from the agreement in the performance of the contract, 30, 31. Of the rights of one who is a stranger to the consideration, 37, 38. distinction between the ancient and modern rule, 37, 38. when strangers to, may bring an action, 38. Of the consideration arising from discharging the debt of another, 38-40. where one is compelled to pay the debts of another he is subrogated to his rights, not so, if he voluntarily pays them, 38, 39. (See Negotiable Paper.) CONSIGNOR AND CONSIGNEE, of power to insure, 512. rights and liabilities, 346, 352, 405, n. 3. CONSTRUCTION, of contracts, 15. (See Limitations.) of terms, 438, 450, 451, 456-461, 464. of policies against fire, 494-507. (See Fire Insurance.) CONTRABAND OF WAR, what property deemed such, 417, and n. 2. trade, not illegal in neutral State, 418. risk must be known to insurers, 418. (See Marine Insurance.) CONTRACTS, unactionable, 78. of marine insurance, how made, 403-408. (See Sales.) CONTRIBUTION, (See General Average.) COOLIES, mutiny of, 447, n. 3. 54 638 INDEX. CORPORATIONS, bonds of, when usurious, 266. of a general agent of, 140. notice to officer or member of, 149. CORRESPONDENCE, (See Agreement.) D. DAMAGES, (See Bankruptcy, 290.) DEL CREDERE COMMISSION, (See Agency.) DELIVERY, (See Statute of Frauds, Sales, Carriage oe Goods.) DEMURRAGE, ■what it is, and when and how recovered, 362-365. (See Shipping.) DESCRIPTION, of property insured, 437-440, 494. mistake in, 437, 495. DETENTION, 450, 451. DEVIATION, (See Marine Insurance.) DISABILITIES, (See Limitations.) DISCHARGE, of insolvent, 294, 307, 314-316. DISSOLUTION, of partnership, 169-172. effect of, 190-194. • of contract of affreightment, how, 365-367. (See Shipping.) DOMICIL, 317, 323. DOUBLE INSURANCE, (See Fire Insurance.) E. EMBARGO, who liable for delay by, 365. EMBEZZLEMENT, by master, 382. EVIDENCE. parol, admissible to decide priority of policies of insurance, 420, n. 5. (See Insurance, Agreement and Assent, Carriage of Goods.) EXPRESSMEN, (See Carriage of Goods.) INDEX. 639 F. FACTORS, 158-163, 169. (See Agency.) FAILURE, (See Consideration.) FERRYMEN, liability of, 202. FIRE, (See Marine Insurance, Carriage op Goods.) FIRE INSURANCE, Of the usual subject and form of this insurance, 488-493. difference between this and marine insurance, 488. what articles are insured in this way, 488. how and by whom may be made, 489. of stock companies, how established, 489. prevalence of mutual companies, and why, 489. • liability of maker of a premium note to pay it, 489, and n. 1. disadvantages of mutual companies, 490. no fund except premiums and notes, 490. security by lien, land connected with buildings insured, 490. stock companies insure for full value, 490. mutual, generally for one half or two thirds, 490. usage may be called in to explain, but not to contradict terms of a contract, 490. what usages can be admitted to explain contracts, 491, and n. 1. when agreement to cancel policy should be signed, 491. when a fire policy is executed, 492. whether bargain may be oral, 492, n. 1. whether may be made by correspondence, 492, and n. 1. effect of a memorandum and of ratification, 493. insured, in fire policy specifically named, 493. how a rule to pay down may be waived, 493. Of the construction of policies against fre, 494-507. what description of property sufficient, 494. intention as expressed in contract must govern, 494, and n. 1. meaning of " stock in trade," 494. meaning of starch factory, 495. when policy void for uncertainty, 495, note. mistake of factor in phraseology may be corrected, 495. * of the admission of a memorandum, 495. how insurance made, 496. of petition in writing, 496. of statements, questions, and specific answers, 496. these papers referred to form part of contract, 496. general reference to a paper not sufiicient, 496, n. 3. when application has effect of warranty, 496, n. 3. 640 INDEX. FIRE INSURANCE,— Conftnue^;. object of applicalion, when part of policy, 497. when condition is condition precedent, 497. when what is written in policy, prevails over printed matter, 497. whole should be construed together, if possible, 497. of scale of premiums, 498. when innocent false statement avoids policy, 498, and n. 2. to statement of hazardous trades, expressio unius exclusio est alterius is applied, 498. cannot vary the policy as to what is more hazardous, 498. whether.description in policy amounts to a warranty, 498, n. 1. person may keep all articles used in his trade, 498. whether insured may change the use of a building, 498, n. 1, 500, and n. 1. how for the risk of insurers may be changed, 500, 501, and n. 1. meaning of the word " storing'' or " keeping," 501, u. 1, 503. notice of any introduction of fire heat, 501, n. 1. meaning of alterations, 501, n. 1. warranty to work mill by day not broken if worked by night, 501, n. 1. intention decides when variance between policy and use of building, 502. what are restrictions in policy as to use of buildings, 503. when policy by its terms is avoided, if hazardous goods are kept, 503. or building used for purpose other than one specified, 503. what is insured as a private dwelling may be used as a boarding-house, 503, n. 1. whether leaving a house vacant, described as a private residence, avoids a policy, 504. livery stable more hazardous than tavern barn, 504. when mere alterations avoid policy, 504. when risk increased is often the only question, 504. soldering a metallic covering increases the. risk, 505. if the soldering be safely completed, this does not discharge the insurers from a subsequent loss, 505. if during the increased risk a loss occur from an independent cause, the insurers are not discharged, 505. as to asking consent of insurer in such cases, 505. if the alteration be of a permanent character and the risk be increased, insurers are discharged as soon as the alteration is made, 505. and the insurers are discharged in such case, whether the fire be caused by the improvement or by an independent matter, 505. insured may keep his buildings in repair without increasing the risk, 506. if the fii'e is caused by means of the repairs, the insurer is not dis- charged, 506. renewal of policy, 506, 507. INDEX. 641 FIRE INSURANCE,— Con&m(?. Of the interest of the insured, 507-514. any legal interest in the property insured is sufficient, 507. an equitable interest is sufficient, 507. expectant interest in property not sufficient to support an insurance 507, 508. party assigning his property for the payment of his debts, has an insur- able interest in the property, 508. insurable interest of partner in building purchased with partnership funds, 508. mortgagor has an insurable interest to the amount of the whole value of the property, 508. mortgagor and mortgagee may both insure the same property, 509. mortgagee has an interest only to the extent of his debt, 509. whether mortgagee can hold both the amount received from the in- surers and also recover the debt from the debtor, 509, and n. 4. debtor may compel mortgagee to enforce his claim against the insurers, and thereby discharge the debt, 510, and n. 1. • if mortgagor is bound to keep premises insured, mortgagee has a lien on proceeds of the policy, 510. tenant, by the courtesy, may insure the property, 511. one holding by disseisin, if he have a freehold interest, may effect insur- ance on the property, 511. insurance by tenant for years, or from year to year, 511. where the insurers have a lien for amount of premium note on property insured, incumbrances must be stated, and the title of the insured fully set forth, 511, and n. 4. insurance by trustee, agent, and consignor, 512. consignor is not bound to insure, 512. consignee may insure his own interest in the property or that of his consignor, 512. by virtue of his implied authority, consignee may insure the whole value of goods in his possession against fire, 512, and n. 4. commission merchant may insure in his own name all the goods of his various consignors, 513. consignee may insure against fire his interest in goods before they are received, 513. bailee having a legal interest in the property bailed, may insure it against fire, 513. ownership of the property must be set forth, 513. there must be an authority to effect the insurance, 514. tenant in common cannot insure for his cortenant, 514. ship-master cannot, as such, insure owner's interest, 514. Of reinsurance, 514-516. reinsurance in fire policies is lawful, 514. what is reinsurance, 514. 54* 642 INDEX. FIRE INSURANCE, — Continued. party effecting reinsurance is bound to communicate all his information concerning the party originally insured, 514, 515. person effecting reinsurance in case of loss, recovers all he is liable to pay, 515. if the insurer effect reinsurance and then become insolvent, the party originally insured has no lien on the policy of reinsurance, 515. reinsurer entitled to same defence as original insurer, 515. reinsured may recover expenses of suit from reinsurer, when, 515. usage in case of reinsurance, 515, 516. Of double insurance, 616-519. difference between double insurance and reinsurance, 516. double insurance not allowed, 516. effect of double insurance, how obviated, 516. usually provided in policies that notice of prior insurance must be given, 516, 517. equity will not relieve a party who has not given sufficient notice, 517. notice of prior insurance may be given to an agent who is authorized to receive applications, 517, and u. 3. of contribution between insurers effecting insurance on the same inter- est, where the insurance is to be void if notice of prior insurance is not entered on the policy, 518. what is double insurance, 518. Of warranty and representation, 519-526. warranty is a part of the contract, 519. operates as a condition precedent, 519. warranty may be affirmative or promissory, 519. an affirmation maj' also be a continuing warranty, 519, and n. 2. what amounts to warranty, 520. word warranty need not be used, 'j2\. effect of indorsement in respect to warranty, 521. a statement in policy may be merely a license and no part of a war- ranty, 021. representation differs' from warranty in not being a part of warranty, 521. representation may be an inducement to the contract, and if fraudulent make it void, 521. effect of an immaterial false statement, 521. i how to determine materiality of statement, 521. statement in application generally considered a representation and not a warranty, 521. difference between written and oral representation, 522. when representations have the effect of warranties, 522. in marine policies, an innocent misrepresentation avoids them, 522. in fire policies only fraudulent representation, 622. why this difference, 522. whether materiality of statement question of fact or law, 522. INDEX. 643 FIKE INSURANCE,— Conftnuerf. effect of suppressing truth or not stating all Insured knows to increase risk, 523, and n. 1. difference between fire and marine policy as to concealment, 523. , of the duty of insurers against fire to examine property, 523. what common matters insurers presumed to know, 524. when fact of many incendiaries should be stated, 524. how questions should be answered, 524. effect of any kind of concealment, 524. when concealment of incumbrance or defect of title will avoid policy, 525. statement of distances of other buildings, 525. whether change could be made in position of movables insured, 525. of insurance of goods in transitu, 525. pleadings in Massachusetts, 525. Of the risk incurred by the insurers, 526-529. property at time of insurance must be in usual safety, 526. general agent of company cannot bind for loss before policy was signed, 526. but policy sometimes retroactive, 526. insurers whether liable for loss by heat, effect of which is not ignition or combustion, 526. liable for damage by water used to extinguish fire, 526. ■when liable for damage by removing goods from danger of fire, 527. liable for injury by blowing up buildings to arrest fire, 526. whether liable for any useless damage, 526. not liable for damage by lightning unless ignition, 527. explosion by gunpowder is, but by steam is not loss by fire, 527. whether liable when negligence of insured is the cause of loss by fire, 526. only negligence that is fraud discharges insurers, 527, and n. 4. fire caused by insanity of insured no defence, 527. liable for destruction of what apparatus for using fire, 528. whether liable for damage occasioned by excessive heat, 528. whether liable for damage by heated lime, 528. whether liable for loss of mill by fermentation of cotton, 528. whether " military or usurped power " does not cover a common mob, 528. " riot" does not include loss by fire caused by a tumultuous assemblage, 528. Of valuation, 529, 530. not usually made in fire policies, and why, 529. of the prohibitive clause in charters of mutual companies, 529. when conclusive against insurers, 530. whether valued policies may be made, 530. of renewing valuation after loss, 530. amount of loss determined by auction sale, 530. Of alienation, 530-535. policies against fire not transferable without consent, 530. 644 INDEX. FIRE INSURANCE,— Con?m«erf. insured must have an interest in property insured, 531. transfer of property destroys claim, 531. J of assignment of policy, 531. when assignee of property has claim on insured, 531. difference between marine and fire policies as to assignees, 531. when policy forbids assignment of insured interest, 531. what amounts to an alienation, 532. whether conveyance and lease back is, 532. whether mortgage and assignment of policy is, 532. contract to convey is not, 532. nor conditional sale, 532. nor mortgage until foreclosure, 532. nor selling and immediately taking back, 532. bankruptcj' is, 533. policy only void so far as aliened, 533. policies not negotiable, 533. indorsee may sue on express promise, 534. right of transferee when originally insured burns building, 534. does not avoid premium note, 534. whether forfeiture waived by receiving payments of notes, 534. what should be done on transferring property, 534. application for consent to assignment, notice of acquisition of interest, 534. whether insurers subrogated to rights of insured against a railroad company, 535. Of notice and proof , 535-537. when production otj condition precedent, 535. when delay in production of, 535. when assignee may give the notice, 536. waiver of, what amounts to, 536. what delay is a waiver, 536, n. 3. whether refusal to settle is a waiver of, 536. whether preliminary proofs are evidence of damage, 536. whether insurers bound by examination under oath, 537. Of adjustjnent and loss, 537-539. insurers liable for what consequences of loss, as profits, 537. whether profits are directly insurable, 537, u. 2. difi'erence between fire and marine policy in, 537. in former, whole amount lost is paid, 537. in latter, only a proportionate part, 537. whether insurers liable for property sacrificed to protect insured prop- erty, 538. no return of pr-emium as contract is entire, 538. when entire premium may be returned, 538. partial retui-ns only made in marine insurance, 538. of insurer's right to rebuild or repair, 538. INDEX. 645 FIRE mSVJKANCE, — Continued. how far liability exhausted by repairing, 538. no defence to suit that insurer elected to repair but could not through no fault of his, 539. no deduction " one third new for old," but damages left to jury, 539. consequence of not permitting the insurers to examine the loss, 539. ■when money paid by insurers may be recovered back, 539. ■when fraud avoids the policy, 539. no equities in favor of third parties, 539. FLOGGING, (See Punishment.) FORGERY, of bank check, 92. FRAUD, (See Sales, Statute op Frauds, and Bankkuptcy, 282, 283.) FREIGHT, dead, 358. pro rata, 350, 351, 475. (See Shipping, Carriage of Goods.) insurance of, 418, 419. (See Marine Insurance.) abandonment of, 475. FREIGHTING VESSELS, whether liable as common carriers, 202. G. GENERAL AVERAGE, (See Shipping, Marine Insurance.) GUARANTY, definition of, 65. when negotiable, 65. no special form necessary, 65. liability of guarantor usually measured by that of principal, 65. not so when the promise of a wife or infant is guaranteed, 65. construed strictly, 65. of guarantor's right to securities, 66. when must be supported by consideration, 66. when consideration of original debt sufficient, 66. definition of consideration, 66. ■when promise of, is original and not within the Statute of Frauds, 66. ■when fraud exists, 66. acceptance of, and notice thereof must be given, 66. ■what change, renewal, or extension of the principal's liability will dis- charge guarantor, 67, and u. 3. when, of a partnership is extinguished, 68, and n. 2. of good conduct, 68. when meant to apply to a single transaction, 68. 646 INDEX. GUARANTY, —Continued. continuing guaranty, 68. when revocable, 68. what indulgence creditor may give debtor without discharging guaran- tor, 69, 294. why creditor cannot be forced to proceed against debtor, 69. when gross negligence of creditor discharges guarantor, 69, and n. 4. delay with consent of surety does not discharge, 69. he is discharged when creditor suspends his right of action, 70. when non-notice no defence, 70, and n. 1. extent of an official guarantor's liabiUty, 70. H. HIRING, contract for, partially performed by party hired, 29. HUSBAND, (See Parties, 9-13.) I. ILLEGALITY, (See Consideration, Sales, Negotiable Paper, Insurance.) INDORSEMENT, of bills and notes, 120-128. (See Negotiable Paper.) of policies, 407. of bills of lading, 63, 346. by assignee, 299, n. 4. effect of, in respect to warranty, 521. INDORSEE, rights and duties of, 120-128. (See Negotiable Paper, Law of Place.) INFANTS, (See Parties.) INSOLVENCY, (See Bankruptcy.) INSURANCE, (See Marine, Fire, Life.) INSURERS, liable for what, 441-445. INTEREST, of insured, 408-412, 507-514, 548-552. (See Insurance.) INTEREST AND USURY, Whal interest is, and lohen it is due, 251-253. meaning of, 251. on what two grounds interest may be demanded, 251. when interest is allowed, 252. when not until money is payable, 252. INDEX. 647 INTEREST AND USVRY,— Continued. Of usury, 253-262. when debt forfeited, 253. rules of each State regulating interest, 253, and n. 4. ■what is a usurious bargain, 254. by intention, not by mere mistake, 255. nothing beyond a usurious contract is effected by usury, 256, and n. 1. agreement to pay a penalty not usurious, 256. usurious interest taken is not conclusive, 256. usurious contracts always void, 257. a usurious note in an innocent indorsee's hands, 257. when new securities are usurious, 257, and u. 5. when usurious debt merged in judgment, 258. when a mortgage to secure a usurious debt may be enforced, 258. of devices to conceal usury, 259. by selling goods at a high price, 259. by discounting notes, 259, and n. 3. whether contract usurious, how determined, 260. borrowing stock at too high a valuation, 260. when return of stock is optional, 261. of two contracts to pay legal interest for the same debt, 261. when a gift is really illegal interest, 262. contract not usurious where made, good everywhere, 262. Of a charge for risk or for service, 262-264. for what risks charges may be made, 262. loan on bottomry, 262. purchase of an annuity, 263. for services, brokerage, or rates of exchange, 263. effect of the intention of the parties on a contract, 263. loaning money to partners for large profits, 263. when money put into a partnership is, and when not usurious, 264. whether discounting by banks is usurious, 264, and n. 4. Of the sale of notes, 265-268. owner's right to sell a note, 265. one cannot sell his own note, 265. when sale of a note is not usurious, 265. sale of corporation bonds for less than face is usurious, 266. whether maker can defend against a bona fide purchaser, 266. burden of proof changes when maker shows the seller to be his agent, 266, whether a person may sell his own credit, 267. seller with indorsement is entitled to ftiU amount, 267. of indorsing for premium, 268. Of compound interest, 268, 269. contract for compound interest not usurious, nor enforceable, 268. recognized in case of trustees not accounting, 158, 269. where money is paid by instalments, what mode of adjusting, 269. 648 INDEX. J. JETTISON, (See General Average.) L. LAW OF PLACE, 317-324. What IS embraced within the law of place, 317. if parties not at home, when contract made or action brought in foreign tribunal, 317. rights affected by, 317. law of place of contract, 317. of domicil of a party, 317. where the thing is situated to which contract refers, 317. of the tribunal before which case comes, 317. importance of this law, 317. 0/ the general principles of law of place, 317-319. enumeration of their principles, 317, 318. distinction between law of real and personal property, 318. place of contract governs in case of personal, 318, n. 5. law of place where situated governs in case of real property, 318, 319, n. 1. Of its effect on capacity of persons to contract, 319, 320. determined by law of domicil as general rule, 319. and qualification of this rule, 319, n. 2. Of the place of the contract, 320-323. when contract made, 320. where made, if this is one place, 320. when contract made by letter, 320, n. 2. qualification of this rule, 321. • in some cases, both rules apply, 321. note made in one place payable in another, 321, n. 3. law of former prevails as to process and remedy, 322, n. 1. arrest, limitation, and prescription, so governed, 323. Of domicil, 323, 324. in general is residence, 323. how changed, 323, u. 2. what evidence of intent, 323, 324. what determines the question of change, 324, and n. 3. LEX DOMICILII, (See Law of Place.) LEX LOCI, 317-324. (See Law of Place, Negotiable Paper.) LEX LOCI CONTRACTUS, (See Law of Place.) LEX LOCI EEI &1T2E, (See Law of Place.) INDEX. 649 LIEN, is an insurable interest, 413. rank of, by bottomry bond, 342, 343. on ships does not depend upon possession, 344, and n. on cargo for freight, how waived, 347, 348. whether lost by want of possession, 359, extent of, 360, 381. of seamen, 388, 389. of material men, 400-402. paid by insured, 471. (See Shipping, Carkiagb op Goods, Factors, Bankrdptct, 294, 295.) LIFE INSURANCE, 540-561. Of the purpose and method of life insurance, 540. of the parties who insured, and whose life is insured, 540. how to get insured, 540. of questions put to the insured, and to the life-insured, 540. of questions to the party's physicians, 540. when the contract of, is valid, or takes effect, 540, and n. Of the premium, 641, 642. how the premium is paid, whether in money or notes, 541. whether quarterly payments must be paid exactly on day due, 541, n. payment in notes not made unless losses require, 642. why overdue premium is left unpaid, 542. conditions as to payment of premiums may be waived, 542. payment of premium waived by taking note, 542. within what day or hour premium must be paid, 542. when acceptance of overdue premium renews policy, 542. Of the restrictions and exceptions in life policies, 542-548. where the life-insured has no right to travel, 642, and n. in what extra-hazardous occupations not allowed to engage, 543. death by duelling avoids policy, 543. what death by one's own hand avoids policy, 543, 544. whether death self-inflicted by an insane person avoids policy, 544. loss of life by accident or insanity extending to unconsciousness, comes not within the provision, 544, and note. of death by the hand of justice, 545, and n. when third party has interest in policy, 546. what is assignment, 546. when time of death important, 547. which of two persons lived longest, how determined, 547. after what time law presumes a person dead, 548. death a mere question of fact, 548. proof of death, what, necessary, 548. Of the interest of insured, 548-552. insured must have an interest in life-insured, 548. person may insure his life, for creditor to amount of debt and balance for his family, 548. 55 650 INDEX. LIFE mSVRAViCE,— Continued. father in life of minor child, 549. what pecuniary interest is sufficient, 549. an existing debt if founded on a consideration, 549. interest of partner, 549. interest of creditor of firm in life of a partner, 549. interest in life of person to whom money has been advanced, 549. ■when insurers discharged after death of debtor, 650. ■whether insured liable after the debt on account of -which life -was insured, is paid, 660, and n, ■whether surety liable after insurers have paid debt, 552. ■when insurers subrogated to rights of insured, 552. insurers have no right of action against person who caused the death of person insured, 652. policy when separate property of wife, 552. Of the assignment of a life policy, 553-555. policies are assignable, 552. assignee entitled to full amount insured, 553. question of, how regulated by policy, 553. what constitutes an assignment, 553. delivery of policy necessary, 553, and n. a separate deed, executed and delivered, sufficient, 654. when verbal promise to assign, good against insured and assignee, 555. when regulated by policy, 555. Of warranty, representation and concealment, 555-560. how questions should be answered, 555. perfect good faith should be preserved, 566. when concealment of disease does not vitiate policy, 656. statements in applications generally made warranties by terms of pol- icy, 556. meaning of expression " good health " in policies, 556. when warranty not broken by not mentioning such disease as dyspepsia, 556, and n. when spitting of blood indicates consumption, it should be stated, 557, and n. burden on insurers to show that insured was not in good health when policy was effected, 567. what untrue answers avoid the policy, 558, note, every physician of Ufe-insured must be stated, 558. whether sober and temperate habits excludes habits of drinking, 559. insurers must use the word abstinence to exclude those using ardent spirits, 559. difference between " not subject to fits " and " have you ever had fits," 559. what are material concealments, 560. withholding intention of going to a dangerous place is a fraud, 560. INDEX. 651 LIFE INSURANCE, — Conimued. when erroneous statements or non-statements do not affect policy, 560. equity will relieve when policy differs from agreement, 560. Insurance against disease and against dishonesty of servants, 561. novelty of this insurance, 561. what questions asked by insurers against misconduct of agents, 561. how declaration of applicant differs from warranty, 561. when may change his course of conduct, 561. LIMITATIONS, Of the Statute of Limitations, 230, 231. of the adoption of James I. statute in our States, 230. Lord Tenterden's Act, 230. Construction of the statute, 231-235. the twofold foundation of the statute, 231. whether a statute of presumption or of repose, 232. of the importance of this statute, 233, and n. effect of Lord Tenterden's Act, 234. of prescription, 234. Of the new promise, 235-238. what new promise is sufficient to take the case out of the statute, 180, 235. whether oral or in writing, 235. whether a mere acknowledgment is sufficient, 235, and n. whether a new promise is made by any expression, how determined, 236. what acknowledgment will amount to a new promise, 236. of a conditional new promise, 237. effect of acknowledgments under process of law, 237. effect of every new item in a running account, 237. when account debts not barred by statute, 238, and n. Of part-payment, 238-240. when part- payment has the effect of a new promise, 238. rio'ht of debtor to appropriate his payment, 239. how creditor cannot appropriate debtor's payment, 239. payment of part of principal or interest renews the debt, 239. evidence of part-payment need not be in writing, 240. Of the promise of one of several joint debtors, 240, 241. of the limitation of the effect of a new promise to him who makes it, 241, and u. one can bind the rest if authorized, 241. To whom the new proiv-ise should be made, 242. whether a promise to a third party is sufficient, 242. what parties will an admission by the maker of a negotiable note to the payee affect, 242. Of accounts between merchants, 243, 244. what is an " account," 243. who are merchants, 243. 652 INDEX. LIMITATIONS, —CoMftnuerf. meaning of the word merchandise, 244. whether any item of an account must have accrued within six years to exempt the whole from the statute, 244. Of the other statutory exceptions, 245-247. in case of what disabilities does the statute not begin to run until after they cease, 245. after the statute begins to run it does not stop, 245. how, when there are several disabilities, 245. meaning of the expression " beyond the seas," 246. what is such return of a debtor as will remove the disability, 246. where by statute, an absence after the debt accrues is no part of the limited period, 246. of successive and of temporary absences, 246. the disabihty applies to a foreign debtor, 247. return of one joint creditor revives the debt against all, 247. all debtors must return before statute begins to run, 247. When the period of limitations begins, 247-250. when an action could have been commenced, 247, 249. where credit is given, when credit expires, 247, 248. when the statute begins to run against interested third parties, 249, 250. That the statute does not affect collateral security, 250. mortgage may be good, though a note it secures is not, 250. LOSS, constructive total, 461, 476. of freight, 474, 475. partial, 484-486. (See Marine Insurance, General Average.) M. MARINE INSURANCE, How the contract is made, 403-408. formerly by individuals, now usually by companies, 403. insurers not bound to insure for all who offer, 403. substance of contract, 403. consideration, 403. policy, 403. no particular instrument essential, 403. need not, perhaps, be in writing;, 403, n. unless writing required by act of incorporation, 404. or by law of Stale, 404. obligation of insured different from that of insurer, 404, u. form of the policy, 404. percentage, when insured voluntarily, defeats the contract, 404, n. execution and delivery, 404, 405. authority to effect insurance, 405. INDEX. 653 MARINE mSVRkm^,- Continued. master has not, as such, nor a consignee, nor a part-owner for other part-owners, 405, n. insurance " for whom it may concern," 405. party interested may sue in his own name, 405. A insured " as agent for B," 405. insured described as " agent " generally, 405. insurance in blank, 406. open or running policy, 406, n., 408. reference to separate documents, 406. paper folded with policy, 406. policies subject to rules of evidence which govern in specialties,* 406, n. policy to be completed by subsequent indorsements, 406. how to be filled up, 406. contract may be altered by indorsement by agreement, 406, policy and indorsement to be construed together, 406. alterations and mistakes, 406. subsequent alteration before breach, 406, n. assignment of policy, 407. when negotiable by indorsement or delivery, 407. whether assignee may sue in his own name, 407, n. assignee of bond on bill of lading may not, 407, n. transfer of property, 407. insolvency or death of insured, 408. . construction of term " alienate," 408, n. claim assignable after loss, 408. agreement as to, 408. vendor or mortgagor retaining possession, 408. Of the interest of the insured, 408-412. open and valued policies, 408. wager policies, excessive valuation, 409. mere exaggeration of value not overvaluation, 409. valuation void if fraudulent, 409. and policy avoided in toto, 409. gross overvaluation evidence of fraud, 409. valuation applied to part of the property, 409. of freight, 410. of pix)fits, 410. where part only of the goods valued are on board, 410, n. value, how determined when the policy is open, 411. insured founds his claim on the value at the time of loss, 411. profits not susceptible of exact valuation, 410, n. when the insurance is on successive voyages, 411, 412. standards of valuation, — invoice price, prime cost, market value, 412, n. deductions and rate of exchange, 412. 55* 654 INDEX. MARINE INSURANCE, — Conimweti. What interests may be insured, 412-419. mere possibility cannot, 412. nor an interest in a contract not performed or capable of enforcement, 412, n. contract to indemnify, and reinsurance, 412. how regulated in England, 412, n. transfer of interest or change in its nature, 412. lien is insurable interest, 413. factors, bailees, consignees, carriers, and lenders on bottomry may in- sure, 413. expectation of profits, loans, advances, 413, and notes, collateral security and subrogation, 413, n. insurable interest of mortgagee, 413. mortgagee trustee for mortgagor, when, 414. recovery of insurance by mortgagee, 413. phrase " lost or not lost," 414. interest originally valid, defeated only by actual devestment of prop- erty, 414. stoppage in transitu, 415, and n. interest originally illegal, 415. policy contrary to law, 415. mariners or mates cannot insure their wages, 415. master may, 416. presumption of legality, 416. illegal intention, une.xecuted; smuggling stores, 416. voyage or cargo may be severable, 416. compliance with foreign registry laws, 416. assured not obliged to state his interest unless required, 416, n. contraband of war, 417. what are deemed such, 417, and n. trade, not illegal in neutral State, 418. risk, must be known to insurers, 418. condemnation for breach of blockade justified by proof of what, 418, u. insurance of freight, what it covers, 41R. insurance of freight, when the risk begins, 418. when the ship sails without cargo, 418. advanced, 419. Of prior insurance, 419, 420. regulated by a clause in the policy, 419. priority refers to time of making insurance, 419. efi'ect, 419. increase of value after first insurance, 419. subsequent policy may be suspended, 420. ratable deduction of valuation, 420. when there is no clause providing for prior insurance, insured may elect, 420. INDEX. 655 MARINE INSURANCE,— Coniinued. insurers contribute between themselves, 420. simultaneous insurances, 420. parol evidence admissible to decide priority, 420, n. Of double insurance and reinsurance, 420, 421. no double insurance, unless subject-matter is identical, and total valua- tion exceeds the true value, 420. reinsurance, when made, 421. Of (lie memorandum, 421, 4 22. origin and meaning of the term, 421. enumeration of memorandum articles, 421. meaning of stranding in memorandum clause, 422. bilging, 422. articles and percentage vary, 422. Warranties, express, 422-424. how constituted, 422. collateral description may not be warranty, 422, n. must be accurately complied with, 422, 423. breach at commencement of the risk avoids the policy, 423. after the risk begins, without fault of insured, 423. usual subjects, — ownership, 423. neutrality, blockade, 423. when there is a trust for a belligerent, 423. time of sailing, 424. " departure," 424. " leave," " final sailing," " being despatched," 424. " in such a harbor or port," or " where the ship now is," construction, 424. " warranted in port," 424. Of implied warranties, 424-429. seaworthiness presumed by law, 424. ^ if broken at the outset, policy does not attach, 425. subsequent breach, 425. where insurance is " at and from a port," 425. evidence of unseaworthiness, 425, n. policy may be suspended by neglect, 425, 426. different kinds of fitness, 426. usage the only safe test, and reason, 426. same principle applicable where a ship at sea is injured, 427. whether seaworthiness is a condition precedent, 427, n. ship must continue seaworthy, 428. in construction of a time policy, 427, 428. cases reviewed, 428, n. fair statement of risk, 429. not to deviate, 429. Of misrepresentation and concealment, 429-432. what is a misrepresentation, 429. 656 INDEX. MARINE mSVRA'NCE,— Continued. what is a concealment, 430. effect, 430. inadvertence or inattention no defence, 430. statement of belief, if proved, is a defence, 431. unless it would reasonably influence insurers, 431, n. answer to direct inquiry is material, 431. concealment from owner by master, 431. insured generally responsible for his agent's representations, 431. second insurance on a tainted policy, 431. how premium may be evidence of concealment, 432, and n. What things should be communicated, 432-434. rumors, the certainty of which is not known, 432. intelligence known to clerks of insured, 432. foreign laws material to the risk, 432. directions sent by express may indicate emergency, 432. general principle, 432, 433. insured need not state what the insurer is bound to know, 433. matters of general knowledge, 433. facts of science, as geographical facts, &c., 433. either party may be put upon inquiry, 434. intention to deviate, or partial damage, 434. false statements of fact and of opinion different, 434. representation construed liberally, 434. substantial compliance sufficient, 434. 0/ the premium, 435-437. when due, 435. if policy acknowledge receipt, this may be no bar to an action for it, 435. note on time usually given, 435. risk mus| be actually incurred, 435. but if vessel sails on voyage, premium is due, 435. when to be returned, 436. passages " out and home," 435. if the whole risk attaches at all, there is no return, 436. ratable return of premium, 436. insurance by agent, not authorized, 436. note signed by agent binds the principal; exception, 436. no return for illegality, if parties equally in fault, 437. Locus pmnitentin: , 437, n. percentage on returnable policy retained, 437. premium set off against loss, 437. Of the description of property insured, 437-440. must be sufficient to identify, 437. mistake does not always vitiate, 437. construction of terms — " cargo," " goods," " merchandise," 438. " property," " ship," " vessel," 438. INDEX. 657 MARINE INSURANCE, -ConimuecZ. construction of terms — includes sextants and chronometers, bank-bills, 438. " return cargo," "proceeds," "returns," 438. interest of the insured need not be specified, 438. mortgagor, mortgagee, assignee, &c., may insure, 439. profits must be specified, or included in the valuation, 439. open policy on the ship does not cover freight, 439. freight from one port to another covers intermediate dues, 439. construction of terms "to," " at and from," 439. what insured under title of freight, 440. specific contract to carry, 439, n. Perils covered by the policy, 440-443. enumerated in polic}', list of, 440. meaning of phrase " all other perils," 440. insurers liable only for extraordinary risks, 440. what are such, 440, n. et seq. not liable for wear or tear, 441. nor for loss from badness of material, 441. nor for leakage or breakage, 441, n. nor for loss from dampness, 441, 442. nor for acts of the insured, or his agents acting under directions, 442. insurers liable for loss from misconduct of master and crew, 442. negligence, when remote cause of loss, 442, n. may assume risks at pleasure, 443. shipper's remedy against ship-owners does not discharge the insurers, 443. if enforced, is to be subrogated to insurer, 443. presumption against loss from negligence, 443. Of the perils of the sea, 443-445. include only extraordinary losses, 443, 444. ^ not destruction by worms, 444. nor by rats, — cases considered, 444, n. cats on board, 444, n. nor delays in harbor by being frozen in, 444. presumption of loss by perils of the sea, when ship is not heard from, 445. no fixed period after which such presumption arises, 445, u. Of collision, 445, 446. how far insurers are liable, 445. conflict of decisions in U. S. and England, 446. Off re, 446, 447. must be extraordinary peril, or insurers are not held, 446. master and crew may burn the ship, to prevent capture, 446. how far insurers are liable for consequences, 446. o-oods injured by water thrown to extinguish fire, 447, n. risk continues if any part of ship or furniture is taken on shore, 447. not so if cargo is taken on shore for barter, 447. 58 INDEX. MARINE INSURANCE, —Continued. Of piracy, robbery ami theft, 447, 448. violence essential to piracy and robbery, 447. may be committed by crew, 447. phrase "assailing thieves," 447. mutiny, — case of coolies, 447, n. theft after shipwreck, 448. piracy held to be a loss by peril of the sea, 448. Of barratry, 448-450. construction of the term doubtful, 448. trading with an enemy may be barratry, 448, n. mere negligence may be barratrous, 448. sailing against directions of pilot, 449, n. master cannot commit barratry, if part-owner, 449. nor if the owner consents, 449. may as against charterer, or other owner, 449. provided against in policy, when insured is ship-owner, 449, 450. effect of such provision, 450. general rule as to liability, 450. Capture, arrest, and detention, 450, 451. construction of usual provision, 450. " people," " capture," " seizure," " detention," " arrest," 450, 451. General clause, 451. construction, 451. phrase, " against all risks,'' 451. Prohibited trade, 452, 453. distinguished from contraband trade, 452. belongs to times of peace, 452. when illegal as to insurers, 452. usually excepted against, 452. when it discharges insurers, 452, 453. intermixture of risks producing loss, 453. Deciation, 454-458. what it is, and why it discharges insurers, 454. may be, while the ship is in port, 454. no change of risk, is deviation, unless without necessity, 454. necessity determined from circumstances, 454. variation of course to avoid ice, or capture, 454, n. if only temporary, will not discharge insurers, 454, 455. seldom can be so, 455. length of time is not essential, 455, n. is an unnecessary departure from usual course, if there be a usage, 455. if no usage, mere mistake is not, 455. insurers entitled to the exercise of the master's best discretion, 455. unnecessary protraction of voyage is deviation, 455. liberty policies, 455. INDEX. 659 MARINE INSURANCE,— Con